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Medtech Losers of 2019

These companies, devices, and concepts struggled in 2019. Here's hoping things look up in 2020.

  • Image by jalandas0 from Pixabay

    Medtech saw some real challenges this year. But given the industry's ingenuity and dedication to improving healthcare, 2020 will bring opportunities to turn things around. 

    Image by jalandas0 from Pixabay
  • Medical Device Excise Tax

    The medical device excise tax continued to weigh on the industry this year as 2020 drew nearer. The tax is scheduled to restart in January after being suspended for the last four years (for two consecutive two-year periods). It appears, however, that the industry's relentless lobbying efforts against the tax may finally pay off once and for all.

    Both houses of Congress have now passed a bipartisan spending bill that would permanently kill the 2.3% medical device excise tax. All it needs now is President Trump's signature.

    "On behalf of the entire medtech industry and the patients we serve, we thank the Senate for passing legislation to repeal the medical device excise tax once and for all," Scott Whitaker, president and CEO of the Advanced Medical Technology Association (AdvaMed), said in a statement the organization released Thursday. "...The industry would be facing massive job losses and cuts to the very research and development we need to save and improve patients' lives. Patients are the real winners here today."

  • Image by mcmurryjulie from Pixabay

    Conventional Duodenoscopes

    Concerns continued to mount in 2019 about the potential for contamination of conventional duodenoscopes, and the devices faced another hurdle this past August when FDA called for users to begin transitioning to such devices with disposable components.

    “Because these studies continue to show elevated rates of contamination in fixed endcap duodenoscopes, including the presence of organisms more often associated with disease transmission, such as E. coli, the FDA believes that incorporating disposable components can simplify cleaning, reduce contamination and reduce disease transmission following reprocessing,” the agency wrote. It advised that healthcare facilities transition away from fixed endcap models including Olympus Corporation’s TJF-160F/VF, TJF-Q180V, PJF-160 and JF-140F; Fujifilm Medical Systems USA’s ED-530XT; and Pentax Medical’s ED-3490TK.

    For alternatives, medtech has stepped up, in a big way.

    “PENTAX Medical has partnered with the FDA, the CDC, as well as leading industry organizations, such as the AGA, SGNA, APIC, and ASGE on an ongoing basis since we became aware of the cross-contamination issues in connection to duodenoscopes several years ago,” Mariano Franco, director, marketing communications, Americas, told MD+DI in an email. “We are steadfast in our dedication to reducing the risk of possible cross-contamination and infection in flexible endoscopy through continuous advancements in flexible endoscope design, human factors-validated reprocessing procedures, and clinical education tools. We remain devoted to providing the healthcare community and patients with innovative solutions that enable improvements in clinical and economic outcomes while increasing patient safety and satisfaction.”

    Fujifilm told MD+DI via email that the company “recognizes the importance of duodenoscopes to assist physicians conducting more than 500,000 potentially lifesaving procedures each year. Fujifilm also understands the need to develop innovative instrumentation designed to balance clinical utility and cleanability to provide a completely reprocessed device that is safe and effective for each patient use.”

    These two companies have had two duodenoscopes with disposable end caps cleared by FDA: Fujifilm’s model ED-580XT and Pentax Medical, model ED34-i10T.

    “Responding to the FDA’s and CDC’s call for advancement in duodenoscope design to increase patient safety, PENTAX Medical introduced the C.A.P. HD Duodenoscope (ED34-i10T) in the USA in 2017, a duodenoscope that featured a disposable distal end cap designed to help reduce the risk of cross-contamination,” said Franco. “More recently, we continued by launching the world’s first DEC HD Duodenoscope (ED34-i10T2), which expands on its predecessor by incorporating a sterile, single-use elevator mechanism within the disposable distal end cap. Our objective with this new duodenoscope was to help reduce contamination to new levels while still offering physicians stunning HD image quality and high-quality construction to ensure optimal performance during every ERCP procedure.”

    Fujifilm's design of the ED-580XT duodenoscope with the removable, single-use distal end cap “provides direct access to mechanically brush clean the elevator mechanism and surrounding recessed distal tip surfaces," the company told MD+DI. "With the distal cap detached, the scope tip surfaces are more readily exposed and can be more easily reached and cleaned by brush compared to the fixed-end cap designs.” The company has also worked “to ensure adequate resources for reprocessing professionals, which includes the development of a new, illustrative quick reference guides for reprocessing the ED-580XT duodenoscope, and the creation of enlarged 3D distal tip model for improved user reprocessing training,” the statement read.

    Olympus is also “collaborating with the FDA, medical societies, and healthcare providers in support of the recommendation to transition from duodenoscopes with fixed distal endcaps to duodenoscopes with disposable components or fully disposable duodenoscopes,” reported Kevin Mancini, Vice President, Marketing, Endoscopy Division, Olympus America, in a statement emailed to MD+DI. “We are working on development of duodenoscopes that fit the recommended profile, including the 510(k)-pending TJF-Q190V duodenoscope with a single-use, removable distal endcap to help facilitate cleaning.”

    Mancini added that “post-market studies will shed light on several factors determining disposable scope usage, including performance, procedural outcomes (and new or unintended complications), pricing (i.e. true cost per procedure) and environmental impact. We recognize also that proper reprocessing of traditional duodenoscopes is critical to reducing contamination risk, and we are developing tools, training, support and services that address human factors issues and improve reprocessing.”

    Another player has emerged with an alternative. Boston Scientific earned FDA clearance to sell its Exalt-D single-use duodenoscope, which is the first fully disposable duodenoscope to reach the market. The company is planning a limited U.S. market release of the device during the first quarter of 2020.

    Image by mcmurryjulie from Pixabay
  • Hologic

    Cynosure was supposed to be Hologic’s beauty, but the medical aesthetics company ended up being a beast after it significantly underperformed. Now two years after it acquired Cynosure for $1.65 billion,  Hologic sold the business to an affiliate of investment funds managed by Clayton, Dubilier & Rice for just $205 million.

    Marlborough, MA-based Hologic has struggled with Cynosure since the beginning. While other segments within Hologic performed well, it was the aesthetics unit that nearly always underperformed and in one earnings quarter caused the firm to drop revenue guidance.

     MD+DI reached out to Hologic, but the company declined additional comment. However, it’s worth noting that since the Cynosure divestiture, Hologic’s stock has appreciated about 12.5% as of vs. 2.3% for the S&P500. That equates to about $1.6 billion of shareholder value created.

     

    AbsolutVision
  • Organovo Holdings

    In 2014, Organovo Holdings was listed by MD+DI as one of five startups poised to change medtech forever. Five years later everything changed for the San Diego, CA-based company. Organovo found itself hitting the hard-reset button after failing to generate decisive scientific data to support prolonged functionality and therapeutic benefit of its liver tissue candidate.

    The firm underwent a massive restructuring. In an August 2019 release, the company said alternatives for restructuring “include the potential for an acquisition, merger, reverse merger, business combination, sale of assets, licensing or other strategic transactions involving the company.”

    Earlier this month, Organovo announced a merger with Tarveda Therapeutics. The transaction was set to advance Tarveda’s proprietary Pentarin miniature drug conjugates including its two clinical programs for the treatment of solid tumor malignancies.

    Under the terms of the merger, it is anticipated that Tarveda stockholders will own about 75% of the combined company and current Organovo stockholders will own about 25% of the combined company on a fully-diluted basis. Going forward the company will be known as Tarveda Therapeutics. MD+DI reached out to Organovo, but the company did not respond for comment.

    Image by Clker-Free-Vector-Images on Pixabay
  • Cybersecurity

    Software, for all its benefits, is a weak link for medical devices, according to a Stericycle Expert Solutions report published earlier this year that found software issues to be the top cause of medical device recalls.

    "As we become increasingly reliant on AI and data collection, software becomes an even bigger vulnerability for patients, physicians, and wrongdoers," said Chris Harvey, director of recall solutions at Stericycle. "If the software that is used to operate a device is inadequate, how can we be sure that it is protected from cybersecurity vulnerabilities? Add to that the fact that companies have only recently been laser-focused on mitigating cyber threats associated with medical devices. It's a recipe for disaster."

    In late June, FDA reported that due to cybersecurity vulnerabilities identified in Medtronic's MiniMed 508 and MiniMed Paradigm insulin pumps, a hacker could potentially connect wirelessly to a nearby device and change the pump's settings. This could allow a person to over-deliver insulin to the patient, leading to low blood sugar, or to stop insulin delivery, leading to high blood sugar and a buildup of acids in the blood. To be clear, there have not been any confirmed reports of patient harm related to these risks, but it's scary to think about the possible fallout if a hacker were to take advantage of this vulnerability to intentionally blackmail or hurt a targeted individual who happens to use one of these devices.

    Cybersecurity was identified early on in 2019 as one of the biggest issues keeping medtech manufacturers awake at night. “Depending on the particular segment, cybersecurity is a really critical issue for the medtech industry,” Yarmela Pavlovic, a partner at international law firm Hogan Lovells, said during a panel at MD&M West 2019. “I see companies at varying stages of adoption in cybersecurity policies, and for very young companies coming more from the tech industry, cybersecurity feels like a much more natural fit. . . But then there are a lot of companies grappling with legacy products and trying to implement cybersecurity controls based on more modern technology for products where those concerns were not part of the original design and development.”

    Steve Abrahamson, senior director of product security at GE Healthcare also spoke about cybersecurity at MD&M West in February (pictured above). "Going back five or 10 years ago, researchers started showing that it was possible to hack into medical devices and possibly cause the patient harm," Abrahamson said. "... It's never actually happened in the real world, but it is very terrifying to people because it could happen in theory."

    Abrahamson said there has been a shift in mentality when people think about security for medical devices.

    "In traditional safety risk management, we're protecting people from malfunctioning devices," he said. "When we think about cybersecurity risk management, we're protecting devices from malfunctioning people."

    Reports of cybersecurity vulnerabilities has drawn particularly harsh criticism from cybersecurity experts outside of the medical device industry.

    "Medical device manufacturers who aren't engaging in real security, or in this case, even basic security practices, should probably have their FDA approvals revoked," said Aaron Zander, head of IT at HackerOne, in response to an earlier cybersecurity issue involving Medtronic's implantable defibrillators. "Unlike a kids toy or a car where a recall is as simple as sending something back in the mail or driving it back to the dealership, an embedded device, one literally embedded in you, isn't meant to come out and be replaced regularly. The surgery to replace this with a 'better' or 'safer' version in itself is dangerous and comes with life-threatening repercussions."

    It should be noted, however, that most cybersecurity vulnerabilities in medical devices are typically addressed with a software or firmware update. Patients do not usually have to have the device surgically replaced.

    "The fact that there are more stringent controls on the software that doctors use to send each other instant messages than there are on the software that goes into a pacemaker shows that the medical device field needs to advance in terms of both regulation and security," Zander said. "The repercussions of not acting now are deadly.”

    Deborah Chang, VP of business development and policy at HackerOne, suggested that the problem has to do with a lack of cybersecurity education.

    "Only in the last 15 years, have there been any formal biomedical engineering degrees. Even so, these degrees/programs do not teach cybersecurity or have it as part of their curriculum," Chang said. "When designing a device, you are thinking about fixing a biological problem with a mechanical device. You are not thinking about the security of the device. Therefore, the culture must be changed."

    The issue has certainly not escaped the attention of lawmakers. In February, Sen. Mark Warner (D-VA) sent letters to several healthcare organizations, including AdvaMed, to seek input on ways to improve cybersecurity in the healthcare industry. In his letter, Warner mentioned apparent gaps in oversight.

    “The increased use of technology in healthcare certainly has the potential to improve the quality of patient care, expand access to care (including by extending the range of services through telehealth), and reduce wasteful spending," Warner said. "However, the increased use of technology has also left the healthcare industry more vulnerable to attack."

    According to the Government Accountability Office, more than 113 million care records were stolen in 2015. A separate study conducted that same year estimated that the cost of cyber attacks would cost the U.S. healthcare system $305 million over a five-year period.

    "As manufacturers of medical devices, patient safety is our number one priority and we take seriously the need to continuously assess the security of our devices in a world where technology constantly evolves," AdvaMed said in its response to Warner.

  • Paclitaxel Balloon and Stent Market

    Paclitaxel-coated balloons and paclitaxel-eluting stents received some bad press in late December 2018 after a meta-analysis showed an increased risk of death for patients treated with these devices. The analysis prompted FDA to investigate, which ultimately led to a two-day panel meeting in June. Based on panel discussions, FDA concluded that there is a signal associated with an increase in mortality through five years of paclitaxel-coated devices as compared to non-coated devices, however the panel members and the agency was clearly befuddled by the discrepancies present in the available data.

    Manufacturers felt the pinch this year as doctors held off on using paclitaxel-eluting stents and paclitaxel-coated balloons while they waited to see how the controversy shook out. Medtronic reported earlier this year that the company saw a "very dramatic 50% reduction" in volumes in the United States for drug-coated balloons, even after FDA  eased up on paclitaxel device recommendations in August.

    There does appear to be a light at the end of the paclitaxel tunnel, however. About a month ago, FDA approved Medtronic's IN.PACT AV drug-coated balloon (pictured above) for the treatment of failing arteriovenous access in patients with end-stage renal disease undergoing dialysis. The approval marked a positive turnaround in the paclitaxel story.

    Image Courtesy of Medtronic
  • Image by PDPics from Pixabay

    Cancer

    Here’s the great news in this slideshow—thanks to significant gains in liquid biopsy and in genetic testing for pinpointing effective cancer treatments, there’s more hope for patients in their battles against cancer. Early detection opportunities and treatment advances are also expanding. Given such progress, we'd like to think cancer is losing ground. 

    There have been several companies leading the battle against cancer. Liquid biopsy has been a force this year thanks to Breakthrough Device Designations for Grail and Thrive. And Guardant continues to make significant progress with Guardant360 assay, which studies show can accurately detect microsatellite instability status as accurately as tissue biopsy. It is also striving for approval of it Lunar-2 test for early colorectal cancer screening, currently under study. 

    There are also significant achievements in genetic testing. Ambry Genetics launched +RNAinsight, which combines RNA and DNA genetic testing for hereditary cancer in one clinical test. Data suggest that the combined test could help more patients discover whether their genetics increase their cancer risks.

    Foundation Medicine Inc.’s tests are offering patients biomarker and genomics information to match them with approved targeted therapies, immunotherapies, and clinical trials. The company recently announced that its FoundationOne CDx earned yet another approval from FDA, making the companion diagnostic now available for 19 FDA-approved targeted therapies.

    MD+DI also chronicled progress in breast cancer detection and treatment with a look at the latest advances in recognition of Breast Cancer Awareness month.

    And there’s even more good news in medtech’s fight against cancer. Click here for additional MD+DI news and features on cancer detection and treatment.

    Image by PDPics from Pixabay
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