The Cleveland Clinic, in collaboration with Fairfax Renaissance Development (FDRC) and more than 20 biomedical and academic institutions, last month reported that it will receive $60 million from the State of Ohio to develop a Global Cardiovascular Innovation Center (GCIC).
The clinic said the grant is the largest-ever made under Ohio's Third Frontier Project, the state's multi-billion-dollar effort to expand its high-tech research capabilities, promote innovation and create high-paying jobs.
The GCIC will be designated as the Wright Mega-Center of Innovation, enabling the project to draw significant state financial support for operations and capital expenses. The funding will be granted over five years.
"The vision for the GCIC is that this is going to be a national entity and that it will drive new technology and new opportunities into the cardiovascular field," Chris Coburn, executive director of Cleveland Clinic Foundation Innovations, the clinic's technology commercialization arm, told Cardiovascular Device Update. He said this is "a $200 million initiative if you count state money plus the match."
Working with its partner organizations, GCIC will also recruit emerging cardiovascular companies and units of established firms to Cleveland and throughout Ohio so that the companies can take advantage of the GCIC capabilities. The hope is to develop a specialized version of Minnesota's highly successful LifeScience Alley but with a much narrower focus.
"In some of these [economic development] regions," Coburn said, "growth has been across many disciplines; we are concentrating solely on cardiovascular," an area that he noted is big enough to encompass the clinic's ambitions "since it's a $400 billion sector."
Heart failure and its two major causes —atherothrombotic vascular disease and valvular heart disease will be the center's main clinical focus, and Coburn stressed the importance of narrowing the field. "We think keeping this relatively tight-focused will allow GCIC to quickly become a presence in the industry and also to add value for corporate partners."
The Cardiovascular Coordinating Center of the Cleveland Clinic will be a critical element of the GCIC. The Cardiovascular Coordinating Center is recognized as an academic research organization with long-standing, high-level relationships throughout the pharmaceutical and medical technology industries, according to the clinic. The center will provide pre-clinical and clinical trial support to Ohio companies involved in cardiovascular medicine and will facilitate linkages as innovations moved through the commercialization process.
Companies working with the GCIC also will have the benefit of a working relationship with the clinic, which has been ranked No. 1 in the nation for cardiac care by U.S. News & World Report every year since 1995.
According to Coburn, the GCIC will develop and acquire new technologies for the treatment of cardiovascular disease, spin off new companies and recruit experienced leaders and emerging companies to establish an internationally recognized cluster of cardiovascular expertise. It will build upon Cleveland Clinic's cardiovascular clinical expertise, its multidisciplinary approach to understanding the factors underlying heart disease and the clinic's history of innovation.
The GCIC is a partnership between Cleveland Clinic, four institutions, 16 companies and FRDC, a community development corporation. The clinic and FRDC will work together to promote economic development and growth locally. FRDC will build, own and manage the GCIC Accelerator, which will be the home for GCIC member companies and the base of operations for the GCIC. The building will be located adjacent to the Cleveland Clinic campus right next to the Lerner Research Institute.
The GCIC will feature a commercialization structure built upon CCF Innovations and will in-license cardiovascular technologies from around the world and combine them with capabilities at its five member institutions — Case Medical Center (Cleveland), Ohio State University (Columbus), the University of Cincinnati, and the University of Toledo — to develop new products and deploy them through Ohio-based companies.
Arteriocyte, Athersys, Cardiac Power, Cell Targeting, Frantz Medical, IntElect, P&G, PeriTec, PrognostiX, RegenRx, Volcano and Zin Technology are among the Ohio companies participating in the project. Medtronic (Minneapolis), Pfizer (New York), IBM (Armonk, New York) and GE Healthcare (Waukesha, Wisconsin) are among the national corporate collaborators involved. Cleveland Clinic is also collaborating with FDRC. Team NEO, Omeris and BioEnterprise to develop the Cardiovascular Innovations Center.
Coburn said, in the early stages, the most critical thing is to find somebody to lead the GCIC as its general manager.
"From our standpoint," he said, "we're trying to get someone who has been senior in the cardiovascular industry and who has some venture experience, either as an investor or board manager or board member of a company, and to really build this initiative around that person." In addition, he said that the company would be looking for at least a dozen additional new hires to work on product development and IP acquisitions.
The GCIC will be headed overall by Steven Nissen, MD, principal investigator and chairman of Cleveland Clinic's Department of Cardiovascular and current president of the American College of Cardiology (Washington).
Coburn said he hopes the new GCIC Accelerator will be ready for business in 18 to 24 months.
Funding will support new Levacor effort by World Heart
World Heart (Oakland, California), a maker of circulatory support systems for the heart, currently in the process of realigning operations, reported completing the second closing of a private placement transaction bringing it a total of $14.1 million. It said this follows shareholder approval of the financing at its annual and special shareholders meeting Dec 20.
Existing investors, including Maverick Ventures Management, Special Situations Fund and Medical Strategy (on behalf of Medical BioHealth-Trends), as well as new investors, including Greenway Capital, and certain members of WorldHeart's management team, participated in the financing.
The company in a statement said that the new funding, "along with previously initiated restructuring and cost-containment efforts, is expected to sustain operations" through initiation of U.S. clinical trials for the company's next-Levacor Rotary ventricular assist device (VAD) product in late 2007 and on into 2Q08.
Jal Jassawalla, president/CEO of WorldHeart, said the financing will enable the company to focus "on the final development, evaluation and eventual commercialization of our advanced Levacor Rotary VAD. We have completed Levacor clinical and technical training at two prestigious medical centers in Canada and expect to initiate clinical use at these centers early next year, followed by a U.S. feasibility trial in the latter half of 2007.
"Thus far, we have been very pleased with the performance of the Levacor in our European feasibility trial," Jassawalla said. "As a result, we have seen strong worldwide interest from other leading clinical centers wishing to participate in the clinical trials."
The company on Dec. 14 reported that it would discontinue the RELIANT trial of the Novacor. However, the company said it will continue to sell and support that product for its approved bridge-to-transplant indication.
World Heart originally entered into a purchase agreement with investors for the private placement on Nov. 13. Gross proceeds from the two-tranche financing totaled around $14.1 million at 25 cents a common share. About $2.8 million of the financing closed on Nov. 16, with the second closing of about $11.3 million just completed.
World Heart also reported making progress towards its previously reported restructuring and realignment, unveiled in November, including reducing its workforce by half. The company said that the realignment reduces spending and positions it to deal with "diminished demand" for its first-generation Novacor LVAS.
The reductions related to the manufacturing, selling and administrative costs primarily associated with its Novacor LVAS.
Also, earlier in December World Heart submitted an application to transfer the listing of its common shares to the Nasdaq Capital Market. In November it received a notice from the Nasdaq indicating that for the quarter ended Sept. 30 its stockholders' equity did not comply with the minimum $10 million equity requirement for continued listing. Transfer to the Nasdaq Capital Market gives World Heart about 180 days to comply with the minimum bid price rule. If approved, World Heart will begin trading on the Nasdaq Capital Market under its current trading symbol WHRT.
The company describes the Levacor as a fourth-generation rotary VAD. It is, according to World Heart, the "only bearingless, fully magnetically levitated implantable centrifugal rotary heart pump in clinical trials." The magnetic levitation is employed to fully suspend the spinning rotor, its only moving part, inside a compact housing, by means of an arrangement of magnetics designed to provide optimal system simplicity and reliability. The company most recently has promoted the concept of developing two types of heart assist devices, one pulsatile (having a beating action), the other non-pulsatile.
CryoLife unveils strategy to focus entire effort on cardiovascular
Biomaterials and biosurgical processing firm CryoLife (Kennesaw, Georgia) and Regeneration Technologies (RTI; Alachua, Florida) last month reported an agreement in which CryoLife will stop accepting donated human orthopedic tissues as of Jan. 1 and will transition all orthopedic tissue products and processes to RTI.
The arrangement follows the company's report in November that, as the result of a review of various options, it had decided against a sale of the company or sale of any of assets, in order to pursue new strategies for growth.
The strategy decided upon clearly is to focus exclusively on the cardiovascular tissue sector.
The companies said that the agreement also includes the transfer of "certain physical assets," those assets not disclosed. They said that the new arrangements involve no cash.
"This agreement will allow each gift of donated cardiac, vascular and orthopedic tissue to be processed by an organization that has a greater focus on surgeries, utilizing that specific type of donated tissue, thereby improving how these gifts are procssed for their intended purpuse," said Steven Anderson, president/CEO of CryoLife. He added:" CryoLife will now sharpen its corporate focus on its core business of developing and providing innovative products and presered tissues to cardiac and vascular surgeons and their patients."
RTI will continue to distribute its exising cardiovascular tissue inventory, and CryoLife will continue to its existing orthoedic tissue inventory through Dec. 31, 2008.
Boston Scientific in voluntary recall of guide catheter
Boston Scientific (Natick, Massachusetts) reported that it was voluntarily recalling certain lots of the Mach 1 guide catheter in the U.S. It said the total number of devices involved in the recall is estimated at 51. The guide catheter is a tube threaded through the body allowing delivery of medical devices to the heart to treat coronary artery disease.
The company said it is initiated the recall because it determined that in some product units, excess strands of resin may exist in the inner lumen near the hub of the guide catheter. If the excess resin is present in the catheter and detaches during a procedure, there is the potential for embolization, in which strands of resin could obstruct a blood vessel.
An obstruction of a small blood vessel by an embolism may not cause tissue damage, it said. But it added: "however, an obstruction of a major blood vessel or multiple small blood vessels could result in serious complications such as stroke, heart attack or kidney problems."
The company said there have been no product complaints reported to it related to this issue, and no reported injuries.
The products affected by this recall were distributed only to hospitals in the U.S. The company said it is notifying affected hospitals via recall notification letters requesting that use of the product affected by this recall should cease immediately.
Suits allege undisclosed Atricure-Cleveland Clinic connection
A class action lawsuit has been filed in the U.S. District Court for the Southern District of New York on behalf of all common stock purchasers of AtriCure (West Chester, Ohio) related to the company's initial public offering, with the class period from Aug. 4, 2005 through Feb. 16, 2006, inclusive.
The complaint charges the registration statements in connection with the initial public offering, about Aug. 4, 2005, failed to disclose that the Cleveland Clinic (Cleveland, Ohio) — where a significant portion of procedures with the company's products were being performed — was an investor in the company and that doctors from the clinic had been paid consultants to the company.
On Feb. 16, 2006, AtriCure reported financial results for 4Q05 and the fiscal year ended Dec. 31, 2005, saying that it was experiencing a "negative impact" on its business due to the revelations concerning the connection with the clinic, and AtriCure's common stock price dropped from $10.36 a share to $8.04 a share.
A similar lawsuit was filed against Atricure by the law firm of Lerach Coughlin Stoia Geller Rudman & Robbins (New York/Washington).
Cleveland Clinic and Boston Scientific in stent deal
Commenting on a deal that originally received no fanfare, The Cleveland Clinic (Cleveland, Ohio) last month acknowledged that in September it had struck an agreement for cardiovascular stents with Boston Scientific (Natick, Massachusetts), under a two-year "preferred vendor" agreement.
It acknowledged the arrangement following a report by CNBC that the deal was exclusive, but a clinic representative said that the institution's physicians could use either Boston Scientific's stents or those made by Johnson & Johnson (New Brunswick, New Jersey).
Eileen Shiel, a spokeswoman for the clinic told new outlets questioning the report that physicians working at the clinic had determined that stents from the two companies were "clinically equivalent," that doctors could use the devices from either company and that there was no endorsement by the clinic of one over another.