A Medical Device Daily

Bristol-Myers Squibb (New York) reported that it plans to sell its medical-imaging unit in Billerica, Massachusetts as part of a broad plan to slash expenses and refocus its business.

The pharmaceuticals giant said it will cut nearly 4,300 jobs worldwide, one-tenth of its workforce; close more than half its manufacturing plants by 2010; and explore selling two other divisions, ConvaTec (Skillman, New Jersey), a wound-care products supplier, and its Mead Johnson Nutritionals (Evansville, Indiana) business.

Like other major drug makers, Bristol-Myers has faced increased competition from generic drug makers as patents on its old blockbuster drugs expire. Pfizer (New York), the world’s largest drug company, outlined plans this year to cut 10,000 jobs, about 10% of its workforce. Johnson & Johnson (New Brunswick, New Jersey) recently said it would cut 5,000 workers, about 4% of its workforce (_{Medical Device Daily}, Aug. 1, 2007).

“It is difficult to see our valued colleagues leave the company, but right-sizing our workforce across all areas is critical to achieving our productivity goals and enhancing the competitive position of the company,” Bristol-Myers CEO James Cornelius said in a statement.

The medical-imaging unit has about 800 employees, including 400 in Billerica.

The company said it planned to sell the medical-imaging unit, originally acquired from DuPont in 2001, because a patent on the unit’s key product, Cardiolite, is due to expire next year. Cardiolite is a radioactive compound used to help track blood flow in the heart. The company cut 123 jobs at the unit last spring, mostly in sales and marketing.

The company said the moves will help it save $1.5 billion in annual expenses. But it faces further challenges.

A patent on the company’s blockbuster product, the anticlotting medicine Plavix, is slated to expire in about four years.

Cornelius said the aim of the restructuring was to change Bristol’s culture to more like a growth-hungry biotech group. “I’m very comfortable with smaller companies and entrepreneurial decision-making,” he said in a speech to investors and analysts.

On the positive side, Bristol’s promising new drug pipeline, coupled with its restructuring efforts, also highlight its promise to avoid big pharma’s problems by shifting its focus to high-margin, biotech specialty drugs.

The group said it expected 64% of its revenue in 2010 - last year’s total was almost $18 billion - to come from biotech drugs, or therapies made from copies of the body’s proteins.

Cornelius also said the company would continue to make acquisitions and alliance deals to help the company come up with products to offset the Plavix patent expiration. He said the group could use proceeds from divestitures to acquire “a string of pearls” of new products.

In other dealmaking news:

• StemCor Systems (Menlo Park, California), a company developing systems for enabling regenerative medicine, reported that it has acquired U.S. Patent 6,849,051, “Devices And Methods For Extraction of Bone Marrow”, and associated know-how from USPure Sciences.

The patent covers devices and methods for aspirating cellular samples from bone cavities. The company said the concept and technologies are complementary to its MarrowMiner, which recently received 510(k) clearance from FDA to market for the harvest of bone marrow.

“We are pleased to add this patent and associated technologies to our bone marrow aspirating intellectual property portfolio,” commented Vartan Ghazarossian, PhD, president/CEO of StemCor. “By building upon the solid foundation of our current technologies, we plan to broaden our capabilities as we develop the systems to improve the harvesting of adult bone marrow for a variety of possible clinical applications in the field of regenerative medicine, including cardiovascular, neurologic, diabetic and orthopedic diseases.”

The MarrowMiner system is designed to rapidly and easily harvest bone marrow in a minimally-invasive manner, in the outpatient setting, and without general anesthesia. The system consists of an access guide, a powered handle that drives a flexible atraumatic shaft through which marrow is aspirated, and an integrated marrow collection container. The MarrowMiner shaft gains access to the bone marrow cavity through the access guide to allow the removal of bone marrow through a single entry site.

This is in contrast to the current practice of bone marrow aspiration through the insertion of a needle into multiple sites in the iliac crest of the hip, which usually requires general anesthesia, an operating room, and multiple clinical personnel.

• Tissue-based cancer diagnostics developer Ventana Medical Systems (Tucson, Arizona) reported that it has received notification from Roche Holdings (Basel, Switzerland) of its intention to seek the election of directors to the board of Ventana at the company’s annual meeting of stockholders in June 2008.

Ventana’s bylaws provide that written notice of proposed stockholder nominations for the election of directors at the 2008 annual meeting of Stockholders must be received no later than Dec. 7, 2007.

On Nov. 13, Ventana entered into a confidentiality agreement with would-be suitor Roche which allowed Roche to commence due diligence and have appropriate access to non-public information regarding Ventana (MDD, Nov. 15, 2007). Ventana said it believes this move will allow Roche to better understand the company’s prospects and the value in companion diagnostics, and that it could break up the logjam that has been Roche’s ineffective tender offer that values the company at $75 a share, or about $3 billion.

Ventana shareholders have been cool to Roche’s offer, first disclosed at the end of June (MDD June 27, 2007), after months of what Roche said were fruitless private advances.

Ventana’s board reiterated that Roche’s $75 tender offer is grossly inadequate and not an appropriate starting point for negotiations as reflected by the fact that Ventana’s share price has consistently traded well above Roche’s offer and our stockholders have overwhelmingly rejected that offer four times. Furthermore, the board said it continues to believe Roche’s offer does not appropriately compensate Ventana’s stockholders for the inherent value of the company or its synergistic value to Roche.

Merrill Lynch & Co. and Goldman Sachs are acting as financial advisors and Sidley Austin is acting as a legal advisor to Ventana.