A Medical Device Daily

Immunicon (Huntingdon Valley, Pennsylvania) reported late last week that it is seeking to end its exclusive arrangement with Veridex (Warren, New Jersey), a subsidiary of Johnson & Johnson (New Brunswick, New Jersey).

In an demand filed with the American Arbitration Association (New York), Immunicon seeks termination of the 20-year exclusive worldwide agreement with Veridex to sell Immunicon’s cancer diagnostic products, revocation of all licenses held by Veridex under that agreement, and compensatory and punitive damages based on “repudiation and fundamental breaches by Veridex of its contractual, agency and other fiduciary obligations to market, sell and distribute Immunicon’s cancer diagnostic products.”

Veridex is appointed as exclusive sales agent, licensee and distributor responsible for selling Immunicon’s cancer diagnostic products and remitting royalties on the sales of reagent kits to Immunicon. In its arbitration demand, Immunicon alleges that Veridex breached its “obligation to use its best efforts to market” those products by “squander[ing] the opportunity to promptly and aggressively launch the Immunicon products in 2004” and thereafter “reneg[ing] on its express commitment to engage and deploy sales representatives to personally promote, or detail, the Immunicon products to doctors.”

According to the demand, “[w]hile seriously damaging to Immunicon and its shareholders, Veridex’s actions are depriving cancer patients — who are in severe need of the best treatment and testing — and their doctors of Immunicon’s FDA-approved cancer diagnostic tests.”

Immunicon wants the arbitration to take place before a single arbitrator, and an award rendered within six months. Selection of the arbitrator is expected to occur within 45 days. Immunicon has retained Jonathan Lerner, of the law firm of Skadden, Arps, Slate, Meagher and Flom to represent it in the arbitration.

Immunicon also said it has discontinued its previously-disclosed contract audit following receipt of Veridex’s response to the audit. Immunicon alleges that “Veridex refused outright to permit a meaningful audit of its performance as exclusive sales agent and licensee for selling and marketing the Immunicon products, and erected a series of other roadblocks to a meaningful audit.”

On May 25, after Veridex was informed that Immunicon was discontinuing the audit and that Immunicon might file claims against it, Veridex notified Immunicon that it was in “material breach” of the agreement. Immunicon said it believes that Veridex’s assertion is without merit.

“We are mindful of the serious nature of the actions we are taking today, but we do not believe Veridex’s conduct has left us any choice,” said Byron Hewett, Immunicon’s president/CEO. “We are at the mercy of our relationship with Veridex because Veridex represents our only sales and marketing outlet for the cellular analysis cancer diagnostic products covered by our agreement.

Immunicon is developing cell- and molecular-based human diagnostic and life science research products, and is providing certain analytical services to pharmaceutical and biotechnology companies to assist them in developing new therapeutic agents, with an initial focus on cancer disease management.

In other agreement activity:

• I-Flow (Lake Forest, California) and GE Healthcare (Waukesha, Wisconsin) reported an agreement to form an alliance to conduct clinical trials and explore joint opportunities in the anesthesiology market.

The initial phase of the alliance between I-Flow and GE is based on conducting a multi-center, prospective, randomized clinical study on the use of ultrasound for the placement of continuous peripheral nerve blocks. I-Flow will initiate the study designed to measure the effectiveness of using GE’s compact ultrasound products for making nerves easier to find, when I-Flow’s ON-Q C-bloc is used.

Regional pain management systems are one of the fastest growing areas for ultrasound-guided procedures, the companies noted.

• MediNotes (West Des Moines, Iowa), a provider of “best-of-breed” electronic medical record solutions for small to medium primary care and specialty medical practices, said it has partnered with Welch Allyn (Skaneateles Falls, New York) to integrate Welch Allyn’s connected cardiopulmonary and electronic vital signs devices with MediNotes e version 5.1, a point-of-service, wireless data collection and documentation system.

Many of Welch Allyn’s products, including the entire EMR-ready family of electronic vitals devices such as the Spot Vital Signs LXi, the Spot Vital Signs 420 Series and the Vital Signs Monitor 300 Series, are directly integrated within MediNotes e version 5.1. In addition, Welch Allyn’s comprehensive, PC-based cardiopulmonary line contains seamless bidirectional connectivity with MediNotes e via the Welch Allyn CardioPerfect Workstation software. The Workstation is an electronic database for diagnostic records providing paperless efficiency and connectivity. Combined with other Welch Allyn diagnostic modules, the Welch Allyn CardioPerfect Workstation gives complete access to all diagnostic tests for each patient.

MediNotes serves more than 4,300 installed sites and more than 18,500 users nationwide.

Welch Allyn makes diagnostic equipment, cardiac defibrillators, patient monitoring systems, and a complete range of digital and connected solutions.

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