CABG Medical (Minneapolis) reported in late November that it had suspended enrollment in the international clinical trial of its drug-eluting Holly Graft System (HGS) for facilitating a coronary artery bypass. The system is the company’s only product. According to the company, a total of eight patients have been treated with an anti-coagulant regimen of aspirin and warfarin and two of the grafts were determined to have occluded prior to the patient’s discharge from the hospital.

That news, coupled with the disclosure that the first enrollment arm of the trial – consisting of 36 patients implanted with the HGS and treated with an anti-platelet regimen of aspirin and clopidogrel – failed to meet the standards necessary to obtain regulatory approval, compelled CABG to suspend trial enrollment. The company had said at that time that it hoped to improve the clinical results in the second phase of its evaluation, but this latest news compelled CABG Medical to alter its plans.

“The incorporation of warfarin into the treatment regimen of HGS patients has not prevented occlusions in the limited set of patients treated with this regimen. The results are disappointing and at this time do not warrant further evaluation in clinical trials,” said Chairman and CEO Manny Villafana during a conference call on the trial enrollment suspension.

“It appears the majority of the failures are due to graft occlusions rather than restenosis, and we will aggressively seek the cause of these failures,” he said. “We are in the process of reviewing all of our clinical and pre-clinical data to determine whether any modifications can be made to the HGS which would reduce the occurrence of occlusion to a level necessary to meet standards required to obtain regulatory approvals.” He said the modifications could take 12 to 18 months “to implement and test pre-clinically.”

The Holly Graft System is designed to treat blockages in multiple coronary arteries from a single graft. The system consists of a flexible, thin-walled vascular graft made of expanded polytetrafluoroethylene. It is attached to the coronary arteries via connectors coated with a drug combination to reduce the risk of blockage and thrombosis.

The major benefit of the system is to avoid a secondary surgery conducted as part of a heart bypass procedure to harvest healthy vessels from the chest, legs or arms for use in the bypass, the company said.

Villafana said that from 2000 to the present, CABG Medical spent about $10.1 million, including $5.6 million this year alone, on the system. He said the company will spend between $5 million and $6 million next year of its remaining $34 million in cash to try to fix the problems with the HGS. If things go “extremely well” with the HGS investigation, the company could increase its spending in the range of $12 million to $15 million.

The Holly Graft System has had some previous problems. The company delayed clinical trial enrollment in August 2005 because two of the devices that were implanted in Australia became occluded. The following month, the company began enrollment in the trial, believing it had fixed the problems that had caused the system to become occluded.

After a September review of its pre-clinical work, the company said it believed that a “simple improvement in the surgical procedure” was necessary and that was incorporated into its human cases. Essentially, surgeons were instructed to make a larger incision in the vena cava where it connects with the system’s flow limiter to ensure that the blood flow gets through to the vena cava. Prior to this decision, surgeons had been making a slit where the device connected.

While Villafana expressed hope during the conference call that some simple fix – such as further opening up the flow limiter, modifying the drug therapy or ensuring proper graft placement – could resolve the problems, he acknowledged that the company wouldn’t “bury our heads in the sand and say ‘this will work.’ Rather, we have to also take a look and see if there are some major design changes that we would have to make.”

Three additional deaths related to Guidant ICDs

The lineup of potential litigation launched against Guidant continued to grow last month with reports of three more deaths related to defects in its implantable cardioverter defibrillators (ICS). The company reportedly told the FDA that the three previously unreported deaths occurred following the company’s recall of devices in June, according to the New York Times. The new reports bring the total deaths related to short circuit malfunctions of the devices to seven.

Depending on which company eventually acquires cardiovascular device powerhouse Guidant (Indianapolis) – original suitor Johnson & Johnson (New Brunswick, New Jersey) or more recent contender Boston Scientific (Natick, Massachusetts) – it will undoubtedly find its lawyers busy attempting to settle with the families of these three individuals, and a long list of other legal claims.

While The Times provided no detail concerning the sources of the information, it hypothesized that the new reports are the result of closer investigation following the death of someone implanted with the devices. It has previously suggested that some deaths of heart attack victims may have gone uninvestigated if they were considered a result of natural causes, not device failure.

The report also builds on earlier stories by the newspaper that have indicated that the electrical failures of the devices were the result of flawed insulation material, named polyimide, that was used in the devices and could deteriorate in contact with human tissue.

The company has denied that this is the source of the problem.

In November, Guidant reported that it had settled with the family of a man who had died when his ICD short-circuited, the case serving to bring problems with Guidant’s ICDs to the attention of The Times.

Subsequently, there have been a variety of suits and investigations launched concerning these problems. They range from shareholder class actions, charges of insider trading by a Guidant executive, investigations by both the Securities and Exchange Commissions and the Department of Justice and investigations concerning the variety of implantable device problems by the FDA. Last month, the Justice Department also subpoenaed records concerning the polymide material from Accellent (Wilmington, Massachusetts), one of the companies that has supplied key material to Guidant.

Medtronic breaks ground on CRM campus

Medtronic (Minneapolis) last month broke ground on the first phase of the new 1.5-million-square-foot headquarters campus for its Cardiac Rhythm Management (CRM) business in Mounds View, Minnesota. The company said that when the project is completed on the 85-acre property – estimated sometime in late 2007 – it will be the largest Medtronic facility in the world and will anchor an estimated $1.9 billion in new economic activity in Minnesota over the next seven years.

The 820,000-square-foot, $65-million first phase will house up to 3,200 employees in the R&D, management, marketing, sales, finance and legal departments and all their support functions. Anchored by two eight-story buildings, the first phase will be primarily dedicated to office space, but will include light mechanical, electrical and software labs to support CRM’s research and development activities. The facility can be expanded up to 1.5 million square feet and could eventually house up to 6,000 employees.

Medtronic CRM is the company’s largest business, developing and marketing implantable pacemakers and defibrillators, monitoring and diagnostic devices and cardiac resynchronization devices, including the first implantable device for the treatment of heart failure. CRM also makes automated external defibrillators.

Boston Sci funds bioengineering fellowship

Boston Scientific (Natick, Massachusetts) reported a $500,000 contribution to the University of Minnesota Foundation (Minneapolis) to fund the creation of a Boston Scientific Biomedical Engineering Fellowship Fund. The fund will help support new full-time graduate students in the department of biomedical engineering within the university’s Institute of Technology.

“This gift from Boston Scientific is a critical first step in our goal to continue to attract the best and brightest biomedical engineering students to the University of Minnesota,” said Bob Tranquillo, head of the department of biomedical engineering.

Fred Colen, executive vice president and chief technology officer at Boston Scientific. “These same students might some day develop medical technologies that could help save or improve the lives of patients around the globe.”

The contribution from Boston Scientific, which will be spread over five years, is a lead gift in a campaign to create an endowment designed to ultimately support the entire class of first-year biomedical engineering graduate students each fall. About a third of the contribution will be used for graduate fellowships, the remainder placed in an endowment to earn interest and fund fellowships over time. The university’s goal over five years is to raise $2 million for biomedical engineering fellowships. These funds will be matched by the UMF to create a $4 million endowment.

Hemosol continues to wind down operations

Blood substitute developer Hemosol (Toronto) last month continued to close down its business operations. After filing for bankruptcy, PricewaterhouseCoopers, in its capacity as trustee, filed an application with the Ontario Superior Court of Justice seeking an order appointing it as the interim receiver over the property, assets and undertaking of the company and approving interim financing by Hemosol’s secured creditors in the amount of $2 million. The company also said that all of its directors tendered their resignations from the board.

Hemosol filed bankruptcy proceedings after it reported defaulting on the payment of interest under a $20 million credit facility because of insolvency. Early in November, it reported that had fallen below the Nasdaq’s requirement of a $1 per share bid price of its common stock. In October, it laid off two-thirds of its employees.