Medical Device Daily Associate Managing Editor

SAN FRANCISCO — One healthcare sector that has pumped up investors over the past several years is cardiology, and there were many companies — both large and small — in that space making their cases at this week's JP Morgan Healthcare Conference as to why investors should consider them.

Among those offering convincing arguments as the conference began to wind down its 23rd annual gathering at the Westin St. Francis Hotel were Angiotech Pharmaceuticals (Vancouver, British Columbia) and OmniSonics Medical (Wilmington, Massachusetts).

One company that has benefited from the drug-eluting stent (DES) via its relationship with Boston Scientific's (Natick, Massachusetts) wildly successful Taxus Express2 DES product is Angiotech.

Bill Hunter, president and CEO, noted that while Angiotech is primarily known for its role with the Taxus stent, licensing the paclitaxel coating to Boston Sci, it does have a number of other programs, including divisions in bio-coatings, polymers and orthopedics implants.

That being said, Hunter acknowledged that the Taxus program has been the catalyst for the company's drive to expand into other areas.

“Taxus has been a fabulous program for us. It has grown at a rate that I think has exceeded anybody's expectations.“ He added that the product's sales have outperformed other so-called “blockbuster“ pharmaceuticals, with more than $2.2 billion in sales in less than a year.

While that program has been very successful, Hunter said that even that gravy train cannot go on forever, which begs two questions: Where does his company go from here? How about more drug/device combinations?

“We started to believe that there was a business to be had here in combining drugs with medical devices and biomaterials,“ he said, “and what we have put together in our business is a comprehensive look at drug screening, trying to find the right drug for the right medical device problems [and] combining that with a diverse biomaterial platform that allows us to deliver drugs in very complicated ways in very specific places.“

By putting together such drug-based medical device delivery systems, Angiotech has turned out to be a pharmaceutical company that really operates in the med-tech space.

The rationale behind this approach is quite straightforward, Hunter said, noting that while there are literally tens of thousands of different medical devices, they're all constructed from the same basic building blocks.

What one finds, he said, is that there are not 200 different devices with 200 distinct problems. “You probably have three or four recurrent problems that occur over and over again every time you try to do a surgical intervention and try to introduce a foreign body into the area.“

What Angiotech ultimately discovered was that nine out of 10 devices ultimately failed because of inflammation, infection or tissue overgrowth. “And here was an entire industry [pharmaceutical sciences] that was spending billions of dollars a year making anti-inflammatories, anti-infectives and anti-cancer drugs,“ Hunter said.

The problem with putting together a comprehensive program was that there were several sophisticated technologies needed to deliver the drug compounds. “Sometimes we need a suture, sometimes we need a gel, sometimes we need a biomaterial,“ he said.

The company decided to build its program though an intensive series of acquisitions over the past 16 months. It acquired adhesion barrier and hemostat technology through its purchase of Cohesion Technologies (Palo Alto, California). The company added lubricious coatings and neuroguidewires with its STS Biopolymers (Henrietta, New York) acquisition. And the NeuColl (Los Gatos, California) buy gave it a collagen implant that got Angiotech into the field of orthopedics.

Another investment that the company made with Orthovita (Malvern, Pennsylvania) came to fruition earlier this week with the commercial launch of Vitagel, a surgical hemostat designed for use in cardiovascular, orthopedic, urologic and general surgery indications to control bleeding. Vitagel differs from other competitors in that it uses a patient's own blood as opposed to products from pooled donor blood, thus reducing the risk of transmission of diseases associated with donor blood.

Hunter said 2005 is shaping up to be an important year for the company. Some milestones he mentioned include: data release on the TAXUS V trial at the Euro PCR meeting in May; pivotal data for the Adhibit adhesion prevention gel coming out in 2Q05; paclitaxel vascular wrap six-month data for the European pivotal trial also coming out in that quarter; and the Boston Scientific Liberté data due to come out at the Transcatheter Cardiovascular Therapeutics meeting in 3Q05.

An interesting private company making a presentation at the meeting was OmniSonics, developing breakthrough treatments for vascular occlusive disease based on its OmniWave acoustic technology platform. The company, which is exploring a broad range of potential clinical indications, is initially targeting the treatment of peripheral thrombosis via its Resolution System.

The company, which has undergone an extensive management change over the past year, raised a $40 million Series C round of financing in June, and has raised roughly $70 million total since its founding.

Explaining how the company was able to raise such a substantial amount of money with just one product in development was CEO Richard Ganz, himself a relatively new hire — he was appointed to the CEO post in June.

“I think one of the reasons we were successful in going out and raising the amount of money that we did was that this technology is not a one-off kind of product but rather a platform technology that can be used in many areas of the body.“

The first market launch in the U.S. for end-stage renal disease will occur in the second half of this year. Following that will be launches in deep vein thrombosis and peripheral arterial disease and finally in coronary artery disease.

The Resolution System, consisting of a thin titanium wire placed into a clogged artery or vein, delivers low-power (40 KHz) acoustic energy to resolve blood clots into minute particles approximately the size of red blood cells.

Ganz said the sonic waves “create unstable bubbles in the fluid and those bubbles explode generating an acoustic energy.“

He said his company's product is differentiated from other ultrasound-delivering technologies on the market by the fact that they are tip-focused — or boring — products rather than internally generating the frequency.

Ganz said that the first market launch for the company in dialysis access grafts is not a big one, he added: “We're excited about the opportunity to prove that this technology works, validate it and put it in the hands of our customers because we think there's a fair amount of pent-up demand not only for using it in dialysis access but in other parts of the anatomy as well.“

The company also said it sees potential use for the system in “non-core“ applications, including neurology, orthopedics, urology and gynecology.

“We're going to be talking to companies about partnership for those non-core applications,“ Ganz said.

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