The failure of Orthovisc to perform as hoped in a Phase III clinical trial resulted last month in a major loss in stock price for the product's developer, Anika Therapeutics (Woburn, Massachusetts). Following announcement of the trial results, the company's stock fell nearly two-thirds, dropping from $4.75 to $2.50, and Anika officials said they may halt development of Orthovisc for the U.S. market. The product is available in Europe, Canada and other countries.
The trial failure was the second major setback for Orthovisc, an injectable hyaluronic acid (HA) preparation. In late 1998, the FDA determined the clinical trial data the company had in hand wasn't sufficient for approval. As a result, the company initiated a Phase III study of 385 patients at 22 centers in the U.S. and Canada to test Orthovisc's ability to treat osteoarthritis of the knee. Patients received three injections of either Orthovisc or saline over a two-week period and were followed for six months following the treatment. Orthovisc, a high-molecular-weight, highly purified, naturally derived form of hyaluronic acid, is designed to coat, lubricate, and protect joint tissues, providing the viscoelastic and cushioning properties of natural HA found in the synovial fluid of healthy joints.
"The trial was designed to show reduction of pain in knees on a relative basis to a saline control," said Douglas Potter, vice president and CFO for Anika. "The difference wasn't statistically significant, and that was the shock, because we were quite confident it would be. It became very clear from the initial data that we weren't going to meet that goal."
Potter said the company needed to analyze the data and evaluate why the trial didn't give the expected results before making any decisions on whether or not to proceed with U.S. development of Orthovisc. "It is unfortunate," he said. "Orthovisc represented a substantial market for us had it been approved."
Anika also said that an ongoing Securities and Exchange Commission (SEC) investigation had resulted in a formal order of investigation, a move that grants SEC full subpoena power. At issue is the company's accounting of sales of its product under a long-term supply and distribution agreement. The initial investigation resulting in Anika restating its financial results for 1998 and the first three quarters of 1999. "We're not sure where they are headed with this," Potter said. "You never really have complete visibility into the process. We have cooperated with the investigation and continue to do so."
Despite all of the bad news, Potter said the company was financially sound and moving forward with its business plan. He noted the company had revenues from foreign sales of Orthovisc, but an even greater source of revenue comes from the sale of Amvisc and Amvisc Plus – HA products for use in ophthalmic surgery. "There is an ongoing business that has adequate cash," Potter said. "We just need to take stock of the situation and move forward." He noted the company also had two products in preclinical development: Incert, a family of HA products designed to prevent post-surgical adhesions, and Ossigel, an injectable formulation of basic fibroblast growth factor combined with HA designed to accelerate healing of bone fractures.
Dot.com firm says e-IRB is a first
DoctorSurf.com (Largo, Florida), an Internet medical site for physicians, reported formation of what it calls the first Internet-based Institutional Review Board, or IIRB. Prepared to review SR and NSR device studies and phase I through IV pharmaceutical trials, the IIRB will offer clinical researchers "immediate access to a diverse community of medical professionals for timely protocol review," Doctor Surf.com said in a statement.
George Stewart, DoctorSurf.com CEO, said that, shortly after its launch, the IIRB received its first study protocol from Critikon (Tampa, Florida), a developer of noninvasive physiological monitoring, for its DINAMAP blood pressure system. Critikon's clinical project leader, Diane Wasoff, said the IIRB provided "timely and resourceful methods used for distribution of study materials."
Biocontrol becomes its own new subsidiary
Biocontrol Technology (Pittsburgh, Pennsylvania) said last month that it will change its name to BICO and create a new division that will retain the name Biocontrol Technology. The new division, headquartered in Indiana, Pennsylvania, will concentrate on the research, development and manufacturing of the company's biomedical products.
Chairman David Purdy will resign as a director and board chairman to become president and CEO of the new division. He also will remain the chairman of Diasensor.com.
Biocontrol is focused on the development of its Diasensor breast cancer detection system. While the product has received some regulatory approvals in Europe, it has been unable to win marketing clearance from the FDA.
Wolf ousted from STAAR posts
STAAR Surgical (Monrovia, California) said last month that John Wolf had been removed from his positions as chairman, president, and chief executive officer. The board of directors formed a search committee comprised of three outside members of the board, and that committee named William Huddleston, the company's chief operating officer, as interim president and CEO.
Huddleston served as chief financial officer of the company from 1990 until being promoted to COO late in 1999. He also became a director of the company in late 1999. Prior to joining STAAR Surgical, Huddleston held various management posts with International Paper, International Pharmaceutical Products, and American Can.
Andrew Pollet, who has served as a director of the company since 1990, has been elected board chairman. "The reorganization and restructuring leaves the company at a very critical stage in its development and we believe Mr. Huddleston is best suited to implement the stated plan," Pollet said.
Founded in 1982, STAAR Surgical makes minimally invasive devices for use in refractive, cataract and glaucoma surgery. Its principal product line includes foldable intraocular lenses, used as replacements for the natural lens in cataract procedures.
Airline adopts remote vital signs system
Virgin Atlantic Airways (Norwalk, Connecticut) reported that it will team with Remote Technologies of the UK and Medlink, the emergency telemedicine service of MedAire (Phoenix, Arizona) to launch the TEMPUS 2000, a new remote vital signs monitor. Virgin says the new initiative comes in the wake of President Bill Clinton's announcement that defibrillators should be installed on all airplanes, and that it was the first airline to introduce defibrillators on all its aircraft.
In a medical emergency on a Virgin Atlantic flight, the TEMPUS 2000 system transmits by satellite key patient vital signs for diagnosing heart conditions as well as video images, to MedLink's board-certified ER physicians. TEMPUS 2000 is a remote monitor designed for use by non-medical experts, using the in-flight satellite phone system on Virgin Atlantic's aircraft. Sir Richard Branson, chairman of Virgin Atlantic, said the airline has been implementing telemedicine with MedLink "for many years now, and TEMPUS 2000 is a major breakthrough in this area." The company said it will begin equipment installations in August.
Company name, location changes
At mid-year, several medical device firms announced changes in location or changes in corporate name:
Aesculap (San Francisco, California), a provider of surgical instruments and implants, said it will move to the Stabler Corporate Center in Bethlehem, Pennsylvania, the corporate headquarters of its parent company, B. Braun. Additionally, Aesculap said it will open a distribution and technical service center in St. Louis, Missouri, this September for more centralized distribution throughout the U.S.
CDT (Westford, Massachusetts), a developer of Optical Coherence Tomography systems for imaging, has changed its name to LightLab Imaging. The new name "better captures the exciting and expanded role we believe light will play in imaging and medicine in the very near future," said Paul Magnin, president and CEO.
SpiderMed.Com (Houston, Texas) has been renamed MedBusiness.net to "better reflect the company's commitment to delivering B2B exchange technology to the physician's back office," according to a company statement. With the new name, the company has rolled out new products to facilitate messaging between physicians on its network and their patients.
Selfcare (Waltham, Massachusetts) has changed its name to Inverness Medical Technology to signal a commitment to diabetes R&D and manufacturing located at its Inverness, Scotland, facility. Its Amex ticker signal was scheduled to change to IMA, effective July 1. The change consolidates R&D, manufacturing and marketing "under one corporate identity," said chairman and CEO Ron Zwanziger.
Ventana Medical Systems (Tucson, Arizona), a supplier of automated instrument-reagent systems to histology labs, said it will build a new worldwide headquarters facility in the Rancho Vistoso Tech Center in Oro Valley, Arizona. The campus facility will include three buildings totaling more than 182,000 square feet on a 19.4-acre site.
Companies ... in brief
Abbott Laboratories (Abbott Park, Illinois) approved the purchase of up to 25 million shares of its common stock from time to time in the open market
ArthroCare (Sunnyvale, California) said its stockholders approved a previously announced 2-for-1 split of its common stock, increasing its authorized shares to 75 million, payable to June 19 holders of record
Cardinal Health (San Diego, California) said it has formed Vistant Corp. (also San Diego), a company that will apply Cardinal's Pyxis dispensing and logistics technologies and experience "beyond the health care marketplace"
Escalon Medical (Wayne, Pennsylvania) reported that its stock has moved from the Nasdaq National Market to the Nasdaq SmallCap Market due to a decline in its minimum net tangible assets resulting from purchase accounting associated with its January 2000 acquisition of Sonomed (Lake Success, New York).