With its multibillion-dollar purchase of Guidant (Indianapolis) earlier this spring, Boston Scientific (Natick, Massachusetts) fully realized that it was taking on a heavy risk of large legal liability fees when, earlier this year, it acquired Guidant (Indianapolis). And those costs may have ballooned considerably early in June with the forced release of company documents indicating that it had composed a letter warning physicians concerning malfunctions of its implantable defibrillator devices but then didn’t put that letter in the mail.

The unmailed letter was among documents in the case unsealed – over the company’s objection – in relation to a product liability lawsuit in Texas. The letter is being interpreted as the company’s acknowledgement that the company was aware of the malfunctions but had decided to send only a standard warning to doctors that encouraged only increased monitoring of patients implanted with the devices.

The letter it did send can best be characterized as a routine “product update,” but came after the company learned of a short-circuiting problem that had occurred in some units of two defibrillator models and is being linked to a variety of malfunctions and, in some cases, deaths.

The unsealed documents indicate that the rationale by Guidant executives not to issue a more pointed and aggressive warning about the malfunctions was that they feared creating “undue alarm” about the problem and that it would lead to a flood of surgeries to remove the devices – surgeries which themselves carry a considerable risk. But in making that choice, the company is now open to allegations that it continued to sell the devices, found to be susceptible to the malfunctions, that it had in inventory.

The unsent warning letter was one of 22 documents order unsealed by Judge Jack Hunter in Corpus Christi, Texas, overruling the contention by Guidant that the documents contained trade secrets.

Paul Donovan confirmed that the warning letter drafted was never sent. Donovan repeatedly has offered the company’s position that it is developing new standards for communications to doctors and patients concerning product performance and that the company acknowledges the need for “doing a better job of communicating,” he said.

The documents unsealed and yet to be released were related to a liability case set to go to trial Sept. 18 in Neuces County District Court in Corpus Christi, Texas. It is the first such case and was brought by Louis Motal and Beatrice Hinojosa, two patients implanted with Guidant’s Ventak Prizm 2 defibrillators. They allege Guidant knew the devices might fail but didn’t warn patients.

Appeals rulings favor Boston Sci vs. Medtronic

A federal appeals court in early June issued a ruling upholding a trial court’s decisions in two cases of patent disputes, the rulings determining that Boston Scientific’s Taxus Express, Express2, and NIR stents do not infringe four Medtronic (Minneapolis) stent patents. Medtronic had filed an appeal of the trial court decisions. In upholding the trial court, the Court of Appeals agreed that Boston Scientific’s products were not within the scope of the Medtronic patents. Paul LaViolette, Boston Scientific COO, said in a statement, “This ruling reaffirms the strength and innovation of our drug-eluting stent technologies.”

Scott Papillon, Medtronic spokesman, said Medtronic was considering the option of appealing the appeals court’s decisions.

The Court of Appeals decision affirmed two 2005 rulings by the U.S. District Court in Delaware.

In the first decision, the trial court granted summary judgment of non-infringement in favor of Boston Scientific, finding that the company’s Taxus and Express stents do not infringe four Medtronic patents. The Express stent is the platform for Boston Scientific’s Taxus Express2 paclitaxel-eluting coronary stent system. In the other decision, the court also granted summary judgment of non-infringement in favor of Boston Scientific, finding that the NIR stent does not infringe the Medtronic patents.

The U.S. Court of Appeals for the Federal Circuit affirmed the ruling last year of a federal judge in Delaware who found that stents offered by Guidant (Indianapolis) and Boston Scientific did not infringe Medtronic’s patents.

Corautus responds to GENASIS trial halt

Corautus Genetics (Atlanta) last month responded to the FDA’s halt of its GENASIS (Genetic Angiogenic Stimulation Investigational Study) Phase IIb clinical trial, for vascular endothelial growth factor-2 (VEGF-2), a chest pain drug after some patients suffered adverse events. The drug maker said it has been working with Boston Scientific (Natick, Massachusetts), which makes the Stilleto catheter used to deliver the drug, over the past several weeks to evaluate the adverse events.

Richard Otto, president and CEO of Corautus, said in a statement that the company believes it appropriately investigated the events that led to the trial suspension and has “developed a plan for dealing with these issues in potential subsequent clinical trials evaluating VEGF-2 for the treatment of severe angina.” Corautus insisted that three incidents of pericardial effusion, a condition where excess fluid builds in the sac surrounding the heart, were not related to the drug. The company said it hopes to advance the drug into late-stage clinical trials.

According to Otto, the company looks forward to analyzing the GENASIS data and continuing discussions with the FDA to determine an appropriate primary endpoint in a trial for the treatment of patients suffering from severe angina. “We continue to be hopeful the information generated by our analysis may support the commencement of a Phase III clinical trial,” he said.

In April the company voluntarily terminated patient enrollment in the GENASIS trial based on the recommendation of its independent data monitoring committee (DMC). The trial had enrolled patients with Class III or IV angina that are not suitable candidates for traditional revascularization procedures and had involved the injection of genes – specifically VEGF-2 – into the heart to stimulate the formation of new blood vessels via a process known as therapeutic angiogenesis.

The DMC recommended to the company that, based on available efficacy data, enrollment should be terminated under the current protocol since, the DMC said, it saw “very little chance for significant efficacy” as to the primary endpoint relative to the safety/risk signal it saw.

Trial termination followed enrollment suspension by the company on March 14 to investigate the three aforementioned recent serious adverse events that the company said it did not believe were associated with the biologic.

Otto said the rate of tamponade events experienced in the GENASIS trial was 1.36% or 4 out of 295 patients treated. The trial had planned to enroll a total of 404 patients at 30 centers in the U.S.

The company currently has a distribution and development agreement with Boston Scientific for use of VEGF-2 in a delivery platform for the treatment of cardiovascular disease.

Via that arrangement, first disclosed in mid-2003, Boston Sci acquired a 17% stake in the company, with the most recent stock purchase of 4.3 million Corautus shares valued at about $18 million having taken place this past June.

Cordis plans for California operations

Cordis (Miami Lakes, Florida) last month reported plans to extend its current R&D operations by establishing an innovation center in the San Francisco Bay Area of northern California. It said that the center is expected to allow engineers and other researchers to strive for innovative new products quickly and efficiently within “state-of-the-art” facilities.

The company’s newly appointed chief technology officer, Campbell Rogers, MD, will head the center and direct its strategic planning.

Rick Anderson, company group chairman, Johnson & Johnson (New Brunswick, New Jersey), and worldwide franchise chairman of Cordis, said, “We are thrilled by the opportunities on the West Coast to extend our research and development capabilities under the leadership of Dr. Rogers. The Silicon Valley is known worldwide as a hub of innovative ideas and engineering talent. This is the ideal place to advance our leadership position in the development of innovative products designed to treat the millions of patients with coronary artery and vascular diseases.”

Vasomedical delisted from Nasdaq

Vasomedical (Westbury, New York) reported receiving notification from Nasdaq that effective May 26, it was no longer listed on the Nasdaq Small Cap Market.

The company said it has enlisted the services of a Nasdaq member firm to file a Form 211 with the Over-the-Counter Bulletin Board and, pending approval, anticipates trading on the OTCBB under the symbol VASO.OB. The company’s securities continue to be traded on the Nasdaq Pink Sheets under the symbol VASO.PK.

The company said it would file the appropriate financial documents and continue to announce its strategic and financial results via press releases and conference calls.

Vasomedical develops external counterpulsation (EECP) therapy, a noninvasive, outpatient therapy for the treatment of diseases of the cardiovascular system currently indicated for use in cases of stable or unstable angina, congestive heart failure, acute myocardial infarction and cardiogenic shock.

Telzuit launches new Statpatch campaign

Telzuit Medical Technologies (Orlando), focused on providing advanced mobile medicine, reported a new branding campaign for its Statpatch wireless heart monitor. “Statpatch” represents the new brand name of the company’s flagship wireless Holter monitor device.

Telzuit said it “continues to make significant advances in the development of mobile medical monitoring,” signified by the new Statpatch brand name. Via the Statpatch wireless Holter monitor, physicians are expected to be able to monitor full 12-lead patient ECG data on a near-real-time basis through Telzuit’s mobile monitoring platform.