The FDA in late July issued to Mentor (Santa Barbara, California) an “approvable” letter for its MemoryGel silicone gel breast implant, and the news immediately drew a barrage of sharp criticism from women’s groups. The approvable notification moves the agency one step closer to reversing its 13-year ban on use of the silicone gel implants for cosmetic purposes, with the devices being a continuing source of controversy – praised by many as important enhancements, vilified by many others as a source of systemic disease and related health problems.

Diana Zuckerman, president of the National Research Center for Women and Families (Washington), acknowledged that the letter falls short of granting full approval, but she termed it “a warning sign that corporate pressure on the FDA has once again put women’s health at risk” and a “stumbling step in the wrong direction.” But Joshua Levine, president and CEO of Mentor, said potential final approval would reverse the limitation on breast augmentation and reconstruction and would provide women a “significant additional option.”

The agency’s apparent move toward approval is in line with its general policy of following the recommendations of its expert panels. In April, its General and Plastic Surgery Devices Panel voted 7-2 to recommend the approval, though tacking on a laundry list of conditions. Those conditions included the provision of company-sponsored education for board-certified plastic surgeons, along with patient education and consent programs; a variety of data collection and monitoring activities by the company; and labeling recommending the identification of possible “silent rupture” after five years of use.

But the recommendation for approval of Mentor’s implant came as a rather large surprise, given that the same panel, in a 5-4 vote the day before, recommended against approval of similar implants made by Inamed (also Santa Barbara). Inamed has not yet received any notice concerning its application.

Both companies, in their presentations to the panel, emphasized important improvements for implants over the versions made 20 to 30 years ago. But also, in both cases, the panelists expressed concerns about the lack of long-term data concerning use of the new implants and still-simmering questions about how ruptures impact women’s health.

According to Mentor’s data presented to the panel, only 1% of implants ruptured during a three-year period in a company study of about 400 women, with no reported cases of gel migration. Executives of the firm predicted an implant lifespan upward to 25 years.

Zuckerman, however, in the statement issued by her organization, charged that Mentor had “misrepresented” the rate of rupture for its implants and that Mentor should not be given “a clean bill of health” until after such charges have been investigated. “A Senate investigation of the Mentor safety data and the FDA approval process is currently under way, and concerns are growing,” Zuckerman said. “Just before the FDA announcement ... key women members of the U.S. Senate sent a letter to the FDA commissioner, expressing their strong concerns about the lack of safety data on silicone gel breast implants.”

Zuckerman also related the issue to recent concerns about “defective pacemakers, recalls of defibrillators and the dangers of several other medical devices,” with resulting questions also for breast implants. “Every week we hear from women with leaking breast implants, who can’t afford the surgery to have them removed,” she said in her statement. “The FDA needs to listen to its scientists and demand more long-term safety data before issuing any kind of decision.” In this case, she said, the FDA’s credibility “is on the line.”

Also lambasting the agency’s “approvable” notification was Sybil Goldrich, executive director of the Command Trust Network (Washington). Goldrich, who had four implants following mastectomy, with silicone then found in other parts of her body, put the onus of potential approval on new FDA Commissioner Lester Crawford. If the Mentor implant is approved, she said in a statement, Crawford “will completely reverse the standards for safety and data” on the implants. And he “will have abandoned any rational basis for FDA’s decision-making and further underscored the necessity of radical reform at the agency.”

Command Trust said in the statement that “Virtually all breast implants fall apart in the body over time, according to independent studies. The largest-ever analysis of explantation showed that fail half of silicone implants fail within 10 years and that three- quarters will rupture within 20.”

For its part, Inamed in a statement praised the FDA notice to Mentor, calling it “positive for the industry, physicians and their patients.” Inamed said it “remains confident about its recently modified responsive silicone gel implant PMA, currently under FDA review, which is comparable to the competitor’s in terms of safety and effectiveness.” The FDA action, Inamed added, has “strategic implications ... relative to the prospects of its Style 410 cohesive-gel PMA which was submitted in December 2004. The company intends to update this PMA by submitting three-year follow-up data and new five-nine years European prevalence rupture data.”

In early August, a group of consumer groups asked Congress to investigate the FDA’s plans to approve Mentor’s implants. In a press conference, the National Organization for Women, Public Citizen and 13 other consumer groups called on U.S. regulators to postpone their final decision on the implants. The groups question the agency’s request for additional data following market approval. Sidney Wolfe of Public Citizen said, “The dangerous doctrine of approve now and test later must be firmly rejected.”

Kim Gandy, president of the National Organization for Women, accused the administration of President George Bush of valuing “short-term profits over women’s long-term health.” Gandy accused Mentor of “losing” data from thousands of women in a prior clinical trial on its implants. “Apparently Mentor did not want FDA reviewers or the general public to know about what might have happened to these women,” she said. “In fact, there are indications that they intentionally omitted from their studies any woman who was made so miserable by her implants that she did not replace them after removal. Only women who replaced their removed implants with new implants were included in the data.”

In a statement, Mentor President and CEO Josh Levine called the issues raised by the consumer groups “old news.” He said, “These groups are once again raising unfounded allegations from a lawsuit that was dismissed after the court reviewed all the facts and evidence. [The] FDA conducted an investigation that we believe included these allegations, and closed the file with no action taken.”

The FDA looked into whether Mentor falsified records but ended its investigation in 2002 without filing charges. The consumer groups are petitioning for all documents related to that investigation, Mentor’s current application and the FDA letter about the conditional approval. They also called on Congress to investigate what they called the FDA’s lowered safety standards for silicone-gel implants. The Senate Health, Education, Labor, and Pensions Committee reportedly is investigating allegations of conflict of interest on the panel of scientists and surgeons who advise the agency on breast implants. The groups also threatened legal action if the FDA fails to release all related documents.

Stryker in hip-resurfacing distribution accord

In a move that could widen the adoption of hip-replacement surgery to a younger patient population, Stryker (Kalamazoo, Michigan) reported that it has entered into an exclusive U.S. marketing and distribution agreement with Corin Group (Cirencester, UK), a manufacturer and supplier of orthopedic devices, for the Cormet Hip Resurfacing System and Optimom, its large-diameter articulation hip system. The 10-year agreement should enable Stryker to be one of the first companies to offer hip-resurfacing technology to patients in the U.S. Interest in hip-resurfacing procedures, Stryker said, is on the rise globally due to the bone-conserving nature of the procedure and anticipated benefits related to post-operative activities and range of motion. In these procedures, surgeons replace the acetabulum in much the same way as a conventional total hip but the femoral head is resurfaced rather than removed.

Andy Nedilsky, a group product manager for primary hip solutions at Stryker, told The BBI Newsletter that the hip-resurfacing procedure is similar in many ways to the traditional hip-replacement procedure. “The main difference in the procedures is on the femoral side, where the surgeon in a total hip procedure takes the head of the femur off and puts a prosthesis in place.” In contrast, he said with the resurfacing procedure only, the femoral head is capped with a piece of metal. “You’re leaving an intact bone there.”

According to Dean Bergy, vice president and CFO of Stryker, the hip-resurfacing procedure is particularly suited to younger more active patients “who want to get back to doing everything that they are doing and it does have the advantage of being bone-conserving.” From that standpoint, he told BBI, “It’s certainly something that particularly in some of these markets outside the U.S. has caught on pretty well.” He noted that targeting younger patients for this kind of surgery has not been the norm, but that recently, the so-called “baby boomers” have been seeking ways to maintain their level of activity in the face of oncoming age-related health problems and the technology to make this kind of radical decision more palatable has recently become more prevalent.

Resurfacing hip procedures are currently in clinical trials in the U.S. and are being performed routinely outside of the U.S. Indeed, Corin said its system has been in clinical use in Europe and elsewhere since 1991, giving it the longest clinical history for any current systems. According to Bergy, Corin filed a premarket approval application (PMA) for the Cormet system with the FDA in March 2005, and Stryker is going to help the company with the more rigorous U.S. approval process “We’re going to jump in and help them as much as we can,” he said.

Corin isn’t the only company vying to have its hip-resurfacing technology approved in the U.S. Bergy said some competitors, including Smith & Nephew (London) and Wright Medical (Arlington, Tennessee), also are “looking for U.S. approval.”

On its web site, Corin said that metal-on-metal hip resurfacing arthroplasty should still be regarded as a “experimental.” But, it added, the Cormet “does potentially provide a conservative method of treatment for the high-risk category of young, active patients.”

Banking subsidiary for Viscogliosi Brothers

Viscogliosi Brothers (New York), gradually broadening its reach in the musculoskeletal and orthopedics arena, is acting to extend its name as a brand in that sector through the formation of Vis-cogliosi & Company, an investment banking subsi-diary. Unlike parent Viscogliosi Brothers, which is building a portfolio of companies in the sector via investments, Viscogliosi & Company will not provide equity financing.

It will, its new president Lloyd Kagen said, work primarily as a facilitator of investment opportunities by providing services such as “underwritings, distribution of private placement securities to high network individual and institutions, investment banking advisory services for mergers and acquisitions and restructurings and, eventually, fairness opinions.”

Formation of Viscogliosi & Company, he told BBI, was driven by the “significant amount of intellectual property within the sector” thus far developed by Viscogliosi Brothers, “and Viscogliosi & Company hopes to leverage that intellectual property.” Kagen emphasized that Viscogliosi & Company will be independent in operation, the only link being ownership by Viscogliosi Brothers.

The unit will be co-managed by Larry Weinberg as chairman. Weinberg joined Viscogliosi Brothers in 2003 as its director of administration and operations. His background includes executive positions, including managing director of institutional equities, head of corporate syndicate, head of research sales, senior trader and retail brokerage account representative.

Established by Marc, John and Anthony Viscogliosi in 1999, Viscogliosi Brothers says its mission is “to create, build and finance companies founded on innovations developed by surgeons that are uniquely focused on ‘life changing’ musculoskeletal and orthopedic technologies.” Its portfolio companies are Alliance Medical (Phoenix), Biorthex (Montreal), Cortek (Dedham, Massachusetts), Paradigm Spine, Raymedica (Bloomington, Minnesota), Small Bone Innovations (New York), Spine Solutions (New York) and Twinstar Medical (Minneapolis).

Quest, Ciphergen in alliance

Ciphergen Biosystems (Fremont, California) and diagnostic test provider Quest Diagnostics (Lyndhurst, New Jersey) reported they have formed a strategic alliance to develop and commercialize proteomic diagnostic tests based on Ciphergen’s SELDI ProteinChip technology. The alliance will focus on the commercialization of selected assays chosen from Ciphergen’s pipeline over the next three years. In addition, for an aggregate purchase price of $15 million, Quest has purchased 6.2 million shares of Ciphergen common stock, or about 17% of that company’s outstanding shares. It also has a five-year warrant to purchase an additional 2.2 million shares for $3.50 per share.

Quest also has agreed to loan Ciphergen up to $10 million to fund certain development activities. The loan would be forgiven based on achieving certain milestones. Additional terms of the agreements were not disclosed.

“Together, we have the opportunity to translate biomarker discovery into clinical diagnostic tests that will address unmet medical needs and improve patient care,” said William Rich, PhD, CEO of Ciphergen Biosystems. Ciphergen’s Biosystems division develops a family of ProteinChip systems for clinical, research and process proteomics applications. The systems enable protein discovery, characterization, identification and assay development to provide researchers with predictive, multi-marker assay capabilities and a better understanding of biological function at the protein level.

Theragenics restructures to ‘sharpen focus’

Theragenics (Buford, Georgia) said last month that it would eliminate about 9% of its work force and restructure the company in order to “sharpen its focus” on its core cancer treatment products and newly acquired CP Medical (Portland, Oregon) business.

CP Medical is a manufacturer of sutures, cardiac pacing cables, brachytherapy needles/spacers and related medical products sold in the professional surgical and veterinary fields. The company, which Theragenics considers its medical devices unit, was acquired in May in a $25.4 million cash and stock transaction.

“Recent market studies, data and competitive analysis have shown significant and recent changes in the competitive landscape where some of our development projects are targeted,” said Christine Jacobs, Theragenics president and CEO, said during a conference call on the restructuring. She added that the company plans to close its facility in Oak Ridge, Tennessee. – for which it is seeking a buyer – and one of its plants in Buford. The closures will eliminate 23 jobs. The company said it plans to focus on its brachytherapy seeds business. Those seeds are small capsules filled with radioactive palladium-103 that are implanted to deliver radiation treatment locally to prostate cancer patients.

Theragenics also will concentrate on its plans to discontinue its development of radiochemicals, plasma separation process technology, vascular activities, macular degeneration treatments and breast cancer therapies, areas where it has been doing development work. Jacobs said the company is discontinuing several business activities that have required substantial resources in order to concentrate on the two business lines that are delivering revenue. “In essence, we are shifting our talents and resources to products that have the potential to reach market sooner and yield returns faster.”

SUD reprocessors Alliance, Vanguard to merge

Two major reprocessors of disposable medical devices – more often referred to as single-use devices (SUDs) – said in mid-August that they will merge their operations, that move likely serving to be an even bigger thorn in the sides of disposable device manufacturers and original equipment manufacturers (OEMs).

Alliance Medical (Phoenix) and Vanguard Medical Concepts (Lakeland, Florida), both private and venture-backed, said in a statement that their merger “will provide current and future healthcare partners with the greatest reprocessing savings opportunities, more available product services, enhanced field service levels, an undeniable guarantee of quality and FDA compliance, and a continuous stream of new product services” from their combined engineering and development teams.

Manufacturers of disposable devices have long been hostile to the reprocessing industry, since every cleaning and refurbishing of a disposable device is a sale lost to the manufacturer. But the reprocessing industry says that reprocessing of SUDs aids in conserving overall resources and provides dollar savings that can be passed down to the consumer – the pass-down cost savings, however, are rather difficult, if not impossible, to document. Reprocessing has gained larger validation over the past two years with passage of the Medical Device User Fee and Modernization Act of 2002 requiring separate FDA regulatory approval for reprocessing of a large number of SUDs. That requirement was pushed by aggressive lobbying by the disposable device manufacturers themselves, who claimed that reprocessing came with significant health risks. But the reports of adverse events related to SUDs have been no greater – and perhaps actually less frequent – than those related to initial device use.

John Grotting, Alliance’s current CEO, who also will head the merged firm as CEO, offered a conciliatory take on the debate. He told BBI: “OEMs are morphing in their thinking. We’re beginning to see indications that they are beginning to look at reprocessing partnerships, to consider that a reprocessing product line, in addition to a single-use line, might make sense. I am highly confident that within the year you will see some good examples of OEM/reprocessing partnerships.”

Grotting said that the sales of the combined firms is “north of $75 million and growing dramatically, quarter-over-quarter” and that the merged firm will put heavy emphasis on R&D. The combination also will serve to avoid research and regulatory redundancies, he said, with the company to consolidate R&D efforts while maintaining research teams, as well as reprocessing operations, at both its Phoenix and Lakeland facilities. Both companies say they hold agreements with leading national group purchasing organizations as well as numerous hospital integrated delivery networks that represent more than 5,000 healthcare facilities. The companies report that, collectively, they have reprocessed more than 30 million SUDs for their healthcare facilities nationwide.

Sprout healthcare team now NLV Partners

New Leaf Venture Partners (NLV Partners; New York/Menlo Park California) reported that the company has closed a $310 million venture capital fund dedicated to healthcare technologies. The company will invest primarily in firms focused on clinical-stage biopharmaceutical products, early-stage medical devices and molecular diagnostics.

New Leaf Venture Partners initiated operations in July under the former managers of the Sprout Group’s Healthcare Technology venture team. Members includes managing directors Philippe Chambon, MD, PhD; Andrew Firlik, MD; Ron Hunt and James Niedel, MD, PhD, in the company’s New York office; managing directors Jeani Delagardelle, Kathy LaPorte and Vijay Lathi in the Menlo Park office; and Vice President Hao Zhou in Menlo Park.

In addition to the new fund, the NLV Partners team will continue to manage the existing $800 million healthcare technology portfolio of the Sprout Group. In a statement, Chambon and LaPorte said, “We are very excited by the closing of our first fund and are grateful for the strong support from an outstanding group of limited partners.” They added: “With the formation of NLV Partners, we have now created one of the few venture firms 100% dedicated to the life sciences, which will allow us to play a significant role in supporting innovative companies in this sector.”

MannKind raises $175M for inhaled insulin

MannKind (Valencia, California) is raising $175 million through a private stock-and-warrant sale, with its top executive buying into half of the placement, to further fund the pivotal development of its lead product. “We publicly stated in our last SEC filing that we would have sufficient cash to last through the third quarter of this year,” Dick Anderson, MannKind CFO, told BBI’s sister publication, Medical Device Daily. “The Street was expecting us to go out and raise money sometime this summer, so this was not a surprise.”

The bulk of the proceeds will go to further developing Mannkind’s Technosphere Insulin System, which is in Phase III testing. A U.S.-based study, which began earlier this summer, is testing the safety of inhaled Technosphere Insulin, while an efficacy study got under way in Europe late last year. Anderson declined to forecast timelines for the completion of those studies, but said that analysts expect regulatory submissions near the end of 2008.