Shares of EV3 Inc. (Plymouth, MN) and FoxHollow Technologies (Redwood City, CA) both surged more than 10% yesterday after the firms announced plans to merge, reports the Star Tribune of Minneapolis. The deal would come to about $780 million. The market capitalization of the two up-and-coming firms would combine for a value of about $1.7 billion, and its annual sales would total about $600 million. EV3 and FoxHollow are both major innovators in endovascular technology, and both firms have been touted highly by Wall Street analysts for years. The company’s combined product portfolio will include atherectomy and thrombectomy devices, PTA balloons, stents, embolic protection devices, infusion catheters and wires, embolic coils and liquid embolics.
July 24th, 2007
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In case you were wondering whether there were more multibillion-dollar deals out there in the device industry, the answer is yes. This morning, reports Bloomberg News, Teleflex Inc. (Limerick, PA) announced it would buy Arrow International Inc. (Reading, PA) for $2 billion. Arrow makes a variety of catheter-based devices for critical and cardiac care. Multi-industry conglomerate Teleflex, which has gone on a huge acquisition binge this year, is offering $45.20 per share, about 20% more than Arrow's closing stock price on Friday.
July 23rd, 2007
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The Star Tribune is reporting that Medtronic Inc. has reached a settlement to end more than 1400 lawsuits related to alleged defects in its defibrillators. The company will be paying more than $75 million as part of the settlement, which is also dependent upon Medtronic's ability to get 90% of the claimants to sign the agreement, the article notes. The claims against the company reportedly said that Medtronic hid battery defects in its defibrillators.  As noted in the blog earlier this week, Boston Scientific agreed to pay $195 million to settle a class-action lawsuit related to Guidant's defective defibrillators.
July 20th, 2007
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A House of Representatives committee approved a patent-reform bill that is opposed by the drug industry but supported by most high-tech industries. That leaves the medical device industry in an odd position, though industry lawyers have encouraged it to side with the drug industry. The bill sets up a way to re-evaluate patents once they are granted. Their validity could be challenged without going through a lengthy court process. That makes sense for high-tech products, which, according to an Associated Press report, "may include hundreds of patented components, [so] industry groups say they are easy targets for patent infringement suits based on inadvertent or minor violations." It does not make sense for pharmaceuticals, which may have only one or two patents at their core. The bill could weaken their patents and create a disincentive to spend money on R...
July 19th, 2007
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Boston Globe columnist Steven Syre has a piece today about the sharp reversal of fortune for the drug-eluting stent businesses of Johnson...
July 19th, 2007
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FDA announced that it has approved the first artificial cervical disc for the treatment of cervical degenerative disc disease. This disease is a significant cause of neck and arm pain. The Prestige Cervical Disc is made by Medtronic Sofamor Danek. Currently, if a patient has a diseased or bulging disc in the neck, that disc is removed and two or more neck vertebrae are fused. The Prestige replaces the damaged disc and is attached to the adjacent vertebrae with bone screws. As with artificial discs for the back, the Prestige offers patients a greater range of motion than they would have with fusion. A post-approval study is required as a condition of approval. The bigger challenge will come with CMS. Artificial spinal disc makers have had trouble getting coverage from CMS. Will the same problem face the Prestige? UPDATE: A second Medtronic cervical disc, the Bryan,...
July 18th, 2007
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Transforming FDA LogoAccording to an Associated Press report, some members of Congress are upset that FDA has increased spending on bonus payments to retain certain employees, especially reviewers. Well, too bad. There's a reason why these bonuses are needed. Without them, the agency would be severely lacking in expertise. The private sector offers much better pay than the public sector, which means reviewers and other personnel are always at risk of crossing over to work for industry. It also means the top scientists and engineers coming out of school aren't exactly chomping at the bit to work for the agency, either. If Congress...
July 17th, 2007
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FDA yesterday approved the first molecular diagnostic test that can detect the spread of breast cancer to the lymph nodes. If breast cancer cells are found in the lymph nodes, that's a strong indicator that the cancer has spread there and the patient's treatment should be changed. The GeneSearch BLN Assay, made by Veridex (Warren, NJ), a Johnson & Johnson company, produces results in 40 minutes and is faster and more accurate than existing tests.
July 17th, 2007
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Boston Scientific agreed to pay $195 million to settle a class-action suit against Guidant, which it now owns, over faulty implantable heart devices. Guidant allegedly knew about the defects but did not bring them to light in a timely manner. The settlement covers the largest class action, which was to be heard in Minnesota, reports the Boston Globe. The class action consolidated 1500 suits by 4000 people. Other suits are still pending. One might argue that Boston Scientific got off easy: It had set aside more than $700 million for legal fees and potential settlements. This case represents why risk management is more than just talk. Guidant ignored a basic fundamental of risk management: The problems that require immediate corrective action are the ones that occur the most frequently and/or pose the most danger to patients. Guidant downplayed the seriousness of the...
July 16th, 2007
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Reading an item on Ogan Gurel's Life Sciences Daily blog about the Stryker-Corin hip-resurfacing partnership, I was inspired to post something I've been thinking about for a while: "I believe that in the future, the device industry will start to look like the pharma industry as far as partnerships go -- at least for Class III products. The clinical-study requirements for Class III devices and combination products are getting so extensive, stringent, and complex that start-ups, even ones with a decent amount of venture capital, won't be able to fund them anymore. That will lead to more of the licensing/milestone arrangements that we see in the pharma industry. That is, the small company invents the product and the big company funds the research and gets marketing rights,...
July 13th, 2007
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