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3M CEO Inge Thulin's Compensation Slightly Down

    Arrow  back3M CEO Inge Thulin

Total Compensation: $19,441,062

Total Salary: $1,448,153

Previous Fiscal Year Compensation: $20,115,589

Percent Difference: -3%

Thulin is another no-brainer for the list, since 3M is another huge conglomerate making much more than medical device products. Compensation was a bit down during 3M's most recent fiscal year ended December 31. Thulin's non-equity incentive plan compensation fell to $2.3 million from $3.5 million. Stock awards and the value of Thulin's pension were also down somewhat.  

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Image courtesy of 3M

GE CEO Jeffrey Immelt Sees Compensation Rise 14%

    Arrow  backGE CEO Jeffrey Immelt

Total Compensation: $23,376,805

Total Salary: $3,800,000

Previous Fiscal Year Compensation: $20,530,474

Percent Difference: +14%

It would make sense that Immelt would make the list, since GE is a huge conglomerate where medical device manufacturing is only a portion of the business. Immelt saw his stock awards double to $6.2 million, and his non-equity incentive plan compensation more than tripled to $7.6 million. The increased incentives more than made up for the drop in the value of Immelt's pension plan and other nonqualified deferred compensation earnings, down about two-thirds in value to $6.3 million. 

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Image courtesy of GE

J&J CEO Alex Gorsky Sees a Dip in Compensation

    Arrow  backJ&J CEO Alex Gorsky

Total Compensation: $23,795,866

Total Salary: $1,613,462

Previous Fiscal Year Compensation: $24,989,306

Percent Difference: -5%

Gorksy's salary was actually up more than $100,000 last year, but the value of his pension and non-qualified deferred compensation earnings was nearly cut in half, to $2.7 million.

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Image courtesy of Johnson & Johnson

Medtronic CEO Omar Ishrak: A Good Deal?

    Arrow  backOmar Ishrak Medtronic

Total Compensation: $15,272,615

Total Salary: $1,548,216

Previous Fiscal Year Compensation: $39,460,266

Percent Difference: -61%

The roughly $15.3 million is only two-fifths the nearly $38.5 million Ishrak received a year before, when the company provided Ishrak roughly $25 million to compensate him for special excise taxes incurred from Medtronic's $50 billion merger with Covidien. Considering that Medtronic now rivals Johnson & Johnson as the largest medical device company in the world, Ishrak coming in fifth on the list appears to be a good deal for the company. (Read the full Qmed story.)

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Image courtesy of Medtronic

10 Medtech CEOs Who Made the Most

    Hands Money

The past year has been really good for many medical device company CEOs. Find out which ones. 

Chris Newmarker

Updated July 19, 2016

It turns out that more than two-thirds of medtech CEOs saw their compensation go up over the past year, according to a Qmed analysis of SEC filings for 38 of the largest medical device companies publicly traded in the U.S.

Average annual compensation for a CEO of a big medtech company was roughly 8 million.

Want to know if your CEO was in the top 10? Read on. 

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And download the full spreadsheet >>

Image courtesy of http://401kcalculator.org

Don't miss the MD&M Minneapolis conference and expo, September 21-22, 2016.

Chris Newmarker is senior editor of Qmed and MPMN. Follow him on Twitter at @newmarker.

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Keeping Heart Failure Patients on Their Feet

Keeping Heart Failure Patients on Their Feet

Procyrion envisions their Aortix device as a less-invasive approach that would keep heart failure patients ambulatory while under treatment.

Even though heart failure affects approximately 6 million Americans, there are surprisingly few device treatments and procedures available for these patients. Left ventricular assist devices (LVADs) have received plenty of attention in recent years for their ability to help severe heart failure patients, but the therapy, which requires invasive surgery, can hold little appeal for people who have less severe heart failure. Yet this same population may no longer be getting satisfactory results from a drug regimen.

"These are patients [for whom] drugs aren't enough anymore, but they're not sick enough to warrant cracking their chest and doing an LVAD or a transplant," said Benjamin Hertzog, PhD, president and CEO of Procyrion. According to the company, this describes a population of more than 2 million heart failure patients.

Procyrion, the Houston, TX-based company that recently won MD+DI's 2016 Medtech Startup Showdown, is developing the Aortix system for chronic heart failure patients who fall into the New York Heart Association (NYHA) Class III and IVa categorization of disease severity, meaning they aren't yet sick enough for LVAD therapy. Aortix aims to offer the benefits of circulatory assistance without chest-opening surgery. Instead, the device could be delivery via a catheter and patients would be able to get out of bed and walk around. 

Care about cardio devices? Get inspired at the MD&M Minneapolis Conference, September 21-22.

Cardiologist Reynolds Delgado, III, MD, FACC, medical director of Mechanical Support Devices in Heart Failure at the Texas Heart Institute, conceived of the idea for Aortix and founded Procyrion in 2005. Delgado is now the company's chief medical officer. In 2007, Houston's Fannin Innovation Studio offered seed funding for the company. Hertzog said that in late 2009 and early 2010, while he was working with Fannin to "triage" the group's portfolio, he spotted Procyrion. "I got really excited about Procyrion and the opportunity for it, the huge clinical unmet need in heart failure and the commercial opportunity for an interventional cardiology tool for heart failure."

Aortix is a tiny device, 6 mm wide and less than 6.5 cm long, that has a micromotor on expandable struts. The pump accelerates blood flow using fluid entrainment. Hertzog explained that a cardiologist would be able to deploy the device in a quick procedure by snaking a catheter into the patient's femoral artery and into the descending thoracic aorta. From there, the pump is designed to reduce cardiac afterload and increase blood flow to organs. The pump could be powered by a flexible power wire or possibly with a subcutaneous transcutaneous energy transfer system, according to information on the company's website. According to Hertzog, pre-clinical animal studies have shown that Aortix increased blood volume by 10-15% and reduced needed cardiac energy by almost 40%, resulting in a nearly 60% increase in efficiency. Since Aortix would enhance blood flow but not fully support the heart, any unexpected device failure should not endanger the patient, unlike with VADs. The system is slated for first-in-human implants later this year.

"Dr. Delgado's original premise was, if all we have are LVADs, it's too late for a lot of these patients," Hertzog said. "If you can get to them earlier, maybe you can change the trajectory of their disease." Intervening earlier would also mean patients wouldn't need as much pumping, he added.

At least one LVAD leader has noticed the company--Gary Burbach, who was president and CEO of major VAD-maker Thoratec from 2006 to 2014, joined Procyrion's board of directors earlier this year.

Hertzog

There are a few main design advancements that are intended to make Aortix a less risky solution for active, ambulatory patients. The device's implant location is one--the descending thoracic aorta is outside of the heart and downstream from the carotid arteries, reducing the risk of thrombotic stroke, valve damage, or blood flow problems within the heart. The location could also be a boon to other organs, including the kidney.

Another unique design detail is the reversible anchoring technology. When the cardiologist has moved Aortix into the descending thoracic aorta, the catheter sheath is retracted to anchor Aortix to the aortic wall using self-expanding, nitinol struts. This anchor can also be collapsed, a feature that should make the pump retrievable. Hertzog explained that this technology is similar to that used in inferior vena cava filters to catch clots. 

One well-known circulatory support technology that is delivered using a catheter is Abiomed's Impella products. The company has grown rapidly in recent years and Hertzog acknowledged the technology's success. However, the Impella heart pumps treat a different population, he pointed out, since they are indicated for temporary ventricular support (< 6 hours) during high-risk percutaneous coronary interventions and short term use (< 4 days) for ongoing cardiogenic shock. Aortix is intended for longer use in Class III and IVa heart failure patients and because it is designed to be anchored and implanted outside of the heart, patients should be able to walk around and be active without the risk of device migration or damage to the heart.

Manesh Patel, MD, director of the Interventional Cardiology and Catheterization Labs at Duke University Health Systems and Duke Clinical Research Institute, wrote in an email to MD+DI that Aortix's "unique ability to treat patients and eventually get them ambulatory" is what initially attracted him to the technology. Patel, who now sits on the company's scientific advisory board, added, "I think one of the ways we can return patients quality of life and reduce some of the hospital-based comorbidity is by providing therapies that allow ambula[tion] while improving their heart failure."

The company has chosen two sites for the first-in-human implants, one in Asunción, Paraguay, and the other at Duke University under FDA's Early Feasibility Study program. "The FDA is wholeheartedly encouraging the development of innovative therapies and we're glad to be participating in that," Hertzog said. 

Beyond evaluating Aortix for safety and procedural feasibility, feedback from those first human implants could come quickly, possibly before the end of the year. "Our device creates a clinical signal very quickly. In the first couple minutes you're able to see changes in hemodynamics. We are going to be looking at some of those hemodynamic parameters. We'll get a good sense whether the device is working as intended or not," Hertzog said.

Hertzog explained that the biggest challenge in the medical device field is funding. "The funding environment in medical devices has continued to be challenging," he said. Procyrion has been successful so far on that front, having raised a total $13.5 million from Fannin Innovation Studio, Dallas-based Scientific Health Development, and other strategic and angel investors. The latest funding round in fall 2015 garnered $10 million, to be used for the first-in-human implants and an early pilot study, Hertzog said. A future round of financing, possibly in 2017, would be targeted at supporting the company through its first regulatory approval.

Looking far into Procyrion's future, Hertzog noted that there is already an existing reimbursement structure in the United States for percutaneous circulatory support. "That's good news for us," he said. The company's plans for regulatory approvals outside of the United States are still being determined.

"We're a small team of engineer-entrepreneurs and our real focus is innovation. We like to push the boundaries. I've got a team of like-minded individuals here and the most motivating thing you can say to us is, 'That'll never work.' We like nothing more than to prove that wrong," Hertzog said.

[Images courtesy of PROCYRION]

Jury Finds For Edwards's CardiAQ in TMVR Tech Dispute

Jury Finds For Edwards&#039;s CardiAQ in TMVR Tech Dispute

Edwards Lifesciences prevails in a lawsuit involving the transcatheter mitral valve replacement company it acquired and that startup's competitor. 

Arundhati Parmar

The landscape of transcatheter mitral valve replacement to treat mitral valve regurgitation remains unconquered by any company, small or big, but that doesn't mean that patent disputes haven't arisen.

Edwards Lifesciences, which acquired TMVR startup CardiAQ Valve Technologies, announced Thursday that a Massachussets federal jury has found in favor of CardiAQ in its legal wrangling with Neovasc, a Canadian company also developing a TMVR device.

Specifically, the jury found that Neovasc breached the nondisclosure agreement that the two parties signed when Neovasc was hired as a service provider. The jury also awarded $70 million to CardiAQ for misapproriating certain trade secrets of CardiAQ.

In the lawsuit, CardiAQ had alleged that Neovasc began secretly developing its own internal TMVR program and did not inform CardiAQ. CardiAQ co-founders Arshad Quadri and J. Brent Ratz hired Neovasc in 2009 to provide tissue processing and valve assembly services, which were covered under a non-disclosure agreement, according to a news release from Edwards.

Stay on top of medtech trends and attend the MD&M East conference at the Jacob Javits Convention Center in New York, June 14-16.

The jury also ruled on two separate questions that the judge is expected to rule at an undetermined later date. It found that Neovasc engaged it unfair or deceptive practices, and that CardiAQ proved convincingly that Quadri and Ratz "contributed to the conception" of a Neovasc patent. In fact CardiAQ recommended their names be added to the Neovasc patent.

"Through many years of dedicated work with Dr. Quadri, we were able to develop an extensive base of knowledge, make important advancements and create the CardiAQ transcatheter mitral valve to help patients in need who are not well-served by therapies available today," said Ratz, who today serves as vice president of research and development with the CardiAQ-Edwards TMVR program. "We are proud of this foundational work and grateful that the jury recognized these contributions to the developing field of transcatheter mitral valve replacement."

A call to Neovasc's chief financial officer, Chris Clark, and an email was not immediately returned.

Edwards bought CardiAQ in 2015 for $400 million, including a $350 million cash payment up front. After that, it halted its own internal program and the goal now is to develop additional sizes of the CardiAQ Valve refine delivery systems and add Edwards's bovine, pericaricardial tissue in the future. It is currently recruiting patients for an early feasibility study. The device can be delivered using both the transfemoral and transapical approahc.

Neovasc is developing the Tiara TMVR device and the Canadian company is also currently recruiting patients for its feasibility trial. The trial is testing the device using a transapical approach. 

Arundhati Parmar is senior editor at MD+DI. Reach her at arundhati.parmar@ubm.com  and on Twitter @aparmarbb

 

Edwards Wins $70 Million in Mitral Valve Tech Suit

The Irvine, CA-based medical device maker inherited the lawsuit through its $400 million acquisition of CardiAQ Valve Technologies.

Qmed Staff

CardiAQ
The CardiAQ device is theaded into the heart from below.

Edwards Lifesciences on Thursday said that a federal jury in Boston has awarded it $70 million in damages for trade secret misappropriation in a suit Edwards inherited from its $400 million acquisition of CardiAQ last year.

CardiAQ--which has a transcatheter mitral valve replacement system, a super hot area in medtech--had accused a former service provider, Neovasc, of breaching the non-disclosure agreement between the parties and misappropriating trade secrets. The federal jury agreed.

CardiAQ co-founders Arshad Quadri, MD, and J. Brent Ratz hired Neovasc in 2009 to provide tissue processing and valve assembly services. But CardiAQ ended up suing Neovasc in 2014 after discovering a late 2011 Neovasc patent publication. Neovasc had been working on its own TMVR program, without disclosing the program to CardiAQ, according to the lawsuit.

"Through many years of dedicated work with Dr. Quadri, we were able to develop an extensive base of knowledge, make important advancements and create the CardiAQ transcatheter mitral valve to help patients in need who are not well-served by therapies available today," said Ratz, who is presently vice president of research and development with the CardiAQ-Edwards TMVR program.

"We are proud of this foundational work and grateful that the jury recognized these contributions to the developing field of transcatheter mitral valve replacement," Ratz said.

A Neovasc official could not be immediately reached for comment.

A federal judge at a later time will decide on two jury factual determinations: that Neovasc was involved in unfair or deceptive acts or practices and that Ratz and Quadri and contributed to the conception of the Neovasc patent.

TMVR is a new frontier for medical device companies, which have already made great strides with catheter-based aortic valve replacement technology. Besides Edwards, Medtronic and Abbott Labs also shelled out hundreds of millions of dollars to buy young companies with promising technology in the space. 

Learn more about cutting-edge medical devices at MD&M East, June 14-15, 2016 in New York City.

Chris Newmarker is senior editor of Qmed and MPMN. Follow him on Twitter at @newmarker.

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You Should Stop Hating on J&J's Device Business

Johnson & Johnson's medical device business has seen lackluster growth hampered by a combination of pricing pressure, healthcare reform, and changes in how healthcare is being delivered. But the situation is going to change. Here's why. 

Arundhati Parmar

Johnson & Johnson has been working behind the scenes to turn around its massive $25 billion-a-year medical device business.

The efforts appear to be paying off.

After it held its annual analyst day Wednesday, many analysts now believe that the company's device business will grow greater than the overall medtech market growth of 4-6%.


JNJ Medical Device Sales
Source: Johnson & Johnson Analyst Day Presentation, May 2016

Before delving into how it will achieve the above-market growth, it's worthwhile to understand the device business segments and how they performed last year.

The Hospital Medical Devices business has a pipeline of products that are set to be filed by 2018. The pipeline cumulatively has the potential to generate more than $6 billion in sales, according to a presentation by Gary Pruden, who leads the hospital medical device business at Johnson & Johnson.

The Consumer Medical Device which includes products for diabetes care and vision care is also set to perform well. In vision care, the sales potential for the current pipeline of products to be filed by 2018 is $1.5 billion. In diabetes care, Johnson & Johnson is developing an automated insulin delivery system that uses algorithms to predict insulin levels and adjust delivery of insulin accordingly.

But it's not just through product innovation that the company is planning to turn around its device business. It's also instituted operational changes to address the fact that the hospital customer is increasingly consolidated and employs a majority of physicians in the U.S.

"While the Medical Device businesses used to be decentralized and managed autonomously, they are now realigned under one Medical Device Management with three global franchises (Ethicon Surgical, Biosense Webster Cardiovascular, and DePuy Synthes Orthopaedics), a single R&D unit, and a single supply chain unit," wrote Joanne Wuensch, an analyst with BMO Capital Markets, in a note after analysts heard from Johnson & Johnson's management team in New Jersey.

Wuensch added that "The purpose is to have customers talk with 'one empowered person' about all their product needs, becoming the ultimate bundling package."

Before this change, the company had 16 business units, 15 management boards, and a non-integrated supply chain.

Back to the product side, overall the med device business is expected to launch 35 products or extensions by 2017 and another 35 in 2018 and future years, she noted.

Aside from Wuensch, other analysts appeared to be impressed by management's hopes for the future. Danielle Antalffy, who described J&J's devices story as "compelling" feels more confident about the company's prospects.

"With a broad product pipeline supplementing improving execution and a seeming recover in end user market volumes, we believe [J&J] is well positioned to accelerate its device business growth to in line with or better than our currently projected 5% [compound annual growth rate] over the 2015-2020 timeframe," Antalffy wrote in a research note Wednesday.

Here's how Glenn Novarro, an analyst with RBC Capital Markets, reacted to the presentation, according to his research note.

"We walked away convinced that despite recent headwinds, [J&J] remains a competitive global player given its scale, breadth of product offering, and focus on growing in key geographic markets."

But the best line about the new, reinvigorated company-- a household name around the world came from Wuensch at BMO Capital Markets.

"This is not your grandma's J&J."

Learn more about cutting-edge medical devices at MD&M East, June 14-15, 2016 in New York City.

Arundhati Parmar is a senior editor at UBM.

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How B. Braun Got in Big Trouble Over Tainted Syringes

The medical device manufacturer didn't even make the syringes, but its brand name was on them. Now the company is paying $7.8 million to settle a U.S. criminal case that provides a reminder of the need to properly monitor suppliers.

Chris Newmarker

B. Braun has agreed to pay $4.8 million in penalties and $3 million in restitution to settle with the U.S. Justice Department over criminal complaints related to contaminated pre-filled saline flush syringes sold in 2007.

The syringes, which infected patients in multiple U.S. states, were actually made by a supplier, AM2PAT, but B. Braun's brand name was on them.

"The Federal Food, Drug and Cosmetic Act prohibits companies from selling contaminated products, even when the company did not make the product itself," Benjamin C. Mizer, head of the Justice Department's Civil Division, said in a news release.

"Companies must take reasonable steps to ensure that their suppliers are making quality products that help rather than harm patients. Today's settlement shows that the government will continue to hold companies accountable for failing to fulfill this critically important responsibility," Mizer said.

Under the U.S. government's non-prosecution agreement with B. Braun, the company acknowledges that it distributed syringes under its label that were adulterated under the FDCA.

B. Braun in a statement shared by a spokeswoman noted that the relationship with AM2PAT ended eight years ago. The German medical device and drug manufacturer, with U.S. headquarters in Bethlehem, PA, said: "We are fully committed to ensuring patient safety. In that regard, we have agreed to undertake additional compliance measures related to the qualification and monitoring of third party manufacturers of finished products distributed by B. Braun with the B. Braun name on the label or logo."

According to the statement of facts in the federal case settlement, B. Braun was aware that AM2PAT had manufacturing problems, even before it started buying pre-filled saline flush syringes from AM2PAT in March 2006.  Both FDA and B. Braun audits had found that AM2PAT had problems complying with good manufacturing processes.

Worse, AM2PAT informed B. Braun in 2007 that it was moving to a new manufacturing facility and changing the company sterilizing the B. Braun saline flush syringes through a new radiation sterilization process, according to the statement of facts. Before B. Braun's quality department approved the changes, B. Braun was already selling saline flush syringes made at the new facility, and under the new sterilization provider. The changes were eventually approved, even though B. Braun officials had not seen operations at the new facility or confirmed AM2PAT's representations that it had properly validated its cleanroom and equipment. B. Braun was already receiving complaints about the syringes changing colors. AM2PAT was also having to make changes to its radiation process to avoid "overcooking" the saline syringes. 

Two months after B. Braun started selling pre-filled saline flush syringes made at AM2PAT's new facility, it recalled them because the sterilization process was causing white particles to develop in the saline inside the syringes.

After the recall, AM2PAT acknowledged to B. Braun that it had provided incorrect information about its new radiation sterilization process, and provided information showing that manufacturing equipment in fact had not been validated after the move to the new facility. Despite these potentially disturbing revelations, B. Braun resumed buying saline syringes from AM2PAT anyway, according to the statement of facts.

Within a month of the decision to resume buying from AM2PAT, saline flush syringes from the supplier became contaminated with blood infection-causing Serratia marcescens bacteria. The syringes were recalled after patients were infected in California, Texas, New York, and Nebraska. 

Besides admitting that it distributed an adulterated product, B. Braun has agreed to increase oversight of its product suppliers, including with on-site audits. On top of that, an independent auditor will assess whether B. Braun is making good on its promises.

"Today's announcement should serve as a reminder of the FDA's continued focus on companies that put profits ahead of the public health." George M. Karavetsos, director of FDA's Office of Criminal Investigations, said in a news release.

Two previous AM2PAT officials, former quality control director Ravindra Kumar Sharma and former plant manager Aniruddha Pate, were each sentenced in 2009 to nearly five years in prison after pleading guilty in federal court in North Carolina to violating the FDCA. AM2PAT's president Dushyant Patel was indicted on similar charges in 2009, but fled the country. He is presently the only medical device executive on the "Most Wanted" list at the FDA's Office of Criminal Investigations. 

Learn more about cutting-edge medical devices at MD&M East, June 14-15, 2016 in New York City.

Chris Newmarker is senior editor of Qmed and MPMN. Follow him on Twitter at @newmarker.

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