As an inventor, Kamen holds more than 440 U.S. and foreign patents, many of them for innovative medical devices. He was responsible for the first wearable infusion pump and the first wearable insulin pump for diabetics. Some of the many devices he’s worked on include the HomeChoice peritoneal dialysis system, the Hydroflex surgical irrigation pump, the Crown stent, which he developed for Johnson & Johnson, the iBOT mobility device (an all-terain wheelchair that climbs stairs), and the famous Segway Human Transporter. He founded his first medical device company, pump manufacturer and marketer AutoSyringe Inc., in 1976. At age 30 he sold AutoSyringe to Baxter Healthcare and founded DEKA soon after to develop its own inventions and conduct R&D for corporate clients.

ArthroCare's Coblation technology (Courtesy of ArthroCare)

London-based Smith & Nephew, which has lately had the financial markets in a tizzy over rumors of an impending takeover by Stryker Corp., has announced that it has completed its own takeover, of ArthroCare Corp. (Austin, TX).

The deal, originally announced in early February, gains Smith & Nephew a highly complementary sports medicine portfolio for a purchase price of $48.25 per share, which translates into a total of about $1.5 billion. For that price, Smith & Nephew will gain ArthroCare's patented Coblation technology, a radio frequency technique that dissolves target tissue with minimal damage to surrounding healthy tissue. This provides surgeons with an alternative to Smith & Nephew's strong mechanical blade portfolio.

And speaking of synergies, Smith & Nephew is a major player in hip and knee replacements while one of ArthroCare's specialties is shoulders and other soft-tissue surgeries. And although ArthroCare has good market penetration in the States, Smith & Nephew is strongest in international markets. For the sales teams of the newly combined company, an expanded product portfolio will lead to increased cross-selling opportunities.

Additionally, ArthroCare has an ear, nose, and throat (ENT) business that will provide new growth opportunities, including  the ability to expand this business into Smith & Nephew's global markets.and the potential to utilize the combined company's technological expertise to develop the product range further.

Of course, everyone is optimistic on their wedding day. Olivier Bohuon, CEO of Smith & Nephew, said, "The acquisition of ArthroCare is a compelling transaction that accelerates our strategy to rebalance Smith & Nephew towards our higher growth segments.  Its technology and highly complementary products will significantly strengthen our portfolio, and we will use our global footprint to drive substantial new revenue growth. We are pleased to welcome ArthroCare's employees to Smith & Nephew and look forward to the further development and expansion of our combined business."

Still, we wonder if the thought of this acquisition and soon-to-happen assimilation might have been one of the reasons that Kevin Lobo, Stryker's CEO, decided to hold off a bit on making an offer. After all, both at the dinner table and at the boardroom table, too much gobbling too quickly can lead to indigestion.

Stephen Levy is a contributor to Qmed and MPMN.

Samsung has beaten Apple to the punch by announcing that it will debut a consumer-focused platform that includes a health-tracking smartwatch known as the Simband. The smartwatch can potentially be used to track everything from ECG to blood pressure and respiration. An onboard accelerometer can track activity. While the company did not release a firm date for the launch of the Simband, it promised it would hit the market before the end of the year.

A cloud-based platform known as SAMI will analyze the data, sharing conclusions with consumers. SAMI, which is an acronym for Samsung Architecture for Multimodal Interactions, can also accept data from non-Samsung devices. Owned by patients, the secured data can be shared with clinicians.

To refine the clinical applications of the technology, Samsung has established a partnership with clinicians at the University of California, San Francisco.

"As far as I know, Samsung's platform is the first with the size and market clout to try and bridge the gap between wearables and care delivery for market segments that would benefit (in health terms) from wearables," said T. Drew Smith, senior business consulting analyst at Kaiser Permanente in the Medical Devices Group on LinkedIn.

The Simband device will be powered by a "shuttle battery," which can be charged while the device is worn.

The Simband is not Samsung's first foray into the health-tracking space. The company had previously introduced the Gear Fit and the S-Health software apps that are compatible with its Galaxy mobile devices.

The Korean tech giant has also announced a $50 million investment fund dubbed the Samsung Digital Health Challenge to spur innovation in the digital health space.

An engineer who formerly worked for Becton, Dickinson and Co. (BD; Franklin Lakes, NJ) and C.R. Bard Inc. (Murray Hill, NJ) has admitted to stealing trade secrets from the two global medical technology companies, U.S. Attorney Paul J. Fishman announced.

According to a press release from the US Attorney's Office, District of New Jersey, Ketankumar Maniar, 37, aka "Ketan Maniar," pleaded guilty before U.S. District Judge Joel A. Pisano in Trenton (NJ) federal court to two counts of theft and attempted theft of trade secrets for his own economic benefit. Maniar, an Indian national, has been in custody since his arrest on June 3, 2013.

Acting on search warrants, special agents of the FBI arrested Maniar in June at a hotel in Ramsey, NJ, disrupting his apparent plan to take the trade secrets he'd stolen back to India. The agents seized, among other things, at least one hard drive containing Bard and BD trade secrets.

Court documents say that from November 2004 until his resignation in January 2011, Maniar worked as an engineer at Bard's Salt Lake City facility and was responsible for developing molding processes and specifications for catheters, ports and other medical products. From February 2012 until his resignation on May 24, 2013, Maniar worked as a staff engineer at BD's Franklin Lakes headquarters, where he helped manufacture pre-fillable syringes and pen injectors. 

Through his work at Bard and BD, Maniar was able to steal secret information related to the companies' products, including Bard's development of the first implantable port used for power injection of pharmaceutical drugs throughout the body. Maniar also had access to secret information related to a self-administered disposable pen injector still under development by BD and not yet available for commercial sale. 

In May 2013, while still employed by BD, the FBI says that Maniar downloaded approximately 8000 files containing, among other things, highly valuable BD trade secret information related to the pen in development. The materials Maniar downloaded essentially comprised a tool kit for mass producing the pen injector.

Most of Maniar's download activity occurred during the weeks leading up to his resignation, and he also downloaded BD files from home after he had called in sick to work. He forwarded numerous files containing confidential information from his work email accounts at Bard and BD to his personal email accounts, and also copied numerous files from his work computers onto multiple storage devices, including external hard drives and thumb drives.

Each count of theft of trade secrets for personal gain is punishable by up to a maximum penalty of 10 years in prison and a fine of up to $250,000. Sentencing is currently scheduled for Sept. 23, 2014.

Stephen Levy  is a contributor to Qmed and MPMN.

China may finally be getting serious about cleaning up corruption, at least where big foreign-owned companies are concerned, as Johnson & Johnson (JNJ), Bausch & Lomb, and others have just found out to the tune of a combined total of over $3 million in fines..

The latest crackdown, in a country long known for bribery and other corrupt practices, is over alleged price fixing in the contact and eyeglass lens markets. Other companies involved in the investigation include Essilor International SA, Nikon Corp., and Carl Zeiss Meditec AG.

In a statement on its website, the Chinese National Development and Reform Commission (NDRC) said the companies had ordered their dealers to set the price of lenses strictly in accordance with a "suggested level," and also made resellers hold similar promotions at the same time in order to maintain pricing consistency.

This comes just weeks after Mark Reilly, the former head of GlaxoSmithKline's China operations, was charged with graft. As reported on our sister publication European Medical Device Technology (EMDT), Reilly is accused of systematically bribing doctors and other hospital staff to boost the company's drug sales and, if convicted, he could face from three years to life imprisonment.

And it remains to be seen what effect, if any, this fine will have on JNJ's business in China, of which eyeglasses and contact lenses are only a part. We recently described the company's impressive overall year-on-year increase of 18 percent, to a $1.4 billion sales total in 2013.

But, according to Reuters, following the 10-month investigation of GlaxoSmithKline, that company's in-country revenues plunged 61 percent in the third quarter of 2013 and were still down by 20 percent in the first quarter of this year, from a year earlier. Official Chinese media have said that the firm may have suffered "irreparable damage" in the Chinese market.

The Reuters report continues, saying that its "legal sources and one source with direct knowledge of the GSK investigation said China's authorities might still try to charge the company itself, which could potentially put GSK's business licenses to operate in China at risk."

This is not the first time that Johnson & Johnson has been accused of bribery. Recent headlines related to the firm include:

• J&J's Other Headache: Foreign Bribery Probe Targets Shanghai Unit (CBS News, June 25, 2010)
• Johnson & Johnson Pays $70 Million In Foreign Bribery Case (The Wall Street Journal, April 8, 2011)
• Johnson & Johnson agrees to pay Texas $158 million to settle Medicaid allegations (The Associated Press, January 19, 2012)
• Johnson & Johnson to pay $2.2 billion to end U.S. drug probes (Reuters, November 4, 2013).

Many other U.S. multinationals have also had troubles in recent years as well.  

Stephen Levy is a contributor to Qmed and MPMN.

By Horst Merkle and Errett Kroeter

IMS Research suggests that the market for wireless patient-monitoring equipment is expected to grow to $9.3 billion by the end of 2014. Most experts agree that the catalyst for this growth is the number of people living with chronic diseases. The number of Americans living with chronic illnesses is expected to climb to 157 million by 2020, according to a paper published in Health Affairs titled “Confronting the Growing Burden of Chronic Disease: Can the U.S. Health Care Workforce Do the Job?”

Pulse oximeters are among the medical devices that can communicate wirelessly using Bluetooth technology.

As more people face chronic illnesses, medical device manufacturers operating in a vast, untapped healthcare ecosystem are tasked with developing technologies that improve patients’ lives. One technology for achieving this end is Bluetooth, a wireless technology standard for exchanging data over short distances from fixed and mobile devices. Bluetooth creates personal area networks with high levels of security. Suitable for use in health-monitoring devices, a more advanced version of Bluetooth—Bluetooth Smart—is a simple and secure connectivity solution that offers both power efficiency and a flexible application development framework.

During manufacturing, thoughtful consideration should be given to Bluetooth implementations in order to deliver successful products and optimize opportunities. Consequently, manufacturers should give careful consideration to such issues as power consumption, ease of use, security, and privacy, enabling them to lay the foundation for long-term gains benefiting both patients and company stakeholders.

Power Consumption

Lithium ion AAA batteries can be an attractive option when powering such wireless devices as glucose meters and pulse oximeters. However, while they are inexpensive and readily available, such batteries are bulky, resulting in medical devices with large footprints and rendering them inconvenient for daily use. In contrast, coin cell batteries such as those used in Bluetooth Smart devices are very small. And because Bluetooth Smart devices use less energy than devices using other connectivity systems, they last longer and are more compact and less obtrusive.

Security and Safety Issues

The increasing use of wireless connectivity technologies in the medical device industry raises a range of security and safety issues. Bluetooth technology uses 128-bit Advanced Encryption Standard (AES) encryption. Established by the National Institute of Standards and Technology (NIST), this standard protects data during transmission from one device to another. While no wireless technology is completely immune from attack, AES is among the most secure technologies available today.

Adding to the complexity of complying with standards and managing security concerns is the fact that there is no harmonized approach to privacy worldwide. Thus, while medical devices in the United States must comply with the Health Insurance Portability and Accountability Act (HIPAA), Europe has its own set of privacy and security regulations. In 2012, the European Commission unveiled a draft of the European General Data Protection Regulation, which will supersede the Data Protection Directive. In addition, privacy laws may limit what types of personal data can be stored and what types can be used for analytics. Medical device manufacturers that offer products for the global market need to maintain a flexible set of protocols and a system that reaches the appropriate balance between privacy and device utility.

Pairing and Ease of Use

Pairing a Bluetooth-enabled device with a hub generally involves two concerns: making pairing easy for the user and supporting a multidevice environment. For example, when a patient at a doctor’s office downloads data from a device onto the physician’s computer, both the patient and the device manufacturer face myriad challenges. With several other patients in the waiting room—and even more in a hospital setting—several Bluetooth-enabled devices and hubs are likely to be engaged, overwhelming users and nurses. Thus, manufacturers must follow guidelines and standards for multidevice environments that support secure, reliable, and simple pairing—in the home, office, or hospital.

In medical device environments, manufacturers must also consider the special challenges involved in sharing sensitive medical information. The good news is that because of the use of adaptive frequency hopping and Secure Simple Pairing (SSP), Bluetooth technology is more reliable and more secure than other technologies. SSP provides multiple association models, depending on the security requirements of the device and user interface capabilities. Manufacturers can also choose to add additional security layers on top of Bluetooth Smart technology.
 

Horst Merkle is the director of diabetes management systems and diabetes care at Indianapolis–based Roche Diagnostics Corp. He is responsible for the initiation, definition, and development of key components of the company’s diabetes management solutions product portfolio, focusing on interoperability/connectivity, standardization, and mobile- and cloud-based applications. Merkle is a member of the Continua Health Alliance board of directors. He has also served on the executive committee of the Connectivity Industry Consortium, which developed the accredited POCT-1 standard for point-of-care systems interoperability. He has bachelor’s degrees in organic chemistry and business administration. Reach him at horst.merckle@roche.com.
 

Errett Kroeter is director of industry and brand marketing at the Kirkland, WA–based Bluetooth Specialist Interest Group (Bluetooth SIG), a body that oversees the development of Bluetooth standards and the licensing of Bluetooth technologies and trademarks to manufacturers. With more than 20 years of experience in business-to-business technology marketing, he is responsible for the worldwide branding strategy for Bluetooth. He has also led global marketing initiatives in such companies as Gateway and IBM Software. Kroeter received a master’s degree in business administration from the University of Colorado. Reach him at and ekroeter@bluetooth.com.

The latest round in the spine, hip, and knee segment's M&A dance has ended with Stryker Corp. admitting that it has its eye on Smith & Nephew plc but isn't ready to pop the question yet.

Meanwhile, Zimmer Holdings Inc. and Biomet Inc. are, after their big April announcement, sitting quietly in the corner and planning the merger that will create the company that will take over the No. 2 spot in orthopedic devices from Stryker.

Bloomberg reports that Kevin Lobo, Stryker's CEO, said that his $31 billion company has been evaluating the purchase of London-based Smith & Nephew, worth about $15 billion, which would expand its share of the market for hip and knee replacements. While the deal is on hold for now, Lobo told Fox Business, the company could move forward with the acquisition at a later date.

When news of Stryker's interest was published in London's Financial Times, the spike in the share price of Smith & Nephew was enough to draw the interest of the UK's Takeover Panel, which is the regulatory body that oversees such matters.

"We were evaluating this as a potential transaction," Lobo said. "But based on the price spike in Smith & Nephew, the Takeover Panel called us and we have to make this public statement." After Smith & Nephew's share price jumped nearly 18 percent, Stryker had to make an offer within 28 days or wait six months under UK takeover rules, unless Smith & Nephew's board recommends the deal. If that should happen, the waiting period could be shortened to three months, RBC analyst Glenn Novarro told Bloomberg.

"Zimmer pulled the trigger on one of the two likely takeover candidates, and that somewhat forces Stryker's hand," Mark Landy, an analyst at Summer Street Research in Boston, told Bloomberg in a phone interview. Stryker must be "analyzing the competition from a larger Zimmer, the potential impact of that on its business and what is the right step for them going forward. Stryker is a logical acquirer for Smith & Nephew, which is a good asset that would bring a lot of diversification."

Also speaking on the phone with Bloomberg, Lisa Bedell Clive, a London-based analyst at Sanford C. Bernstein & Co., reportedly said, "The Zimmer-Biomet announcement really changed the game." She continued, "Zimmer has consulted enough antitrust lawyers that they think they can complete the Biomet transaction. That potentially paves the way for Stryker to do the same."

Even after Stryker's denial that it was planning a bid, London traders said the return of takeover speculation would continue to support S&N shares. "There have been bid rumors in Smith & Nephew for ages ... People are buying on the back of that," Mark Ward, head of execution trading at Sanlam Securities, told Reuters.

Still, all this jockeying is just for the right to call themselves Number 2. The top spot is, apparently unassailably, reserved for Johnson & Johnson.

Stephen Levy is a contributor to Qmed and MPMN.