Saying that it is making moves meant to respond "to a new environment emerging in human health and well being," healthcare giant Johnson & Johnson (J&J; New Brunswick, New Jersey) in mid-November unveiled a series of organizational changes which it said are intended to "sharpen its focus on opportunities outside its traditional areas of interest and in the growing intersections of healthcare." The changes include the creation of a new strategy and growth organization and two new business operating groups.

The reorganization comes at a time when the company has had to reduce costs in response to a downturn in sales of key products, such as the once wildly successful Cypher drug-eluting stent (DES) — due to safety concerns — and its Procrit anemia drug. Procrit sales have fallen as a result of Medicare and Medicaid program reimbursement cuts, also initially sparked by safety issues.

The moves come a bit more than three months after the company reported plans to reduce its global workforce by 3% to 4%, or up to 4,820 jobs, in a restructuring that it hoped would generate about $1.3 billion to $1.6 billion in savings for 2008 to offset declining sales. That plan primarily impacted the company's Cordis (Miami Lakes, Florida) unit — maker of the Cypher — and its pharmaceuticals unit.

J&J said it will now form a new surgical-care group to focus on technology and services to improve patient care and a new comprehensive-care group aimed at treatments for chronic and pervasive conditions.

The company currently has three major business units: pharmaceuticals; medical devices and diagnostics; and consumer. But beginning in January, the device business will be divided into two units: surgical-care and comprehensive-care. The surgical-care group will include its Ethicon (Somerville, New Jersey) unit, which makes suture technology and other surgical products. The comprehensive-care group will include Cordis.

New possibilities, Weldon said, include healthcare products that the company doesn't currently sell. He also mentioned health information, genetics, biomarkers and medical records.

"These decisions recognize that a new environment is emerging in human health and well-being," Weldon said. "They reflect our assessment of the best way for us to capture and develop the opportunities associated with those changes and they capitalize on the unique, broadly-based, decentralized approach of Johnson & Johnson."

----

FDA panel recommends approval of Xience DES device

Johnson & Johnson saw more competition coming last month with an FDA panel recommendation to approve the Xience drug-eluting stent (DES) from Abbott Laboratories (Abbot Park, Illinois). The Xience is seen as winning FDA approval sometime early next year -- along with the Endeavor DES from Medtronic (Minneapolis), which received a panel thumbs-up in October. The two stents will challenge the 1st-generation DES devices, including the Cypher DES made by J&J business Cordis (Miami Lakes, Florida) and the Taxus from Boston Scientific (Natick, Massachusetts).

Attempting to block the Xience's entry to the market, J&J filed a lawsuit shortly before the late November panel meeting, alleging that the Xience infringes on intellectual property for DES held by Cordis.

The circulatory systems advisory panel asked what one analyst called some "cranky" questions during the meeting, but the Xience provided few issues concerning efficacy as compared to first-generation DES devices, and it received a 9-1 panel vote to recommend.

But given the current atmosphere of uncertainty and ongoing debate concerning the safety of DES devices, the panel also advised the agency to provide final approval of the Xience only with agreements from Abbott to perform rigorous long-term follow-up surveillances studies.

Clyde Yancy, MD, chair of the panel, referred to the company's data indicating efficacy of the Xience, but termed the large majority vote by the panel a "cautious endorsement" of the stent and that the bigger question will be the device's safety over the long term — a question still hovering over the entire sector, both first-generation and those DES devices to come.

While recent cardiovascular conference reports have generally dismissed the view that DES devices are less safe than bare-metal stents, Yancy and other panelists frequently referred to safety issues. And Yancy indicated that the panel, despite the 9-1 vote, was generally divided on feeling that Abbott had presented enough long-term safety data.

Abbott and Medtronic, of course will hope for quick final approval so that they can roll out these new products in 2008, with both products expected to provide immediate stiff competition to the Cypher and the Taxus .

Boston Scientific may be hurt the least, however, since it will share the profits from Xience; Guidant had been developing this stent and when Boston Scientific acquired that company, the stent technology was divested to Abbott; but Boston Scientific retained the right to sell the same device, as the Promus, under a private-label arrangement.

The panel recommendations put Endeavor and Xience at the starting gate, and the race is now on to see which wins first FDA approval, largest uptake and ultimate market laurels.

Abbott provided data for more than 400 patients in the category of long-term usage of the Xience, with those patients implanted for at least two years. But that was not considered long enough, or representing enough patients, by some panelists. Panel member John Somber, MD, professor of pharmacology at Rush University Medical Center (Chicago), said "one-to-two-year data" was not adequate.

And Somberg cast the lone dissenting vote against Xience approval.

Wachovia Capital Markets device analyst Larry Biegelsen, in a note, said he foresees FDA approval of Xience as early as the second quarter of '08, though "the FDA could decide to wait until the data becomes available in mid-2008, given the intense scrutiny of the safety of DES." He said that his analysis puts Xience as the market leader for DES with a 55% share in the U.S.

Bear Stearns analyst Rick Wise echoed the concerns that the FDA may wait until 2Q08 to see full two-year data on the Xience and so he predicted FDA approval and market launch in the third quarter of '08. He wrote: "We felt the overall tone of the FDA during their afternoon presentation was positive for Xience.

"The FDA supported [Abbott's] pooling of SPIRIT II & III [trial] data to increase the sample size in order to better analyze rare events like late stent thrombosis despite some pushback from the panel. Also, the FDA's statistical analysis showed that across the SPIRIT family of clinical trials Xience generally showed non-inferiority vs. Taxus even in a worst case analysis."

----

Pfizer to pay $125 million to Nektar in dropping inhaled insulin

Pfizer (New York) is paying Nektar $135 million to Nektar Therapeutics (San Carlos, California) $135 million to resolve contractual obligations between the companies as the result of Phizer's decision in early November to abandon the marketing of Exubera, the first inhaled insulin approved by the FDA.

The two companies had partnered on the inhaled product, with Nektar primarily responsible for developing the drug formulation and the inhaler used for its delivery. Because inhaled, Exubera had been seen as relieving those with diabetes of using needles to inject insulin. It had been predicted to produce up to $10 billion annually for Pfizer, with Nektar to receive 10%-20% in sales and royalties. But it had captured only about 1% of the insulin market.

A variety of concerns had plagued the product, including reports of reduced lung function by Exubera users, the inability to provide accurate dosage and the user-unfriendliness of the inhaler device, about the size of a thin tennis ball can.

With announcement of the move, officials at Nektar had criticized Pfizer for failing to promote the product aggressively, but the $135 million payment appeared to patch things up between the companies. In a joint statement, Jeffrey Kindler, CEO of Pfizer, and Howard Robin, president/CEO of Nektar, indicated there were no hard feelings between the compoanies, thus providing a potential path to future collaborations.

"The agreement strengthens our relationship and demonstrates our ability to work together to craft a solution that allows Nektar the ability to pursue additional commercial opportunities for the Exubera and NGI inhaled insulin franchises. Further, we look forward to advancing our joint development of PEGylated human growth hormone therapy to treat short stature and growth problems," the two executives said.

In addition to the fee the agreement also covered remaining obligations relating to Next Generation Inhaled Insulin (NGI), a product currently in Phase I clinical development.

In the event that Nektar teams up with another partner on the product Pfizer has agreed to transfer its remaining rights and all economic benefits for Exubera and NGI. This would include the transfer of the Exubera New Drug Application and Investigational New Drug Applications and all ex-U.S. regulatory filings and applications, continuation of ongoing Exubera clinical trials and certain supply chain transition activities.

----

RBM receives 'Fast-Track' grant financing for neonatial sepsis diagnostic

Rules-Based Medicine (RBM; Austin, Texas) reported that the National Institutes of Health has awarded RBM a "Fast-Track" grant for the development of a diagnostic test for neonatal sepsis. The grant, entitled "Biomarker Profiles for Early Diagnosis of Sepsis in Neonates," uses RBM's HumanMAP platform to characterize and validate a pattern of biomarkers that can detect early signs of infection in newborns. The project will be performed in collaboration with the University of New Mexico (UNM; Albuquerque).

In a preliminary study, data indicated that a sensitive, specific diagnostic is possible where no predicate test exists today. The project, funded for $849,000, will examine samples provided by UNM from their Neonatal Intensive Care ward. RBM will administer the grant and perform all of the testing and statistical analysis.

Michael Spain, MD, RBM's chief medical officer, said,. "Our collaboration with UNM has greatly facilitated the search for a solution to this problem."

This project is being supported by a grant from the National Institute of General Medical Sciences.

----

New ventures

Cyberkinetics, NeuroMetrix in j-v for peripheral nerve damage

Cyberkinetics Neurotechnology Systems (Foxborough, Massachusetts), a company developing implantable products to treat neurological diseases and injuries, and NeuroMetrix (Waltham, Massachusetts), a developer of neurological diagnostic and therapeutic products, have formed a joint venture to accelerate development of therapies for peripheral nerve damage using Cyberkinetics' Andara oscillating field stimulator (OFS) therapy platform.

NeuroMetrix has purchased $2.5 million of Cyberkinetics common stock (5.4 million newly issued shares), or about 13% of the company's shares, at 46 cents a share. NeuroMetrix also received a warrant to purchase another 2.7 million shares, exercisable at 46 cents a share with a term of five years. NeuroMetrix will be required to exercise the warrant if Cyberkinetics receives FDA approval of the humanitarian device exemption for the Andara OFS system for acute spinal cord injuries.

In a conference call, Shai Gozani, president/CEO of NeuroMetrix, said the company is interested in the application of electrical stimulation not just in the activation of nerves for the diagnostic purposes but also to promote neurological tissue repair and regeneration. He said that the partnership positions his company "to enter this arena with a near-term commercialization of a product for acute spinal cord injury and in the longer term, with neurostimulation devices for peripheral nerve and chronic spinal cord injury," Gozani said during the call."

Terms include: Contribution by Cyberkinetics of intellectual property, know-how and scientific expertise; NeuroMetrix funding up to $1 million annually for the first two years of the j-v; the companies sharing further development costs equally; NeuroMetrix obtaining an option to negotiate for exclusive rights to commercialize any products that are developed within the j-v.

NeuroMetrix also received the right to first negotiation for the acquisition of Cyberkinetics, or any other change of control, and a right of first negotiation for the commercialization of the Andara OFS system for the treatment of acute spinal cord injuries.

The Andara OFS system uses electrical stimulation to promote the growth of nerve fibers and is currently being reviewed by the FDA for HDE approval for treating acute spinal cord injuries. Results from a Phase Ia, 10-patient clinical trial of the therapy in patients with recent spinal cord injuries were published in the January 2005 issue of the Journal of Neurosurgery: Spine, and indicated statistically significant improvements in sensory and motor function at 12 months after treatment.

NeuroMetrix has additional products in development for the diagnosis, monitoring and treatment of nervous system diseases and pain.

  • ConcepTx Medical (St. Paul, Minnesota) reported closing a $4 million, Series A convertible preferred stock financing co-led by Versant Ventures and Advanced Technology Ventures (ATV). Medical device executives Mike Berman, Mike Selzer and Dale Spencer reported the formation of the company. The founders have more than 30 years of experience creating and directing Twin Cities medical device companies.
    They said ConcepTx Medical was created "to identify compelling medical-device opportunities to treat large, growing and undertreated patient populations and develop them into separate businesses using a proven, capital-efficient business model designed to reduce financial risk. "
    Versant and Advanced Technology said they have "lengthy track records of success in early stage healthcare and emerging technology businesses, especially cutting edge medical devices." Each currently manages more than $1 billion in capital.

No Comments