BBI Associate Managing Editor
and DON LONG
The first two weeks of September clearly demonstrated the breadth, depth and vitality of the cardiovascular sector, with a wide variety of deals and product-focused announcements amplifying that sector’s place atop the medical technology industry. And all of those news events were independent of the early September annual meeting of the European Society of Cardiology (ESC; Sophia Antipolis, France) in Stockholm, Sweden, which had its own large collection of news involving the sector, a report on which will appear in the November issue of BBI. Not included was the Heart Research Society (Washington)-sponsored “Policy Conference on Pacemaker and ICD Performance,” reported on in a separate story beginning on page 15 of this issue.
In the dealmaking arena, Cardiac Science (Irvine, California) and Quinton Cardiology Systems (Bothell, Washington), said as September unfolded that they had finally completed their merger, plans for which originally were revealed six months earlier. The combined company is known as Cardiac Science Corp. and is headquartered in Bothell. Its common stock began trading on the Nasdaq National Market Sept. 1 under the symbol “CSCX.” Shareholders of the companies overwhelmingly okayed the deal in special meetings held on the final day of August, with holders of about 96% of Cardiac Science common shares voting in favor and holders of about 97% of the Quinton Cardiology common shares doing likewise.
Cardiac Science is a maker of automated external defibrillators (AEDs), hospital defibrillators and patient monitor-defibrillators, while Quinton manufactures a variety of advanced cardiology products, including electrocardiographs, stress test systems, Holter monitoring systems, cardiac rehabilitation telemetry systems and cardiology data management systems. The companies also sell a variety of related products and consumables, and provide a portfolio of training, maintenance and support services. In addition to the Bothell headquarters, the new company has operations in Lake Forest, California; Deerfield, Wisconsin; Shanghai, China; Copenhagen, Denmark; and Manchester, UK.
“We appreciate the overwhelming support of the shareholders of both organizations,” said John Hinson, president and CEO of the new firm and former Quinton CEO. “We believe the new company will have enhanced prospects for revenue growth based on our expanded product portfolio, stronger distribution capabilities in both the domestic and international markets, and the potential to leverage combined technological expertise and manufacturing strengths.” Hinson said the focus now would be on completing integration of the two companies during the balance of 2005.
Former Cardiac Science Chairman and CEO Raymond Cohen, who will continue as chairman of the board of the new company, said, “The merger creates a significantly larger, debt-free company with excellent people, technology and products which speak well for our future prospects.” He added: “Both John Hinson and Michael Matysik, the company’s CEO and CFO, have the management expertise and leadership skills necessary to ensure [that] we realize the potential for growth in revenue and profitability.”
Pursuant to the agreement and plan of merger agreed to by the boards of directors of both companies on Feb. 28 and later amended, each share of Cardiac Science Inc. common stock outstanding immediately prior to the effective time of the merger has been cancelled and represents the right to receive 0.10 share of common stock of the new Cardiac Science Corp. Each share of Quinton Cardiology Systems common stock represents the right to receive 0.77184895 share of common stock of the new corporation.
Former Cardiac Science shareholders own about 11.4 million shares of the new company, or roughly 51.3%, while former Quinton shareholders own about 10.9 million shares, or 48.7%.
Shareholders of record as of the effective date of the merger will receive materials from Mellon Shareholder Services, the exchange agent for the transaction, with instructions on how to surrender the certificates covering their shares of the two predecessor companies for certificates of new Cardiac Science Corp. common stock issued pursuant to the merger agreement, as well as cash in lieu of any fractional shares.
A company statement said the new firm “will leverage the combined managerial, operational and technology strengths of its predecessor companies to become a global leader in the development, manufacturing and marketing of a broad range of life-saving cardiology products and services under the trusted brand names Burdick, Powerheart and Quinton.”
Aggressively positioning itself to leapfrog the state of the art in ventricular-assist device (VAD) technology, Biophan (West Henrietta, New York) unveiled on Sept. 14 an agreement with Myotech (Dedham, Massachusetts) to take a lead position in the development, regulatory approval and marketing of that company’s MYO-VAD cardiac-assist technology.
Biophan said that it would “direct” all future Myotech development programs and that it has acquired “a substantial minority” position to garner a controlling interest in Myotech. The new agreements and potential acquisition follow through on Biophan’s announcement in July of its intention to make major moves into the cardiovascular market and to develop a separate division to pursue that goal.
In unveiling that strategy, Biophan “had this [acquisition] in mind and a few other things,” CEO Michael Weiner told BBI from New York while traveling between meetings in downtown Manhattan. Weiner said that the acquisition of a controlling interest in Myotech is at Biophan’s discretion or at certain milestone points. And he repeated his company’s strategy of doing deals that will link it to big partners “to deliver them competitive advantage.”
Known for being consistently upbeat about Biophan’s activities, Weiner exuded enthusiasm concerning Myotech’s technology – its system called MYO-VAD – and its potential to move ahead of earlier-generation VAD technologies, both commercialized and under development.
The MYO-VAD is described as consisting of a flexible polymer cup which fits around the heart, coupled to a drive unit which pumps the heart to restore blood flow. Myotech terms the technology platform Mechanical Ventricular Actuation (DMVA) and says that the MYO-VAD is the first in a family of devices that will use DMVA.
As described by Weiner, a key advantage of MYO-VAD is that the device has no contact with circulating blood and thus avoids the various problems associated with the current generation of VAD devices. “Every VAD on the market requires some contact of an impeller pump with blood, but blood doesn’t like to be agitated and tends to clot,” he said. “They also require cuts into the major vessels of the aorta and heart chambers.” Additionally, he said, VADS typically produce “bruising” of the heart and require the use of follow-on blood thinner medications.
Still another advantage of the MYO-VAD is procedural. In a statement, Biophan noted that “conventional VADs take from 45 minutes to several hours to install at specialized transplant or cardiac care facilities. The MYO-VAD can be installed in about three minutes with a small incision. This procedure could potentially be performed in life-saving emergency situations at most hospitals by general surgeons. This provides the potential to extend the VAD market well beyond the small number of transplant and specialized cardiac centers today.”
Weiner noted that “a previous version” of the MYO-VAD technology has been installed in more than 700 animals “and helped to save human lives in emergency-use situations.” Beyond its use to support the heart, the MYO-VAD provides a system for delivery of drugs to the heart, he said, providing another broad path for linkup with various pharmaceutical partners.
Rhetorically, Weiner asked: This technology “is so exciting, why hasn’t someone else figured it out?” His answer: “People get caught in their own paradigms, particularly when they’ve gone to Wall Street. We watched the horizon to see if there was an opportunity for major improvement or a paradigm shift,” which he said the MYO-VAD clearly offers.
”Biophan will bring to Myotech [our] core competencies in the implantable and interventional device markets,” Weiner said, noting that the company has been “involved with the [MYO-VAD] project for several years,” and offering an opportunity to move ahead of others in the sector.
Weiner repeated Biophan’s position that its customers are not hospitals or physicians but rather major biomedical or pharmaceutical players and that the Myotech deal fits its three-part strategy: It offers a chance to partner with these big partners “to move market share in an existing or successfully performing product”; it offers a strong intellectual portfolio position; and it has “some pre-validation of interest from the big companies, and we can show them the evidence they need to do a deal with us.”
Biophan already has made a large partnership mark, via financing position taken in the company by Boston Scientific (Natick, Massachusetts) in July. In February, it reported acquiring a majority interest in Amris (Castrop-Rauxel, Germany), providing it additional patents in MRI technology. And in late August, it reported the formation of the Biophan Business Development Group, a unit that will focus on leveraging the company’s patent portfolio, supported by a $30 million fixed-price stock financing.
Biophan’s current activity in med-tech was foreshadowed in 2003, when it rolled out its plan to move from a kind of “stealth” mode to more aggressive trumpeting of its technologies – at the time nearly exclusively focused on improving the compatibility of implanted devices with MRI.
Last month, Weiner modified that a bit: “Certainly we’re going to aggressively talk about our activities,” he said, but he said that the Myotech deal did not necessarily signal an aggressive acquisition path unless a deal meets its three criteria. Besides offering a challenge to the VAD market for end-stage heart failure, the MYO-VAD technology, Weiner said, has potential applications in returning the function of congestive heart failure patients to normal pumping ability, as well as the delivery of drugs to the myocardium, or even cell-delivery applications.
He suggested the launch of clinical trials for the device in the next two to three years, though declining to offer any timelines for regulatory filings or eventual product approvals. “I think we’ll be proven to be fleet of foot,” he said in assessing future applications and partnerships linked to the MYO-VAD. “The opportunity for this technology is wide open.”
In a smaller deal, Recom Managed Systems (Greenville, South Carolina) reported that it has entered two binding, definitive agreements with cardiac products company TZ Medical (Portland, Oregon), expanding a relationship that already includes a joint venture to develop a new intracardiac catheter line.
Both agreements involve the acquisition of existing products and devices that Recom said would enhance its market share during its rollout this quarter. By expanding its market share at this early stage, the company’s noise-reduction technologies will receive maximum exposure, it said.
Showcased among its acquisitions, Recom acquired the OTC TZ Cardio Sentry event recorder, which is the size of a credit card and can be carried by patients in their shirt or pants pockets. The event recorder has been cleared for sale by the FDA and is available without prescription for over-the-counter purchase. The company said it is negotiating with global, international partners to mass-distribute OTC Cardio Sentry. Recom said it anticipates that its amplifier will quickly be deployed for OTC Cardio Sentry.
Recom acquired other devices and technologies, such as TZ’s prescription CardioSentry RX event recorder, as well as the FM Demodulator, which converts the signal from event recorders to an electrocardiograph (ECG). Both of these products are FDA-cleared as well.
“This two-pronged relationship with TZ Medical ... offers Recom yet another opportunity to use its unique, noise-reduction technology to help improve patient outcomes by providing physicians in the EP lab with better data during diagnostic and therapeutic procedures that utilize intracardiac catheters,” Pamela Bunes, president and CEO of Recom, told The BBI Newsletter. “We also are pleased to create further value for our shareholders through the revenue that will be generated by these agreements.” She added: “Of particular interest is the OTC Cardio Sentry device, and now owned by Recom, which provides patients with access to their own cardiovascular information over the counter at drugstores and outlets nationwide.”
Recom said these new technology buys expand and enhance its product suite as it proceeds to market and that the deal “fully expands and matures the company’s product line.” Prior to the TZ Medical deals, the company’s only product was the Model 100 Heart Monitor, a Holter monitor that was cleared by the FDA in January 2004 and is undergoing clinical trials at Duke University Medical Center (Durham, North Carolina). “With my experience in the healthcare industry in the past [I felt] it was very important to have a full product suite, rather than just one product,” said Bunes, who joined the company in April. “It was more important for us to be able to come to market with a full product suite. With only a Holter monitor, we felt we might be somewhat limited.”
The asset purchase agreement also includes employment agreements with the founding partners of TZ Medical, Tom Tribou and Byron Zahler, who will continue marketing efforts for the current monitoring devices and for next-generation products that incorporate the Recom noise-reduction technology. Recom said these employment agreements are “incentive-oriented,” with compensation based upon profitable sales for Recom as the rollout is ongoing.
The company also reported that it has completed its catheter j-v with TZ Medical in furtherance of the memorandum of understanding first disclosed in August. Recom said that not only does this enhance its immediate revenue base, but the company also will realize monitoring revenues from the devices. As previously disclosed, TZ Medical is contributing its entire line of intracardiac catheters to the joint venture, and Recom is contributing its patented and patent-pending signal-amplification and noise-reduction technologies.
An intracardiac catheter is a flexible tube that is inserted through a vein in the leg and fed into the heart. When used for diagnostic purposes, the catheter is equipped with electrodes connected to an electrocardiographic monitor that allows physicians to evaluate cardiac function, including arrhythmia, or irregular heartbeat. The physician can then predict the patient’s risk for future cardiac events and determine the best therapy.
With current technologies, the presence of interference – also called an artifact – in the reading makes the true reaction of the heart to the diagnostic or clinical procedure difficult to measure.
The companies said they would immediately begin development of a new catheter line incorporating Recom’s technology, which is designed to allow physicians to make more accurate diagnoses and better therapeutic choices. The company said the status of the intracardiac prototype testing will be reviewed in upcoming press releases, as Recom has “already begun, and made extraordinary progress, on that development with the assistance of its renowned scientific advisory panel.”
The j-v for the manufacture, development and marketing of intracardiac catheters will be conducted through the creation of a limited liability corporation, to be managed and controlled by Recom. For the first six months, TZ will receive 70% of profits, and Recom will receive the remainder. Profits will be split equally thereafter.
Bunes said the j-v was another avenue for the company to utilize its technology in new pusuits. “Basically, we have some technology that can do a lot of things. Intracardiac electrocardiograms are read differently, they have different frequencies that they’re read on and this catheter just required some modifications to our existing device and it is an area where there is a tremendous amount of growth. We have technology that could basically revolutionize or change the catheter readings that [doctors] are able to get.”
TZ Medical was founded in 1990 by Tribou and Zahler. The company sells intracardiac catheters, cardiac monitors, hemostatic products and defibrillation electrodes.
Abbott is 2nd in U.S. carotid stent market
In a move that further opens a new avenue to stent treatment as well as providing competition in the sector, Abbott (Abbott Park, Illinois) subsidiary Abbott Vascular Devices (Redwood City, California) reported in mid-September its receipt of FDA approval for a new minimally invasive device to treat patients with carotid artery disease (CAD), a risk factor for stroke. Abbott received FDA approval for the Xact Carotid Stent and 510(k) clearance for the Emboshield Embolic Protection System to treat patients at risk of stroke who are not favorable candidates for surgery, i.e., high-risk patients.
Abbott becomes the second company to enter the U.S. carotid stent market, joining Guidant (Indianapolis), which received a clearance from the FDA for its Rx Acculink carotid stent and Rx Accunet embolic protection system in September 2004.
The company beat out powerhouse Johnson & Johnson (J&J; New Brunswick, New Jersey) for the second-to-market honors even though the company’s Precise carotid stent, manufactured by Cordis Endovascular (Warren, New Jersey), was recommended for approval by the FDA’s Circulatory Systems Devices panel in April 2004 and given a conditional approval in August of that year. The device has been in regulatory limbo since J&J received a warning letter from the FDA concerning the need for “corrective actions” related primarily to lapses in protocol for a trial of the Precise system.
The new Abbott system features a stent specifically designed to treat diseased carotid arteries — arteries in the neck that have become clogged or partially blocked due to the build-up of fatty plaque and debris, also known as atherosclerosis. The Xact stent is self-expanding and has a closed-cell design that creates a tightly knit yet highly flexible mesh intended to help restore the inner diameter of a carotid artery, promote a smooth inner vessel surface, and potentially reduce the release of emboli from a diseased vessel when it is treated, which can lead to stroke.
The Xact stent is designed for use in combination with the fully retractable Emboshield filter. Emboshield is designed to capture emboli that can break off during a carotid stenting procedure. The goal of CAD treatment is to restore adequate blood flow in the region of the artery that is blocked and to stabilize the fatty plaque in order to prevent plaque rupture that can create embolic debris leading to a stroke. Patients with severe carotid blockages have traditionally been treated via the highly invasive carotid endarterectomy (CEA), a surgical procedure in which the artery is opened and the plaque is removed.
Geoff Yates, global marketing director for endovascular at Abbott, told BBI that the key difference between the Emboshield and other embolic protection devices on the market is Abbott’s use of what he calls Barewire technology. “All the other devices on the market place are actually fixed to the wire,” he said. Yates said that since the wire floats freely in the Emboshield, “the filter stays apposed to the vessel wall, [and] the wire moves freely, preventing any type of trauma or damage to the vessel.” He said with all the other embolic protection devices on the market, filter movement occurs during carotid artery stenting (CAS). “With Barewire technology, we eliminate that.”
Abbott established an exclusive agreement to market and distribute the system in February 2001 with Mednova (Galway, Ireland), which developed the stent and filter. Yates said that the Mednova agreement was a staged acquisition and that the FDA approval “triggers the finalization of the acquisition.” He noted that Abbott already has been distributing the products in the international market – primarily Europe and Australia – “for a number of years,” and has garnered a 10% market share in Europe alone.
The company received approval and clearance for its system based on the submission of SECuRITY Registry Study data in a premarket approval application filed in 2004. Both products have CE-mark approval and were launched in the European market at the end of 2003. The SECuRITY Registry Study was a prospective, multi-center, non-randomized trial involving 305 patients from 30 sites in the U.S. and Australia, designed to demonstrate the safety and effectiveness of the system in treating CAD.
In April, Abbott initiated a trial that, if successful, could greatly expand the patient population for carotid artery stenting. The ACT 1 (Asymptomatic Patients with Significant Extracranial Carotid Occlusive Disease Trial) trial is a multi-center, randomized study investigating the benefits of CAS vs. carotid artery surgery in the broader asymptomatic patient population. These are patients without symptoms of stroke who have CAD and who would otherwise be referred for surgery to treat their condition.
If Abbott’s new trial shows carotid stents to be as effective as traditional surgery in preventing stroke in lower-risk patients, it could potentially expand coverage for the procedure to a much larger population. An estimated 175,000 CEAs were performed in the U.S. in 2003, with another 100,000 procedures done in other countries.
Guidant has listed its combined stent and filter system for CAD at $3,500, and Yates said his company plans to be “competitive” with that figure.
Other firms developing distal protection devices and carotid stents include Boston Scientific, with the FilterWire EZ and Carotid Wallstent; EndoTex Interventional Systems (Cupertino, California), with the NexStent; Medtronic (Minneapolis), with the Percu-Surge balloon occlusion system; the Vascular Systems unit of B. Braun Medical (Melsungen, Germany); and Rubicon Medical (Salt Lake City), with the Rubicon Filter.
Boston Sci launches newest cool ablation catheter
Boston Scientific reported the launch of the Chilli II Cooled Ablation Catheter – which it said is the first bi-directional cooled-tip catheter available in the U.S. The company said the Chilli II catheter, which is available immediately for sale, offers physicians the benefits of cooled ablation technology coupled with the proven performance of the Boston Scientific Blazer catheter platform.
Cooled cardiac ablation is a recent advancement in the treatment of ventricular tachycardia (VT) using radio frequency (RF) energy. VT is a serious cardiac arrhythmia characterized by heart rates above 100 beats per minute. The Boston Scientific Chilli II Cooled Ablation System features a closed-loop cooling system designed to reduce complications often encountered in standard ablation procedures for the treatment of VT.
Consistent, continuous fluid circulation cools the catheter tip, reducing coagulum formation and allowing deeper lesions to be created. The closed-loop design of the system eliminates the need to add fluid and monitor flow rates during the procedure, reducing the potential for fluid overload.
The Chilli Catheter uses a pump to inject fluid into a catheter lumen to cool the catheter ablation electrode during the delivery of RF energy. The heat of RF ablation is considered a key drawback, since it limits the amount of energy that can be delivered to the treatment site. In the Chilli Catheter system, circulation of fluid draws heat away from the metal electrode and from the electrode-to-tissue interface, enabling delivery of higher RF power to create wider and deeper lesions. .
Chris Lafontaine, a spokesperson for the company, told BBI that Boston Scientific acquired the Chilli technology with its $115 million acquisition of Cardiac Pathways (Sunnyvale, California) in August 2001. Cardiac Pathways became part of Boston Scientific’s EP (electrophysiology) division. The company also acquired Cardiac Pathways’ Realtime Position Management (RPM) System, a cardiac mapping and catheter navigation technology, which it has incorporated into its Blazer RPM advanced navigation and ablation catheter.
Lafontaine added that this device is, as the name Chilli II implies, the second generation of the product. The RPM advanced mapping and navigation provides guidance of the ablation catheter while creating 3-D representations of the heart chambers. By creating visual maps of the heart’s conduction system, that device can assist in the identification of complex tachycardias. The Blazer platform integrates advanced mapping, navigation and electrophysiology recording into one unit, allowing a single operator to perform all of the functions.
It is estimated that VT is present in nearly 75% of the more than 300,000 cardiac deaths annually in the U.S., and about 300,000 patients are hospitalized annually for treatment of VT. “Cooled ablation is a major advance in the treatment of VT,” said Frank Marchlinski, MD, director of clinical cardiac electrophysiology at University of Pennsylvania Health System (Philadelphia). “The Chilli II Catheter provides a marked benefit by integrating cooled ablation technology onto the bi-directional Blazer Catheter platform.”
Other companies with cold catheter ablation technology in various stages of approval for the treatment of VTs include Medtronic (Minneapolis), CryoCath (Montreal) and CryoCor (San Diego).
Boston Scientific also reported receipt of the CE mark for the Taxus Liberte paclitaxel-eluting stent system, its next-generation drug-eluting stent (DES) system. The company said the new platform has been designed to offer improved deliverability and conformability in challenging anatomy.
Taxus Liberte is the first drug-eluting coronary stent system to incorporate a next-generation stent platform, Boston Sci said. It said the Liberte stent features the Veriflex stent design, “an extremely flexible cell geometry with thin struts and uniform strut distribution.” The system also features the enhanced TrakTip catheter tip, mounted on the Maverick2 delivery catheter, to provide what Boston Scientific describes as “better lesion crossability.” The company said the TrakTip catheter tip has a low lesion-entry profile, which also is intended to improve crossability.
Boston Scientific said it plans to launch the product in European markets and other international markets where the CE mark serves as a regulatory qualifier. The Liberte was launched earlier this year in certain international markets and is expected to launch in the U.S. in 2006.
Paul LaViolette, chief operating officer of Boston Sci, said, “The Taxus Liberte stent system is designed to improve deliverability and conformability, providing physicians with state-of-the-art stent performance coupled with proven paclitaxel-eluting technology.”
“[This] stent system combines the new Liberte stent platform with the unparalleled rigor of the Taxus clinical program,” said John Ormiston, MD, interventional cardiologist at Mercy Hospital and the Green Lane Cardiovascular Unit of Auckland City Hospital (Auckland, New Zealand). “The Taxus Liberte system offers enhanced ability to deliver across complex lesions, especially for patients with complex anatomies and tortuous lesions, and is designed to provide uniform drug delivery.”
Boston Scientific received the CE mark for the bare-metal Liberte stent system in December 2003, while FDA approval was granted for the bare-metal version in January of this year. In May, the company reported 30-day safety data from its ATLAS pivotal study, designed to support FDA approval of the Taxus Liberte stent system.
After delay, CABG Medical begins European trial
CABG Medical (Minneapolis) reported the commencement of enrollment in its European clinical trial of the Holly Graft System, a drug-eluting graft (DEG) for facilitating a coronary artery bypass procedure. The news came just over a month after the company said that it would temporarily delay its CE-mark clinical trials for that device because the first two devices implanted (in Australia) became occluded.
According to Manny Villafana, chairman and CEO of the company, CABG was able to get back in the saddle so quickly due to the relative simplicity of the corrections that needed to be made on the system in order for the trials to procede. “The concern that we had with the device was that the connection has to be made a certain way surgically,” he told BBI.
After reviewing its preclinical work, the company said it believed that a “simple improvement in the surgical procedure” was necessary and that has been incorporated into its human cases. Essentially, surgeons will make a larger incision in the vena cava where it connects with the system’s flow limiter to ensure that the blood flow gets through to the vena cava. Prior to this decision, surgeons had been making a slit where the device connected. “We feel that the slit was closing down, which then impairs the function of the graft and causes the graft to close down,” Villafana said.
He also said CABG Medical has developed a new coating process to spray the heparin coating on the vessel connector. The spray heparin, he said, “allows for a more uniform and consistent application of the coating, which has demonstrated superior in vitro bench testing results and in vivo preclinical results.”
“All of the approvals that we needed overseas were based on the newer coating process because of our animal work and so we were ready to go,” Villafana said, adding that after the fixes were made, “Doctors came in, were trained in one week [and] they turned around and started doing implants.”
Lastly, at the suggestion of its clinical study surgeons, the company implemented a change in the anti-coagulation regimen to include chronic administration of warfarin, a commonly used anti-coagulant in cardiac surgery. The anti-coagulation change was made, the company said, based on the review of the first cases, discussions with clinical investigators and CABG’s scientific advisory board.
The Holly Graft System is designed to treat blockages in multiple coronary arteries from a single graft. The system consists of a flexible, thin-walled vascular graft made of expanded polytetrafluoroethylene; it is attached to the coronary arteries via connectors coated with a drug combination to reduce the risk of blockage and thrombosis. The major benefit of the system is to eliminate a secondary surgery conducted as part of a heart bypass procedure to harvest healthy vessels from the chest, legs or arms for use in the bypass, the company said.
The company reported that a total of three patients were treated with the Holly Graft System by Uwe Klima, MD, a cardiac surgeon at the Medizinische Hochschule (Hannover, Germany). “This represents the first step in a true advancement for cardiac surgery and to advance our goal of less invasive procedures for coronary bypass,” said Klima in a statement. “Additionally, the introduction of drug-eluting technology represents a new opportunity to improve patients’ outcomes. Time and results will determine the place of the Holly Graft System as a source of conduit.”
In keeping with its historical policy on disclosure, CABG Medical said it does not intend to provide press releases documenting individual human cases going forward. In this case, however, the initiation of human cases in Europe constituted a “significant development for the company, thereby warranting a news release to the investment community.”
“The initiation of our clinical trials in European markets, such as Germany, represents a significant milestone for the company,” said Villafana, adding that the company intends to release the first preliminary data from the European trial at the Pioneering Techniques in Cardiac Surgery meeting Dec. 1-2 in Leipzig, Germany.
Because of the delays, Villafana said the company would have to postpone its investigational device exemption (IDE) submission to the FDA from its projected late 2005-early 2006 estimate to at least the second half of 2006. CABG Medical raised more than $30 million in an initial public offering of some 5.5 million shares late last year and subsequently added another $4.5 million through sale of an additional 825,000 in the exercise of over-allotment options.
SilverHawk mines some big funding
New drug/device collaborations keep coming, with the related money growing larger. FoxHollow Technologies (Redwood City, California) and drug giant Merck & Co. (Whitehouse Station, New Jersey) last month reported the formation of a collaboration that will focus on analyzing atherosclerotic plaque removed from the arteries of patients suffering peripheral artery disease (PAD). These samples of plaque will be collected using FoxHollow’s SilverHawk system, with the sample then analyzed by Merck to identify new biomarkers of atherosclerotic disease and the development of new drug therapies for Merck’s pipeline.
Merck will make initial payments of $9 million in cash to FoxHollow to cover the first year of the collaboration, with Merck then having the option to continue the project at the first and second anniversaries, said Duke Rohlen, vice president of corporate development at FoxHollow, in a conference call. The drug maker could potentially make additional payments to FoxHollow of up to $31 million, plus other milestone and royalty payments.
A key driver of the collaboration, Rohlen said, is the “lengthy and expensive” pathway in taking a drug from first idea to commercialization. He said that FoxHollow has been talking to several “leading drug development companies concerning this opportunity” and that FoxHollow and Merck had “a shared vision about how biomarkers will ultimately influence the detection and treatment of cardiovascular disease and from the urgency that this opportunity necessitates.”
The SilverHawk Plaque Excision System is a minimally invasive catheter system used to remove atherosclerotic plaque, which often blocks blood flow in the arteries. The device is used to treat peripheral arterial disease, a condition that affects 12 million Americans and can lead to debilitating leg pain and possible amputation. Approved by the FDA two years ago, the system will be used for “mining the tissue” for the necessary samples, Rohlen said.
In its part of the partnership, Merck said it would analyze the plaque samples for biomarker identification and then use these biomarkers for compound “profiling.”
John Simpson, PhD, MD, chairman of FoxHollow, termed Merck “the undisputed leader in advancing cardiovascular medicine” and “the best possible partner for this collaboration.” He called the proposed research as offering “groundbreaking exploration of a disease area that remains little-understood and significantly under-treated.”
Richard Pasternak, MD, vice president clinical research at Merck, said, “We currently assess risk of heart disease using blood markers such as cholesterol, blood pressure, blood sugar and CRP, but none of these provides a direct view of the immediate cause of disease which is atherosclerotic plaque. Our collaboration with FoxHollow has the potential to provide insight [into] cardiovascular disease and to accelerate development of novel drugs for this widespread health issue.”
FoxHollow, which went public in October 2004 with an offering that garnered $67 million, is focused on device treatments for PAD, estimated to afflict 12 million people in the U.S. alone.
St. Jude, Cardiac Science in Japan approvals
Rounding out the two-week flurry of activity in the sector, St. Jude Medical (St. Paul, Minnesota) and Cardiac Science reported receiving regulatory and reimbursement approvals from the Ministry of Health, Labor and Welfare in Japan for new products.
St. Jude’s approval was for the Epic+ and Atlas+ implantable cardioverter defibrillator (ICD) product families, which the company said are the first of its ICDs available in Japan.
Engineered to anticipate a wide variety of diagnostic and therapy needs of ICD patients, the ICDs also are designed to make it easier for physicians to manage patients with atrial fibrillation (AF). Paul Bond, president of Getz Brothers Co. Ltd. (Tokyo), a St. Jude company, said, “Physicians will appreciate the ways they can improve patient care with this advanced technology, and ICD patients will appreciate the comfort made possible by the compact size of the devices.”
In addition to Getz Brothers, the ICDs also will be distributed in Japan through Fukuda Denshi Co. Ltd.
“Japan represents the world’s second-largest medical technology market, with ICD implants growing at a rate of 20% to 30% annually over the past few years,” said Joseph McCullough, president of St. Jude Medical International. “[This] introduction opens this market to St. Jude Medical and establishes important new ICD therapy options for patients in Japan.”
The Epic+ and Atlas+ ICD families include St. Jude’s AF Suppression algorithm, which provides technology to suppress episodes of atrial fibrillation, and AutoSensitivity Control, morphology discrimination (MD) and A-V rate branch, which are designed to help avoid unnecessary shocks and promote fast diagnosis and therapy with precise, patient-specific supraventricular tachycardia (SVT) discrimination.
St. Jude said the Epic+ is the smallest ICD available in Japan capable of delivering a “clinically important” 30 joules of energy, while the Atlas is the most powerful device available in that country, providing up to 36 joules of delivered energy.
Cardiac Science received MHLW approval to market a biphasic version of the company’s automated external defibrillators (AEDs) in that country. The biphasic AED product, a private-labeled OEM version of Cardiac Science’s flagship Powerheart AED, will be marketed in Japan under the CardioLife brand name by Nihon Kohden (Tokyo), Japan’s largest medical device manufacturer.
Cardiac Science said its STAR (self-tracking active response) biphasic waveform customizes the defibrillation therapy for each patient by measuring each patient’s ability to conduct electricity (impedance) and automatically customizing the waveform for that patient by varying duration, voltage and energy in order to optimize external defibrillation efficacy. Subsequent shocks progressively escalate to higher levels if additional shocks are needed to convert a sudden cardiac arrest victim to a normal rhythm.
Raymond Cohen, Cardiac Science chairman, said, “This biphasic submission has been under review by Japanese regulators for over two years, well beyond our initial expectation. As AED demand has grown in Japan, so has the demand for biphasic version AEDs. Nihon Kohden reports that substantial demand exists for our biphasic AED product.”
Nihon Kohden began selling Cardiac Science-manufactured AEDs in 2Q02. Published market analysis indicates that the Japanese AED market has the potential to be approximately 60,000 units per year by 2010, roughly 20% the size of the combined U.S. and European markets.
Cardiac Science said current buyers of AEDs in Japan include medical and dental clinics, hospitals, fitness centers, airports and airlines. Potential AED users include thousands of commercial buildings and government facilities, as well as about 90,000 physician offices; 53,000 police, fire and emergency vehicles; 41,000 schools; 2,000 golf courses; Japan’s extensive railway system and consumers.