Diagnostics & Imaging Week Contributing Writers

Moving on: Gavriel Meron, founder, longtime CEO, president, member of the board of directors and uniting impetus behind Given Imaging (Yokneam, Israel), who resign-ed in mid-June from the company he started in 1998.

That turn of events followed the apparent success story of a company that turned science fiction into reality with the introduction of the PillCam, a swallowable camera in a capsule that revolutionized endoscopy and gastroenterology.

Though reimbursement in the U.S. for the initial product PillCam SB (small bowel) has been exceedingly successful, there has been slow reimbursement for the PillCam ESO (esophageal), slowing company growth.

To hasten market penetration in the face of increasing competition, Given mounted a concentrated management shakeup with a revamped sales effort and strategy.

Yuval Yanai was appointed CFO last September and Christopher Rowland became senior vice president of business development and corporate strategy and Ehud Har-Chen became senior vice president of human resources, both in February.

In April, Nachum (Homi) Shamir was brought in by the controlling shareholders to replace Meron as CEO and president, and Meron was given a new role as executive vice chairman.

In May, the company's stock price began a fall, responding to "disappointing financial results."

Meron told Medical Device Daily that the problem [of falling stock price] is not necessarily inherent in the company. He said, "I still believe that the company has a great future and growth opportunity even just in the small intestine," noting that Given is continuing to develop new products and features of significance to the gastrointestinal market.

"Stock price reflects more about communication with the public, and managing expectations, rather than the actual company results and expectations," Meron said. "We hope that more will be done in this arena to help correct this."

For example, in April, the U.S. Patent and Trademark Office issued a decision confirming the validity of 13 of the original 17 claims of Given Imaging's first U.S. patent, answering a challenge by Japanese imaging giant Olympus (Tokyo), filed in December 2003, but the positive outcome did not get much coverage, Meron said. He cited Given's broad patent estate of more than 300 patent applications worldwide and 43 issued patents in the U.S., Eur-ope, Japan, Australia, Korea and Israel.

He said the patent infringement suit by Olympus is more of an annoyance, and may be only "a pre-emptive strike," but it is not being portrayed as such.

Olympus bought a patent from Boeing (Chicago) in July 2005, titled "High Frequency, Low Power Light Source for Video Camera," which expires in December 2008. Boeing had approached Given Imaging in November 2002, offering a license to that patent, but when Given demonstrated its position that the PillCam capsule doesn't infringe the patent in any way, Boeing abandoned its pursuit of the issue early in 2004.

"But 'patent infringment' is news, with these facts little known," Meron said.

A more than 30-year veteran economist who handled large-scale operations such as the manufacture of the Mer-kava tank in the Israeli army, Meron has worked in the medical field for 15 years, including with Interpharm, which was Israel's flagship biotechnology company.

On June 12 Given announced that Meron had "resigned in order to pursue other interests."

He continues to be both a visionary and deeply practical analyst, as well as an articulate spokesman for the company he founded, telling MDD, "I am sure that in the long-run, Given will forge ahead according to plan and take a significant market share. In the meantime, I am pursuing other interests which include Daf Yomi [the daily page, a higher Judaic learning] that would not have been possible under my intensive, albeit enjoyable work schedule during the past eight years."

Meron said, "I have many people all over the world to thank for bringing the vision of Given Imaging into a successful reality, and am satisfied that the platform and infrastructure are in place that puts the company into a position to bring improved healthcare with cost savings to the patient, the health system and to society."

Gilde reports 1st closing of new fund

Gilde Healthcare Partners (Utrecht, the Netherlands), a life sciences venture capital group, has reported the first closing of Gilde Healthcare II (GHC II), its second life science venture fund.

Current commitments to GHC II amount to EUR 85 million ($107 million), with further closes anticipated later this year. The fund expects to reach a final close of at least EUR 125 million ($158 million), the company said.

GHC II has attracted a number of major new investors as well as "significant support" from existing investors, Gilde said. It said the fund has been raised in a relatively short time frame from investors across continental Europe and that further closes may include investment from the U.S.

Investment in the first close included 47% from banks, 24% from fund of funds, 11% from pension funds, 6% from biotech cross-over funds and 12% from family offices and management.

GHC II will invest principally in privately held European start-up companies, Gilde Healthcare said. It will invest broadly across the healthcare sector including therapeutics, diagnostics, medical devices and enabling technologies. Investment size will range between EUR 1 and EUR 12 million per portfolio company.

Pieter van der Meer, one of the managing directors, said, "This is a very satisfying result in what is generally regarded as a challenging fund-raising environment. We are delighted to have attracted such significant support from both new and existing investors and expect to announce further commitments to GHC II soon. We believe that the timing for investing in healthcare is right."

Gilde Investment Management has EUR 2.0 billion ($2.5 billion) under management in private equity, of which more than EUR 200 million ($250 million) is in specialized healthcare venture funds.

Primagen says DFS tech is validated

Primagen Holding (Amsterdam, the Netherlands), an emerging company in molecular diagnostics for infectious diseases and cancer, said that its special dry filter paper (DFS) technology has been internally validated for use with the Roche Cobas Amplicor HIV-1 test v 1.5.

With the Primagen DFS system, body fluid samples (e.g. blood, plasma, urine, mother's milk, etc.) are sent as dried spots on Primagen filter paper to central testing laboratories that provide HIV-1 viral load testing services. The DFS samples are stable for months at ambient temperature, do not require any special handling (e.g. time limitations, refrigeration or dry ice) and, most importantly, are not infectious.

The company said DFS would give HIV/AIDS care providers a simple, cost-effective sample collection system for patients requiring monitoring of their HIV-1 viral load using tests including the Roche Cobas Amplicor test.

Full results of the study were presented at the 14th International Symposium on HIV and Emerging Infectious Diseases in Toulon, France, in the latter part of June.

"With Primagen's DFS technology, care providers can monitor more HIV-1 patients because samples are simpler to collect and cost less to transport when in a non-infective state," said Bob van Gemen, CEO of Primagen. "These benefits are particularly important in resource-poor settings, where, if healthcare providers can lower the cost of sample collection and shipment, they can free up funds for patient care."

Cylex signs Japanese distributor

Cylex (Columbia, Maryland), a life sciences company focused on immune function testing, reported a supply agreement with Medical & Biological Laboratories Co. Ltd. (MBL) to distribute Cylex's ImmuKnow assay in the Japanese market.

Distribution of the assay throughout Japan will begin immediately.

Cylex's flagship product, ImmuKnow, is the first and only FDA-cleared cellular assay for measuring and managing the health of a patient's immune system. The company said it has "significantly expanded" its customer base in the international market and that this agreement marks ImmuKnow's official entry in the Asian market.

"MBL [is] a leader in the autoimmune, immunology and infectious disease diagnostic markets in Japan," said Tim Ellis, president of Cylex. "ImmuKnow's breakthrough into the Asian market further confirms the acceptance of the assay, not only in the U.S., but on a global level, as well."

The assay is currently used in the management of transplant recipients at more than 50 U.S. medical centers. ImmuKnow also is being utilized in widespread research applications.