BB&T Contributing Editor

BRUSSELS — The opportunity in a Europe-wide surgical event is to see dozens of CE-marked products a number of years before FDA approvals and an introduction to the U.S. market.

On one hand, a European industry event becomes an off-Broadway venue for U.S. companies who come here to prepare for the big box office rewards that a winning performance can earn back in the vast and unified U.S. market.

The European market itself is a serious business opportunity that can be as rewarding for sales revenue as it is challenging for overcoming the fragmented distribution and reimbursement structures of the European Union. More and more Europe serves as a reminder of how off-Broadway box offices cast a considerable shadow over those of the Great White Way.

What drew the crowds at EuroSpine 2007, held here last week, were products playing to the emerging surgical preferences for the patient-friendly and cost-effective qualities of "minimally invasive" and "preserving motion."

Meanwhile, bioabsorbable materials have not yet come to center stage for spinal implants, although the number of presentations on these themes and the increase in product development for such qualities promise that bio-friendly will play a greater role in the near future.

Pat Beyer, president for Europe, Middle East and Africa (EMEA) for Stryker (Kalamazoo, Michigan), told Biomedical Business & Technology, "After the minimally invasive products, I am seeing a lot of reference to morphogenic proteins and note that generally more biologics are hitting the market for spine at the show this year."

Among orthopedic surgeries, the spine remains a special area, and surgical practices have been staunch holdouts against certain product innovations, notably in the trend toward nearly natural flexibility and movement for implants and prosthetics brought on by the introduction of new materials that have captured a significant share of new products introduced for other surgeries.

"Over the past 15 years, hip and knee surgeons have developed protheses to preserve movement," noted Christine Coillard, MD, a pediatric surgeon at the Centre Hospitalier Universitaire Sainte-Justine at the University of Montreal.

"Yet in spine we are late, very late in changing, and even today we continue to fuse, and only to fuse, the vertebrae," she said.

Coillard was attending EuroSpine for the introduction of a novel surgical approach to treat adolescent idiopathic scoliosis in a way that "not only allows growth, it even grows with the patient."

Meanwhile, Chip Bao, VP of spine development for Pioneer Surgical Technology (Marquette, Michigan), already has let go of the past, saying bluntly, "Fusion was yesterday; tomorrow is motion persistence."

Bao was on hand to explain the science behind what his company promoted as a first posterior disc arthroplasty system.

A surprise introduction at a EuroSpine luncheon was a new concept for interspinous distraction from Synthes (Solothurn, Switzerland).

A percutaneous approach to treat lumbar stenosis and neurogenic intermittent claudication, Synthes In-Space requires a 1.5 cm incision, for the insertion of a series of tools that use blunt dilation rather than cutting to get past spine muscles and position the implant. To position the insertion sleeve that will guide the implant for placement between the vertebrae, the intra-spinous ligament is pierced but significantly, the supra-spinous ligament is not touched.

Procedure time is half of the 40 minutes needed for the implant of a device through traditional surgical techniques.

At Scient'x (Guyancourt, France), "the story is big growth and gaining market share on our competitors," according to Anne Renaus, responsible for both those areas as VP of marketing and business development.

"In 2002 we were at €10 million ($14.1 million) and we will pass €32 million ($45 million) this year," she said, adding, "Millenium Research Group ranks us as fifth for market share in Europe, so we are now ahead of Zimmer."

Ahead of Scient'x in the ranking for market share in Europe in ascending order are Stryker EMEA (Montreux, Switzerland), Synthes, DePuy Spine (Raynham, Massachusetts) and Medtronic (Minneapolis).

At EuroSpine, Scient'x launched five new products, available only in the European market.

Two products aim "to complete our products portfolio," Renaus said.

Lyra is a new plate for thoracic and thoraco-lumbar instabilities, and Isobar TTC offer implants for occipito-cervical spinal osteosynthesis.


Gilde Healthcare Partners closes its second fund of €150 million

Venture capital firm Gilde Healthcare Partners (Utrecht, the Netherlands) reported the close of its €150 million ($213 million) venture fund, Gilde Healthcare II (GHC II).

Gilde said that GHC II is one of the largest funds ever raised to invest in European healthcare and is backed by current investors in Gilde Healthcare Funds, who have been joined by some new investors.

The original target for GHCII was €125 million, but Gilde said the additional investment was attracted by its "excellent investment track record [resulting in] six exits in the past two years.

Gilde said that GHCII will invest in companies developing therapeutics, diagnostics, medical devices and enabling technologies at all stages of a company's development from seed stage to pre-IPO rounds. Investment size will range from €1 million up to €15 million per investment after all private rounds of financing. It is planned to make more than 15 venture investments from GHCII.

Pieter van der Meer, General Partner of Gilde, said, "The quality of our investment portfolio, which we have built and moved to liquidity within five years, has enabled us to generate attractive returns to our investors."

Gilde Healthcare Partners currently reports over €275 million ($390 million) under management and says it is looking to lead new investments in therapeutics, diagnostics, medical devices and enabling technologies.

Founded in 2000, Gilde has representatives in London and Madrid. Companies that Gilde has supported include Ablynx (Belgium), Agendia (Netherlands), AMT (Netherlands), Chroma Therapeutics (UK), and Symphogen (Denmark).


Von Eschenbach, China FDA meet to discuss safety issues

FDA chief Andrew von Eschenbach, MD, met last month with officials from China's State Food and Drug Administration (SFDA) as part of an ongoing series of meetings for the exchange of views on product safety. The FDA said in a statement that the meetings, conducted at the prompting of Michael Leavitt, secretary of the U.S. Department of Health andHuman Services, involved von Eschenbach meeting with Chen Zhu, MD, the minister of health of the People's Republic of China. Von Eschenbach also met with the SFDA commissioner, Shao Mingli, and vice minister Chuanzhong Wei of the Chinese General Administration of Quality, Supervision, Inspection and Quarantine.

With the 2008 Summer Olympics just around the corner, the move is seen by some as vital to Beijing's efforts to ensure that travel to the world's most populous nation is not discouraged by the rash of recent reports of tainted products.

In an FDA statement, von Eschenbach said that his discussions with the Chinese officials were "very productive," adding that the Beijing contingent's members "are, like me, dedicated to enhancing the health of the men, women, and children we each serve, and to protecting the safety of our food supply and chain of medical and pharmaceutical products."


Rosenergoatom extends cobalt-60 pact with MDS Nordion

MDS Nordion (Mississauga, Ontario), a provider of medical isotopes and radiopharmaceuticals, reported that it has signed a 17-year contract for the supply of cobalt-60 with Rosenergoatom (Russia), the operating utility of Russia's nuclear power plants. The contract expands upon the 2005 agreement by providing for an increased supply of cobalt-60 to MDS Nordion until 2024.

MDS Nordion said that with the agreement its overall supply will increase by about 30% by 2016. Cobalt-60 is primarily used for the sterilization of hospital medical supplies and pharmaceuticals to help prevent patient infection and disease by reducing harmful bacteria.

"As demand for cobalt-60 increases each year, this contract is great news for the global medical community," said Steve West, president of MDS. "It demonstrates MDS Nordion's ongoing commitment to provide customers a long-term supply to meet their growing sterilization needs."

MDS said that cobalt-60 is used to sterilize 45% of all disposable medical devices worldwide, such as surgeons' gloves, syringes, sutures, and catheters.

Valery Lebedev, a deputy director general at Rosenergoatom, said, "Unlike most power reactors, Rosenergoatom can harvest cobalt-60 while the reactor is in operation. This allows MDS Nordion to more closely match cobalt-60 supply to customer demand by increasing the reliability and efficiency of the overall supply chain."

MDS, a provider of medical isotopes, radiation and related technologies, is a business unit of MDS Inc., a company that provides market-leading products and services for drug development, therapeutics and diagnostics.

Rosenergoatom, the operating utility of Russia's nuclear power plants, operates all 10 state-owned Russian nuclear power facilities with a total of 31 nuclear reactors and an installed electrical capacity of 23,242 Megawatts.


Intl. Diabetes Federation issues new guidelines for care

The International Diabetes Federation (IDF; Brussels, Belgium) has issued a new guideline for diabetes care that includes the management of post-meal glucose. The guideline emphasizes that people with diabetes should have their blood glucose levels closely monitored after meals in order to improve diabetes control and reduce complications, particularly cardiovascular disease.

IDF, an umbrella organization of more than 200 member associations in 160 countries, said this new approach will assist in developing effective strategies for managing diabetes. The new evidence-based global guideline was unveiled last week at the annual meeting of the European Association for the Study of Diabetes (EASD).

The guideline recommends that people with diabetes try to keep post-meal blood glucose levels to less than 7.8 mmol/l (140 mg/dl) two hours following a meal, a timeframe which conforms to guidelines published by most of the leading diabetes and medical organizations. Topics addressed in the guideline include post-meal hyperglycemia, treatment strategies and regimens, self-monitoring of blood glucose, and non- pharmacologic and pharmacologic therapies.

"Diabetes is now recognized as one of the largest epidemics humanity has ever faced and a leading cause of death," said Professor Stephen Colagiuri, chair of the IDF Task Force on Clinical Guidelines. "It accounts for 3.8 million deaths per year, many of which are related to cardiovascular disease."

Until recently, a key recommendation for good diabetes management was to lower fasting or pre-meal blood glucose levels, but recent studies suggest a link between post-meal glucose control and improved outcomes in people with diabetes. Existing global guidelines do not include the management of post-meal glucose.

The guideline also includes the 1,5-anhydroglucitol blood test, GlycoMark, and continuous glucose monitoring as emerging technologies for measuring post-meal glucose.

GlycoMark is an FDA-approved test for monitoring intermediate glycemic control by measuring the levels of a monosaccharide 1,5-anhydroglucitol (1,5-AG) in blood. Studies have shown that the 1,5-AG test is a specific index of postprandial hyperglycemia (elevated after-meal glucose levels) and short-term glycemic control - providing a useful complement to A1C testing.

GlycoMark is being used in clinical practices and is available at major reference laboratories, including Quest Diagnostics, LabCorp, Esoterix, Mayo Medical Laboratories, ARUP Laboratories and Specialty Laboratories.

In a study published in the journal Diabetes Care, the GlycoMark test reflected after-meal glucose levels more robustly than the A1C test. The study also showed that GlycoMark was able to reveal dramatically different after-meal glucose levels in patients with similar A1C levels.

GlycoMark is being commercialized by a partnership between Toyota Tsusho America (New York), Nippon Kayaku (Tokyo) and the BioMarker Group (Kannapolis, North Carolina), with product activities centered in the North Carolina Research Campus in Kannapolis.


Amber Master Fund adds stake in IVL, French home care firm

Amber Master Fund (Cayman Islands) has increased its holding in LVL Medical Group (Lyon France) to 18.68%, making it the single largest shareholder after the company's founder, Jean-Claude Lavorel, who holds 42% of the capital but exercises 54.6% of the voting rights.

Specializing in home-based medical assistance services, LVL saw its share price jump 130% over the past year as it tamed profitability problems due to a too-rapid expansion into Germany in 2003.

In July, the company reported a further expansion in Germany with two more acquisitions reinforcing its foothold in the populous northern state of Schleswig-Holstein. LVL draws 22% of its annual revenue in Germany, while France, where the company is ranked third in market share, accounts for the majority of sales.

LVL installs equipment for prescribed home care and provides patient and caregiver training and medical device maintenance. The company operates in three care areas — respiratory assistance and treatment of chronic respiratory insufficiency; perfusion, nutrition and insulin therapy services, including chemotherapy, antibiotic therapy, pain management or chronic digestive illnesses; and home support furnishing such as beds, lifts and wheelchairs.

Hedge fund Amber Master Fund invested in a French debt instrument for LVL in 2004 called OCEANE (option de conversion et/ou d' change en actions nouvelles ou existantes) where, with the termination of the three-year loan, it could either receive a cash reimbursement of €41 for each debt instrument, or trade each OCEANE share for 4.18 actions of LVL, an exchange rate reported in August.

Though LVL reported a steady 16% increase in sales to €46 million ($65 million) and exceeded projections with a 37% gain in net income, the Paris stock exchange pushed the share price down 2% to €22 ($31) and it has surfed just below that value since.

Lavorel said in a July interview with analysts that the expansion in Germany has been marked by costly closings and consolidations of acquired care facilities but that the market promises revenue growth almost four times greater than projected over the near term in the French market, which he said is far more rigid for home care reimbursement from the state health insurance fund.


Accounting 'irregularities' probed by Symmetry in its UK unit

Symmetry Medical (Warsaw, Indiana), a provider of products to the global orthopedics industry and other medical markets, said the audit committee of its board has initiated an independent review of "apparent irregularities" with respect to the company's accounting policies and practices at its operating unit located in Sheffield, UK.

Based on information reported by company management, certain transactions at issue appear to have resulted in the overstatement of revenues by that unit dating back to 1999, well prior to Symmetry's acquisition of the Sheffield operations in June 2003.

From its initial review, management estimates that the overstatement of revenue and income before taxes for the entire nine-year period amounts to between $12 million and $16 million.

Symmetry said the employees at the UK unit believed to be primarily involved in the accounting activity in question, including its senior VP for Europe, are either no longer with the company or have been suspended, pending the completion of the review. The audit committee said it believes that it may be necessary for the company to restate its financials for the periods subsequent to the date of the Sheffield acquisition.

Symmetry is a provider of implants and related instruments and cases to the orthopedic device industry and also produces such products for companies in other segments, including the arthroscopy, dental, laparoscopy, osteobiologic and endoscopy sectors. It also provides limited specialized products and services to non-healthcare markets, such as the aerospace market.


China Sky One wins bid, receives $1.5M grant for cancer testing

China Sky One Medical (Harbin, China), a manufacturer and distributor of pharmaceutical, medicinal and diagnostic products in China, said it has won a bidding process organized by the Chinese Ministry of Science and Technology for a $1.5 million grant to further develop its six Early-Stage Cancer Diagnostic Kit project. The six products, which will enter clinical trials in the first half of 2008, were created by First Bio-Engineering, a wholly-owned subsidiary.

The company will receive $1.5 million over two years, 60% of which was received last month and 40% of which will be received in the beginning of 2008. The grant will support China Sky's R&D efforts on the six products. The clinical trials that will begin next year will test sensitivity, specificity and accuracy of the products.

Upon commercial launch, the test kits will be used for the fast screening and supplementary clinical diagnosis for various cancers, including the Colloidal Gold Rapid Diagnosis Reagent Kit for each of lung, stomach, intestinal, liver, pancreatic and ovarian cancers.

Yanqing Liu, company president/CEO of China Sky, said, "This project aims to develop cancer diagnosis techniques and provide them to domestic hospitals at an affordable cost. This again speaks to our commitment to enhancing the overall health of [the] Chinese people."


J&J fund launched to spur diabetes research in UK

Johnson & Johnson (J&J; New Brunswick, New Jersey) has launched a £500,000 fund available to life science companies in England's South East region to accelerate research into the diagnosis and management of diabetes and related illnesses. J&J said the funding is aimed at stimulating R&D of diabetes diagnosis and management.

The South East region has the highest concentration of medical technology companies in the UK, with about 600 firms. Taken together, they provide one-third of the life science sector's jobs nationwide.

The fund is being financed by J&J 's Ortho-Clinical Diagnostics (Raritan, New Jersey) unit and the corporate Office of Science and Technology in conjunction with the South East Health Technologies Alliance, Finance South East and the South East England Development Agency.

The deadline for proposals is Nov. 17. The fund is likely to offer two awards of £125,000, two of £75,000 and four of £10,000.

The fund is only open to companies in Kent, Surrey, Sussex, Hampshire, Berkshire, Buckinghamshire, Oxfordshire and Milton Keynes, though academic institutions from elsewhere will be able to apply.


IsoRay and Belgian firm in brachytherapy agreement

IsoRay Medical, a subsidiary of IsoRay (Redmond, Washington), has signed a letter of intent with International Brachytherapy (IBt; Seneffe, Belgium) to form a global strategic alliance focusing on worldwide sales of brachytherapy solutions in the treatment of prostate cancer and other malignant-tissue cancers.

IsoRay is a medical isotope company focused on brachytherapy solutions for prostate cancer and other malignant tissue cancers through use of its proprietary Cesium-131 radioisotope, marketed under the name Proxcelan. The company said Cesium-131 is "the most significant scientific advancement in prostate cancer brachytherapy in more than 20 years."

Major elements of the proposed alliance include the future marketing of IsoRay's Proxcelan Cesium-131 brachytherapy seeds and Iodine-125 brachytherapy seeds in Russia. It includes planned distribution in 19 European countries using IBt's established distribution channels.

IsoRay said it will continue to develop a new generation of Cesium-131 brachytherapy sources using IBt's polymer seed technology and automated manufacturing processes, which it said "should further differentiate Cesium-131 in the cancer therapy market."

"This letter of intent represents another major step in the strategic business plan for IsoRay as we continue to grow the domestic market for Proxcelan and begin taking advantage of growth opportunities and demand worldwide," said Roger Girard, CEO and chairman of IsoRay.

Girard said the increasing awareness of brachytherapy and particularly Cesium-131 as a treatment option in the U.S. and other parts of the world was a key factor in the entry into the letter of intent with IBt.

"Through this joint effort, we will have access to new channels to distribute Cesium-131 technology to the growing European market and other emerging markets," he said. "By obtaining access to IBt's expertise and existing distribution channels, we will be in a position to meet the increasing demand for the latest technology by patients and physicians abroad who understand the therapeutic and quality of life benefits of using brachytherapy."

IsoRay said the alliance will form the basis of a collaboration between the two companies in the areas of R&D and sales and marketing.

IsoRay said it intends to collaborate with IBt to complete the research and development process to design and build new-generation Cesium-131 brachytherapy sources using IBt's polymer seed technology and advanced automated manufacturing processes.

It also may in the future manufacture Iodine-125 polymer seeds for worldwide distribution, depending on market conditions.

IsoRay and IBt said they will collaborate on efforts to optimize manufacturing processes and locations based on economic conditions and access to specific markets. IsoRay said it will collaborate with IBt to develop new technologies, which may include bio-absorbable polymer technology, for use in multiple cancer indications.

IsoRay and IBt will negotiate a five-year exclusive performance-based distribution agreement for IBt to sell Proxcelan Cesium-131 brachytherapy seeds in Europe, with rights for other parts of the world to be determined.

IBt said it will grant IsoRay the exclusive right to market the future polymer Cesium-131 seed and the polymer Iodine-125 seed in North America and South America.


Plexus Malaysian facility receives PMA evaluation OK from FDA

Plexus (Neenah, Wisconsin), a contract manufacturer of electronics products, reported that one of its facilities in Penang, Malaysia, has received approval from the FDA, through its pre-market approval (PMA) supplement evaluation process, to manufacture Class III finished devices on behalf of a large medical OEM.

CEO Dean Foate said, "This is another significant milestone in our more than 20-year history of supporting the increasingly global outsourcing requirements of medical device OEMs. Plexus has three FDA-registered manufacturing facilities — in the U.S., Mexico and Malaysia — of which two now are approved to manufacture finished Class III medical devices."

Andy Hyatt, a VP of the company's Medical Sector, added, "We believe Plexus is one of the first contract manufacturers to have an Asian facility with FDA approval to manufacture finished Class III medical devices."


Allied Respiratory buy grows Air Liquide's UK 'footprint'

After entering the UK homecare and medical gases market in May with the acquisition of Linde UK, Air Liquide (Paris) last month said it will now have an even larger "national footprint" in Britain's respiratory homecare market with the acquisition of the respiratory homecare businesses of Allied Healthcare Products (St. Louis).

Air Liquide will acquire Allied Respiratory and Medigas (together, Allied Respiratory), providers of unified oxygen services including concentrators, directly to customers in the South East of England and Northern Ireland as well as cylinder gases in Scotland. The payment is denominated in sterling and consists of an initial consideration of £36.5 million with £500,000 held back until certain conditions are met.

Allied Respiratory provides unified oxygen services including concentrators directly to customers in the South East of England and Northern Ireland as well as cylinder gases in Scotland. The consideration is denominated in sterling and consists of an initial consideration of £36.5 million with £500,000 held back until certain conditions are met.

With the acquisition, the combined Air Liquide businesses will serve over 20,000 patients in England and Northern Ireland, particularly in the highly populated area of the South East, with homecare sales of around €34 million.

In the UK, the National Health Service (NHS) has required an increased quality in homecare services, thus attracting its interest, Air Liquide said. Today, patients in Britain are mainly treated for chronic obstructive pulmonary disease in their home.

In other European countries, the group has developed an enlarged offer covering more treatments, respiratory or not, in the same home setting. Allied Healthcaregrew a respiratory homecare business serving 14,000 patients.

Jean-Marc de Royere, senior VP in charge of the Healthcare World Business Line and member of the executive committee of the Air Liquide Group, called the acquisition "an excellent base for Air Liquide — which now becomes No. 2 in the British market — to further develop homecare services across the country. It fits exceptionally well in our homecare plan to implement an extensive network in the growing European markets, to the benefit of our customers."

The Healthcare World Business Line of Air Liquide is a global provider of medical gases, homecare and medical hygiene with 7,000 employees in 35 countries and sales of €1.7 billion in 2006. Its customers include 5,000 hospitals and 300,000 patients throughout the world.

Air Liquide says it also has expanded its services for other chronic diseases, for example diabetes in France. These treatments are being developed in addition to hospital care and allow patients to have a better quality of life and the community to enjoy a reduction in costs.

Sarah Eames, interim CEO and deputy chairman of Allied, said, "As we move forward, Allied will continue to concentrate its efforts on expanding the company's significant UK branch network, which provides homecare services and flexible staffing to local governments and Primary Care Trusts. "Allied is committed to providing a full spectrum of disease state management programs to sustain patient independence and mobility in the home."

David Moffatt, CFO of Allied, said that the company "will utilize the proceeds from the transaction to pay down debt and invest in information technology that will enable the company to more efficiently partner with local governments in patient care management." We are optimistic about the growing market potential that exists in the UK, and look forward to moving ahead with a significantly strengthened balance sheet," he said.