BB&Ts

Abbott (Abbott Park, Illinois) has agreed to acquire Visiogen (Irvine, California) for $400 million in cash, providing the company with a next-generation accommodating intraocular lens (IOL) technology to address presbyopia for cataract patients.

The deal was welcome news for Visiogen's largest investor as well as others who follow the ophthalmology device industry. "We're all very excited. I think the venture industry is excited actually about this acquisition," Jeani Delagardelle, managing director at New Leaf Venture Partners (New York) told Biomedical Business & Technology. The firm's investments in Visiogen came out of the Sprout Group (New York), whose healthcare technology investments are managed by New Leaf.

Delagardelle noted that this type of acquisition has been a little sparse lately, particularly for companies who have not yet achieved FDA approval. She said Abbott's purchase of Visiogen shows there is still an interest in acquiring venture-backed companies. Visiogen's accommodating IOL, called Synchrony, is designed to deliver improved vision at all distances, potentially eliminating the need for glasses or contact lenses, reducing glare and nighttime halos, and improving contrast sensitivity.

IOLs are typically implanted in a patient's eye after the removal of a natural lens that has become clouded by a cataract. Conventional monofocal IOLs are designed to focus primarily at a distance and not to correct presbyopia, an age-related change in vision in which the eye's lens can no longer adjust its focal length to allow clear vision at different distances. Presbyopia usually begins after the age of 40 and is estimated to affect more than 1 billion people worldwide, according to Abbott.

"We think it's definitely a great outcome. This is a company that we invested in very early when it was just the two founders," Delagardelle said. "This is a very large market, there are a lot of attractive things about it in the first place ... self pay [and] very low reimbursement risk, which is very important particularly in today's market."

Visiogen's Synchrony accommodating IOL is a significant advance in artificial lens technology, according to Abbott. The lens is designed to mimic the eye's natural capacity to change focus (accommodation) with the potential to deliver a full range of vision. Synchrony has been implanted in more than 1,200 eyes and has been available commercially in Europe since January 2009. The device is currently under review by FDA.

"Their lens mimics what the eye does in terms of change of focus. The other lenses out there don't have the same mechanism of action," Delagardelle said. "We were convinced that this was going to be a winner," she added, stating further that Visiogen's technology is a "great fit" with Abbott, now that the company has decided to get into ophthalmology "in a big way."

Abbott entered the vision care segment earlier this year with its acquisition of Advanced Medical Optics (AMO; Santa Ana, California). The company reported in January that it had agreed to acquire AMO for $22 a share in cash, or about $2.8 billion, including debt.

Vertebroplasty with cement not effective

Compression fractures of the vertebra - typically caused by osteoporosis - are often treated with vertebroplasty, a procedure in which bone cement is injected to secure the fractured bone and relieve pain. It sounds like a logical solution and the number of these procedures has been on the rise in recent years, but two new studies suggest it may be ineffective.

David Kallmes, MD, a Mayo Clinic (Rochester, Minnesota) physician who specializes in radiology and neurosurgery, said when he initiated a trial to test the theory, he had no idea there was no benefit derived from the cement. "I thought we'd enroll 20 people and they would say we're showing big benefits and we'd stop. But they never told us to stop," he told BB&T.

In both the U.S. study and another performed in Australia, participants had equivalent pain relief whether they had the cement or the local anesthetic. Researchers from eight medical centers in the U.S., UK and Australia enrolled a total of 131 patients divided into control and study groups, with those in the former group getting an injection of lidocaine but not the cement. Within days of treatment, the groups reported similar improvements in function and pain.

"I really don't know why," Kallmes said. "You have to anesthetize skin and bone for all patients so it may be partially related to that, but lidocaine is short acting, so it could be the placebo effect." But because the results of Kallmes' study were duplicated in another, "it gave me more confidence in my results," he said.

The other study used the same methods with 78 patients. "I was aware of that trial, but it was completely independent, although they decided to gather the same data," he said. Both studies appeared recently in the New England Journal of Medicine (NEJM) along with an editorial that puts the number of vertebroplasty procedures performed in the U.S. at 8.9 per 1,000 people, a rate that has doubled in recent years.

So if it appears the cement isn't doing the intended job, why not just stop using it? Kallmes pointed out that there is some level of pain reduction.

"We aren't saying the vertebroplasty doesn't work, because it somehow does," he said. "Both sets of patients experienced significant improvements in pain and function a month following the procedure whether they received cement injections or not. Improvements may be the result of local anesthesia, sedation, patient expectations, or other factors."

There is a downside to the use of cement whether it does the intended job or not. It can seep into the lungs and into the spinal canal, elevating the risk of new fractures. "It's not totally benign," Kallmes said.

Kallmes said that because these two trials raised as many questions as it answered, he's preparing to launch a new study for further investigation with a new variable - the absence or presence of local lidocaine.

Schultz out at CDRH; Shuren is interim director

The wires were abuzz recently with the announcement that Dan Schultz, MD, director of the Center for Devices and Radiological Health at FDA, turned in his resignation "by mutual agreement" with the new leadership at FDA.

Schultz announced the move in a letter to CDRH employees in which he stated that his decision was "based on discussions with Commissioner [Margaret] Hamburg." Wire service stories indicated that Schultz said his departure "had nothing to do with any specific issue related to a device's approval process," although the intensity of the recent flap over the approval of the Menaflex 510(k) application by ReGen Biologics (Franklin Lakes, New Jersey) makes the claim seem questionable.

There has been a swirl of controversy over the 510(k) program thanks to letters from disgruntled employees to congressional leaders and the Obama administration. One of those letters alleged that Schultz and the director of the Office of Device Evaluation, Donna-Bea Tillman, PhD, placed relations with industry over safety considerations. According to a May letter from the renegade reviewers to Joshua Sharfstein, MD, at the time the acting commissioner at FDA, Schultz and Tillman seemed "seem far more concerned about ensuring their current positions and protecting and promoting their own careers and those of their cronies than they are about ensuring the safety and effectiveness of medical devices."

Schultz is said to have overridden his subordinates to approve the Menaflex 510(k) while Tillman is said to have opposed the clearance. Among those outside of FDA whose role in the Menaflex clearance was seen as pivotal is Rep. Frank Pallone (D-New Jersey), chairman of the health subcommittee for the House Energy and Commerce Committee, which has spearheaded an effort to put the brakes on the 510(k) program. FDA commissioner Margaret Hamburg, MD, announced shortly after Schultz's announcement that Jeffrey Shuren, the agency's associate commissioner for policy and planning, will serve as the interim director of CDRH.

Mark Leahey, executive director of the Medical Device Manufacturers Association (MDMA; Washington) told BB&T in an e-mail: "MDMA has appreciated working with Dr. Schultz over the years to provide patients with timely access to safe and effective products and wish him the best."

Steve Ubl, President/CEO of the Advanced Medical Technology Association (AdvaMed; Washington), said in an Aug. 11 statement that Schultz "served the nation for more than 30 years" and that he "supervised FDA's device center at time of unprecedented scientific advancement and helped continue U.S. leadership in the development of safe and effective medical treatments."

Researchers find HIFU suitable for brain surgery

A team of researchers at MR-Center of the University Children's Hospital (Zurich, Switzerland) are one step closer to providing noninvasive procedures in nearly every part of the body using MR-guided ultrasound. They recently completed a pilot study using transcranial MR-guided high intensity focused ultrasound (HIFU) to treat 10 patients with neuropathic pain. The origin of chronic pain in these patients included post-amputation phantom limb syndrome, nerve injury, stroke, trigeminal neuralgia and post-herpetic neuralgia from shingles.

The ultrasound system used in this combination, the ExAblate 4000, developed by InSightec (Dallas), is mated to a 3-Tesla high field unit made by General Electric (Fairfield, Connecticut). The findings of this study will be published in a forthcoming issue of Annals of Neurology and have the potential to change the way the medical community thinks about HIFU, say the authors of the study.

Neal Kassell, MD, a neurosurgeon at the University of Virginia, and chairman of the Focused Ultrasound Surgery Foundation (both Charlottesville, Virginia), which helped fund the study, said the benefits of this procedure were numerous.

"First of all it's totally non invasive and you're able to treat the patient in real time. Plus the effect of the procedure is known immediately," Kassell said. "It's proof that through the intact skin and skull you can make lesions in an awake person's brain," he said. "I think in the next few years we'll see the liver, pancreas and prostate treated this way."

The preliminary results in these patients are consistent with conventional therapy, radio-frequency ablation, an invasive procedure requiring drilling through the skull and insertion of an electrode through normal brain tissue into the thalamus. Compare this to the MR-HIFU procedure, in which a patient goes through what amounts to an outpatient procedure without anesthesia.

"This research demonstrates that transcranial MR-guided focused ultrasound can be used non-invasively to produce small thermal ablations with extreme precision and accuracy deep in the brain," Kassell said. For years, HIFU has been used for the treatment of uterine fibroids and tumors of the prostate gland. However, its application to the brain through the intact skull for noninvasive neurosurgery was not possible until recently.

The plan now is for other research sites to initiate clinical studies using this technological marriage for other brain disorders within the next year, including studies for Parkinson's disease, essential tremor, and brain tumors.

"I posit that in 10 years from now that people will either be treated by this procedure or they'll know someone who has been treated by this procedure," Kassell said. "But for now we're very much on the ground floor."

Private firms still able to raise funds

Pacific Biosciences (Menlo Park, California), a private company developing what it calls a "transformative" DNA sequencing technology, said it has raised an additional $68 million. The current financing comes from a combination of new and previous investors, including strategic investments from Monsanto and the Wellcome Trust. Sutter Hill Ventures joins the list of the company's institutional investors, many of which also contributed additional capital to this latest financing round.

"We are excited to be part of investing in a new generation of DNA sequencing technology that has the power to unlock how inheritance and environmental factors affect human health," said Bill Castell, chairman of the board of governors for the Wellcome Trust. Previous investors include Deerfield Management, Intel Capital, and Morgan Stanley.

"The fact that we have been able to raise a total of $188 million since last summer during a very difficult economic market is further validation of our business and the promise of our disruptive technology platform," said Hugh Martin, CEO of Pacific Biosciences. The company plans to launch the commercial version of its SMRT (single molecule real time) sequencing system in the second half of 2010.

In other financing activity, NiTi Surgical Solutions (Chesterfield, Missouri), a surgical device company, reported the completion of a financing round, in which the company raised roughly $18.5 million. The round was led by Forbion Capital Partners (Naarden, the Netherlands), with additional participation from existing investors, including Evergreen Venture Partners and Israel Healthcare Ventures (both Tel Aviv). In conjunction with this closing, Avi Molcho, MD, venture partner at Forbion, will join NiTi's board of directors. Proceeds from this financing will be used to support the marketing and roll-out of the company's ColonRing with BioDynamix Anastomosis technology.

Once bankrupt SeraCare now profitable

Turning a company around from bankruptcy, Nasdaq delisting, and an SEC investigation to achieving profitability is no simple task even in a good economy. In an economic state as dire as the current one, it's nearly impossible. Yet, one life science company has done just that within only three years.

But despite the challenges facing SeraCare Life Sciences (Milford, Massachusetts) three years ago, the company's President/CEO and its CFO told BB&T that SeraCare today is right where they always knew it would be.

"I think we absolutely thought we would [achieve profitability] and this has been the timeline in which we anticipated turning profitable," Sue Vogt, President/CEO told BB&T. CFO Greg Gould added that SeraCare had to make some changes in its plan based on current economic challenges, but ultimately, "We always knew that we could get this company profitable."

In March 2006 SeraCare reported that it had dismissed four executives and made other moves that reflected what it said was the discovery of "material weaknesses" in its internal controls. But the company's troubles really began in January that year when an investor filed suit against SeraCare in federal court, accusing the company of stock inflation. According to that complaint, SeraCare's stock price fell by as much as 62% on Dec. 20, 2005, after the company revealed that its independent auditors had issued a report about deceptive accounting issues. The Nasdaq market subsequently delisted SeraCare.

SeraCare filed for bankruptcy that spring and was at the same time under investigation by the SEC. Vogt and Gould joined SeraCare that summer. Under the new leadership, the company has emerged from bankruptcy, raised money in a rights offering, closed the SEC investigation, and achieved relisting on the Nasdaq.

SeraCare reported profitable operational and financial results for its third quarter of fiscal year 2009, ended June 30.

The company had a net income of $0.7 million and earnings per share on a basic and diluted basis of $0.04 for the quarter ended June 30, compared to a net loss of $0.6 million and a loss per share on a basic and diluted basis of $0.03 during the same period in 2008.

"In the third quarter of fiscal 2009, SeraCare met its most significant goal for the year - achieving profitability," Vogt said. "The fact that SeraCare was able to turn a profit in the midst of a significant economic downturn speaks to the inherent strength of our products and services and our position as an innovator and quality leader in the markets we serve."

"We continue to see marked improvements in sequential quarter over quarter revenues during the fiscal year and believe our focus on introducing new, differentiated products to the marketplace and our cost control initiatives will support ongoing profitability."

Among its recent corporate milestones, SeraCare notes that it generated $1.8 million in net cash flows from operating activities for 3Q09; improved gross margin by seven percentage points, to 36% from 29%, for 3Q09 compared to the same quarter last year; and increased diagnostic and biopharmaceutical products revenue by 5%. The firm says it boosted bioservices revenue by 18% compared to the second quarter ended March 31 and generated $0.8 million in operating income, which included non-cash expenses of $0.3 million for depreciation and amortization. SeraCare also launched two differentiated products - the SeraCare Human Papillomavirus (HPV) Genotype Performance Panel and the Accurun 632, 644 and 676 controls.

According to the company, the HPV Genotype Performance Panel is the first product on the market to enable labs, researchers and diagnostic manufacturers to validate the ability of their HPV testing systems to differentiate between high- and low-risk HPV genotypes. SeraCare also noted that the Accurun 632, 644 and 676 controls are the only commercially available single-vial controls that allow researchers and IVD manufacturers to test for all cystic fibrosis mutations currently detected by the leading testing platforms.

According to the company, it had $3.7 million in cash as of June 30.

Due to "external market" conditions, Vogt said, SeraCare did not achieve the top line growth this year that it had originally planned. "Without that growth we had to be much more aggressive in terms of focusing on streamlining the operations, finding ways to cut costs and balancing investments with rate of return."

Devices render similar outcomes for hip fractures

The Agency for Healthcare Research and Quality recently published the results of a study comparing the various approaches to dealing with hip fractures, and the news for device makers is both good and bad: nobody's device looked any worse than the others, but none of them looked particularly better.

According to the AHRQ report, the analysis looked at fractures immediately under the femoral head as well as those occurring in and under the trochanter, the broad superstructure connecting the femoral shaft and the head. AHRQ's review of data drew from Medline and two other web-based sources, the Cochrane Library and Scirus. AHRQ states that it also peered into data posted at ClinicalTrials.gov, and the agency said it had engaged "expert consultants."

The results of the study were that "mortality does not appear to differ by device class or by devices within a class," according to the AHRQ report, noting also no difference in pain, functioning or quality of life. The study indicated that some internal fixation devices offer a more rapid return to functionality for the patient, but "such gains are very short lived."

As for the efficacy of total hip replacements, AHRQ states that it noted "improved patient outcomes over internal fixation," but the data are not sufficiently exhaustive to ensure that those outcomes "would continue to hold if the analyses included the full complement of relevant covariates," such as age, gender and the patient's ambulatory state prior to the fracture. Even the type of fracture does not seem correlated to outcomes, although the statement notes that outcome measures vary, making such comparisons difficult to render.