During the first two months of 2001, cardiovascular was clearly the most active of the medical technology and device sectors, seeing both major consolidations and the fulfillment of promise in the artificial heart/heart pump sub-sector. Over a three-week period from late January to February, the industry saw two major mergers and a third proposed and, in the same time span, approval by the FDA of two important clinical trials for heart pump technologies.
Among the most interesting of the consolidations was the late January acquisition of Heartport (Redwood City, California) by Johnson & Johnson (J&J; New Brunswick, New Jersey) in a deal valued at about $81 million. Initially offering high promise in the minimally invasive surgical arena, Heartport had been a high-flying darling of Wall Street during the mid-1990s, with investors pushing the company's market value over the $1 billion mark. But while the company had a good vision, Heartport management was "too far ahead of their time and didn't really execute well as a company," according to Larry Haimovitch, president of Haimovitch Medical Technology Consultants (San Francisco, California), who follows the sector for The BBI Newsletter and its sister publication, Cardiovascular Device Update. Overall, analysts saw J&J's strategy as an attempt to lock up Heartport's intellectual property portfolio and further the product lines of its Ethicon business unit. In many ways, the acquisition mirrored the 1999 purchase of CardioThoracic Systems (Cupertino, California) by Guidant (Indianapolis, Indiana), in the larger company's strategy for bolstering its surgical platform.
From a technology standpoint, a larger deal may be the completion of the merger of Thoratec Laboratories (Pleasanton, California) and Thermo Cardiosystems (Woburn, Massachusetts) in mid-February in a stock-for-stock deal valued at about $570 million. First announced last October, the merger hit a small speed bump earlier in the year when Abiomed (Danvers, Massachusetts) made an unsolicited offer for Thermo, then revised it slightly upward. Neither offer stirred much interest among Thermo's shareholders, and Abiomed then withdrew, saying the bid was never intended as hostile. Thoratec and Thermo Cardiosystems then approved their link-up, with the new company to be named Thoratec Corp. Based in Pleasanton, the merged firm will combine the two firms' considerable expertise in heart pump devices. Thoratec's lead offering in this sector is its ventricular assist device (VAD) approved for use as a bridge to transplant and for recovery from open-heart surgery, while Thermo Cardiosystems has developed the HeartMate, which is implanted beside the natural heart.
Mid-February then saw another potential cardio-consolidation in the defibrillation sector, with Cardiac Science (Irvine, California) agreeing to acquire Survivalink (Minneapolis, Minnesota). The deal is valued at $71 million, with Cardiac Science to pay half in cash, half in common stock. Raymond Cohen, president and CEO of Cardiac Science, said that the acquisition "is a key component in our strategy to position Cardiac Science as a significant player in the external defibrillation business and to extend our reach beyond the hospital market." Cardiac Science said it will integrate its monitoring and automatic detection technology into Survivalink's FirstSave AED system.
Besides these consolidations, clear progress in heart pump technology was seen with FDA approval of human clinical trials by two companies, Abiomed and Arrow International (Reading, Pennsylvania). In late January, the agency approved an investigational device exemption (IDE) trial for Abiomed's AbioCor artificial heart, with the first implant to begin either later this month or in 2Q01. Winning that approval meets the company's timeline for launching human implants and heartened stockholder confidence in Abiomed's ability to reach commercialization with the AbioCor. Then in early February, the FDA approved a Phase I IDE trial for human implantation of Arrow's LionHeart left ventricular assist system (LVAS). The LionHeart is unique in that it does not need the standard through-the-skin tethering of pump and power source, but uses a wireless radiofrequency power source outside the body to drive the implanted pump. Additionally, Arrow believes that the LionHeart can eventually be used as a "destination" therapy rather than as a bridge to transplant.
Surgical robotics feud on 1-year hold
An ongoing battle over patent rights in the surgical robotics sector has been put on hold for a year with the decision of a U.S. district court in California to stay proceedings between the two main sector combatants, Intuitive Surgical (Mountain View, California) and Computer Motion (Santa Barbara, California). The stay gives the U.S. Patent Office time to resolve recently declared interferences between the companies concerning a patent application, exclusively licensed to Intuitive, owned by SRI International, and three of Computer Motion's U.S. patents. SRI/Intuitive will be the "senior party" in each interference because its application was filed in January 1992, seven months before the earliest filing date of Computer Motion's patents.
Intuitive said in a statement that because of significant overlap in key issues, it requested the stay while the patent office decides how to resolve the issues. "As junior party in the interferences, Computer Motion bears the burden of proving that it is entitled to keep its patents," said David Shaw, chief patent counsel for Intuitive.
Dr. Yulun Wang, founder and chief technical officer of Computer Motion, said that the stay will allow his company to communicate with the patent office on the issues. "Until now, Computer Motion has not been involved in any of the interference discussions. The issue at hand is not whether SRI had filed patents before Computer Motion, but whether or not SRI invented what is claimed in Computer Motion's patents. Now that we can present our case, the patent office will understand the substantial differences between the SRI disclosures and our own inventions."
Cellular-cardio monitoring interference cited
Cellular telephones can cause clinically significant electromagnetic interference when held close to external cardiopulmonary monitoring devices, according to a study released by the Mayo Clinic (Rochester, Minnesota). Dr. David Hayes and associates tested the effect of five cellular telephones – four digital and one analog – on 17 different devices, measuring the distance and angle at which interference occurred. They reported interference in 41% of the devices tested. Clinically important interference was defined as any that could hinder interpretation of the data or cause the equipment to malfunction, with this type of interference seen in 7.4% of the tests.
The report said the most significant disturbance occurred during testing of a Veolar-Hamilton ventilator. When any of the five phones were held two inches from a communication port located on the back of the ventilator, the ventilator shut down. Recovery occurred after the phone was removed or turned off. Six of the seven devices affected display electrocardiograms; interference took the form of noise on the baseline or baseline movement. The farthest distance that interference was observed involved an analog phone and a telemetry pack 84 inches apart. Otherwise, the phones caused interference when held 6 to 33 inches away from the devices. "Had the phone been used in a patient's room but outside a 60-inch radius from the equipment, we hypothesize that interpretation would not have been compromised," the researchers said.
Parkinson's centers established
The Department of Veterans Affairs (VA) has moved to create six new centers specializing in research, education and clinical care of Parkinson's disease patients, committing more than $30 million to support the centers over the next four years.
Dr. Thomas Garthwaite, VA's undersecretary for health, said that establishment of the specialized centers "will enable top VA researchers, clinicians and educators to better understand Parkinson's disease, develop more effective treatments and clinical care strategies for patients, and improve education for caregivers."
The centers, named Parkinson's Disease Research, Education and Clinical Centers (PADRECCs), will be established this year at VA medical centers in Houston, Texas; Philadelphia, Pennsylvania; Portland, Oregon; Richmond, Virginia; San Francisco, California; and West Los Angeles, California. They will function similarly to VA's Geriatric Research, Education and Clinical Centers and Mental Illness Research, Education and Clinical Centers.
Each center will conduct research covering basic biomedicine, rehabilitation, health services delivery and clinical trials. In addition, the centers will participate in a landmark clinical trial to assess the effectiveness of surgical implantation of deep brain stimulators in reducing the symptoms of Parkinson's disease.
Parkinson's disease is slowly progressive and caused by degeneration of cells in a region of the mid-brain that produces the chemical and neurotransmitter dopamine. Symptoms are characterized by tremors, slowness of movement, stiffness of limbs and gait or balance problems. While treatments exist, there is no cure for this debilitating disease. Creation of the new centers represents the second substantial VA initiative regarding Parkinson's disease in two years. In 1999, VA and the National Parkinson's Federation signed an agreement to establish the NPF-VA alliance to cure Parkinson's disease.
Garthwaite said, "We are very optimistic that VA's support for this research, clinical care, and education effort will result in significant progress. It provides additional hope for veterans and all Americans affected by Parkinson's disease."