Medical Device Link.

McGlynn

Earlier this month, Bristol-Myers Squibb Co. (New York City) announced its intention to sell its ConvaTec unit to private equity firms Nordic Capital (Stockholm, Sweden) and Avista Capital Holdings LP (New York City) for $4.1 billion. Based in Skillman, NJ, ConvaTec is a leading manufacturer of wound therapeutics and ostomy care products, and generated 2007 revenues of $1.16 billion. The unit has more than 3400 employees in nearly 100 countries.

The acquisition represents this year’s largest medtech deal to date and the largest private equity transaction in the sector since the $10.9 billion sale of orthopedics manufacturer Biomet Inc. (Warsaw, IN) to a private equity consortium led by the Blackstone Group LP (New York City) in September 2007. Over the past year, Bausch & Lomb Inc. (Rochester, NY) and DJ Orthopedics Inc. (San Diego), two mid-cap, publicly traded medtech firms, have gone private in deals valued at $4.5 billion and $1.5 billion respectively.

Private equity firms have long been recognized as an established funding resource for medtech start-ups and early-stage companies. But over the past year, such firms have continued to show interest in acquiring larger companies with market valuations of $500 million and above. J. Casey McGlynn, chairman of the life sciences group at Wilson Sonsini Goodrich and Rosati (Palo Alto, CA), believes there is an emerging trend. “Private equity is particularly interested in acquiring underperforming public medtech companies where there is an opportunity to revitalize the firm with better management and new products,” he says. [More]   

Top Roche Executive Departs

Olson

Earlier this month, Tiffany Olson, North American head of Swiss biotech giant Roche Diagnostics and president and CEO of Roche Diagnostics Corp. (Indianapolis), announced her resignation from the company, effective immediately. Michael Tillmann, previously head of Roche Diagnostics' Asia-Pacific region, located in Singapore, has stepped into Olson’s role.

Olson cited personal reasons for her departure and said that she had been considering taking her career in a different direction for some time. However, she noted that she was determined to leave the company on a high note. “The North American business is performing strongly,” she says. “Currently performance is at double-digit growth over the prior year with strong growth in new products.”

Despite her departure from Roche, Olson says she expects to remain a contributing member in the healthcare industry. “My entire career has been in healthcare, and it has been extremely rewarding,” she says. “This is where the strength of my contributions can have the biggest effect, and I’m currently looking for opportunities in this field. Board work is an interest of mine, and I hope to expand in this area.” [More] 

Sunshine Act Revised as State Gift Bans Loom

Mussallem

The new draft of the legislation—which would require medical device manufacturers to submit quarterly and annual reports of payments and other transfers of value made to physicians and affiliated entities—addresses some, but not all, of the concerns raised by industry association AdvaMed upon its review of the bill’s earlier iteration. The revised legislation would impose significantly lower penalties on entities failing to meet physician payment reporting requirements. It would also preempt state-level reporting requirements, some of which would be more stringent.

“Physicians play a vital role in medical technology innovation, and their contribution, which leads to improved patient care, needs to be valued and understood,” said Michael A. Mussallem, chairman and CEO of Edwards Lifesciences (Irvine, CA) and AdvaMed board chairman. “This revised legislation lays out a framework for the appropriate disclosure of financial relationships between physician innovators and the companies that make their vision a reality.” [More]

IP Watch: Mixed Patent Rulings for Boston Scientific

Early this month, Boston Scientific Corp. (Natick, MA) announced favorable rulings in two separate patent disputes. However, several weeks later, these victories were overshadowed by a ruling in a separate patent dispute, in which a U.S. District Court jury in Marshall, TX, found that Boston Scientific had infringed three patents owned by Medtronic Inc. (Minneapolis). The jury awarded Medtronic $250 million in damages.

Following the verdict, Boston Scientific reported that it has raised a number of defenses that were not considered by the jury but will be heard by the district court on July 31. If those defenses are successful, the jury’s verdict will be set aside, the company stated. If its defenses are not successful, Boston Scientific plans to seek to overturn the verdict in posttrial motions before the district court and, if necessary, to appeal to the U.S. Court of Appeals for the Federal Circuit, in Washington, DC.

Earlier this month, two separate court rulings looked much more favorably on Boston Scientific’s intellectual property. On May 8, the company announced that the Canadian Federal Court had dismissed a lawsuit in which Johnson & Johnson Inc. (J&J; New Brunswick, NJ) accused Boston Scientific’s Nir stent of infringing two of its patents. In addition, in a separate case, the company reported that an arbitration panel of the World Intellectual Property Organization (Geneva) had ruled that its Liberté and Taxus Liberté stents do not infringe patents held by Medinol Ltd. (Tel Aviv, Israel). Read more about these cases and other industry patent news in this month’s edition of “IP Watch.” [More]