Boston Scientific (Natick, Massachusetts) last month denied allegations by the Federal Trade Commission (FTC) that it has failed to comply with a recent consent order and that it will mount a "vigorous defense" against the charges. The lawsuit arose from Boston Scientific's 1995 acquisition of ultrasound specialist Cardiovascular Imaging Systems, with the FTC saying that the purchase included an agreement to license certain intravascular ultrasound (IVUS) catheter systems, to provide technical assistance to the licensee and to sell IVUS catheters to the licensee for a three-year period, those moves intended to encourage competitive entry.

Boston Scientific says that it fully complied with the consent order by entering a license agreement with Hewlett-Packard (Palo Alto, California) giving HP the rights to all of its IVUS catheter patents and other technologies.

While the FTC alleged that Boston Scientific's attempts at compliance were insufficient, company President and CEO Jim Tobin said that "when the facts are known, our position will be upheld."

The company said in a statement that it "delivered to HP thousands of pages of documents on catheter manufacturing," and its staff "spent hundreds of hours with HP personnel, showing them Boston Scientific's manufacturing operations and answering their questions." And it said it made other efforts to encourage HP's business in this sector. "Despite these efforts, the FTC has evidently concluded that a small number of minor disagreements between Boston Scientific and HP over the meaning of terms in the license agreement has somehow resulted in violations of the consent order," the statement said. "The FTC appears also to believe that these disputes harmed HP's ability to compete against Boston Scientific in IVUS catheters, and that they contributed to HP's decision to exit the IVUS business in 1998." The company noted that a later suit HP launched against Boston Scientific had been settled and was followed by a license agreement, but the FTC "misinterpret[s] the language of the license agreement."

"It is overwhelmingly clear that Boston Scientific's actions did not cause HP's exit from the IVUS business, or have any other adverse effect on competition," said Tobin. "The IVUS market has not met our expectations, and we believe that spreading the use of IVUS is facilitated by having more participants in that market. With HP having abandoned its IVUS business, we are hopeful that enabling additional competitors to enter the market can lead to increased investment in IVUS development and greater availability of IVUS technology for doctors and patients."

Federal challenge kills Varian/IMPAC merger

Varian Medical Systems (Palo Alto, California) said it is walking away from its plan to acquire IMPAC Medical Systems (Mountain View, California) after the Justice Department said it would challenge the merger on antitrust grounds. The proposed deal was first announced in early June.

Richard Levy, president and CEO of Varian, said the intent of the acquisition was "to advance and accelerate the standardization of modern multidisciplinary cancer diagnosis and treatment through integration of the best aspects of the two companies' oncology information systems. We respectfully disagree with the Department of Justice's market interpretation and conclusions regarding how this acquisition would affect consumers, but we believe we would be doing our customers and investors a disservice by entering into what could be a protracted legal proceeding."

He said that rather than pursuing the acquisition, the company's strategy would be to seek the development of "user-friendly software tools" in this sector via "internal development as well as alliances with other software companies." The Varian-IMPAC alliance was to be structured as a pooling of interests. Varian said that it will take a $2 million charge in 1Q01 for costs related to the proposed transaction.

Guilford reacquires anti-cancer wafer rights

Guilford Pharmaceuticals (Baltimore, Maryland), developer of the Gliadel Wafer, a treatment for recurrent primary malignant brain cancer, said last month that it has reacquired commercial rights to the biopolymer product. Guilford repurchased the rights from Aventis Pharma, the pharmaceutical company of Aventis SA (Frankfurt, Germany), in an agreement that gave Aventis 300,000 shares of Guilford common stock valued at about $8 million. Aventis will continue to sell Gliadel Wafer through the transition period ending Dec. 31.

Since 1996, Gliadel Wafer has generated more than $60 million for Guilford in sales – largely in the U.S. – equity investments and milestone payments, according to Stacey Jurchison, Guilford's director of communications. In 1999, worldwide sales were $16.3 million.

Gliadel Wafer delivers chemotherapy directly to the site of a brain tumor, minimizing drug exposure to other areas of the body. The product is a small, white dime-sized wafer comprised of biodegradable polymer incorporating the chemotherapeutic agent BCNU (carmustine). Up to eight wafers can be implanted in the cavity created when a surgeon removes a brain tumor. There, the wafers slowly erode, releasing BCNU directly at the tumor site in high concentrations.

Gliadel Wafer was commercially launched in 1997, several months after Guilford and Aventis entered their marketing and distribution agreement. (The agreement excludes Scandinavia, where the product is marketed by Orion Pharma.)

"At the time of the agreement, Guilford was a much smaller organization," Jurchison said, explaining the original agreement with Aventis. "We didn't have the means or infrastructure to support marketing and sales activities."

Before last month's announcement, Guilford received about 35% of the revenues for Gliadel Wafer, and "in reacquiring the product, we have an opportunity to increase our top-line revenues, and it will provide additional cash flow to support our ongoing programs," Jurchison said.

Specifically, Guilford in June completed Phase III trials of Gliadel Wafer used to treat brain cancer at the time of diagnosis. Data on the trials will be released soon and the company anticipates filing a supplemental new drug application in mid-2001.

Gliadel Wafer's 1997 FDA approval was based on a study involving 222 patients undergoing surgery for recurrent glioblastoma multiforme. In the Phase III double-blind, placebo-controlled clinical study, Gliadel Wafer increased survival at six months by more than 50%. In a second randomized, double-blind Phase III clinical study in 32 patients newly diagnosed with malignant glioma, Gliadel Wafer increased survival at one year to 63% compared to 19% with placebo.

News of new grants

Stanford University Medical Center (Stanford, California) has received a grant of $31.8 million from the Lucile Packard Foundation for Children's Health (Palo Alto, California), to establish a center to treat patients with pulmonary vascular disease and to support research dedicated to finding cures. The Vera Moulton Wall Center for Pulmonary Vascular Disease at Stanford will provide diagnostic and therapeutic services for adults and children with pulmonary vascular disease, focusing on pulmonary hypertension. It also will support and expand research collaboration between the schools of medicine and engineering at the university.

SurroMed (Palo Alto, California) and Quantum Dot (Hayward, California) reported being awarded a $5.6 million Advanced Technology Program (ATP) grant from the National Institute of Standards and Technology to develop new blood fingerprinting and optical detection technologies. The system will be based on SurroMed's microvolume laser scanning cytometry (MLSC) technology and Quantum Dot's light-emitting Qdot quantum dots, for the rapid and comprehensive analysis of whole blood for cell-surface markers, pathogens, and biologically important soluble factors. Gordon Ringold, PhD, SurroMed CEO, said the MLSC platform "is an important component in the suite of advanced technologies that SurroMed is developing and integrating into a platform for comprehensive phenotypic analysis."

PPL Therapeutics (Blacksburg, Virginia) has received its second ATP grant from the National Institute of Standards and Technology in the U.S. Department of Commerce. The grant is for $1.9 million over three years to fund further work on a new approach for deriving a large number of mammalian pluripotent stem cells using a method that does not require an embryo intermediate. Research funded by this grant will be focused on the production and differentiation of stem cells from non-human primate and livestock species. Therapies and products from human pluripotent stem cells have broad potential applications in treating a variety of diseases.

Abiomed (Danvers, Massachusetts) reported receiving $1.8 million in additional funding from the National Heart, Lung and Blood Institutes (NHLBI) to support continued testing of its AbioCor Implantable Replacement Heart. The AbioCor currently is undergoing testing in preparation for human trials. The $1.8 million award increases NHLBI funding for the AbioCor to $15.3 million under the current contract, according to Abiomed. Separately, the company said it expects to complete its IDE submission for the AbioCor heart before the end of this quarter and, pending regulatory approval, predicts launch of human clinical trials early next year.

OraSure Technologies (Beaverton, Oregon) has received a $1 million grant from the National Institutes of Health (NIH) to fund Phase II of the company's development of a test for syphilis using either blood or oral fluid. The funding is a "fast-track"grant which the company achieved via specific milestones set in Phase I, funded with an NIH grant of about $118,000 last September. OraSure's syphilis project is developing tests for syphilis that both screen and confrim the result using an oral fluid sample from an OraSure oral specimen collection device.

Ixion Biotechnology (Alachua, Florida) has received a $100,000 Phase I SBIR grant from the National Institute of Diabetes and Digestive and Kidney Diseases titled "Oxalobacter Formigenes Diagnostic Kit Development." O. formigenes is an anaerobic bacterium that lives in the intestinal tracts of humans, and the largest market for the kit being developed by Ixion will be patients with calcium-oxalate kidney stone disease, affecting as many as 20 million people in the U.S., according to the company. Ixion develops diagnostic and prevention systems for oxalate-related disorders, such as kidney stones, Crohn's disease and cystic fibrosis.