Medical Device Daily Contributing Writer

SAN FRANCISCO — Although medical technology is an important part of the healthcare investing world, its importance at last week’s JPMorgan Health Care Conference at the Westin St. Francis was dwarfed by the large biotechnology and pharmaceutical companies. Nevertheless, interest in this sector remains high as evidenced by well-attended sessions for most med-tech company presentations.

Abiomed (Danvers, Massachusetts) CEO Michael Minogue described his company as a “26-year-old startup” because it is on the verge of a major new product launch. FDA 510(k) approval of its percutaneously-implanted micro pump device, tradenamed Impella, appears to be imminent. According to several investment banks that follow the company, Impella could rack up annual global revenue in excess of $100 million within five years of its launch, more than tripling the company’s current sales.

Minogue noted that “our core competency is heart recovery” and that Impella fits in well with its existing product line of ventricular assistance devices (VADs). However, whereas Abiomed has historically focused on a niche market within the VAD space, selling short-term devices intended for in-hospital use, it will now have the opportunity to serve a far larger market by tapping into the more than 1 million angioplasty procedures performed annually in the U.S. Thus, this product launch could transform short-term VAD technology from a niche therapy to a mainstream one.

Minogue, who joined the company in 2004 after a 12-year career at GE Healthcare (Waukesha, Wisconsin), said that Impella represents a “paradigm shift” because it offers, for the first time, a device that increases blood flow to the heart muscle and vital organs and therefore reduces heart muscle workload.

It is expected that Impella’s initial use will be during high-risk angioplasties, which are believed to account for some 5% to 7% of the angioplasties performed.

The current gold standard for short-term cardiac support is intra-aortic balloon pumping (IABP), with about 110,000 cases per year in the U.S. utilizing this technology. In mid-December, Abiomed reported that it had received FDA approval for its own IABP system, trade-named the iPulse.

Minogue said that if Abiomed is successful in garnering one-third of the domestic IABP market, it will generate in excess of $700 million in annual revenue.

The regulatory status of the Impella, which has been in a state of limbo since the company filed its 510(k), now appears to be a bit clearer. Early last week in an 8-K filing with the SEC, the company said it had submitted what it believes to be the final response to FDA in connection with its submission. The response included treatment data from 35 patients, which Abiomed believes demonstrates the device’s safety.

According to the filing, the company expects to receive a response from the FDA on its 510(k) clearance submission sometime before March 31. Minogue told Medical Device Daily that “we are ready for a full-scale launch and are a very optimistic about our prospects.”

Whereas Abiomed has been a public company for many years, a newcomer to this arena is EnteroMedics (St. Paul, Minnesota). The company completed its IPO in mid-November, raising roughly $40 million. While it was a substantial IPO by most medical device standards, the amount raised was about half what the company had hoped for. Difficult market conditions and a decrease in investors’ appetite for early stage, non-revenue-producing companies had a major impact.

CEO Mark Knudson said that his company’s technology “addresses the shortcomings of the current approaches to treating obesity,” offering a safe therapy that he fully expects also will prove to be very effective. He noted that the market opportunity EnteroMedics addresses is very large, representing about 15 million Americans who have a body mass index in excess of 35.

“Fewer than 2% of these patients seek surgery and we believe that our approach will dramatically expand the number of patients treated,” he said.

He indicated that about 1.2 million patients opt for medical management, which is not very effective, though it is safe and non-invasive. He noted that 168,000 patients in the U.S. were treated last year with highly invasive surgery — either gastric banding or bypass. While these are effective, they are invasive, risky and often involve onerous side effects and entail major lifestyle and dietary changes.

EnteroMedics’ laparoscopically implantable Maestro system targets the physiology of obesity, causing both a reduction in hunger feelings between meals and earlier fullness during meals. Patients follow a normal diet with reduced portion size.

The Maestro, which uses a generator and leads similar to pacemakers, is designed with a neuroblocking algorithm system that intermittently blocks the vagus nerves using high-frequency, low-energy electrical impulses. The therapy, which is called VBLOC, is delivered intermittently over about a 12-hour period every day on an ongoing basis.

This approach seems to prevent the accommodation or work-around that the body will do if the vagus nerve is cut, which was another treatment modality that has been tried and proven unsuccessful in the past.

Knudson cited several key advantages of the Maestro, including a reversible 60- to 90-minute surgical procedure with no anatomical alteration, minimal follow-up and an excellent safety profile. To date, with nearly 100 implants done worldwide, there have been no deaths or serious adverse events.

Just prior to Knudson’s talk, EnteroMedics reported interim clinical results for its RF2 system, which is being evaluated in a clinical feasibility study with 33 obese patients outside the U.S.

The most recent follow-up of nine RF2 patients, among the earliest patients implanted in the trial, showed a weight loss of 29.5% after nine months of therapy.

“We are very encouraged by these results, while recognizing that relatively few patients have been treated,” Knudson said.

This same system will be used for the company’s EMPOWER pivotal trial, in which it hopes to enroll 300 patients in 15 centers in Australia and the U.S. This double-blind, placebo-controlled study is expected to complete enrollment in the first half of 2008, with a pre-market approval submission expected in mid-2009.