Synthes has bowed to intensive media speculation and confirmed that it is in talks with Johnson & Johnson over a possible takeover by the US healthcare giant.

Any deal to acquire Switzerland-based Synthes would represent one of the largest attempted by J&J since it lost out to Boston Scientific in the battle for control of Guidant. J&J is rumoured to be offering around US$20 billion to acquire Synthes, a major player in the spine and trauma markets. If J&J were to secure its target it would return the company’s DePuy business to the top spot in the worldwide orthopaedic market and ending Zimmer’s dominant position. A combined DePuy-Synthes unit could potentially be worth US$46 billion and boast strong positions in orthopaedic, spine, sports medicine and biologic products. Ironically, Zimmer itself went to the number one position by securing another Swiss company, Centerpulse, in 2003.

Since the beginning of the new year, it seems J&J has been looking for a big deal and was strongly linked with a US$11 billion approach for UK-based Smith & Nephew. The pharmaceutical/medical device giant can afford it as well, with around US$28 billion in cash lying in its balance sheet. Whilst it can clearly afford it, the company doesn’t tend to overpay with its purchases – a fact that appears to have been illustrated following the non-appearance of an offer for S&N – and will be hoping that rumours of a rival offer from Medtronic do not materialise.

So what makes Synthes such an attractive proposition to J&J? Although headquartered in Switzerland, the majority of Synthes’ 2010 sales (58 per cent) originate in North America and followed by Europe (23 per cent) and Asia-Pacific (12 per cent). The company increased its sales by 8 per cent to US$3.7 billion in 2010 and net earnings jumped 10 per cent to US$908 million. It has strong trauma and spine products, whilst DePuy’s expertise is particularly focused in hip and knee implant – which means the case for synergies and antitrust approval could also be strong.

Despite its size, J&J is under pressure to react to competition in its medical device fields, particularly within the cardiovascular market. The company’s once dominant position in drug-eluting stents has long been usurped by Boston Scientific, and competition from the likes of Abbott and Medtronic have bitten hard. Within orthopaedics, DePuy has been dogged by a series of recalls that are understood to have cost J&J nearly US$1 billion so far. The unit has also been hit with several lawsuits regarding its recalled ASR hip implant, with complaints rolling in on a weekly basis. Despite these woes, DePuy still upped its net sales during 2010 by 4 per cent to US$5.6 billion, highlighting the potential of orthopaedic products to achieve strong revenues and profit margins.

News that Synthes is even discussing a deal represents a rare opportunity to buy a company that has never really been touted as a bid target. The reason for this is that the company is majority-owned by its Chairman and guiding light, Hansjorg Wyss, and various Wyss-family controlled trusts so any bid will have to meet his approval to stand a chance of success. Switzerland also has complex minority shareholder rights – just ask Novartis after its protracted battle for Alcon – so although the talks are significant, a deal is not entirely certain.

J&J’s approach for Synthes could kickstart a further period of consolidation in the orthopaedic market or alternatively represent an albeit mighty dent. Below the big players, Wright Medical Group is in a bit of a bother having kicked out some its management team recently, whilst the question remains – will anybody make a move for S&N? The rather quiet cosy world of orthopaedics looks like waking from its slumber at last!

Thank you to Lawrence Miller for a great post, Lawrence is Epicom’s medical newsletters team leader, and also editor of the excellent publications Orthopaedic Business News and Medical Industry Week.

Thanks for reading, back in two weeks time, Paul.

GHV hopes to grab a slice of Viagra’s success with sublingual ED product offering

Global Health Ventures, a specialty pharma company focused on drug-delivery and formulation, is attempting to gain a piece of the lucrative erectile dysfunction (ED) market by testing out its ED treatment – X-Excite (sublingual sildenafil citrate) in Europe. GHV will take on global market-leader Pfizer in a European treatment comparison study that will pitch X-Excite against Pfizer’s well-established Viagra treatment. The EMA has given the comparison study the go-ahead, and GHV hopes to begin in the next few weeks.

ED affects around 10 per cent of men worldwide, and is currently treated by drugs that prevent the enzyme 5-phosphodiesterase – drugs like sildenafil, tadalafil and vardenafil that collectively generate over US$3 billion a year. They all, however, carry side-effects related to gastric and colonic absorption. Step forward GHV, with its sublingual sildenafil citrate formulation, aimed at bypassing gastro-intestinal side-effects and making ED treatment more patient-friendly.

The 24-patient clinical trial will compare sublingually-delivered X-Excite with Viagra and will take about three to four months to complete. The study aims to look at the speed at which each drug appears in the bloodstream and its effect on liver enzymes that might address some of the side-effects that are often seen with the current administration route. X-Excite delivers sildenafil citrate – the active ingredient in Viagra – sublingually. Sublingual delivery is widely believed to be the fastest way to get a drug into the blood, bypassing the liver. A lot of side-effects from drugs are due to liver metabolism and the use of the liver as the first passage to the body. In theory, GHV’s sublingual delivery should have fewer side-effects because it bypasses the liver.

GHV’s sublingual technology aims to enhance drugs to be delivered to the body without the use of injection, enabling the majority of pharmaceuticals to be rapidly absorbed through the mucosal membrane (the tissues of the mouth). The technology is a good match for drugs that need fast results and have major side-effects. It has so far been tested against 40 major drugs, and is used in GHV’s other product candidates – Nico-Z (sublingual nicotine for smoking cessation) and T-Stim (an anti-obesity drug).

Thanks to Sophie Bracken for this article, sophie is the editor of Espicom’s Drug Delivery Insight news service.

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Reva raises A$77.5 million as investors take a bet on the next big thing in stent technology – bioreabsorbable drug-eluting stents

Welcome back to the Medical Technology Blog. This is the last post of the year as I finish today for the Christmas holidays, please read on…

Reva Medical, a start-up company focused on the development and eventual commercialisation of its bioreabsorbable stent products, has successfully raised A$77.5 million (net) from an initial public offering (IPO) through an issue of CHESS depositary interests (CDIs) on the Australian Securities Exchange.

Based in San Diego, CA, the company has received approximately US$100 million in funding to date and attracted the attention of both Boston Scientific and Medtronic, both of which have previously made sizeable investments in the company. Boston Scientific’s participation included an option to acquire Reva at a later date. However, as a result of the share issue, these merger plans have now been terminated – at least for the time being – with Boston Scientific holding onto an option to distribute Reva’s products should they reach the market. Medtronic is also maintaining its support and has invested a further A$10.5 million in the Reva share placement. Reva plans to use A$38.9 million of the proceeds to support development work, with A$31.4 million invested in ReZolve and A$7.5 million other programmes. A further A$10.3 million will be spent on funding the pilot and pivotal CE mark trials, A$24.2 million on working capital and the remaining A$4.2 million on manufacturing. Overall, the proceeds are expected to support Reva’s development over the next three years.

Billed as the “next major advance in coronary stent technology”, Reva’s core technology, known as ReZolve, is a non-permanent implant that combines a “slide and lock” stent design with a polymer. In development for over ten years, the device claims a number of significant advantages as it is designed to provide the same benefits as traditional metal stents, with the additional benefit of being dissolved by the body over time after treatment of the artery. The reabsorption of the stent minimises clotting risk and reduces the need for long-term drug therapy. In addition to cardiovascular disease, this technology could also be applied for the treatment of other conditions, including peripheral artery disease and spinal trauma surgery. With regards to the latter, Reva is currently seeking a partner interested in licensing its side-chain crystallisable  polymer for use as a flowable cement.

Reva has held an exclusive licence since 2004 for its polymer material from Rutgers University in New Jersey for use in stents, stent coating and embolics. In July 2010, Reva entered into a new licence agreement with Rutgers which broadened the company’s exclusive rights to the original polymer group and all new polymer compositions developed to cover all vascular applications. The company also intends to use sirolimus, an anti-restenotic drug used in other DESs. A target dose of 80µg of sirolimus is coated onto the outside surface of the ReZolve stent using a polymer solution containing the drug.

Reva is targeting a competitive coronary stent market that was valued at over US$5.3 billion in 2009, with drug-eluting stents (DESs) taking up US$4.4 million of this total. The company finds itself in potential competition with the likes of Johnson & Johnson (Cordis), Abbott Laboratories, Boston Scientific and Medtronic, which collectively accounted for 95 per cent of all DES sales in 2009.

Primary competition for Reva’s products is expected from both traditional DESs and other bioreabsorbable stents. Whilst a number of companies are working to develop bioreabsorbable or polymer stents, so far only two have reached the clinical trial stage. Abbott Laboratories is developing its Bioresorbable Vascular Scaffold (BVS), which is forecasted to reach the European market before Reva’s Resolve stent, and Biotronik, which is developing its second generation Dreams magnesium-based reabsorbable stent. Biotronik began clinical trials of its device in July 2010.

Reva is now in the process of finalising the design of the ReZolve stent, with a 50-patient pilot human, non-randomised trial scheduled to commence in Brazil and Germany during the second quarter of 2011, with patients followed at one, six and 12 month intervals after implant of the device, and annually thereafter, for a period of up to five years. Positive findings could then led to enrolment in a 350-patient trial at centres in the EU, Brazil, Australia and New Zealand, in the first and second quarters of 2012, with a full to securing marketing approval in Europe by the end of 2013. If successful in generating such sales, Reva anticipates using the revenue to fund the US human clinical trials, as well as other development activities. Highlighting the tough regulatory climate for DES technology in the US and the associated costs incurred, Reva’s proposed US trial programme, in contrast to Europe, would involve at least 2,000 patients.

Thank you to Lawrence Miller for that article, Lawrence is Espicom’s medical newsletters team leader, and editor-in-chief of Medical Industry Week

A big thank you to all my readers, Happy Christmas and a prosperous New Year to one and all.

Paul

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MJFF launches biomarker initiative study aimed at finding a cure for Parkinsons Disease

In its latest quest to find a cure for Parkinson’s disease (PD), the Michael J Fox Foundation for Parkinson’s Research (MJFF) has unveiled further details of its Parkinson’s Progression Markers Initiative (PPMI), the first-ever large-scale clinical study exclusively focused on identifying and validating PD biomarkers. The study forms a major part of MJFF’s goal to develop a cure for PD within the coming decade. Since it began in 2000, the foundation has spent over US$205 million in specialised research in the field, either directly or through partnerships, which has helped the foundation learn more about the disease; develop better treatments for patients; and, ultimately, move a step closer to ending PD.

The latest five-year study, expected to cost US$40 million over five years, will be funded by the foundation with a lead gift from Lily Safra, a Board member of MJFF, and through the support of industry partners that include Pfizer and GE Healthcare. The PPMI study will be led by principal investigator, Dr Kenneth L Marek, President and Senior Scientist, Institute for Neurodegenerative Disorders, New Haven, CT.

The study will be carried out at 18 sites in the US and Europe, and will track 400 people newly-diagnosed with PD and 200 who do not have the disease. The study is testing the most promising biomarker candidates at present through neuroimaging, the collection of blood, urine, and spinal fluid, and clinical and behavioural tests. Valid measures could allow scientists to predict, objectively diagnose and monitor diseases, as well as definitively determine which medications work and which will not. The goal of the collaboration is to help increase the pace of biomarker validation and clinical testing, as well as accelerate the pace of discovery.

Recruitment of study volunteers is now under way at six sites, with all sites expected to be recruiting by year-end. Sites participating in the PPMI include the University of Alabama; Arizona Parkinson’s Disease Consortium; Baylor College of Medicine; Institute for Neurodegenerative Disorders; Northwestern University; the Parkinson’s Institute and Clinical Center; Boston University; Oregon Health & Science University; and the University of Pennsylvania. Additional sites will also join the study in Atlanta, GA; Tampa, FL; Baltimore, MD; Rochester, NY; Seattle, WA; Innsbruck, Austria; Kassel/Marburg, Germany; Tuebingen, Germany; and Naples, Italy.

Described as an observational study as opposed to an interventional trial, the PPMI will not test any experimental drug. Participants will be contributing to a large body of data and biological specimens whose aim is to further biomarker research. The PPMI will make biological samples and collect clinical data from a single, large and well-characterised cohort available to qualified researchers around the world, to help spark further innovation and collaboration, in order to develop new, more effective treatments more quickly.

When considering the implications of this research for the industry, a biomarker could dramatically reduce both the cost and time of development – since to bring a new central nervous therapy to market requires an investment of over US$1 billion and takes over nine years. Current US annual sales of PD therapies are estimated at US$800 million – however, this could increase to US$2 to US$3 billion with the advent of a disease-modifying therapy.

In the past, PD biomarkers have represented a key area of R&D for MJFF, with approximately US$25 million invested to date over several years. As the foundation embarks on PPMI, it believes more strongly than ever that the discovery of PD biomarkers is a high-impact use of its resources, and that this study will pay dividends towards better treatments and a cure.

This article was taken from an issue of our Espicom’s excellent publication Diagnostics Focus which is edited by Sophie Sanderson

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Biosensors highlights concerns over the time and costs of approving devices in the US

Jeffrey Jump, the recently appointed CEO of Biosensors is a frustrated man. His company – a Singapore-based stent manufacturer – has grown increasingly exasperated with the regulatory climate that exists in the US and he wants everybody to know just how difficult it is getting a device approved by the FDA.

Concerns over the lengthy and demanding regulatory process in the US are not new. For years, many of the groundbreaking devices to emerge in the healthcare market – not just in cardiovascular devices – have made their debut in markets outside of the US first. Indeed, many US companies have found themselves marketing their technology in Europe long before the clearance process in the US has been negotiated. Europe’s gain has been the US’s loss but there are fears the gap is widening. In its defence, the FDA’s supporters will argue that its processes are there to protect the American people and if that means a more strenuous approval process then so be it. However, as Mr Jump suggests, it seems as if this regulatory gap is getting worse and the issue has to be addressed.

Worldwide, the approval process continues to take less time and, more importantly, costs less to fund. It takes a device manufacturer three to five years to get a medical device approved in Japan and China, at cost of US$3 million or less in each market. In Europe, the time can range from six months to two years and cost just US$2 million. In contrast, getting approval in the US for a medical device can take between two and seven years and cost between US$50 to US$100 million.

This discrepancy in time and costs is raising a few questions that Mr Jump and other CEOs increasingly feel need to be answered as a business. Most importantly, is it really worth spending that much time, effort and money on securing FDA clearance? It’s an issue that doesn’t just trouble the smaller companies, even the bigger ones are weighing up the options. According to Mr Jump, major medical device companies could be facing bills in the region of US$200 million just to get approval for their next-generation stent technology in the US and, as a direct result, may seriously consider abandoning the US market for this important technology.

With the global economic downturn very much in the memory of CEOs, the stringent and lengthy requirements needed to accommodate the FDA have also seen innovative companies bite the dust as they get bogged down in the regulatory steps imposed by the FDA. For Biosensors this brings opportunities to acquire technology at much lower prices because these companies simply run out of cash and time.

Already, Mr Jump has snapped up CardioMind, a US company which has developed a drug-eluting stent (DES) for the treatment of small vessel lesions, and plans to complete the acquisition of another undisclosed device company shortly. Paying for such high quality assets at knockdown prices is possible for Biosensors because it looks to gain its market share from markets outside of the US, which ultimately place considerably less strain on its cashflow. How long will it be before other companies choose a similar path?

Whilst Abbott will probably find the prospect of not marketing its bioreabsorbable vascular scaffold (BVS) platform in its home country ultimately unpalatable, and you could say it’s big enough to handle the costs, the debate is unlikely to go away. China is set to become the largest market for medical device by 2016, so why go through the trials and tribulations of the US when there are richer pickings to be had elsewhere? Biosensors has already closed its R&D operations in the US and transferred its activities back to Singapore and its R&D centre in Morges, Switzerland – also a centre for R&D for Medtronic and Edwards Lifesciences – because the costs of manufacturing and marketing medical devices in the US do not justify the potential returns.

The FDA is unlikely to be too concerned at the comments made by Biosensors, even if they are shared by the CEOs of some of the largest US medical device companies.  But that could change in the future as there is a real possibility that advanced technology – and US-developed technology in particular – could find itself not available in the US, or at least be available several years behind the global market. This has potential ramifications not only for the US healthcare system but also for the skills base in the US. Will the US be able to keep hold of its expertise if companies are increasingly outsourcing such facilities internationally?

For Biosensors, the die has been cast. The company is committed to marketing its BioMatrix Flex abluminal biodegradable polymer DES in markets outside of the US, and it doesn’t market or manufacture any interventional cardiology products in the US. That’s not say the Biosensors is totally excluded from the US market – it also sells bare metal stents and balloon dilation catheters, as well as a sizeable business that includes critical care catheter systems, haemodynamic monitoring and related devices used during heart surgery procedures and intensive care treatment. It is also handily placed should Abbott market its BVS device in the US as it also incorporates royalty earning Biosensors technology. But, despite all of these points, you can’t help share Mr Jump’s disappointment that the US market is rapidly becoming out of bounds to innovation.

This post was brought to you by Lawrence Miller, Espicom Business Intelligence’s medical news team leader.

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A warm welcome back to The Medical Technology Blog.

Newcastle University’s bioengineering team has made a bid for some of the credit in helping to persuade Johnson & Johnson‘s DePuy Orthopaedics unit to recall its Articulating Surface Replacement (ASR) hip prosthesis from the market.

The researchers,  led by Dr Tom Joyce, began investigating the ASR hip prosthesis as far back as February 2008, and discovered a number of failings in the design of the implant and offered an explanation into how and why the metal joint was being worn away, releasing high levels of toxic metals into the patient’s bloodstream. The subsequent recall means that thousands of patients – estimated at 93,000 worldwide, are being recalled in an effort to determine the extent of the problem and offer support to those who have been left with the crippling side-effects. According to DePuy, “very few” of the ASR devices remain on the worldwide market, following the company decision in 2009 that it would be discontinuing the ASR system as a result of “declining demand and the intention to focus on the development of next generation hip replacement and resurfacing technologies that best meet the needs of surgeons and patients.”

Joyce explained: “The thinking was that a metal-on-metal ball and socket joint should be far more effective and hard-wearing for patients than the older style metal-on-polymer system where the softer polymer tended to wear away quite quickly, releasing particles and eventually causing the artificial joint to fail. What our research showed was that if the ball and socket were not perfectly aligned then the metal wore away quite vigorously – the initially ultra-smooth surfaces roughening and then grinding away against each other – to release nano-sized particles into the body that were then absorbed into the bloodstream and tissues, causing far greater damage.” According to Joyce, only in a minority of cases were the joints actually functioning correctly.

Concerns first began to arise when a number of patients reported groin pain, some not long after their arthritic hips had been replaced with ASR prostheses. Working with orthopaedic surgeon David Langton, based at North Tees University Hospital and now working towards a PhD in Bioengineering under the supervision of Joyce, the NU team studied over 100 explanted hip joints sent to them from across Europe. Blood tests revealed high levels of cobalt and chrome ions in the blood stream of ASR patients. The ASR is made from cobalt-chrome alloy so this implicated the artificial hip. Using a “state-of-the-art” machine, the team studied the surface of the artificial hip joints and found that instead of being highly polished with a mirror-like surface, the failed devices had become roughened. This caused the lubrication of the joint to fail so that, with each step, the patient was producing relatively high volumes of metallic wear debris.

The ASR device formed part of a class of large diameter, monoblock hip resurfacing and replacement devices often selected by surgeons for younger patients who may benefit from a more stable device that can reduce the chances of dislocation after surgery. The DePuy ASR hip resurfacing system was introduced in 2003 and is only approved for use outside of the US, whilst the ASR XL acetabular system was first launched in 2004 and has been available worldwide.

DePuy, like its peers in the industry, will look back on this chapter in the history of hip replacement and hope to learn its lessons. For one thing, sometimes a development that appears to be successful and the answer to a major problem may not necessarily work out all so wonderful in reality over time. The industry has also had to trade off the benefits of technology with its failings, but recalls such as those from DePuy and Zimmer are inevitably going to make it much more difficult to convince surgeons and and potential patients that future technologies won’t suffer the same fate in the future. It is also likely to lead to much more stringent and expensive clinical trial programmes, and further regulatory scrutiny.

Thanks to Lawrence Miller for this post, Lawrence is the medical newsletters team leader and managing editor of Medical Industry Week and Orthopaedics Business

More to come this week, drop back soon, thanks, Paul.

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Welcome back to this weeks second article from the Medical Technology Blog, which centres on the pharma company Cypress Bioscience, please read on…

In an effort to expand its CNS pipeline, Cypress Bioscience has struck a deal with Mountain View, CA-based Alexza Pharmaceuticals to license the latter’s Staccato technology – a novel nicotine inhaler system intended to aid in smoking cessation. Cypress’ Chairman and CEO, Dr Jay D Kranzler, views the licensing deal as consistent with the company’s renewed focus on CNS drug development, and plans to take the technology into Phase I development late next year.

According to a specialist in nicotine addiction, Dr Neal Benowitz of the University of California San Francisco, a pulmonary nicotine device like Staccato nicotine may be useful in addressing a “pressing pharmacological problem” in overcoming nicotine addiction – namely the acute cravings during quit attempts are inadequately treated by current nicotine replacement therapies. Benowitz believes that a device that provides for rapid absorption of nicotine, combined with electronic controls to adjust doses for tapering and cessation, is “what the field has been waiting for.”

This is not the only step that Cypress has made lately to forge ahead in the world of CNS drugs. Late in August, the Californian company acquired patent rights and technology related to a novel, intranasal formulation of carbetocin, a potential breakthrough treatment for the core symptoms of autism. Cypress made an upfront payment of US$750,000 Marina Biotech, the developer of the therapy, which could increase to US$27 million in milestone payments. Cypress has committed to funding all continuing development activities, and will pay single-digit royalties to Marina based on any commercial sales.

Staccato and carbetocin have joined CYP-120 and CB-CAP in Cypress’ existing development portfolio of CNS therapies. CYP-120 is an antipsychotic for the potential breakthrough treatment of schizophrenia, which was licensed from BioLineRx in June and is currently under clinical development; while CB-CAP is a technology platform of cell-bound complement activation products to diagnose and monitor debilitating autoimmune disorders. The latter technology was acquired from Cellotape Corporation in February 2009 and Cypress hopes to see the first services using the therapy to be available in the fourth quarter.

Thanks to Sophie Bracken for this article. Sophie is editor of Drug Delivery Insight at Espicom Business Intelligence.

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Medtronic boosts AF market presence with Health Canada approval

Welcome back to the Medical Technology Blog. Once again i have to apologise for the lack of posts recently, but i am currently updating our main website Espicom, with 60+ pages of world pharmaceutical market pages as well as many new reports, which i will list in my next post, thank you for your patience, please read on…

In a move that brings Medtronic one step closer to securing its goal of becoming the physician partner of choice for atrial fibrillation (AF) ablation, the company has welcomed news of Health Canada approval for its Ablation Frontiers Cardiac Ablation System.

Ablation Frontiers’ radiofrequency (RF) ablation technology for the treatment of AF was added to Medtronic’s growing AF Solutions franchise in February 2009 when the company acquired Ablation Frontiers for US$225 million. Operating within Medtronic’s Cardiac Rhythm Disease Management (CRDM) business, Ablation Frontiers, alongside CryoCath Technologies, a leader in cryoablation treatments for AF which was acquired by Medtronic in November 2008, expand the company’s AF Solutions business. The goal of Medtronic’s AF Solutions franchise is to be the physician partner of choice for AF ablation by bringing breakthrough AF therapies to patients and physicians that are simpler, safer, and offer more predictable procedure times than current treatment methods.

With this latest receipt of Health Canada approval, it would seem that Medtronic is now well positioned to address the increasingly significant area of AF with its Ablation Frontiers Cardiac Ablation System tools now approved for use in Canada, which include the GENius multi-channel RF generator and the Pulmonary Vein Ablation Catheter (PVAC), a single anatomically-shaped mapping and ablation catheter designed to efficiently isolate the pulmonary veins to treat AF. The GENius generator and PVAC, with the addition of the Multi-Array Septal Catheter (MASC) and Multi-Array Ablation Catheter (MAAC), are available in Europe and are under investigational use in the US. As a condition of Health Canada’s approval, Medtronic will provide periodic clinical updates on the safety and effectiveness of the PVAC catheter.

Going forward, Medtronic’s previous acquisition of Ablation Frontiers and CryoCath Technologies is set to further expand the company’s presence in the AF market with additional product milestones expected to take place in the near future. These include the anticipated receipt of FDA approval for the Medtronic Arctic Front Cardiac CryoAblation Catheter System, for which a PMA was submitted in March 2010, and gaining FDA approval for Ablation Frontiers’ system of catheters and the RF generator for permanent, or chronic, AF.

Please check back soon for an updated list of new reports at Espicom Business Intelligence, thanks, Paul.

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Medtronic bags Osteotech as expansion into biologics continues apace

In a move representing a further step in Medtronic’s strategy to build a broader business in regenerative biologics, the Minneapolis, MN-based corporation has agreed to buy Osteotech for US$123 million, or US$6.50 per share, following unanimous approval from the latter’s Board of Directors.

Osteotech is a leader in the growing field of biological products for regenerative healing, and has working on a number of technology platforms. Medtronic’s acquisition of the New Jersey firm is designed to complement Medtronic’s existing bone healing portfolio and expand its current presence in the spine, orthopaedic trauma and dental markets into many additional treatment areas, including joint reconstruction, foot & ankle, and sports medicine.

In recent years, Medtronic has made attempts to enter the regenerative biologics market. In March of 2007, the company signed an agreement with OsteoGenix, an orthobiologic pharma company based in California, enabling OsteoGenix to complete preclinical work on its bone anabolic agent and advance the programme through clinical trials. The agreement gave Medtronic an additional source of bone growth therapies for surgeons whose patients require bone grafting options. As recently as April 2008, Medtronic and Scil Technologies agreed to the development of the latter’s rhGDF-5 (recombinant human growth and differentiating factor-5) dental regenerative technology.

However, Medtronic has been looking for ways to speed up its biologics presence and has moved to take advantage of a spat between directors and shareholders that has dogged Osteotech in recent times, in order to boost that strategy. Osteotech’s Board has faced growing criticism over strategy and direction from a dissident group of shareholders with a stated aim to gain majority control of the boardroom. The acquisition by Medtronic is likely to put paid to this campaign just when it appeared that the shareholder group was gaining momentum. The Osteotech Board itself had appointed Deutsche Bank Securities in 2009 to advise the company on strategic options that could enhance shareholder value after growing frustrated at the inability for its share price to reflect the value of its biologics portfolio.

Despite its corporate difficulties, Osteotech’s extensive portfolio of biologics is used in a broad range of musculoskeletal procedures, and its Grafton range of demineralised bone matrix products holds a large body of evidence that support its “best-in-class” bone-generating capabilities. The company is also currently seeking FDA clearance for the first product based on its HCT (human collagen technology) platform, an engineered human collagen biomaterial.

As regenerative medicine continues to move to the fore as a first-line treatment in orthopaedic and spinal cases, the acquisition agreement seems to be mutually beneficial for both companies. For Medtronic, Osteotech’s products and capabilities will hugely assist the former gain a more prevalent position in today’s competitive musculoskeletal biologics market; and for Osteotech, the protection and safety offered from such a large corporation was too good to pass up.

In related news, RTI Biologics has been forced to calm shareholders that its relationship with Medtronic, involving the supply of BioCleanse sterilised biologic implants to meet Medtronic’s spinal allograft needs, will not change in near-term. RTI says that Medtronic is “supportive” of the agreement, which runs until June 2014.

I hope you found this article of interest, it was written by Sophie Bracken, editor of Orthopaedics Business for Espicom Business Intelligence.

Hello and welcome back once more to The Medical Technology Blog.

The European Union has applied EUR 1.67 million from its Sixth Framework Programme (6th FWP) for research programme to help develop an instrument that more quickly identifies the harmful bacteria or fungus that may be lurking in the wounds of burn victims and causing an infection. Such a device would help to speed up the diagnostic and healing process by days.

At present, doctors have had to rely on microbiological tests that take several days to identify which bacteria are responsible for the infection. In contrast, researchers from Germany, Italy, Lithuania and the UK have been working on a small prototype electronic device, known as the Woundmonitor, which can pinpoint the type of bacteria within a few minutes, by identifying the minute amounts of gas the bacteria are producing. The quicker infections can be diagnosed, the faster patients can be treated, which can in turn lower the cost of lengthy hospital stays.

Most burn injuries occur at home or at work and are more predominant among vulnerable groups such as the elderly or young children. Early diagnosis and treatment of infection in burn patients is critical. However, despite advances in modern medicine, it still takes up to three days for microbiological tests to identify the bacteria present in the wound. Traditionally, medical students were taught to recognise bacterial infections by their characteristic odour. Clinicians and researchers from Germany, Italy, Lithuania and the UK in the Woundmonitor project used the same approach, but were assisted by the latest information and communication technologies.

The researchers developed an instrument that can identify types of bacteria from the small amount of volatile gases, recognisable by smell, that they emit. The experts first identified the three major types of bacteria: staphylococcus, streptococcus and pseudomonas, which account for about 80 per cent of the bacterial infections found in burns. They then identified the volatile chemicals spread by the bacteria when they multiply. With this information, the team designed an instrument containing eight gas sensors. The pattern of the responses from the sensors represents the characteristics of the chemicals present, by which the bacteria are identified.

This complex , but nimble, instrument has already been tested in a hospital in Manchester, UK, and at a Kaunas regional hospital (Lithuania). Results are said to have been very satisfactory and the researchers have positively assessed the instrument’s risk level. Several commercial companies have also indicated an interest in the instrument and discussions are underway to develop the instrument for commercial use.

The University of Manchester in the UK s co-ordinating the EUR 2.2 million programme, which commenced in January 2006. Other partners in the project include Puslaidininkiu Fizikos Institutas and Kaunas Medical University Hospital (both in Lithuania), CNR-Istituto Nazionale per la Fisica della Materia and Biodiversity (both Italy-based), Umwelt-Systemtechnik (Germany) and the Department of Burns and Plastic Surgery at South Manchester University Hospitals Trust.

Thanks to Lawrence Miller for this post, Lawrence is Espicom‘s medical newsletters team leader, and the managing editor of Medical Industry Week and Diagnostics Focus