A Medical Device Daily

Cardinal Health (Dublin, Ohio) and Patient Safety Technologies (PST; Temecula, California) have entered into a five-year exclusive distribution agreement to co-market the SurgiCount Safety-Sponge System, which helps prevent retention of sponges and towels unintentionally left in patients during surgical procedures.

The new agreement builds upon a relationship that began in 2006 when Cardinal Health became the exclusive distribution partner for the SurgiCount Safety-Sponge System, a complete and comprehensive sponge counting and documentation system designed to dramatically increase the accuracy of sponge counts performed in hospitals. Cardinal Health will continue to package SurgiCount's lap sponges, gauze sponges and operating room towels in its market-leading Presource kits and trays.

In addition, Cardinal Health has issued a $10 million purchase order for SurgiCount products, calling for deliveries over the next 12-month period. As part of the purchase order, PST has issued Cardinal Health warrants to purchase 1.25 million shares of PST common stock at $2 per share and 625,000 shares of its common stock at $4 per share.

"Cardinal Health and SurgiCount Medical have created a strong relationship over the past three years with a mutual goal to improve safety in the operating room," said Steve Inacker, president of Cardinal Health's Clinical and Procedural businesses. "Our enhanced partnership solidifies the Safety-Sponge System as Cardinal Health's preferred technology to help our customers protect their patients from retained foreign objects during surgeries."

To date, PST and Cardinal Health have shipped more than 20 million SurgiCount Safety-Sponges that have been used in more than 700,000 procedures without a single undetected retained event.

In other agreements/contracts news:

• ValveXchange (Aurora, Colorado) recently executed a license agreement with the University of Colorado for a process to transform cardiac imaging data into high-quality three-dimensional models used for heart valve product development, clinician training, and pre-procedure planning. The CU technology converts data from routine medical imaging of soft tissues (ultrasounds and CT and MRI scans) into 3-D models, which are then transformed into physical models using 3-D printers. ValveXchange will use the technology in conjunction with its implantable heart valve program. ValveXchange is developing a novel artificial heart valve that has all the advantages of today's tissue-based heart valves, but can be implanted and replaced through a small incision between the ribs. This approach is expected to replace traditional open-heart surgery for many heart valve procedures.

• EraGen Biosciences (Madison, Wisconsin), a developer of molecular reagents for the in vitro diagnostics (IVD) market, and Illumina (San Diego), a company that makes integrated systems for analysis of genetic variation and biological function, have formed a strategic partnership and the execution of non-exclusive licensing agreements.

Under these licensing agreements, EraGen will have access to Illumina's BeadXpress platform for the continued development and commercialization of molecular-based, high-throughput clinical multiplexed assays with its unique, patented MultiCode-PLx technology. EraGen has proven commercial success with multiplex molecular assays for the infectious disease and genetic disorder markets. Illumina has licensed EraGen's MultiCode-PLx technology for the life sciences, research and clinical markets.

• Smith & Nephew (Memphis) Orthopaedics Division reported signing a technology development contract with the U.S. Department of Defense that may lead to the creation of a fracture fixation system intended to change the treatment of the limbs of soldiers who sustain battlefield injuries.

Last year, the Defense Advanced Research Projects Agency (DARPA), the central research and development agency for the U.S. Department of Defense, accepted proposals to create and develop "fracture putty," a dynamic new material that would markedly enhance the healing of soldiers who suffer traumatic wounds in the field of battle. These wounds often lead to secondary fractures and infections, multiple surgeries, long rehabilitation times and, in some cases, amputation. The fracture putty system is intended to provide substantial support of the injured limb early in the body's natural healing process so the soldier can more quickly participate in physical therapy and thus reduce the risk of further complications. The putty will then resorb - meaning it will dissolve over time, leaving natural healthy bone in its place.

"Fracture putty represents the ultimate convergence of orthopedic material science and mechanics, and has the potential to revolutionize the way patients are treated," said DARPA's program manager, Mitchell Zakin, PhD. "If all technical challenges are met, we believe this innovative technology will provide superior clinical outcomes for patients."

• Life Technologies (Carlsbad, California) reported a partnership with TrimGen (Sparks, Maryland), a molecular diagnostic company focused on developing advanced genetic tests. Through this relationship, KRAS and BRAF mutation detection assays developed and manufactured by TrimGen for research use only, will be sold under the Applied Biosystems brand. Commercialization is anticipated in the first half of calendar year 2010.