Cyberonics Inc. made much news in 2005 when its VNS Therapy neuromodulation system received FDA approval to treat depression. But in 2007, CMS denied reimbusement coverage for that indication. Partly as a result of that, Cyberonics restructured itself to focus on growing VNS Therapy as a treatment for epilepsy, which has been approved since 1997 and reimbursed since 1999. The results have paid off so far, and the firm whose future viability was once in question returned to profitability. But there remains the issue of what to do about the depression indication. In February, the company announced plans to seek a buyer for the rights to it. But yesterday it announced that it has not received any offers that appropriately reflect the value of the indication. The Associated Press reports that the company "is now evaluating alternative actions that could help...
October 2nd, 2008
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Boston Scientific said it will appeal a $700 million verdict against it after a United States District Court judge in Delaware found that it had violated a Johnson & Johnson patent covering bare-metal stent technology. The suit, originally filed in 1997, concerned Boston Scientific's NIR stent, which it hasn't sold since 2004. Last month, the court denied Boston Scientific's motion for a new trial and approved J&J's motion for entry of judgment. The decision awarded J&J about $400 million in damages and about $300 million in interest. J&J also won $500 million from Medtronic for violating the same patent, bringing its haul to $1.2 billion. It can buy another company or two with that.
October 1st, 2008
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Here's the connection--the same technology that helped to create Gollum (aka Smeagol), a character from Lord of the Rings, is being used by doctors to measure the length and depth of wounds. Equipped with a camera and an embedded laser, the portable SilhouetteMobile is a noninvasive way to assess a patient's external wound at the bedside. It's certainly a more appealing alternative to having a clinician stick a sterile swab or probe into the sensitive area to measure wound depth. According to the manufacturer's CEO, Bruce Davey, PhD, the potential for the device is huge in the billion-dollar wound care market. Made by Aranz Medical (Christchurch, New Zealand), the Silhouette received FDA clearance last year and is being used in 50 centers around the United States, Davey told MD...
October 1st, 2008
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Today is the day that CMS stops reimbursing hospitals for procedures related to certain medical errors, including some hospital-acquired infections. A number of state and private insurers are following suit. It is now more important than ever that medical devices be designed in a way that doesn't cause patients to contract infections. That means coatings on catheters and ventilator tubes, among other things. You can read more about this issue in the September edition of MD&DI.
October 1st, 2008
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Appropriately named Hercules, a three-stage balloon dilator launched by Cook Medical is made using proprietary technology (P.E.T.FLEX) that the company says is the strongest dilation material available. It combines high tensile strength and the flexibility needed for a balloon that inflates to three distinct and increasing diameters. Hercules is designed for use in benign and malignant esophageal strictures--the narrowing of the esophagus that causes difficulty or painful swallowing, and food regurgitation. The balloon is inflated in the esophagus to open these strictures. One of the advantages of P.E.T.FLEX is that it keeps its shape and strength during dilation, and studies have shown that the balloon produces 154% greater radial force than its competition. This could reduce the need for a repeat procedure. Hercules is used with a Rapid Deflation Sleeve and an express evacuation catheter, which quickly deflates the balloon upon the application of negative pressure to the inflation...
September 30th, 2008
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Cardinal Health's grand experiment is over. The conglomerate, one of the largest distributors of drugs and other products to hospitals, attempted in recent years to become a medical device company also. But now it has decided to spin off its high-margin, high-tech medical device businesses, reports Reuters. It is doing so in order to focus on turning around its core drug distribution business, which has been underperforming. The spinoff is expected to be completed by the middle of next year. The new company's product lines will include Alaris drug infusion pumps, ATEA and LTV respiratory ventilators, and Pyxis automated drug dispensing systems for hospital pharmacies. These high-margin, attractive products could help the new company get a more favorable stock valuation on its own than as part of Cardinal. Cardinal will retain lower-margin and commodity medical products such as surgical gloves and...
September 30th, 2008
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Covidien, the life sciences conglomerate with a significant portion of its business in medical devices, announced that it will begin a restructuring program in fiscal year 2009. It did not provide details other than to say that it will take a charge of $200 million in restucturing costs at the beginning of FY '09, and that it expects the program to save between $50 million and $75 million per year in operating costs. That suggests job cuts are coming. The goal is to "improve cost structure and to deliver improved operating growth." CEO Richard J. Meelia said the restructuring should enable the company to invest more in R&D, and to expand into other product areas.
September 29th, 2008
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Medtronic announced plans to purchase a Canadian firm that makes a device to treat atrial fibrillation for $380 million, the Star Tribune of Minneapolis reports. The deal for CryoCath Technologies Inc. is expected to close by the end of the year. CryoCath's signature product is Arctic Front, a minimally invasive cryo-balloon catheter that may be a safer alternative to current treatments, which include drugs and electrical shocks to the heart. It has received approval in Europe but not yet in the United States, where a pivotal trial is in progress. Some are surprised that Medtronic acted now instead of waiting for the results of the trial, but if it were successful, the firm's price could have gone up. And Medtronic rival St. Jude Medical has already bought up several players in this space.
September 26th, 2008
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The Wall Street Journal has obtained an unredacted version of a 2002 lawsuit against Medtronic that contains some very damning allegations -- and was brought by a former lawyer for the firm, Ami Kelley. It states that the company gave spinal surgeons "a variety of incentives to use its products, including regular entertainment at a Memphis strip club, trips to Alaska, and patent royalties on inventions they played no part in." The lawsuit, brought to recoup Medicare-fraud-related damages for the government, was one of two that led to Medtronic's $40 million settlement with the government in 2006. Kelley said she was fired by Medtronic after questioning the payments. That settlement may now be in jeopardy, as the other lawsuit's plaintiff, Jacqueline Poteet, has appealed the dismissal of her suit, saying the settlement was too small. Whistleblowers who help the government recover money...
September 25th, 2008
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Boston Scientific announced that it has received FDA approval for the Taxus Express2 Atom drug-eluting stent system, which is the first drug-eluting stent designed for small coronary vessels. It is the first DES approved by FDA for use in vessels as small as 2.25 mm in diameter. The firm also got approval for the Taxus Express2 DES, which is indicated for treatment of in-stent restenosis in bare-metal stents. This gives Boston Scientific four DES models on the U.S. market, the most of any company. The other two are the original version of Taxus and Promus, the firm's version of Abbott's Xience V, originally developed by Guidant. UPDATE: Boston Scientific CEO Jim Tobin says he expects FDA approval of the firm's next-generation DES, Taxus Liberte, to come...
September 25th, 2008
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