A Medical Device Daily
Cardica (Redwood, City, California) and Cook Medical (Bloomington, Indiana) reported that they have expanded their original agreement regarding the development of vascular closure devices first disclosed in June (Medical Device Daily, June 20, 2007). Cook will pay Cardica up to $750,000 for the development of an additional product for the closure device product line.
As part of the prior agreement, Cardica has received $900,000 in fees and is eligible to receive about $2.7 million in additional milestones during the development effort, as well as royalties on future worldwide sales of the device.
Similar to the original agreement under which Cardica developed the Cook Vascular Closure Device (CVCD), under this amendment Cardica is responsible for product design and preclinical development and is entitled to receive royalties on worldwide sales by Cook. Cook is responsible for clinical development and regulatory approval and has exclusive commercialization rights.
“We are excited to apply Cardica’s innovative product design and development to the next device in our vascular closure product line, as we believe that this technology has the potential to effectively address large and growing market needs,” said Brian Bates, senior VP of business development for Cook Medical. “We plan to launch the first product of the Cook Vascular Closure Device line in Europe in the next six months.”
“We look forward to expanding upon our excellent working relationship with Cook by broadening our closure device product line using our proprietary microclip technology,” said Bernard Hausen, MD, PhD, president/CEO of Cardica.
An estimated 8.5 million diagnostic and interventional catheterization procedures were performed worldwide in 2006, all of which required access site closure either by manual compression or alternative vascular closure devices and techniques. In about 45% of these cases, a closure device was used, and that number is steadily increasing. Cook estimated that the worldwide market for femoral artery closure devices alone is about to be over $750 million by 2008.
The potential advantages of the closure devices developed by the companies include, they said, a simple user interface, the ability to place it through the same introducer sheath used for the interventional procedure for greater convenience and speed, scalability, and lower cost of goods.
In other financing news:
• Healionics (Redmond, Washington) provider of biomaterial solutions to enhance the biocompatibility and performance of medical devices, reported a partnership deal with Strategic Applications (SAI; Libertyville, Illinois), a manufacturer of catheter and infusion devices.
Healionics’ deal with SAI will fund a catheter cuff study — the amount not disclosed — that will compare Healionics’ STARcuff to other catheter cuffs available on the market. The deal also includes an exclusive supply and distribution agreement.
Additional terms of the deal include SAI’s purchase of STARcuffs from Healionics for assembly on SAI catheters, and royalty payments to Healionics based on net sales.
“STARcuff is a very promising solution to reduce infections associated with long-term catheters,” said Michel Alvarez, COO of Healionics. “The STARcuff is designed to allow the patient’s own tissue to grow into it and heal — providing a natural skin seal or barrier to help prevent bacteria from entering the body along the outside of the catheter.”
Hospital-acquired infections that kill people are often catheter-related infections derived from long-term catheter use. The Center for Disease Controland Prevention (Atlanta) estimates 1.7 million hospital-acquired infections each year that result in nearly 100,000 deaths, and about 250,000 central venous catheter-related infections each year resulting in about 60,000 deaths.
• Bausch & Lomb (B&L; Rochester, New York) reported that it is initiating cash tender offers and consent solicitations for four series of outstanding debt securities and two series of outstanding convertible debt securities.
These tender offers and consent solicitations are being conducted as part of the financing associated with the proposed $3.67 billion merger between the company and an affiliate of Warburg Pincus that was first disclosed in May (Medical Device Daily, May 25, 2007).
Completion of the tender offers and consent solicitations is not a condition to completion of the merger.
The tender offers and consent solicitations with respect to each series of outstanding debt securities will expire at 8 a.m., EDT, on Oct. 19, unless extended or earlier terminated by the company. In order to be eligible to receive the purchase price, which includes the consent payment, holders must validly tender, and not validly withdraw, their debt securities prior to 5 p.m., EDT, on Oct. 3, unless extended or earlier terminated by the company.
• VeriChip (Delray Beach, Florida), a provider of radio frequency identification (RFID) systems for healthcare and patient-related needs, said its board authorized repurchase of up to $1.5 million of its common stock over the next four months.
As of Sept. 19, the company had about 10.3 million shares of common stock outstanding.
“We believe our stock price does not reflect the current or future prospects of our business,” said Scott Silverman, CEO/chairman of VeriChip. “As we announced this morning, we have made significant progress in generating revenue earlier than expected from sales of our VeriTrace and VeriMed Patient Identification Systems. In addition, our Healthcare Security and Industrial segments remain strong. Despite this, our stock has lost more than half of its value since mid-July. Our decision to repurchase shares reflects our confidence in the future prospects of VeriChip.”
VeriChip develops RFID systems to locate and protect people and assets. The company recently began marketing its VeriMed Patient Identification System for identifying people who arrive in an emergency room and are unable to communicate. This system uses the first human-implantable passive RFID microchip, the implantable VeriChip, FDA-ceared for medical use in 2004.
The company’s RFID products were the subject of a recent Associated Press article that claimed an association between implantation of the chip and a heightened incidence of cancer in laboratory animals (MDD, Sept. 13, 2007).