Edwards Lifesciences (Irvine, California) said last month that, as part of a new corporate initiative, it has invested in two ventures aimed at identifying early-stage technologies and product ideas with potential for treating cardiovascular disease. Edwards entered into a products development agreement with Gunstar LLC (Holland, Michigan), that grants Edwards the option to license and commercialize all product ideas in the areas of cardiac surgery and cardiology that Gunstar generates or licenses from others, including physicians who envision products to improve patient surgeries. Edwards also committed to providing certain initial capital contributions to Gunstar and, in return, retains a minority equity interest in the company.

Gunstar is a privately held company formed in August 2000 by Steven Gundry, MD, a cardiothoracic surgeon and inventor, and Ronald DeVries, who has 20 years of management experience in the medical device industry. The company's aim is to assist physicians in bringing new product ideas to market.

Another investment by Edwards was in Foundation Medical Partners, a venture capital fund that is focusing on medical devices, biopharmaceutical products and platforms, and web-enabled health care products and services. Other investors in the fund include the Cleveland Clinic Foundation; National City Equity Partners; Key Capital Corp., a wholly owned subsidiary of KeyCorp; and State Teachers Retirement System of Ohio.

Stuart Foster, Edwards' corporate vice president of technology and discovery, a function created recently to manage the company's research and development, product pipeline and external technology investments, noted: "As we move forward with our transformation into a more growth-oriented company, it is important to have a balanced portfolio of technologies and products that we are exploring for the future." Foster said that Edwards also is aggressively pursuing nearer-term growth opportunities, such as research and development collaborations, technology acquisitions, and licensing and distribution agreements.

In other financing news:

Myocor (Maple Grove, Minnesota) said it has completed an $18.75 million private placement of preferred stock, led by St. Paul Venture Capital. Additional firms participating in the financing included Alta Partners, Affinity Capital Management, Coral Ventures and Institutional Venture Partners. The proceeds will be used to support enrollment in Phase I and Phase II clinical trials in the U.S. in 2001 and 2002, and for the completion of clinical studies in 2001 necessary to obtain the CE mark for European commercialization of the Myocor Myosplint, an implantable device designed to improve cardiac performance and efficiency in a heart failure patients. Myocor completed an initial $500,000 round of angel financing in April 1997, and has raised a total of $11 million in two rounds of financing completed with Institutional Venture Partners and Coral Ventures.

Corgentech (South San Francisco, California), a private company developing genetic therapies for cardiovascular and other diseases, raised $13 million in cash through a series B financing round. The investors were InterWest Partners, Alta Partners and JPMorgan Partners. John McLaughlin, Corgentech president and CEO, said the funds primarily will go into the company's clinical development programs, in particular for the E2F Decoy, a combination drug and device designed to prevent vein grafts used in coronary and periphery artery bypass procedures from occluding and failing. "We expect to announce preliminary results of a 200-patient Phase IIb clinical trial of this product in coronary artery bypass surgery by the end of this quarter," McLaughlin said. "In addition, we plan to start a Phase III study in peripheral arterial disease in mid-summer based on previously reported results of a Phase I/II trial in that patient population."

CardioNow (Daly City, California) said it has closed its third round of funding led by Versant Ventures and Fremont Ventures. The amount of the financing was not disclosed. "This investment validates the potential of CardioNow's cardiac image archiving and telecardiology service from investors with impressive records in backing successful medical device and information technology companies," said John Lonergan, president and CEO. The latest round of funding follows the successful launch of CardioNow at the American College of Cardiology (ACC; Bethesda, Maryland) meeting in March. CardioNow said it will use the funds to support U.S. launch of the product and further development efforts.

Panel to review Eclipse PMR system

The Circulatory System Devices Panel of the FDA will meet July 9 to review Eclipse Surgical Technologies' (Sunnyvale, California) premarket approval application for its minimally invasive heart laser procedure known as percutaneous myocardial revascularization (PMR). In PMR, a cardiologist uses an Eclipse laser to drill tiny channels in the heart muscle that are believed to stimulate angiogenesis, or the growth of new blood vessels. Clinical trials have shown that the process significantly reduces angina. Eclipse's transmyocardial revascularization (TMR) system was previously approved by the FDA in 1999.

In making its PMA application in December 1999, Eclipse submitted results from the pivotal PACIFIC trial, which included acute clinical data on the outcomes of patients who had received PMR as well as follow-up data on the patients charted as much as 12 months after the procedure. The study, which was led by Stephen Oesterle, MD, of Massachusetts General Hospital (Boston, Massachusetts), compared such revascularization to drug therapy in "no option" patients with severe angina. Eclipse said the data in that trial demonstrated significant improvement in the PMR patients in both exercise tolerance and angina relief compared to those who received only drug therapy.

Eclipse said the clinical benefits of its PMR system also were shown in the BELIEF study, as presented at the ACC scientific sessions by Jan Erik Nordrehaug, MD, of Bergen, Norway. Eclipse said the BELIEF study, which used a double-blinded protocol to isolate any placebo effect, showed that patients who underwent PMR received a significant improvement in angina compared to those who received a sham procedure.

Michael Quinn, chairman and chief executive officer, said he welcomed the panel review of the PMR data. "The Eclipse team is well-prepared to answer any questions from the Circulatory System Devices Panel that may arise at the meeting," he said.

The company makes the Eclipse TMR2000, solid-state laser system, as well as the Eclipse SoloGrip III, a surgical handpiece with built-in laser fiber optics.

Boston Scientific eyes more acquisitions

Boston Scientific (BSX; Natick, Massachusetts) executives said last month that firm plans to continue its acquisitive ways and could do five or more new deals this year. However, the company intends to structure many of them as all-stock deals rather than tap cash as it has in previous deals this year. The company bought four companies during the first quarter to bolster its product diversity. CFO Larry Best said during the company's annual meeting last month that since many in the medical device field view Boston Scientific shares as undervalued, it can use this to come up with more "creative" stock deals in offers to attractive companies.

CEO James Tobin said Boston Scientific will continue to acquire companies that will "bring leadership in markets related to the company's existing product lines," and where the operations can be leveraged with Boston Scientific's existing distribution and sales network. Company executives said they think the investment community has undervalued Boston Scientific shares, because it has focused on the poor performance of the company's Scimed stent-making unit, where operations are complicated by a nasty legal battle with stent supplier Medinol Ltd. (Tel Aviv, Israel). The unit also has been hurt by shrinking demand in the worldwide stent market. Stents are tiny devices used to prop open collapsed heart arteries after surgery. Best said he estimated that Medinol stent-related products will account for $375 million of the company's potential $2.6 billion in sales this year.

Boston Scientific says investors have ignored the huge success of much larger product divisions that are usually world leaders in their market niche. Best noted, for example, that most of the company's divisions showed double-digit percentage growth in the first quarter on a constant-currency basis, and the company continued to show strong positive cash flow although it had a 1Q01 loss of $5 million, or 1 cent a share.