You can learn from history in order to avoid past mistakes. That was the position being taken last month by Abiomed (Danvers, Massachusetts) following the first implant for its AbioCor artificial heart in Louisville, Kentucky, thus launching the company's human clinical trial of the device. Abiomed clearly was attempting to avoid the media circus that followed implantation of the Jarvik heart in Barney Clark nearly 20 years ago, and it has maintained a tight control of the news surrounding the first implant of the AbioCor.
Abiomed had promised what it called a "quiet period" following the first procedure, but it had to break that silence as a result of a news leak to The Courier-Journal in Louisville following the initial implant procedure at that city's Jewish Hospital on July 2. As a result of that leak, Abiomed and the hospital issued a statement verifying that the implant had taken place and followed that with a news conference, but one which produced only a few additional details about the operation and the patient.
He is male, age 50, and was accepted for the procedure because of his extremely poor condition, according to Robert Dowling and Laman Gray, the two surgeons who performed the operation. At CDU's press time – about three weeks after the implant – the patient was still alive, but additional reports about his condition have added little substantive information. Those reports indicate that, as expected, various minor follow-up procedures needed to be performed, that the patient occasionally is breathing on his own, and that he can communicate with family and friends as he attempts to rebuild his strength.
The news-hungry media have not been happy with the quiet-period approach, however, with a major broadside launched against it by The New York Times, charging that a news blackout does a disservice to the public and medical science.
In response, Abiomed issued its own statement reaffirming the policy and emphasizing the extensive amount of planning that had gone into shaping it. In what was a clear allusion to the Jarvik heart debacle, the company said it had made an "extensive review of past high-medical events" and that it had consulted both with "a wide variety of experts" and its other clinical centers to establish the policy. Repeating that the news blackout was intended to help keep focus on the best clinical practice for the patient, Abiomed said it was attempting to avoid "the kind of speculative frenzy that can be associated with the frequent release of details of unknown significance." And, overall, it characterized the general feedback to the quiet period policy as "overwhelmingly positive." Finally, the statement promised "full and open discussion of the clinical trial with appropriate medical peer groups at the earliest possible time, and to the provision of information to the public in a reasonable time frame."
The message for the media and the public: Stay tuned.
Cardio sector busy on litigation front
While the cardiovascular sector made its biggest headlines on the clinical front last month with the start of the AbioCor trial and approvals of advanced pacemaker devices, the sector also was lively on the legal front as well.
An arbitration panel awarded Boston Scientific (Natick, Massachusetts) $169 million in damages in a patent infringement case involving devices produced by Medtronic AVE (Santa Rosa, California), a unit of Medtronic (Minneapolis, Minnesota). In addition to the damage award, a permanent injunction was issued against Medtronic AVE's sale of the infringing devices, which include the S670, S660 and beStent 2 rapid-exchange stent delivery systems and the RIS balloon dilatation catheter. In deciding the binding arbitration case, the panel ruled that Medtronic AVE "willfully infringed" Boston Scientific's "Bonzel" patent. Medtronic also was ordered to pay costs and attorneys' fees.
For its part, Medtronic expressed "disappointment" in the panel's decision, and said that decision covers products in only a "limited portion" of its vascular business – products that generate less than 3% of its worldwide revenues. Medtronic said sales of the S670 and S7 coronary stents – which it described as "market leading" – will continue because they are available on Medtronic over-the-wire delivery systems. It added that its over-the-wire catheter business is larger than its rapid-exchange stent delivery system business and that it will "continue to market single-operator catheters outside the United States, where the patents at issue do not apply."
In the patent dispute with Boston Scientific's SciMed unit, Medtronic had contended that it acquired the right to use patents related to rapid-exchange coronary angioplasty when it bought the angioplasty business of C.R. Bard (Murray Hill, New Jersey). It said Bard had gained that licensing agreement in patent litigation with Schneider (USA). However, the arbitration panel determined that a rapid-exchange catheter marketed in the U.S. by Medtronic AVE was not covered by the license acquired from Bard. Boston Scientific filed suit against Medtronic in April 2000.
This is the second significant damage award Medtronic has been ordered to pay in recent months for infringement of patents related to stents. In December 2000, a federal court jury in Delaware ordered a payment of $271.1 million by Medtronic AVE to the Cordis (Miami Lakes, Florida) unit of Johnson & Johnson (New Brunswick, New Jersey) for violation of patents on coronary stents.
In other court-related activity:
Vascular Solutions (Minneapolis, Minnesota) entered into an agreement that settles all existing intellectual property litigation between itself and St. Jude Medical (SJM; St. Paul, Minnesota). Vascular Solutions will pay a royalty of 2.5% of net sales of its Duett vascular-sealing device to SJM, up to an undisclosed maximum amount over the remaining life of the St. Jude Medical "Fowler" patents. For its part, SJM has granted to Vascular Solutions a non-exclusive license to its Fowler patents and has released the company from any claim of patent infringement based on previous sales of the Duett sealing device. In addition, Vascular Solutions has granted a non-exclusive cross-license to the "Gershony" patents to St. Jude Medical, subject to a similar royalty payment if St. Jude Medical uses the Gershony patents in any future device.
Howard Root, CEO of Vascular Solutions, said the settlement "allows us to proceed with the U.S. roll-out of the Duett sealing device without the distraction and legal expenses of continuing to defend [against] St. Jude Medical's intellectual property litigation." He added, "given the expense of defending against intellectual property litigation and the length and uncertainty of the legal process, we believe that this settlement is in our company's best interests." Vascular Solutions said it will incur an additional general and administrative expense in the amount of $350,000 in the recently completed 2Q01 for the royalty on net sales of the Duett device since 1998. It said that, beginning with 3Q01, it will include a royalty expense of 2.5% of net sales in its cost of goods sold until the maximum royalty is attained. The company added that a result of the settlement of the litigation, it expects to reduce its legal expenses by about 50% each quarter beginning in 3Q01.
St. Jude issues ICD warning
St. Jude Medical last month said it had distributed what it termed a "technical memo" to physicians advising them that sensing anomalies and/or premature battery depletion can occur in a small number of its Profile MD (Model V-186HV3) implantable cardioverter defibrillators (ICDs). The company said that no deaths or serious injuries have been reported in relation to this reliability issue. SJM is providing detailed information to physicians who it said "should use their clinical judgment" to recommend a course of action for each patient.
The company said the notification affects 771 implanted devices (548 in the U.S.). The company also suggested that for a subset of affected patients, increased monitoring might be the most appropriate course of action. To facilitate increased monitoring in the U.S., the company is offering free of charge its Housecall transtelephonic patient monitoring system to affected patients.
For a second subset of patients, the company advised that device replacement might be considered as an option. If a physician chooses to replace a Profile affected by this notification, SJM said it would provide a replacement device free of charge under its warranty policy.
According to the company, the device anomalies that caused this notification are related to a specific lot of ceramic capacitors supplied by a vendor and incorporated into device modules (subcircuits) manufactured during a specific period of time in 1999. All of the reported failures have occurred within 24 months of the date that the modules were incorporated into fully assembled Profile devices. Based on engineering analysis and statistical modeling, the company estimated that fewer than 13 additional devices would exhibit decreased reliability.
The company said that components involved in the notification were not used in any other St. Jude ICD or pacemaker product. Additionally, SJM said that the affected capacitor components are used in the device circuitry and are not related to the main charging capacitor. The company said it has adequate financial reserves and product inventory to manage the impact of this notification. Approximately 7,000 Profile MD ICDs have been implanted worldwide.
Medcath IPO raises $150 million
Medcath (Charlotte, North Carolina), an operator of eight hospitals treating cardiovascular diseases in the western U.S., last month raised $150 million in an initial public offering. The offering tendered six million shares at $25 a share. It will now trade on the Nasdaq under the symbol MDTH.
MedCath was originally launched as public firm in 1994 and then returned to private status when its share price failed to meet expectations. After it was taken private, it opened five heart hospitals and sold one. It is expected to open more hospitals by 2002, reaching a total of 10. Two buyout firms will now each hold about 30% of MedCath's stock after the offering. In its regulatory filing, the company said that the time for the IPO was right "to access the capital markets and fund the execution of our heart hospital development strategy."
Deutsche Banc Alex. Brown and Banc of America Securities were underwriters for the offering.