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CareFusion Inks Deal for Infusion Technology and Contract Manufacturing Firm

CareFusion Corp. made its first purchase since its spinoff from Cardinal Health in September last year. In early April, the company said it would acquire Medegen, a maker of needleless systems to deliver intravenous medications, for $225 million in cash.

Not solely an OEM, Medegen also has units that provide contract manufacturing services to medical device and drug companies. The company has FDA-registered and ISO 13485-certified operations at is headquarters in Ontario, Calif., where it provides molding capabilities, and Tijuana, Mexico, where its assembly operation is located. Medegen also provides outsourcing customers with supply chain management assistance.

The acquisition of the privately held company is a move for CareFusion to expand in the $2 billion global market for disposable intravenous drug delivery sets. From its first day as a standalone company, CareFusion executives said they would actively look to buy companies and technologies to complement the firm’s infusion, respiratory, dispensing and surgical products businesses.

“Medegen is an ideal strategic fit with CareFusion due to the complementary nature of our infusion product lines, R&D investments, and our focus on products that are backed by clinical evidence and differentiation,” said David Schlotterbeck, chairman and CEO of CareFusion.

Medegen, founded in 2001, also makes needleless access valves that are designed to help reduce catheter-related blood stream infections in hospitals. In the United States, Medicare and Medicaid no longer reimburse for care related to such infections, which can cost an average of $29,000 per patient to treat, according to CareFusion, based in San Diego, Calif.

The acquisition is expected to close by June 30, when CareFusion’s fiscal year ends. Executives expect the deal to be neutral to adjusted earnings in the first year and accretive to earnings thereafter.

FDA Finally Will Enforce 2007 Directive for Pediatric Devices

The U.S. Food and Drug Administration (FDA) will require medical device makers to provide information pertaining to pediatric patients. This isn’t a new directive from the agency. It is a reaction to 2007 legislation requiring device companies to include information on pediatric populations in certain pre-market applications for new devices.

Pediatric-specific medical technology often isn’t high on device companies’ development lists because of the small patient populations (i.e., small profit potential vs. cost of product development).
Manufacturers will have to supply information in certain pre-market applications on pediatric patients who suffer from a disease or condition that the device is intended to treat, diagnose or cure, even if the device is intended for adult use.

“Very few devices are developed or assessed specifically for use in pediatric patients—those 21 or younger at the time of treatment or diagnosis,” according to a statement released by the FDA. “This effort will provide a better understanding of which devices developed for use in adults should be assessed or modified for use in pediatric populations.”

Officials said the rule also would improve the agency’s ability to track the number of approved devices for which there is a pediatric subpopulation who could benefit and the number of approved devices labeled for use in pediatric patients.

Pediatric healthcare advocates hope this move will encourage medical device companies to reevaluate the youngest patient populations. For example, a closer look at pediatric data could encourage the development of a device to meet the specific needs of pediatric patients or perhaps the redesign of existing adult devices for younger patients.

If a manufacturer does not submit the required information, the FDA said it might not approve the application for the new device. However, the agency said it would maintain contact with companies that forget this information and that devices approved but for the lack of information on the patient population would receive approval once the information on pediatric use is received.

The same legislation granted the FDA additional resources to conduct more intense reviews of new devices and drugs as well as encourage further research and development of treatments for pediatric patients.

The rule is scheduled to go into effect August 16, unless there are significant adverse comments. Feedback is required to be filed by June 15.

Eye on R&D: New University Research Yields Potential for Novel Cardiovascular Devices

A group of researchers has developed a thin, flexible and stretchable electronic
device to help locate and treat abnormal heart rhythms.

Scientists from Northwestern University, the University of Illinois and the University of Pennsylvania claimed they are the first to demonstrate a flexible silicon electronic device used for a medical application. In a recently published paper, titled “A Conformal, Bio-Interfaced Class of Silicon Electronics for Mapping Cardiac Electrophysiology,” the researchers said their device produces high-density maps of a beating heart’s electrical activity, providing potential means to localize and treat abnormal heart rhythms. Such technology holds promise for a new generation of flexible, implantable medical devices for the treatment of abnormal heart rhythms or epilepsy, in addition to flexible sensors, transmitters and photovoltaic and microfluidic devices, researchers said.

“The heart is dynamic and not flat, but electronics currently used for monitoring are flat and rigid,”Yonggang Huang, professor at Northwestern and a senior author of the paper, told United Press International. “Our electronics have a wavy mesh design so they can wrap around irregular and curved surfaces, like the beating heart. The device is thin, flexible and stretchable and brings electronic circuits right to the tissue.”

The technology is based on flexible electronics developed in 2008 by Huang, Professor John Rogers at the University of Illinois and Associate Professor Brian Litt of the University of Pennsylvania.

In the experiments conducted at the University of Pennsylvania, Huang’s team demonstrated that the electronics continue to operate when immersed in the body’s fluids, and the mechanical design allows the device to conform to and wrap around the body’s irregularly shaped tissues. The device uses 288 contact points and more than 2,000 transistors positioned closely together. Standard clinical systems usually have only five to 10 contact points. The new device is roughly the size of a nickel.

According to researchers, by bringing electronic circuits right to the tissue, rather than having them located remotely, the device can process signals right at the tissue. Close contact allows the device to have a much higher number of electrodes for sensing or stimulation than currently is possible in medical devices. The device can collect large amounts of data from the body at high speed.

Researchers will be able to map the body’s complicated electrical networks in greater detail, with more effective implantable medical devices and treatments likely to emerge.

The U.S. Department of Energy and the National Institutes of Health also supported the work.
Halt in Defibrillator Sales Will Cost Boston Scientific; FDA Panel Recommends Device
According to industry analysts, Boston Scientific Inc.’s recent move to suspend defibrillator sales will cost the company hundreds of millions of dollars in sales.

Wells Fargo Securities analyst Larry Biegelsen estimated the Natick, Mass.-based firm could lose $469 million in defibrillator sales during the next two years following its recall of the heart-rhythm devices. Consequently, the use of similar devices made by Medtronic Inc. and St. Jude Medical Inc. will increase through 2011, Biegelsen said in a recent note to investors.

On March 15, Boston Scientific announced that it had stopped sales of seven brands of implantable cardiac defibrillators and was voluntarily recalling them because it failed to notify the U.S. Food and Drug Administration (FDA) of two changes to its manufacturing process, as required.
Karen Riley, a spokesperson for the FDA, said the agency currently is reviewing paperwork submitted by the company.

A short-term bottom-line loss could lead to longer-term scars, however. Some of Boston Scientific’s market share loss could be permanent due to lost goodwill with physicians. The defibrillator problem also “may have a negative spillover effect’’ on the company’s cardiac pacemaker business, Biegelsen said.

He estimated that defibrillatorsales for Medtronic could increase $278 million in 2010 and 2011, while St. Jude would benefit to the tune of $137 million in additional sales.

Boston Scientific’s defibrillator market share may drop to 21 percent in 2011 from 29 percent in 2009, according to analysts at Sanford C. Bernstein & Co.

Other analysts told the Reuters news service that the company could look to sell off its pain management (also called neuromodulation) or neurovascular intervention businesses to offset losses.

Citibank analyst Matthew Dodds said the neuromodulation business could carry a $1.6 billion price tag, with Johnson & Johnson or Abbott the most likely suitors. Dodds said the neurovascular intervention business could be worth up to $1 billion if sold.

The FDA isn’t the only government agency looking into the matter, however. The U.S. Department of Justice (DOJ) and the Securities and Exchange Commission (SEC) have begun informal investigations into the current defibrillator debacle. Boston Scientific recently received a DOJ subpoena looking for documents, and the Securities and Exchange Commission has begun an informal inquiry, according to an internal company memorandum originally reported by The Wall Street Journal.

Federal investigators want company documents on how it discovered the problem as well as communications with regulators, doctors and stock analysts, according to the Journal. DOJ and SEC officials could not be reached for comment.

Last year, as part of an investigation into problems with defibrillators made by its Guidant division, Boston Scientific pleaded guilty to two misdemeanor charges and agreed to pay $296 million to settle a DOJ probe.

The news on the defibrillator front isn’t all bad for Boston Scientific, however. In late March a new therapy that reduces the risk of mortality and heart failure in patients with mild cardiac disease received a thumbs up from the FDA’s Circulatory System Devices Panel.

The panel recommended that the firm’s Cognis cardiac resynchronization therapy defibrillator (CRT-D) be approved for use in patients with mild heart failure in the United States. Cognis already is approved to treat patients with severe heart failure. With this latest approval by the FDA, nearly 4 million more Americans would be candidates for treatment with CRT-D. The FDA is not required to follow its panels’ recommendations, but it usually does.

Approval Wrap-Up: A Look at Devices Recently OK’d by Government Regulators

Stentys, based in Princeton, N.J., and Paris, France, received the European Union’s CE mark for its self-expanding and disconnectable stent to treat acute coronary syndrome. The self-expanding feature of the Stentys platform is designed to ensure optimal apposition of a stent in the critical initial hours and days after an acute myocardial infarction procedure, by being continuously applied to the vessel’s internal surface even during thrombus and vessel spasm relief, thereby avoiding malapposition, a significant concern to cardiologists.

Neomend, Inc., of Irvine, Calif., received premarket approval from the U.S. Food and Drug Administration (FDA) for its ProGEL Pleural Air Leak Sealant. Surgeons use the device to seal air leaks on lung tissue after standard closure techniques—sutures or staples—for open resection of lung tissue. Pleural Air Leak Sealant is sprayed or “painted” on the lung tissue, and the ProGEL forms on the lung tissue by chemical reaction. Diagnosis of lung cancer often requires surgical removal of lung tumors. After tumors are removed, air leaks can develop around the sutures or staples used to close the surgical procedure. Neomend estimates approximately 150,000 lung resections are performed in the United States every year. Intraoperative air leaks are a primary complication of lung surgery and can lead to other complications such as infections, pneumonia and extended hospitalization.

Thoratec Corp., of Pleasanton, Calif., received FDA premarket approval of its HeartMate II LVAS, a left ventricular assist device system that helps the heart’s left ventricle (the main pumping chamber of the heart) deliver blood to the rest of the body. The HeartMate II LVAS includes a pump implanted inside the patient’s body and a pump controller and batteries that are worn outside the body. The HeartMate II LVAS does not replace the natural function of the heart. Rather, it works along with the patient’s own heart to pump blood. In a healthy heart, the left ventricle pumps blood throughout the body. In a heart weakened by heart failure, the left ventricle is not strong enough to pump the blood sufficiently. The HeartMate II LVAS helps the heart by supporting the weak left ventricle and providing additional blood flow.

TriReme Medical, Inc., Pleasanton, Calif., received FDA 510(k) clearance for its newest product, the Glider balloon catheter, for percutaneous transluminal angioplasty of lesions in the peripheral vasculature including the iliac, femoral, ilio-femoral, popliteal, infra-popliteal, and renal arteries. Approximately 12 million Americans are affected by peripheral arterial disease (PAD), according to the company. Those patients suffer from chronic pain, significant mobility limitations and debilitating quality of life. Left untreated, PAD can lead to a limb loss and even to death.

Instrumentation Laboratory, an in-vitro diagnostic firm in Bedford, Mass., received FDA 510(k) clearance from for its HemosIL D-Dimer HS 500 assay, as well as a license from Health Canada for the product. The product will be distributed in North America by Beckman Coulter, Inc. The assay received CE mark in Europe in April last year. The assay is used to detect venous thromboembolism in outpatients suspected of deep venous thrombosis (DVT) and pulmonary embolism (PE). DVT occurs when a blood clot forms in a large vein, usually in a leg. A potentially fatal PE happens if the blood clot breaks loose, migrates to the lungs and blocks a pulmonary artery or one of its branches. These conditions can occur after any surgery, as well as in patients with spinal fractures and spinal-cord injury, though it is most commonly seen in patients who recently have undergone orthopedic surgery. Two hundred thousand new cases of DVT and PE occur in the United States annually and 20 percent of those patients suffer sudden death as a result of PE, according to the company.

On the Record

Medical device professionals weigh in on industry trends and current events.

“We share the same concerns as everyone else. It is fundamentally a bad idea. It will hamper innovation. We are going to spend the next three years trying to make it go away.”
—Jan Keltjens, president and CEO of AngioDynamics in Latham, N.Y., commenting on the medical device tax included in the recently passed healthcare reform legislation. Quoted in the The Business Review of Albany, N.Y.

“The idea that providing insurance coverage to the uninsured will increase the number of medical devices sold is incongruent with reality. People will not experience more spinal cord injuries, torn ACLs, or heart attacks just because people have insurance coverage.”
—Frank Reynolds, CEO of Cambridge, Mass.-based InVivo Therapeutics, a company developing a treatment for spinal cord injuries, as quoted in a company press release issued following a meeting with Massachusetts Governor Deval Patrick about the impact of the new healthcare law’s medical device tax. Reynolds added that he feared jobs would be lost in Massachusetts and innovation funding would slow.