Welcome back to the Medical Technology Blog. Apologies for the lack of posts lately, busy times at Espicom, thanks for your patience. Today we have a detailed post taken from Espicom’s business publication, Cardiovascular Device Business, please read on…

Medtronic caps busy period for R&D with trial data from DES, pacemakers, heart valves and renal denervation study programmes

RESOLUTE US trial

According to two-year follow-up data from the RESOLUTE US trial, Medtronic’s Resolute drug-eluting stent (DES) maintains a powerful and persistent treatment option for a wide variety of patients with coronary artery disease, including those with diabetes mellitus.  The Resolute DES was approved by the FDA in February 2012, with a specific indication for the treatment of coronary artery disease in patients with diabetes mellitus.

The RESOLUTE US trial enrolled 1,402 patients across 128 US-based clinical trial sites. The two-year results among 1,359 patients include low rates of TLF (7.3 per cent), clinically-driven TLR (4.3 per cent), and def/prob ST (0.2 per cent). These results were achieved despite 34 per cent of the patients having diabetes mellitus, which typically drives higher event rates. Among the 474 patients with diabetes in RESOLUTE US, the Resolute DES showed low two-year rates of TLF (8.9 per cent) and clinically-driven TLR (5.7 per cent) and no def/prob ST (0.0 per cent).

Pooled analyses, provided by the worldwide RESOLUTE clinical programme, consisted of a large randomised controlled trial and a series of confirmatory single-arm studies involving nearly 250 sites in 32 countries. In total, the programme enrolled 5,130 patients who received a Resolute DES; about one third (n=1,535) of these patients had diabetes, a proportion that mirrors the US patient mix for percutaneous coronary intervention (PCI). For the pooled analyses related to safety and diabetes, two-year data on more than 5,000 patients from the RESOLUTE programme who received a Resolute DES were included. Individual trials, while designed for many composite endpoints, are often underpowered to show real differences for low-frequency, but clinically important adverse events such as ST.

The two-year update to RESOLUTE Pooled Safety showed very low rates of clinically-driven TLR (4.7 per cent) and def/prob ST (0.9 per cent), despite 46 per cent of the patients in the RESOLUTE programme being considered complex. Additionally, the two-year update to RESOLUTE Pooled Diabetes, which presents clinical outcomes in patients with and without diabetes who received a Resolute DES, shows consistently low event rates out to two years despite the higher-risk nature of the diabetes patient population.

In a separate development, two clinical trials relating to Medtronic’s Symplicity renal denervation system show that the treatment provides safe, significant and sustained blood pressure reduction for up to three years in patients with treatment-resistant hypertension. The system is not yet cleared for the US market, but has been available since April 2010 in certain parts of Europe, Asia, Africa, Australia and the Americas. The FDA granted Medtronic approval for the protocol for SYMPLICITY HTN-3, the company’s US trial of the Symplicity system, for treatment-resistant hypertension, in August 2011.

SYMPLICITY HTN-1 trial

Results from the SYMPLICITY HTN-1 trial showed sustained safety and effectiveness of renal denervation with the Symplicity system for up to three years, and results from the SYMPLICITY HTN-2 trial showed safe, sustained and significant blood pressure reduction one year following the procedure. Renal denervation therapy is a minimally invasive, catheter-based procedure that modulates the output of nerves that lie within the renal artery wall and lead into and out of the kidneys. These nerves are part of the sympathetic nervous system, which affects the major organs that are responsible for regulating blood pressure: the brain, the heart, the kidneys and the blood vessels.

SYMPLICITY HTN-1 is a series of pilot studies involving 153 patients at 19 centres in Australia, Europe and the US. Subjects in the trial maintained an average blood pressure reduction of -33/-19 mm Hg at 36 months (n=24) from baseline (p<.001) following treatment with the Symplicity system. An increasing proportion of patients who completed follow-up had at least a 10 mm Hg reduction in systolic blood pressure. At six months 71 per cent of patients were classified as responders, which increased to 100 per cent among the patients who completed three year follow-up. There was no evidence of renal impairment, no patients were hospitalized due to hypotension, and no procedure-related serious adverse events were seen.

The SYMPLICITY HTN-2 trial is an international, multi-centre, prospective, randomised, controlled study of the safety and effectiveness of renal denervation in patients with treatment-resistant hypertension. In total, 106 patients were randomly allocated in a one-to-one ratio to undergo renal denervation with previous treatment or to maintain previous treatment alone (control group) at 24 participating centres. At baseline, the randomised treatment and control patients had similar high blood pressures: 178/97 mm Hg and 178/98 mm Hg, respectively, despite both receiving an average daily regimen of five antihypertensive medications.

The one-year follow-up analysis included data from 47 patients initially treated, who at 12 month follow-up sustained their significant drop in blood pressure (-28/-10 mm Hg [p<0.001] from baseline) with no significant difference from the previously disclosed six month follow-up (-32/-12 mm Hg [p=0.16]). In addition, 35 qualified patients in the control group who received renal denervation six month post randomisation also showed a similar drop in blood pressure to the treatment arm at 6 months post procedure (-24/-8 mm Hg [p= 0.15] from 6 month treatment arm). Safety results were sustained with no significant decline in kidney function and no late vascular complications.

The Symplicity system consists of a flexible catheter and generator. In an endovascular procedure, similar to an angioplasty, the physician inserts the small, flexible Symplicity catheter into the femoral artery in the upper thigh and threads it into the renal artery. Once the catheter tip is in place within the renal artery, the generator is activated to deliver a controlled, low-power radiofrequency energy routine according to an algorithm that aims to deactivate the surrounding renal nerves. This, in turn, reduces hyper-activation of the sympathetic nervous system, which is an established contributor to chronic hypertension. The procedure does not involve a permanent implant.

ISSUE-3 study

In the area of pacemakers, Medtronic has released data from a double-blind, randomised study, ISSUE-3, which found that patients who suffered from fainting due to neurocardiogenic syncope had fewer fainting occurrences when treated with a Medtronic pacemaker. The data showed a statistically and clinically significant 57 per cent relative reduction of fainting recurrence in patients at two years. In the study, patients at high risk for syncope recurrence (asystolic neurally-mediated syncop) were identified through the use of Medtronic’s Reveal range insertable cardiac monitors (ICM), thereby allowing physicians to determine which patients could benefit from a pacemaker implant.

While a previous observational study, ISSUE-2 (International Study on Syncope of Uncertain Etiology-2), showed that the use of an ICM effectively diagnosed asystolic syncope, thereby leading to effective treatment outcomes, the ISSUE-3 study was needed to confirm these results through a more rigorous, randomised controlled trial. The ISSUE-3 study was conducted at 51 centres in Western Europe and Canada in two phases: a screening phase, followed by a treatment phase. From September 2006 to November 2011, 511 patients met the inclusion criteria and received a Reveal device to assist with the diagnosis of each patient’s syncope.

Results of the ISSUE-3 trial showed that fainting re-occurred in 185 of the 511 study patients (36 per cent) and was documented by the ICM in 141 (76 per cent) of these patients. The Reveal ICM diagnosed 51 per cent) of patients with reoccurring fainting as an asystolic event, indicating them for a pacemaker and making them eligible for the treatment phase of the study. These patients received a dual-chamber Medtronic pacemaker and were randomised 1:1 (pacemaker on and pacemaker off). The treatment phase showed significant reduction in recurrence of fainting in patients who received Medtronic pacemaker therapy. For patients receiving pacemaker implants, the fainting recurrence rate was 25 per cent when the pacemaker was turned on and the fainting recurrence rate was 57 per cent when the pacemaker was turned off.

Medtronic pacemakers are currently indicated for use in patients who have experienced one or more of the following conditions: symptomatic paroxysmal or permanent second- or third-degree AV block, symptomatic bilateral bundle branch block, symptomatic paroxysmal or transient sinus node dysfunctions with or without associated AV conduction disorders and bradycardia-tachycardia syndrome.

Meanwhile, the largest international, prospective, single-arm clinical trial evaluating Medtronic’s CoreValve system in patients with severe aortic stenosis who are at high-risk for surgical aortic valve replacement (SAVR) showed that, in a real-world setting, patients experienced high procedural success combined with positive clinical outcomes. The CoreValve system is currently limited to investigational use in the US, but has been CE marked since 2007 for treatment of patients deemed at high or extreme risk for SAVR.

ADVANCE study

The CoreValve ADVANCE study displayed survival rates of 95.5 per cent at 30 days and 87.2 per cent at six months, which are consistent with previously disclosed data from national registries in Europe. The procedural success rate was 97.8 per cent, and overall complication rates were low with stroke rates of 2.9 per cent and MACCE rates of 8.3 per cent at 30 days. Patients in the study experienced significant improvement in valve function (mean gradient decreased from 45.6 mmHg at baseline to 9.3 mmHg at 30 days).

According to Medtronic, the study is one of the largest multicentre transcatheter valve trials to date, with 1,015 patients (mean age of 81 years) consecutively treated at 44 transcatheter aortic valve implantation (TAVI) centres across 12 countries. Clinical endpoints in the trial were calculated according to Valve Academic Research Consortium (VARC) standardised definitions. All data were independently monitored, all adverse events related to the primary endpoints were adjudicated by an independent Clinical Events Committee (CEC) consisting of experienced cardiac surgeons and interventional cardiologists, and all cerebrovascular events (including stroke and other events) were adjudicated by an independent neurologist using neuroimaging and systematic NIH Stroke Scale assessments.

This article was taken from Cardiovascular Device Business, edited by Lawrence Miller, Espicom’s medical newsletters team leader.

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Abbott’s plan to break itself up into two businesses – one for medical products and one for research pharmaceuticals – has suddenly got the analysts’ thinking caps on.

Barely a moment after the surprise news went public, the talk was on the future of both businesses and their chances of survival. Overall, the changes have been welcomed and represent a key moment in the 123 year old company’s history. It’s been there before, on a smaller scale of course, with the formation and successful spin-off of its hospital products business into Hospira in 2007, which has since enjoyed strong growth.

Both of Abbott’s divisions have grown in stature and offer contrasting demands in terms of resources so the split into two businesses is bound to improve clarity amongst the investment community. The medical products business will have 2011 revenues of approximately US$22 billion and the research-based pharma unit will have an estimated US$18 billion sales turnover. However, without the protection of the other, both companies could swiftly find themselves the target of deal makers.

With clarity comes opportunity. Abbott’s upstart research business finds itself just outside of the biggest players of the pharmaceutical market, but with a hot drug on its hands in the form of Humira – an anti-inflammatory drug that posted sales of US$6.5 million in 2010. In a market where the focus is on product pipelines, particularly blockbuster ones, the unnamed Abbott business has a relatively strong pipeline.

Whilst the spin-off is impressively detailed, there’s the nagging doubt that the company, like Johnson & Johnson, continues to find it hard to break up the relationship of medical devices and pharmaceuticals, a model long since ditched by the likes of Bristol-Myers Squibb, Allergan and Pfizer. The medical device business, which is particularly strong in cardiovascular devices and ophthalmic products, sits uneasily amongst the slightly larger divisions of generics, and nutritional products. Whilst Generics enjoys double-digit sales growth, such targets remain elusive in the medical device field for Abbott.

Still, Rome wasn’t built in a day and the spin-off plan is likely to keep investors happy for the moment at least. The company has shown in recent times that it isn’t afraid of ditching certain markets if it feels warranted. The company’s ruthless and swift exit from the spine market when the going got too tough being a classic case in mind.

Whilst this blog is not saying that Abbott’s commitment to medical devices is likely to wane in the short-term – the current spin-off alone will take at least a year to complete at least, but one wonders how long it will take before investors start questioning to rationale of keeping a medical device/pharma mix over the long term. Would an opportunistic offer from Medtronic or an attractive offer from a private equity group change things? One suspects that all the time the company keeps posting sales growth and delivers the financial numbers, Abbott’s investors won’t mind a bit either way.

Thanks to Lawrence Miller for providing this article, Lawrence is Espicom’s medical newsletter team leader and editor of Medical Industry Week

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One step back, two steps forward for Cordis?

Something had to give in the faltering drug-eluting stent (DES) market, but the move by Johnson & Johnson to withdraw from the cardiovascular stent sector by the end of 2011 still raised a few eyebrows at Medical Industry Week. The decision, which will cost the company around US$600 million and the closure of two factories, is a bitter pill to swallow but looks set to be the right decision in the long run. It brings to an abrupt end Cordis’ participation in a market that it had played such a pivotal role in developing.

The DES industry has always suffered to a degree by over expectations. When Cordis won the race to get a DES onto the market in the US back in 2003, it could be forgiven for giving itself a pat on the back and a “well done” to its R&D team. The company could effectively write its own cheque for the technology and the profits rolled in.

In retrospective, this head start was as good as got for Cordis. It didn’t take long for others to notice the profits rolling in and soon enough, Boston Scientific, Medtronic and Abbott responded with their own stent programmes and it didn’t take long for Cordis’ lead at the top to be usurped by Boston Scientific. Chasing the dream led the two to lock horns together in a multi-billion dollar duel for Guidant back in 2004.

Boston Scientific may have won the battle for Guidant, but Cordis didn’t wait too long to hit back and paid US$1.4 billion in February 2007 for a cardiovascular start-up, Conor MedSystems, an astonishing sum considering the relative size of Conor. It would prove to be a costly mistake as barely a year later Conor’s core DES programme – the CoStarr paclitaxel programme – failed to meets its primary endpoint in a pivotal trial, leaving Cordis to focus entirely on sirolimus.

By 2008, however, the signs were clear that the DES market was suffering from a significant downturn in its fortunes. Although not alone in the industry, J&J’s Cypher DES sales, which peaked at the US$2.5 billion mark at one stage have annually declined and reached barely US$627 million in 2010, with sales expected to nearly halve again in 2011.

In truth, the DES market hasn’t helped itself either by failing to adapt quickly to the environmental challenges out there. In a contracting market for healthcare spending, DESs biggest selling point – their cost effectiveness against bare metal alternatives – ultimately proved to be its Achilles heel. When questions were raised over their long-term restenosis rates, the industry struggled to persuade the market not to ditch their use in preference to alternatives. In the UK, National Institute for Clinical Excellence went from recommending the device in 2003 to limiting its use in only 30 per cent of UK patients.

Competition has also hit the industry hard, particularly outside of the US where the regulatory framework is much kinder and it’s easier for the devices to be cleared. However, in all markets, margins are forever being tightened and clearly there is just not enough profit to go round. Worse still, the company is not likely to be in pole position for the next chapter in the story of DES – biodegradeable DESs. Abbott, Boston Scientific and Medtronic are all in advanced stages in development. It’s also noticeable that the company has effectively chosen to shut down its operations rather than attempt to find a buyer for the assets.

It’s not all doom and gloom. Although J&J hates not being number one, J&J’s expensive withdrawal will mean the company will no longer have to spend time answering questions about its faltering DES sales from persistent analysts and allow the focus of attention to turn to its more successful cardiovascular technologies. It will also help reduce the over capacity in the DES market going forward, with Boston Scientific and Abbott the strongest placed to benefit.

Thanks to Lawrence Miller for this article, Lawrence is the medical newsletters team leader and editor of Medical Industry Week

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.

Medtronic has thrown down the gauntlet to group purchase organisations (GPOs) in the US by revealing plans to terminate five orthopaedic and cardiovascular supply contracts with Novation, the GPO that represents VHA and University HealthSystem Consortium (UHC).

It’s a high-risk, aggressive-minded strategy to tear up national supply contracts that are collectively worth around US$2 billion in revenues to the company. However, Medtronic clearly feels that there’s more to gain from supplying hospitals on a local level than through the big GPOs contracts.

So have the GPOs just got too good at leaning on healthcare manufacturers and gone too far? After all, every contract that these groups sign at some point or another highlight the major cost savings for the hospital groups it represents. By dealing with hospitals direct, maybe Medtronic is gambling that it’ll be able to turn the tables on its customers and use its size and strength to negotiate better margins for its products without the might of GPOs helping them out?

It’s all rather too much for Novation, which annually oversees US$38 billion in healthcare spending by its members. The GPO says that ditching the contract model will not only drive up costs for its member organisations, but stifle the implementation of new technologies in the US.

Local hospitals and academic medical centres are worried too. They’re already under pressure to accommodate a US$155 billion cut in US healthcare spending over the next ten years, and are hardly jumping with the joy with the thought of having to secure decent deals with mammoth giants from the likes of Medtronic. Indeed, 16 of them have already written an open letter to Medtronic’s Chairman and CEO, Bill Hawkins, stating the change in approach represents “an unprecedented burden on their existing fragile financial viability.”

Whilst it’s unlikely to see the GPO model disappear overnight – Medtronic itself only recently signed a supply contract with Premier for peripheral and biliary stents for example- it still has major implications for the future should the strategy achieve its ultimate aim and could swing the pendulum in favour of the manufacturer. It’s a US$2 billion throw of the device that looks set to give GPOs sleepless nights and at the same given Medtronic’s rivals something to think about!

Thanks to Lawrence Miller for this article, Lawrence is Espicom’s medical newsletter teamleader, and editor of Medical Industy Week

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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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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.