BB&T

PARIS — As of the first of September, the newly revised European directives regulating medical devices were being adopted by the 27 EU member states and then will be implemented progressively in those countries. Full enforcement of the directives will become effective in 2010.

The revised directives approved by the European Parliament at the end of July were adopted by the Council of the European Union and are now being translated into all languages required for publication in the Official Journal of Europe. The directives affect more than 10,000 types of products covering the range of medical applications, from prosthetics to implants, from surgical devices to wound care, and including software for those devices.

With the revision to the original 1993 directives, Europe is passing a milestone in what has been a long journey toward harmonizing the diverse laws regulating medical devices in a highly fragmented but lucrative market that covers some 450 million citizens.

The journey never ends, of course.

"To make things even more confusing, the Commission is already working on major revisions to the revised directives," said Anna Ludwinek, public affairs executive with Eucomed (Brussels, Belgium) the European medical device industry association.

She told Biomedical Business & Technology that the European Commission will address a host of issues resulting from the development of emerging technologies and new materials: for example, the thorny problem of single-use devices, or advanced therapies, such as hybrid drug/device products, that were excluded.

The approved directives winding their way into law include the overarching Medical Device Directive, (MDD 93/42/EEC), the Active Implantable Medical Devices Directive (90/385/EC), the In Vitro Diagnostic Devices Directive (IVDD, 98/79/EC) and the Personal Protective Equipment Directive (PPE 89/686/EEC).

All but the Personal Protective Equipment Directive are called "new approach" directives that aim to harmonize rules to allow the free circulation of medical devices in the EU.

Products that fall within their scope must be CE-marked to show that they comply and must meet all applicable essential safety and administrative requirements. Qualifying products may be freely sold throughout the European Economic Area (EEA) without being subject to additional national legislation, except in matters concerning funding and reimbursement.

The much-compromised and amended directives were passed overwhelmingly, with 645 representatives for the proposal and only 15 against. Passage was assured by a compromise reached in early March with the European Council on product labeling, reprocessing and greater transparency.

Reproccesing refers to single-use products, which has caused so much disagreement (as it has in the U.S.) It has taken three years to bring these revisions to Parliament.

In August, the EC closed a web-based dialogue exploring suggestions for better handling of reprocessed medical devices addressed in Article 12a of the revised Directive 93/42/EEC. The commission is now assessing responses to the central questionnaire.

The European Association for Medical Device Reprocessing (EAMDR;Brussels), which seeks clear and binding conditions for decontamination practices in Europe, said the resolution adopted "was less concrete than had been hoped for.

"Nonetheless, by adopting the directive the European Parliament has acknowledged just how important is this topic," the association said in a letter to members, saying, rather optimistically, "The European Commission is obliged to submit a report on medical device decontamination within the next three years and to explore whether further proposals are needed."

The newly-passed regulation leaves decisions and policies on device reprocessing to individual member states.

Germany is one of the few European countries to allow medical device decontamination, regardless of the device's designation, and a sizable industry has emerged that, based on nearly five years experience, is ready to expand to other opportunities as European countries loosen regulations. German reprocessing companies report that after testing more than 20,000 products, some 16% of all single-use labeled medical devices may be reprocessed under the country's strict guidelines.

EAMDR estimates overall revenues of the European disinfection and sterilization equipment market will expand to $708 million by 2011, or about 26%.

Getinge (Getinge, Sweden), the MMM Group (M nchener Medizin Mechanik, Munich, Germany), Belimed (Munich), Matachana (Barcelona, Spain), Cisa (Torri di Quartesolo, Italy) and Aesculap (Tuttlingen, Germany), part of the B. Braun Melsungen group (Melsungen, Germany), have developed a strong European presence due to the base business in Germany, according to EAMDR.

The emerging potential for hybrid products that mix pharmaceuticals, biotechnologies and medical devices also were not addressed by the revised directives. The EC said it will fold such regulations into legislation for advanced therapy medicinal products that is being developed.

Eucomed objects to this approach, saying that current regulations for hybrid products "have worked well so far."

Eucomed cites drug-eluting stents as an example, saying, "These devices were made rapidly available to patients in the EU, thanks to the existing regulatory framework," that establishes the quality and safety of the medicinal substance in parallel with the applicable requirements of the Medicinal Products Directive.

The new directives also open the door for harmonizing e-labeling of medical devices in Europe.

Device labeling in the previous EU directives refer only to "leaflets," but the new requirements would allow a CD-ROM or downloadable PDF documents, as well as information available on a screen built into a device, for example the pacemaker monitor cited above.

Eucomed threw its support behind the changes, saying, "With more than 20 different EU languages, the size and volume of the paper instructions for use are considerable, and electronic support can also be more easily updated and disseminated."

International dealmaking particularly active in September

International dealmaking is always active, but some of the most interesting adquisitions, buyouts and company creations occurred this past month. Following is a roundup.

BTF Precise Microbiology acquired by bioMerieux

French in vitro diagnostics leader bioMerieux (Marcy L'Etoile, France) acquired BTF Precise Microbiology (BTF; Sydney, Australia), along with its prized technology for testing food, water and pharmaceutical products. BTF has built a niche in industrial microbiology and its acquisition by bioMerieux is expected to result in new products for a broad spectrum of life sciences applications for media quality control, quantitative quality control, method validation, accreditation compliance and multi-laboratory standardization.

BTF was privately held by its founders and the venture capital firm Kestrel Capital. It will operate as a stand-alone subsidiary of bioMerieux. Financial details of the deal were not disclosed.

In addition to integrating the BTF technology into its product portfolio, bioMerieux said it will "significantly expand" market opportunities for BTF innovations through its commercial network, covering 150 countries through a combination of 35 subsidiaries and a network of distributors.

bioMerieux offers tools to determine sources of infectious diseases and contamination, identify high-risk cardiovascular conditions, een for cancer and detect microorganisms in food products, pharmaceuticals and cosmetic products.

"We are acutely aware of the quality-assurance challenges our customers are facing and are constantly on the lookout for technological breakthroughs that can facilitate their work," said Alexandre Merieux, VP for industrial microbiology at the French company.

BTF products are used in quality control for testing processes, to verify the performance of control methods and assure precise reference samples for analytical laboratories.

According to bioMerieux's manager for pharmaceutical marketing, Renaud Jonquieres, the accuracy of BTF's BioBall technology is essential for pharmaceutical companies facing significant penalties for non-compliance with quality control requirements. He said some major companies in recent years have experienced shut-downs of facilities due to failed inspections.

BTF is the third company acquired in the past 12 months by bioMerieux as it pursues an aggressive five-year strategy — unveiled in January — to build its core competencies in a growing market for diagnostics of infectious diseases.

In April, bioMerieux acquired privately-held Biomedics (Madrid, Spain), a specialist in the production of culture media. Biomedics produces 11 million petri dishes a year, with 2006 sales of E4.1 million ($5.7 million). And in September 2006, bioMerieux acquired Bacterial Barcodes (Athens, Georgia), a molecular biotechnology firm with a patented system for automated microbial genotyping to track hospital-acquired infections and for environmental control for product safety.

bioMerieux's revenues in 2006 topped €1.04 billion ($1.43 billion), with 83% of sales outside of France. Only 26% of sales come from the U.S., currently seen as a weakness among stock analysts in Paris. Europe, the Middle East and Africa account for 40% of company sales, while the Asia-Pacific region contributes 11%.

3M buys second-largest orthodontic firm in Brazil

3M (St. Paul, Minnesota) has agreed to acquire Abzil Industria e Comercio (Sao Paulo, Brazil), a maker of orthodontic products. The company is the second-largest manufacturer in the Brazilian orthodontic market. The transaction — terms of which were not disclosed — is expected to close in 4Q07, subject to customary closing conditions.

3M said Abzil is a player in the "fast-growing Brazilian orthodontic market." It said the Brazilian company's brackets, bands, tubes and wires "are widely recognized as some of the highest-quality orthodontic products available in the country."

"Abzil's strong brand and product portfolio complement our full line of orthodontic solutions and will allow us to better serve customers in Brazil and beyond," said Paul Keel, president of 3M Unitek.

"Abzil and 3M are a natural fit," said Tufy Lemos Filho, owner and president of the Brazilian company. "We will draw on the strength of 3M's global resources and expertise to provide a broader product offering for orthodontic professionals."

3M said its Unitek business has been a "global leader" for nearly 60 years, "providing the orthodontic profession with novel innovations such as Clarity Ceramic Braces, APC Adhesive Pre-Coated Brackets, and most recently, SmartClip Self-Ligating Braces and Clarity SL Ceramic Self-Ligating Braces." The company delivers more than 14,000 orthodontic products and solutions worldwide.

Abzil employs about 300 people at its operations in Sao Paulo.

Delft purchased via management buyout by Nucletron

Nucletron (Veenendaal, the Netherlands) reported completing its management buyout of Delft Instruments (Delft, the Netherlands), creating an independent company dedicated to radiation oncology.

Nucletron has operated several entities in the field of radiation oncology. It said the consolidation of the various entities into a single focused company further establishes its leadership role in the field. The company said partnerships, pioneering research and development of advanced technological innovations will enable it to "more effectively deliver cancer treatment solutions globally."

The supervisory board of Nucletron will be chaired by Rob Westerhof, who has held senior positions in Asia and the U.S. for Philips Medical Systems and Royal Philips Electronics. Westerhof said, "Nucletron represents a strong brand in the world of oncology and related areas, and there are excellent opportunities for expanding our market share."

"The creation of an independent Nucletron is the result of the company's success in the past two years," said CEO David Imperiali. "Nucletron has a strong tradition of innovation in radiotherapy, and the breadth of our capability positions the company well to continue to make significant contributions to the treatment of cancer."

The previous company, under Delft Instruments, was created by merging Nucletron, a leader in brachytherapy solutions, with the Oldelft Simulix brand of radiation therapy simulation and imaging technology. In 2003, Nucletron integrated the Helax and Theratronics treatment planning and management solutions from MDS Nordion (Ottawa) into its portfolio to create Oncentra MasterPlan and Oncentra Information Management.

Nucletron delivers solutions to more than 3,000 institutions in more than 120 countries, with annual sales of $160 million. It has offices in 16 countries, including a production and R&D facility in the Netherlands, R&D centers in Uppsala, Sweden, and Oslo, Norway, and sales, service and support operations in Europe, Asia, Australia and North America.

Evotec sells chemical unit to Aptuit for $63.9 million

Evotec (Hamburg, Germany) said it has sold its Chemical Development business to Aptuit (Greenwich, Connecticut) in a cash deal valued at some €46.4 million (about $63.9 million). The business includes Evotec's capabilities in process research and development, custom preparation, analytical development, pilot plant manufacturing and formulation. With about 210 employees based in Oxford and Glasgow, UK, the business generated €26.8 million in revenues in 2006.

J rn Aldag, president/CEO of Evotec, said the transaction "put[s] us in a much stronger position to leverage our clinical CNS [central nervous system] assets and we are committed to further expand our pipeline and capabilities through in-licensing or M&A."

Symbion shareholders nix takeover bid

In a deal that didn't happen, shareholders of Symbion Health (Melbourne, Australia) rejected a A$2.9 billion ($2.4 billion) takeover bid led by Healthscope, Australia's second biggest hospital owner. This extended a nine-month battle for more than 130 pathology laboratories and medical clinics in Australia.

According to a Bloomberg report, Primary Health Care, which amassed a 20% stake in Symbion after its own buyout bid was rejected in February, voted against the A$4.49-a-share offer, preventing Healthscope from getting the three-quarters majority needed for approval.

Observers have commented that the vote may prompt Primary, Australia's third-largest health company, to revive its own takeover plans. At stake are more than 900 clinics, labs and collection centers in Australia, where the proportion of retirees will double over the next 40 years, stoking healthcare demand, the news service said.

Excluding Primary's stake, 99.2% of shares voted were cast in favor of Healthscope's proposal, Symbion said in its statement. "Our proposal is extremely popular with Symbion shareholders as a whole," said Bruce Dixon, managing director of Healthscope.

Symbion's laboratories analyze specimens from about 10 million patients a year that are collected at 660 centers in every state except South Australia and Tasmania. That gives it about a third of the private pathology market in Australia, according to the Bloomberg story.

Retina Implant incorporates in its preparation to go public

Retina Implant (Reutlingen, Germany), developer of a sub-retinal chip for restoring partial vision in people suffering from certain forms of retinal degeneration, has become a corporation ahead of an expected intial public offering. Details about the IPO have not been disclosed, although changing the form of organization prepares the company for expected investments to support its plans for an initial expansion to Western Europe markets, followed by an entry to the U.S.

Several companies have introduced prosthesis devices to restore sight, such as a stimulator chip from the Massachusetts Institute of Technology (Cambridge) that sits on the retina and receives signals beamed from a camera mounted on a pair of glasses.

Another comapny with a device in clinical trials is Optobionics (Naperville, Illinois), a private company supported in part by Medtronic (Minneapolis), that received FDA authorization to implant an artificial silicon retina (ASR) device designed to stimulate damaged retinal cells and allow them to send visual signals again to the brain.

The Optobionics ASR microchip contains 3,500 solar cells that detect light and convert it into electrical impulses and does not require the use of external wires or batteries.

The Retina Implant amplifies images with a power boost. The chip uses a microphotodiode array of 1,500 light-sensitive microelectrodes that collect incident light and transform it into an amplified electrical current to stimulate the retinal ganglion cells. A wire from the device runs from the eye socket to behind the ear and is connected to a battery. The chip measures 3 mm, with a thickness of 50 microns.

Animal trials were conducted beginning in 2000 to validate the company's technology and the project entered clinical trials in 2005.

Early in 2007 a team of surgeons at the University of Tübingen (Tubingen, Germany) reported chip implant behind the retina of one eye in seven legally blind patients between the ages of 26 and 58. The chips restored limited vision to three of the patients, they reported.

The company reports these three patients can perceive light in certain shapes and patterns and can recognize sources of light and contrast patterns, such as a light-colored plate on a dark table.

By 2009, Retina Implant hopes to launch a fully functional chip after winning quality control certification essential for authorization to market the device.

The Economist estimates the cost of the device will be around $35,000, which company CEO Walter Wrobel says is less than the expense of training a guide dog.

Reports challenge benefits of e-health system in England

A landmark report published Sept. 10 by a King's Fund (London) think tank finds England far advanced in its £12.4 billion ($24.8 billion) quest for an electronic health system. But the oranization concludes it will never reach the avowed "Holy Grail," the system-wide integration of detailed patient records capable of guiding care delivery.

This damning conclusion and the 300 pages of criticism of the Connecting for Health (CfH) program will not be easy for the British government to ignore, as it was written by the founding father and chief architect of the program, Sir Derek Wanless.

The House of Commons, in a separate 117-page report published by the Health Committee Sept. 13, affirms the vital importance of electronic patient records for the future of healthcare in England but goes on to cite a "worrying lack of progress on implementing local systems."

The Commons report blames the two-year delay in implementing clinical software on "unclear communications" between the centralized development group and hundreds of local sites where the software is expected to work.

Hospital staff told the Commons committee they were "at the bottom of the food chain" and often excluded from planning between CfH and firms now developing the go-live interface with caregivers.

Wanless' 2007 report, "Our Future Health Secured?" offers a broader review of National Health Service (NHS) funding and performance over the five years since Wanless' 2002 report, "Securing Our Future Health," that according to The Guardian was "implemented almost to the letter."

NHS received a 50% budget increase for hiring medical staff, boosting wages and improving delivery for a healthcare system universally regarded as the worst in the European Union (EU).

The Wanless report recognizes a remarkable turnaround in care delivery as a result of a £43 billion re-engineering effort, but five years into the program he turns his lights to the centerpiece of his 2002 vision, an IT-enabled healthcare system.

In 2004 NHS launched CfH, called the world's largest IT project, by awarding contracts valued at £4.7 billion ($9.4 billion) to a dozen firms, with the biggest winners being iSoft (Banbury, UK), British Telecom (BT; London), Accenture (New York), and Computer Science (El Segundo, California).

The sweeping scope of England's effort to digitize healthcare and bring it online makes it the most-watched benchmark among 26 other EU members who are at different stages of development toward e-health. The Wanless report acknowledges that BT has successfully delivered the central data spine that powers record exchanges, a contract valued at £620 million ($1.2 billion).

The Choose and Book scheduling system also is seen as working, though a majority of doctors refuse to use it. The British Medical Association (London) roundly criticized the system, but stopped short of calling for its suspension.

While the e-prescription system has been delayed, currently 11% of daily prescriptions are moving through the system, according to an August update from the director-general for NHS Finance.

The Wanless report also credits CfH with building some unexpectedly useful systems, including the Secondary Uses Service, a planning, clinical audit and research tool; the Personal Demographics Service; and the Quality Management and Analysis System for assessing the work of general practitioners.

Yet as beneficial as these programs have proven to be, the core objective, or Holy Grail, remains a centralized system for electronic health records, he asserts. Wanless warned that "the extent to which the NHS will benefit from these substantial investments remains unclear."