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MONDAY, APRIL 14 , 2014

VOLUME 18, NO. 70

New Boston Sci registry to evaluate WASHINGTON ROUNDUP Vercise DBS in Parkinson’s patients FDA nod to Block HF adds 800K to By Amanda Pedersen, Senior Staff Writer market for biventricular pacing Boston Scientific (Natick, Massachusetts) has enrolled the first patient in a new registry to evaluate clinical outcomes and the economic value of the Vercise deep brain stimulation (DBS) system in patients with Parkinson’s disease. The device has been on the market in Europe and Australia since 2012 for the Parkinson’s indication and just last November the Vercise received CE mark for the treatment of primary and secondary dystonia, a neurological movement disorder characterized by involuntary muscle contractions. DBS is a surgical treatment option for patients with movement disorders such as Parkinson’s, whose symptoms are not adequately controlled with medication. See Boston Sci, page 5 REPORT FROM ISRAEL

By Mark McCarty, Washington Editor

FDA reported April 10 it had approved an application from Medtronic (Minneapolis) to expand the indications for a number of the company’s pacemakers and defibrillators to provide biventricular pacing for patients with demonstrated atrioventricular block and class I-III heart failure. The news is of considerable importance to Medtronic, which told Medical Device Daily in an e-mail that the additional patients could number as high as 800,000, with nearly 79,000 new entries each year. The approval, based on data from the Block HF trial, allows Medtronic to label the devices for patients with left ventricular See Washington, page 6 REPORT FROM EUROPE

Nazareth incubator NGT3 raising funds with lofty dual agenda

Focus shifts from sales to costs for French startups

By Jonathan Goldstein, Israel Editor

By John Brosky, Europe Editor

When one mixes business operations and any other agenda, as lofty as it may be, one often encounters lack of achievement in the business aspects, and possibly in the second goal too. In the case of the NGT3 Incubator (Nazareth, Israel), a privatized government med-tech accelerator that serves the local Jewish and Arab Israeli populations, the coordinators are hoping that this is not the case. The government-supported privatized Incubator aims to advance businesses, as well as to synthesize Jewish-Arab cooperation in Nazareth. These social harmonization goals do See Israel, page 7

PARIS — Moving well beyond a startup stage to maturity, three French innovators with unique medical technologies report robust sales and leaner operations, though each of the companies continue to burn cash. In 2005, Mauna Kea Technologies (Paris) pioneered a new category in diagnostic imaging called optical biopsy with the Cellvizio endomicroscope for a minimally invasive assessment of suspect tissue in the gastro-intestinal track and the lungs. The company went public in 2011. Founded in 2006 by Nobel-prize winner Georges Charpak, See Europe, page 8




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Staff Writer Robert Kimball on one of med-tech’s key sectors Read this week’s Monday Special

MONDAY, APRIL 14 , 2014



Varian settles patent litigation with University of Pittsburgh for $35M Staff Report Varian Medical Systems (Palo, Alto) reported that it has settled patent litigation with the University of Pittsburgh. Varian will pay a lump sum of about $35 million to fully settle this matter. The settlement will be largely recorded in the financial results for the company’s second and third quarters of fiscal year 2014. The University of Pittsburgh initiated a patent infringement lawsuit against Varian in 2007 regarding the company’s Realtime Position Management technology, which is used to account for breathing motion during delivery of radiation therapy. In 2012, the U.S. District Court for the Western District of Pennsylvania ruled against Varian, ordering payment of about $102 million in damages, enhanced damages, interest and fees as well as ongoing royalty payments. Varian challenged that ruling in the U.S. Court of Appeals for the Federal Circuit, which published its opinion on Friday. Earlier, during the second quarter of fiscal year 2014, Varian and the University of Pittsburgh reached a settlement agreement that was dependent upon today’s ruling from the appeals court. Under this pre-negotiated settlement, Varian will not owe any future royalty payments associated with the sale of Varian products that incorporate the patent at issue. Varian customers will continue to have full use of these products. Varian is reviewing the accounting treatment of this settlement. A portion of the settlement will be expensed in the second quarter with the balance to be recorded as a prepaid royalty in the third quarter.

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In other court news; Smith & Nephew (S&N; London) has agreed to pay $12 million to settle lawsuits filed by ArthroCare (Austin) shareholders seeking more money in a proposed $1.7 billion takeover by the medical-device maker, according to a filing from the Securities Exchange Commission. The company reported the execution of a definitive agreement to acquire ArthroCare (Austin) for about $1.7 billion or about $48.25 per ArthroCare share (Medical Device Daily, Feb.4, 2014). ArthroCare investors alleged in lawsuits filed in Delaware Chancery Court in Wilmington that the offer was too low. Smith & Nephew settled to avoid the “inconvenience, expense, risk, and distraction of further litigation,” according to court papers filed today. Company officials denied all allegations of wrongdoing or liability. //

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MONDAY, APRIL 14 , 2014



Covidien in plan to acquire New Wave Surgical for $100M Staff Report Covidien (Dublin, Ireland) has acquired New Wave Surgical (Pompano Beach, Florida) for more than $100 million according to public filings. New Wave Surgical has developed the D-HELP kit, which keeps laparoscopic and robotic lenses heated, defogged and clean during procedures. New Wave Surgical’s kit is used in 1,200 hospitals in the U.S. and has been used in more than one million procedures — 500,000 in 2013 alone. Covidien has changed the name of the product to Clearify Visualization System. New Wave Surgical grew to 145 employees and logged $21 million in annual revenue in 2013; $8 million of that came in the final quarter. Most of its explosive growth has been in the last two years as more doctors became aware of the device. New Wave had several other products under development. In other dealmaking activity; Ametek (Middlefield, Connecticut), a manufacturer of electronic instruments and electromechanical devices, reported that it has entered into a definitive merger agreement under which Ametek will acquire all of the outstanding shares of common stock of Zygo at a purchase price of $19.25 per share in cash, which represents a premium of 31% to Zygo’s closing share price on Thursday. The aggregate enterprise value of the transaction is about $280 million, taking into account Zygo’s outstanding equity awards and net cash to be acquired in the transaction. The transaction was unanimously approved by Zygo’s board. Founded in 1970, Zygo is a provider of optical metrology solutions, high precision optics, and optical assemblies for use in a wide range of scientific, industrial, and medical applications. For the calendar year ended Dec. 31, 2013, Zygo had sales of about $162 million.

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“Zygo is an excellent acquisition for Ametek. We are excited about the opportunity to acquire such a strong brand and technology leader,” said Frank Hermance, Ametek chairman/ CEO. “Zygo’s leading position in non-contact optical metrology nicely complements our strength in contact metrology and enables us to offer our customers a full range of metrology solutions.” The transaction is expected to be completed towards the end of the second quarter of calendar 2014. //


By Percent

By Dollars

Baxano Surgical




Titan Medical


NxStage Medical


Bovie Medical








NxStage Medical


Bovie Medical




Titan Medical




Baxano Surgical






RTI Surgical


RTI Surgical


Biosign Technologies


Biosign Technologies



By Percent

By Dollars



Intuitive Surgical




C.R. Bard


Bacterin International Holdings


The Cooper Companies


Delcath Systems




Hansen Medical


HeartWare International


Cardiovascular Systems


Align Technology


Intuitive Surgical


Zimmer Holdings




Becton, Dickinson and Co.


Mazor Robotics


Varian Medical Systems






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MONDAY, APRIL 14 , 2014



Seno awarded CE mark for Imagio imaging system Staff Report Seno Medical Instruments (San Antonio), a maker of optoacoustic technology as a new tool to improve the process of diagnosing breast cancer, has received the CE mark for Imagio, a new opto-acoustic imaging system, in Europe. Seno is in the middle of its Pivotal Study whose purpose is to determine if this technology will provide new information to the physician to decide if a woman may avoid negative (unnecessary) biopsies. Seno says its Imagio fuses opto-acoustics, a technology based on “light-in and sound-out,” with traditional ultrasound. The opto-acoustic images provide a unique blood map in and around suspicious breast masses. Cancerous tumors grow relatively quickly and require significant amounts of blood and oxygen, so a network of blood vessels grows around cancerous masses. Imagio provides images of these networks and a map of relative oxygen-rich or oxygen-deprived blood. Radiologists believe that Imagio images depicting significant vascular structures and low oxygen levels are likely to indicate cancers. Unlike other functional fusion technologies, Imagio uses no X-rays (ionizing radiation) or injectable contrast agents to obtain its information, thereby reducing the patient’s exposure to any potentially harmful aspects of imaging.

Cepheid releases Xpert Norovirus in Europe

Cepheid (Sunnyvale, California) reported the release of Xpert Norovirus, a qualitative in vitro diagnostic test for rapid identification and differentiation of Noroviruses genogroup I (GI) and genogroup II (GII), to be marketed as a CE IVD product under the European Directive on In Vitro Diagnostic Medical Devices. The test runs on Cepheid’s GeneXpert System, a molecular diagnostic platform. Norovirus is a highly contagious virus and is the most common cause of viral gastroenteritis worldwide. Noroviruses can be transmitted from an infected person, contaminated food or water, or by touching contaminated surfaces. Nausea, vomiting, watery diarrhea, and abdominal pain characterize infection. Globally, the virus affects around 267 million people and causes over 200,000 deaths each year. “Norovirus exposure is an unfortunate fact of life. The associated illness can spread quickly in the hospital setting and be very serious, especially in young children and older adults. To actively manage the infection, clinicians have been forced to choose between accuracy and time-to-result when selecting a testing method – but now Xpert Norovirus delivers both,” said John Bishop, Cepheid’s chairman/CEO. Noroviruses are divided into five genogroups, GI to GV. Xpert Norovirus detects and differentiates the GI and GII genogroups, which account for the majority of human infections.


“In the hospital setting, patients admitted with severe Norovirus infection can be a source of this infection to other patients,” said Kate Templeton, Honorary Senior Lecturer in Medical Microbiology at the University of Edinburgh in Scotland, and a Consultant Clinical Scientist in Microbiology. “It is important that patients infected with Norovirus are identified as early as possible. Rapid molecular testing, when combined with prompt infection control measures of infected patients, provides an important new weapon in our battle against healthcare associated infections.” Cepheid is a molecular diagnostics company. // FINANCINGS ROUNDUP

Ventas prices public offering of senior notes Staff Report Ventas (Chicago) reported that it has priced a public offering of $300 million aggregate principal amount of 1.250% senior notes due 2017 at 99.815% of principal amount and $400 million aggregate principal amount of 3.750% Senior notes due 2024 and, together with the 2017 at 99.304% of principal amount. The notes are being issued by the company’s operating partnership, Ventas Realty, Limited Partnership, and will be guaranteed, on a senior unsecured basis, by the company. The sale of the notes is expected to close on April 17, subject to customary closing conditions. The company said it expects to use the net proceeds from the offering to repay indebtedness outstanding under its unsecured revolving credit facility and for working capital and other general corporate purposes, including to fund future acquisitions and investments, if any. Barclays Capital, Citigroup Global Markets, and RBC Capital Markets, acted as joint book-running managers for the offering of the notes. //

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MONDAY, APRIL 14 , 2014


Boston Sci Continued from page 1 Boston Scientific’s Vercise DBS system is an implantable device designed to selectively stimulate targeted areas in the brain, enabling customized therapy and helping improve quality of life for Parkinson’s patients. The multi-center, prospective study is expected to enroll up to 300 patients with Parkinson’s at hospitals internationally. Deanna Harshbarger, global director of the DBS program at Boston Scientific, told Medical Device Daily that this registry will enable the company to gather longer term and real-world data with its DBS system. “It’s an opportunity to enroll all types of patients in the study,” she said. The registry will include patients from all areas where the device is commercially available. Harshbarger also noted that the company started a pivotal trial in the U.S. last year which will support the company’s efforts to win FDA approval for the device. “We’re quite excited about our system . . . we believe we have a unique technology to allow physicians a lot more opportunity to fine tune stimulation,” Harshbarger said. The area of the brain that neurosurgeons target for deep brain stimulation is very small, Harshbarger explained, about the size of a pea. “It’s important to allow them all sorts of opportunities and options to be able to get the stimulation exactly where they want it,” she said. The device is also designed with features to make it easier for the patient to use and integrate into their lifestyle, plus it has a rechargeable battery, Harshbarger noted. Parkinson’s is a progressive neurological disorder that affects 6.3 million people worldwide, according to the European Parkinson’s Disease Association (London). The multi-center, prospective study will be led by co-principal investigators Gunther Deuschl, MD, director of the Department of Neurology at the University Hospital (Kiel, Germany) and Jan Vesper, MD, Department of Functional Neurosurgery and Stereotaxy at Heinrich-Heine University Hospital (Dusseldorf, Germany). “Parkinson’s disease is a serious and progressive neurological disorder that affects millions of people worldwide. We welcome the opportunity to collect and review a more complete set of data to better understand the clinical impact and the potential of the Vercise DBS system to help manage symptoms of Parkinson’s disease,” Vesper said. “The unique features of the Vercise system, including the ability to selectively stimulate targeted areas of the brain via multiple independent current control, as well as the longevity of the Zero Volt battery, are designed for improved patient outcomes and enhanced clinical effectiveness.” This new registry builds on previous data the company has collected on the use of this device. A preliminary analysis


of the VANTAGE study, a multi-center, prospective trial for patients with Parkinson’s implanted with the Vercise DBS system, demonstrated a mean improvement in motor function of 62.4% for patients at six months post implant, as assessed by the Unified Parkinson’s Disease Rating Scale Part III, when compared to baseline. “Boston Scientific is dedicated to supporting clinical research to bring forth innovative technologies that can help improve the quality of life for patients,” said Maulik Nanavaty, president of Boston Scientific’s Neuromodulation business in a company statment. “This registry will enable us to provide physicians with a comprehensive, long term view of real world experience and results with the Vercise DBS system for the many patients affected by Parkinson’s disease.” //



Interleukin Genetics (Waltham, Massachusetts) reported the pre-print online publication of its research study titled “Association of interleukin-1 gene variations with moderate to severe chronic periodontitis in multiple ethnicities” in the Journal of Periodontal Research. The study results from multiple ethnic groups further validated the association between periodontitis and the interleukin-1 beta (IL1B) composite genotype pattern, a specific genetic profile that can be elucidated by Interleukin’s PerioPredict genetic risk test. In addition, the study results demonstrated that detection of the IL1B variations tested provided added value in the prediction of moderate to severe periodontitis above and beyond the risk attributable to smoking and diabetes alone. PerioPredict measures variations in genes for interleukin-1 (IL-1), a key mediator of inflammation, and identifies individuals who are at increased risk for moderate to severe periodontal disease. This international study, which included more than 1,500 individuals, aimed to test the hypothesis that the utilization of functional IL-1 gene variations would allow the test to be valuable across multiple ethnic groups. In the discovery phase of the project which tested Caucasians and African Americans, the study results showed that there was significant association between the presence of IL1B single nucleotide polymorphisms and moderate to severe periodontitis. This association was further confirmed in two additional studies consisting of Hispanics and Asians and in a meta-analysis of all three populations. The study validates the influence of IL-1 genetic factors on the development of moderate-to-severe periodontitis. The PerioPredict genetic test is quick, easy and painless and is performed by dentists during a routine exam or cleaning. Interleukin Genetics makes genetic tests for chronic diseases and health related conditions.

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MONDAY, APRIL 14 , 2014


Washington Continued from page 1 ejection fractions of 50% or less, a development that puts the company in an enviable market position, including for sales of electrophysiology leads. Medtronic presented secondary data from Block HF at last year’s annual meeting of the Hearth Rhythm Society (Medical Device Daily, May 14, 2013), and the trial indicated a 27% relative risk reduction in a composite endpoint of “heart size, heart failure hospitalizations and mortality,” according to Medtronic’s April 10 statement. Medtronic managed a 4-3 vote that the benefits of the expanded indication outweigh the risks at an FDA advisory hearing (MDD, Oct. 10, 2013), although the panel voted 6-1 that the data strongly suggested a reasonable assurance of safety and 7-0 that the data offered a reasonable assurance of efficacy. The decision expands the indications for two cardiac resynchronization (CRT) devices with pacing, the Consulta and Syncra devices, and eight CRT devices with defibrillation, including the two Protecta models. Edward Schloss, MD, an electrophysiologist at Christ Hospital Physicians/Ohio Heart & Vascular (Cincinnati) told Medical Device Daily he has followed Block HF closely. The trial has been “a passion of mine for a long time. It’s nice to see it finally get approval,” he said. Heart failure patients often improve with medical therapy, but Schloss said atrioventricular (AV) block is also a block to improvement in heart failure. “People that come in with AV block” in most instances “aren’t reversible, so the indication of putting a device in” would hold, he said. Lifestyle changes won’t help this condition, either. “Being a Boy Scout is not going to cure AV block,” Schloss quipped. Typically, the question is “which device, not whether you put in a device,” he said. Schloss said the patients “who are the sickest are the ones who stand most to benefit” from most interventions, which he said applies in this case as well. “Those are the ones to whom I can say ‘this will change your life,’” he observed, but he acknowledged that in general, “it’s hard to take someone who feels good and make them feel better,” a point he said applies to some class II patients. Still, Schloss said he sees “a substantial proportion” of class I heart failure patients who are legitimate candidates for biventricular pacing. He explained that those who receive a dual-chamber device are probably “going to be back because at some point, there’s a reasonable chance your heart failure may progress because of the pacing I’m performing.” This would entail subsequent implant, which he observed, “is harder than the original implant.” Given these and other considerations, Schloss said, “I would not hesitate personally – based on what I know about the data – to offer this to a class I patient if they had some degree


of LV dysfunction.” He said there are patients with block who nonetheless present with a functional left ventricle, a group he noted was not in the trial, thus excluding them from eligibility. However, he said the trial data allow physicians to address class I patients with an LVEF of 40%, who previously could obtain a dual chamber device, only to have to revisit the decision with a new implant “in six months” due to declining LV function. “We can prevent that now,” he said. The fundamental question for the practicing physician, Schloss said is, “When is the right time to intervene?” A physician and their patient can act prophylactically or wait until the patient’s condition worsens. Schloss said Block HF indicated that he can keep a patient “in class I for the rest of their life, and that’s exciting.” “Reversing people is more immediately gratifying to the doctor,” Schloss said, but he noted that he prefers to “keep them on the straight and narrow so they don’t have to go down that path” in the first place. He also said this approach can “eliminate the need for some defibrillator implants,” which entails a more expensive and more complex procedure. Ron Podraza of Reimbursement Principles (Highlands Ranch, Colorado) indicated some skepticism that the Centers for Medicare & Medicaid Services is eager to cover the new indication. “It is increasingly the case that CMS is unimpressed with the basis for FDA’s decisions,” he asserted. “There is no question that all the payers are looking for better treatments for heart failure,” Podraza acknowledged, noting, “a lot of men in their 40s and 50s who are covered by the Aetnas of the world” are also diagnosed. Still, he claimed that these payers “would not place a whole lot of stock in data FDA generates unless it’s comparative in nature.” Podraza noted that CMS has not updated many portions of its coverage policy for EP devices in roughly a decade, adding, “it would make a lot of sense . . . to review that policy in light of the new information.” Podraza added that the pattern of CMS tackling this development before private payers approach it is “certainly a pattern we see a lot,” but he remarked, “in this case, if I’m a private payer with some substantial expenses for HF patients, I’m going to take an independent look.” Podraza also seemed unfazed by the notion that cardiologists will argue for coverage per FDA’s approved labeling. “It’s certainly true that CMS has never agreed squarely with the cardiologists’ criteria” for this and other coverage questions, so the agency may be skeptical about what the professional societies see as the appropriate criteria. CMS “wouldn’t necessarily be waiting for a study” that would change the agency’s mind, he said, but noted that the agency would be especially wary if the trial “tended to favor the cardiologist’s view of the world.” //

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MONDAY, APRIL 14 , 2014


Israel Continued from page 1 not, it appears, conflict with its for-profit project incubation activities. “Our ability to pick winning Israeli projects is not jeopardized, but only improved,” explained Zachi Berger, PhD, VP Business Development at NGT3, himself an entrepreneur. “Given the number of investment applications that we receive,” he added, “we have no difficulty in cherry picking the highest quality projects. Because we are based in Arab Nazareth, and close to some major Israeli med-tech centers, we have access to a large number of stellar startups, and we pick the best, with very little racial bias.” The mixed-ethnicity technology accelerator was the brainchild of a group of some Arab businessmen together with Davidi Gilo, an astounding Israeli entrepreneur, who felt that that the fabric of Israeli culture would benefit from a center that integrated Jewish and Israeli Arabs under one roof. Their legacy is advanced today by Gary Jacobs, managing director of Jacobs Investment Company (San Diego). “The way I explain my involvement to U.S. colleagues,“ Jacobs told Medical Device Daily, “is that if Mideast peace is not just a mantra, but actually a goal,” he added, “then this personal interaction between Arab and Jewish people with a common goal might actually bring us closer than many other approaches between governments.” “The board and management of the incubator consist of a mixture of Jews and Arabs,” explained Nasri Said, NGT3’s CEO, “and that explains why we tend to be a first port of call for innovation ideas from the 4,000 Israeli Arabs who are biomedical graduates annually, or the 1,300 specialty physicians in Israel.” “We have a large population of Arab graduates and postgraduates here in Israel, and - for our benefit as well as for theirs – we want them to play a role in our growing economy, and especially in the hi-tech and biomedical industries” commented Avi Hasson, the chief scientist of the Israeli Ministry of the Economy, who recently awarded NGT3 its incubator license in Israel’s largest Arab town. One of the model companies of the Incubator portfolio is MetalloTherapy (Nazareth), a company that has advanced a novel molecular coating to the gold nanoparticle (GNP), enabling a powerful marker of tumor cells. The company initially focused on using GNP as a target for radiation therapy; discussions with clinicians have now led to them considering their proprietary GNP as a potential contrast agent that might be able “to substitute the PET-CT with our Metallo-CT,” explained Amal Ayoub, PhD, CEO and founder of the company. Her proprietary GNP material, Ayoub explained, confers improved stability to the GNP, and enables enhanced activity and longer-lasting targeting of tumor cells. The company has raised capital from venture firm Arkin Holdings (Herzliyya, Israel), and is now raising its next round, towards human trials in early 2015. Pini Orbach, PhD, director,


and investor in MetalloTherapy on behalf of Arkin Holdings, told MDD “we are proud to be involved in this promising startup, and we believe that it has the potential to bring major innovation to this field.” A rising star at NGT, Ayoub is one of Israel’s few Arab women entrepreneurs. Nasri Said, Director at Metallotherapy commented, “We believe that the entrepreneurial instinct that we see in Amal is latent in many hundreds of well-educated Israeli Arab men and women, and we would like to extend our reach towards these people, and help create the pride and the value that they deserve to enjoy.” The latest NGT3 Incubator has only been investing for two quarters. Its first portfolio company was initiated by Amnon Weichselbaum, PhD, a startup entrepreneur with three modest medical exits behind him. Aqueduct Medical (Nazareth, Israel) addresses the procedure cervical dilation, performed in 3 million gynecological examinations per annum in the U.S. alone, to ensure physician access for procedures varying from hysterectomies to IUD insertion, and from abortions to endometrial sampling. “Methods for this unpleasant but essential process have hardly advanced in the past few decades. They either involve considerable risk of cervical injury and infections, or else offer a good solution, but take 4-12 hours,” he explained to MDD. The proprietary system that Aqueduct has developed – and is already testing ex-vivo less than 6 months post inception – enables the advantages of both safety and speed. The device uses a smart catheter system to protect the two sides of the cervix, and then to gently dilate the cervical wall, all in a matter of minutes. “The system is both elegant and simple, and in our tests towards first-in-man, appears highly effective,” added Consultant Marwan Odeh MD, Senior Gynecologist, Hospital of Western Galilee, (Nahariya, Israel) affiliated with Bar Ilan University (Givat Shmuel, Israel) The company plans to begin human trials by the end of 2014, and aims to apply for CE mark approval by early 2015. Based on his experience in other startups, “I prefer to make the best product possible, and then to enable the best marketing partners in U.S. and Europe do their magic. Entrepreneurism also means knowing what you’re good at,” he quipped. The second company seeded this year by NGT3 is ParaSonic (Ramat Gan, Israel), a consumer products company focusing on treating a most ubiquitous houseguest, the head louse. The company has developed a novel device to rid the head of the louse by means of the use of acoustic vibrations. “This may mean an alternative to the terrible lice shampoo and comb approach,” explained Mor Cohen, CEO and founder of the company. To date, the company has shown how a brief session of low-level acoustic irradiation can destroy an infestation with no collateral scalp damage. The global size of the head lice market, Cohen shared, was approximately $1 billion annually, with the ensuing markets for treating bedbugs and pets’ parasites significantly larger. The company is working towards a field trial later in late 2014, and plans to apply for CE mark or FDA approval by mid 2015. See Israel, page 9

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MONDAY, APRIL 14 , 2014


Europe Continued from page 1 EOS Imaging (Paris) parlayed his revolutionary research work in particle detectors into a commercially viable imaging system capable of simultaneously creating 2-D and 3-D image of the skeleton in a natural standing position with a ultra low radiation dose. The company went public in 2012. Vexim (Toulouse) introduced SpineJack in 2007, a minimally invasive implant capable of repairing a fractured vertebra and restoring the anatomy of the spinal column. The company went public in 2012. While the companies could boast of substantial increases in sales as they win wider adoption of their respective technologies, the fuller story revealed in recent reporting for the full year 2013 shows the struggle has shifted from marketing to managing costs in order to assure the public markets. For example, in 2013 Mauna Kea posted sales growth of 13% to €9.9 million ($13.7 million) (Medical Device Daily, Jan. 24, 2014). Yet the top-line message from the Vice-President Finance, Eric Cohen, also includes an emphasis on cutting operating expenses and significantly reducing the cash burn. Full-year gross margin was stable at 70%, the highest level since the company was founded, the result of rigorous management of operating expenses, the company said. Sales and marketing, its largest single expense item, decreased 11%, and headcount was reduced from 121 employees at the end of 2012 to 112 at the end of 2013. The net result for the year was still a loss of €11.5 million ($16 million), though net cash burn at Mauna Kea was reduced to €9.8 million ($13.5 million), compared with €14,5 million ($20 million)in 2012. The CEO of EOS Imaging, Marie Meynadier, reported “buoyant revenue growth that reflects the medical community’s adoption of the innovation provided by EOS to osteoarticular imaging and orthopedic surgery.” Driven by sales of 34 systems at an average price of €399,000 ($553,000), revenues grew in 2013 to €15.17 million ($21 million), a 61% increase over 2012. Sales in EMEA doubled over 2012 to 18 systems. In North America, the company squeaked out a 13% increase, the equivalent of two additional system in 2013, and Meynadier noted a lengthening of sales cycles in the region as well as frustration with “shifts on several projects.” The bright spot in 2013 was the Asia Pacific region. Following on the first installation of a system in Singapore in 2012, EOS Imaging further expanded with a successful entry into the Japanese market during the fourth quarter. Sales for the region totaled almost €2 million ($2.8 million), an increase of 105%. Despite the sales momentum, the company recorded a net loss of €5.88 million ($8.15 million) in 2013, reducing the overall


net loss from 2012 by 19%. The net cash position at the end of the year was €15.75 million ($21.8 million). An ongoing reduction in production and maintenance costs yielded a 3% improvement in gross margin to 43%, despite a negative currency effect, said Meynadier. Revenue during the first quarter of 2014 increased 14% over the the same period in 2013 with equipment sales totaling €1.56 million ($2.2 million). The pressure on prices is continuing, however, with the sale of each system averaging €390,000 ($540,000) this year. Vexim celebrated an increase in sales greater than two-fold to reach €6.2 million ($8.6 million) in its consolidated annual results for 2013. Sales growth was evenly distributed between the home market in France and EMEA. The company was unapologetic for a surge in operating costs that increased to €11.6 million ($16 million) in 2013 due to what it called “a context of dynamic activity reflecting the ramping up of the European commercial development.” Chalking up 2013 as “a year of investment,” the company reported a net loss of €6.9 million ($9.6 million). Jérôme Marzinski, Deputy CEO of Vexim explained, “the doubling of our sales is the result of solid marketing efforts, with 25 sales staff present in five European direct sales subsidiaries. The reported loss is in line with our forecasts, and is due notably to the first half of 2013. The second half of 2013 shows a reversal of the first half trend thanks to tight control over operations. This indicator will continue to improve.” Vexim aggressively accelerated its business plan in early 2013 creating subsidiaries in Spain and the UK, the final two of the five key European kyphoplasty and vertebroplasty markets targeted for a direct sales force. Direct sales accounted for 91% of total sales in 2013, compared with 85% in 2012. Sales and marketing costs were also increased by an intensified training program in 2013, with a further 200 surgeons qualified for the SpineJack surgical procedure. In 2014 the company said it expects to train a further 300 physicians in the procedure. Holding just €1.7 million ($2.35 million) in cash at the end of 2013, Vexim was able to extend its runway through a capital increase of €11.8 million ($16.3 million) without preferential subscription rights. CEO Vincent Gardès judges this funding is sufficient to implement a development strategy in the American market. Noting that in 2013, Vexim recorded what he called “major strategic breakthroughs” on a clinical level, on a commercial level and in terms of investing in innovation, he said, “we are thus approaching 2014 with a solid competitive position on our target European markets and, thanks to January’s strengthening of our equity capital, with the necessary resources to further accentuate our technological edge and break into the strategic U.S. market.” The company will lead with an entry into the vertebroplasty market using its newly licensed technology for mixing and injecting orthopedic cement, anticipating an arrival in the U.S. in

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MONDAY, APRIL 14 , 2014


PRODUCT BRIEFS • The Spectranetics Corporation (Colorado Springs, Colorado) reported FDA clearance of two new mechanical lead extraction platforms that expand physicians’ options for safe removal of cardiac leads. Each incorporates innovative designs for mechanical extraction aimed at providing total lead management solutions. The TightRail rotating mechanical sheath platform combines unprecedented shaft flexibility and column strength to help physicians safely navigate the vasculature during cardiac lead extraction procedures. An advanced forward-facing dilating blade remains shielded until activated. The tip feature rotates in both directions for efficient dilation. The physician controls when the blade is exposed, for procedural safety. The SightRail manual dilator sheath platform features visual indicators that show bevel orientation and tip alignment, supplementing fluoroscopy as a means to determine position and orientation. A longer inner sheath gives physicians improved ability to grip and manipulate the device, especially when advancing and rotating. The SightRail sheath set has also received CE mark approval for use in Europe. Spectranetics makes single-use medical devices used in minimally invasive procedures within the cardiovascular system. PEOPLE IN PLACES • Dehaier Medical Systems (Beijing) has named Huili (Alisa) Li as its new chief financial officer and as a director, in both cases to replace Jingli Li, who resigned on April 8. Li resigned these positions solely for personal reasons and not due to any disagreement with the company. Li has been the company’s financial manager since 2013. Dehaier makes medical products, including medical devices and sleep respiratory products.


Sebelius out at HHS, but Burwell unlikely to steer different course By Mark McCarty, Washington Editor Health and Human Services Secretary Kathleen Sebelius announced April 10 she had resigned, a move followed in short order by the Obama administration’s announcement that it will nominate Sylvia Mathews Burwell, the chief of the Office of Management and Budget, to replace her. Burwell would take the job for an administration that is facing a difficult mid-term election and is in its final two years, the well-known lame-duck presidency. The situation suggests Burwell will mainly oversee the policies of her predecessor and will have few if any opportunities to point HHS in a different direction. Sebelius steered the department through the difficulties associated with the website, recently the most conspicuous element of the Affordable Care Act. She was one of a number of HHS employees who absorbed criticism for the website’s ills, although some critics believe the federal government’s procurement process was at least as much to blame for the fiasco. Sebelius was also the administration’s lightning rod for what proved to be spurious claims that enrollment in ObamaCare plans were meeting the targets set out by the administration, questions President Obama ordinarily addressed only in friendly settings. Among the questions that remain for her successor are how many of the reported 7.5 million enrollees are actually enrolled and paid, and whether adverse selection is likely to tank the exchange plans in the months to come. The Senate will take up Burwell’s nomination after Congress’s spring recess, although she needs only 51 votes to succeed to the post thanks to the exercise of the “nuclear option” by Senate Democrats in November. BRIEFLY NOTED


Israel Continued from page 7 As part of the Israeli government incubator program, the government will cover 85% of the projects costs for the first 2-3 years of the project life (up to approximately $700,000). Private investors greatly value the leveraging opportunity that the incubator structure offers; as a result, the government requested that the winner of this tender would have access to additional capital, in order to offer next-stage investment for their own successful portfolio companies. NGT3 is thus raising a small ($26 million) fund, which completed a first closing just a few months ago. “We are almost halfway there,” explained Nasri Said, “and with help from our friends in both the U.S. and Europe, Inshalla (with The Lord’s help) we will get there.” //

FzioMed (San Luis Obispo, California), a medical device manufacturer specializing in biomaterials, has received notification from FDA that the Medical Device Dispute Resolution Panel (MDDRP) will convene and make a decision on the approvability of Oxiplex Gel on June 10. Oxiplex is an absorbable, clear, viscoelastic hydrogel that is applied during lumbar spine surgery. The MDDRP provides advice to the commissioner of the FDA on complex or contested scientific issues between the FDA and medical device sponsors, applicants, or manufacturers relating to specific products, marketing applications, significant regulatory decisions and actions by the FDA, and Agency guidance and policies. The Panel is convened infrequently and makes recommendations on issues that are lacking resolution, in this case they will decide whether to overturn CDRH’s denial of the Oxiplex PMA or uphold the previous decision.

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NEUROLOGY EXTRA Keeping you up to date on recent developments in neurology By Robert Kimball, Staff Writer RESEARCH SHOWS THAT A HUMAN PROTEIN MAY TRIGGER PARKINSON’S DISEASE

A study led by the Research Institute Vall d’Hebron (VHIR), Barcelona, has shown that pathological forms of the α-synuclein protein present in deceased patients with Parkinson’s disease are able to initiate and spread in mice and primates the neurodegenerative process that typifies this disease. The discovery, published in the March cover of Annals of Neurology, opens the door to the development of new treatments that allow stopping the progression of Parkinson’s disease, aimed at blocking the expression, the pathological conversion and the transmission of this protein. Recent studies have shown that synthetic forms of α-synuclein are toxic for the neurons, both in vitro and in vivo, which can spread from one cell to another. However, until now it was not known if this pathogenic protein synthetic capacity could be extended to the pathological human protein found in patients with Parkinson and, therefore, whether it was relevant for the disease in humans. In the present study, led by Doctor Miquel Vila, from the group of Neurodegenerative Diseases of the VHIR and CIBERNED member, and in which two other groups of CIBERNED have also participated (led by Doctor Isabel Fariñas, University of Valencia, and Doctor José Obeso, CIMA-University of Navarra), as well as a group from the University of Bordeaux in France (Doctor Erwan Bezard), the researchers extracted α-synuclein aggregates from brains of dead patients with Parkinson’s disease to inject them into the brains of rodents and primates. Four months after the injection into mice, and nine months after the injection into monkeys, these animals began to present degeneration of dopaminergic neurons and intracellular cumulus of α-synuclein pathology in these cells, as occurs in Parkinson’s disease. Months later, the animals also showed cumulus of this protein in other brain remote areas, with a pattern of similar extension to that observed in the brains of patients after years of disease evolution. According to Doctor Vila, these results indicate that “the pathological aggregates of this protein obtained from patients with the Parkinson’s disease have the ability to initiate and extend the neurodegenerative process that typifies the Parkinson’s disease in mice and primates”. A discovery that, he adds, “Provides new insights about the possible mechanisms of initiation and progression of the disease and opens the door to new therapeutic opportunities”. Therefore, the next step is to find out how to stop the progression and spread of the disease, by blocking the transmission of cell to cell of the α-synuclein, as well as regulating the levels of expression and stopping the pathological conversion of this protein. MONDAY, APRIL 14 , 2014

Parkinson’s disease is the second most common neurodegenerative disease after Alzheimer’s disease. It is characterized by progressive loss of neurons that produce dopamine in a brain region (the substantia nigra of the ventral midbrain), and the presence in these cells of pathological intracellular aggregates of the α-synuclein protein, called Lewy bodies. The loss of brain dopamine as a consequence of neuronal death results in the typical motor manifestations of the disease, such as muscle stiffness, tremors and slow movement. The most effective treatment for this disease is levodopa, a palliative drug that allows restoring the missing dopamine. However, as the disease progresses, the pathological process of neurodegeneration and accumulation of α-synuclein progressively extends beyond the ventral midbrain to other brain areas. As a result, there is a progressive worsening of the patient and the emergence of non-motor clinical manifestations unresponsive to dopaminergic drugs. There is currently no treatment that avoids, delays or halts the progressive evolution of the neurodegenerative process. In the U.S., a separate study aimed to produce comprehensive estimates of the current and projected economic burden of Parkinson disease (PD). The authors combined information from nationally representative surveys to create a burden of PD model. The model estimates disease prevalence, excess healthcare use and medical costs, and nonmedical costs for each demographic group defined by age and sex. Estimated prevalence rates and costs were applied to the U.S. Census Bureau’s 2010 to 2050 population data to estimate current and projected burden based on changing demographics. The authors estimate that approximately 630,000 people in the United States had diagnosed PD in 2010. The percentage of the total US population diagnosed with PD was reported as follows: age 20-44 years, 0.02%; age 45-49 years, 0.04%; age 50-54 years, 0.09%; age 55-59 years, 0.29%; age 60-64 years, 0.30%; age 65-69 years, 0.61%; age 70-74 years, 1.29%; age 75-79 years, 1.48%; age 80-84 years, 1.85%; age 85 and older, 1.51%. Prevalence rates range from 0.01% of the population under age 45 to 1.2% for the population over age 65. To the extent that some individuals with PD will be undiagnosed, these prevalence rates underestimate total prevalence, but reflect the cases that rise to the severity that they are diagnosed. For each age group, prevalence rates were higher for males than for females. Approximately 15% of PD patients are in nursing homes, with the diagnosed PD prevalence rate approaching 9% of nursing home residents aged 75 to 84. Population projections suggest that, based on changing demographics, diagnosed PD will reach 819,000 by 2020, 1.06 million by 2030, 1.24 million by 2040, and 1.34 million by 2050. Continues on next page



NEUROLOGY EXTRA Continued from previous page

The population with PD incurred approximately 1.9 million hospital inpatient days in 2010, which is 801,000 more days than would be expected for a population with similar demographics but without PD. Excess healthcare use attributed to PD in 2010 includes 1.26 million physician office visits, 57,000 outpatient visits, 31,000 emergency visits, 24,000 home health days, and 26,000 hospice days. Among this population, one would expect 8,000 residents of nursing homes. The estimated number in nursing homes is 103,000, suggesting 96,000 excess residents attributed to PD. An estimated 108,900 patients with diagnosed PD were employed in 2010, which is approximately 40,200 fewer than expected for a similar population without PD. The number of PD patients receiving Supplemental Security Income (SSI) for disability is approximately 16,200 higher than would be expected for a similar population without PD. Key findings of this study are that approximately 630,000 people in the U.S. are diagnosed with PD, the national economic burden of PD exceeds $14.4 billion (about $22,800 per patient), and disease prevalence and economic burden are projected to grow substantially over the next few decades. Nursing home care is a major contributor to the medical cost burden, whereas reduced employment is a major indirect cost of PD. The burden of chronic conditions, such as PD, is projected to grow substantially over the next few decades as the size of the elderly population grows. Such projections give impetus to the need for innovative new treatments to prevent, delay onset, or alleviate symptoms of PD and other similar diseases (see Article Review: “The Current and Projected Economic Burden of Parkinson’s Disease in the United States.” As cited in the Incidence and Prevalence Database, by Thomson Reuters).


Neuroscientists reveal how the brain is able to focus attention on objects, such as someone’s face, when presented with a range of visual information. This kind of attention – which would allows us to pick a face we recognize out of a crowd of people – is called “objectbased attention.” Scientists have previously known much less about this than “spatial attention,” which involves focusing on a particular location. But the team behind the new study, from the Massachusetts Institute of Technology (MIT; Cambridge, Massachusetts), find that these two variants of attention actually use similar mechanisms and related brain regions. “The interactions are surprisingly similar to those seen in spatial attention,” said Robert Desimone, the Doris and Don Berkey Professor of Neuroscience, director of MIT’s McGovern Institute for Brain Research and senior author of the paper. “It seems like it’s a parallel process involving different areas.” MONDAY, APRIL 14 , 2014

Both spatial and object-based attention are governed by the prefrontal cortex - the brain region that controls most cognitive functions. The prefrontal cortex decides which areas of the visual cortex receive sensory input. For example, in spatial attention, the visual cortex will map to the assigned area of focus within the field of what the viewer can see. Desimone and team – who published their results in the journal Science – found that, in object-based attention, an area of the prefrontal cortex called the inferior frontal junction (IFJ) tunes visual processing areas to recognize specific types of objects. Working together – the IFJ, the FFA and the PPA images of faces overlapping with images of houses Participants were presented with a series of overlapping images of faces and houses, and asked to look only for faces or only for houses. The IFJ – which allows us to gather and coordinate information while performing a task – has two major allies in facilitating object-based attention. These are a brain region responsible for processing faces, known as “the fusiform face area” (FFA), and a brain region that processes information about places – “the parahippocampal place area” (PPA). To examine the relationship between these brain areas, the researchers used magnetoencephalography to scan the brains of participants who were presented with a series of overlapping images of faces and houses. The two images were presented to the subjects at different rhythms – two images per second and 1.5 images per second. The participants were instructed to pay attention to either faces or houses. This test was designed to measure object-based attention rather than spatial attention, because, as the faces and houses were in the same position, the participants’ brains could not distinguish them using spatial information. When the subjects were told to look at faces, the FFA and IFJ synchronized in brain activity. And when the subjects were told to look at houses, the PPA and IFJ synchronized. A further magnetic resonance imaging (MRI) scan also found that the IFJ is “highly connected” with white matter to both the FFA and PPA.



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