Megatrends in Medical Technology

(June 2006 MedMarket Outlook in MedMarkets)

Megatrends in Medical Technology
Aside from other trends in the medical product industry we’ve addressed previously in MedMarket Outlook, such as the dissolution of boundaries between device and pharmaceutical technologies, the increasing integration of information and information technologies with medtech, and the rise of “holistic research” (aka “systems biology”) that recognizes the value of studying pathology with a multidisciplinary scientific approach, there are specific overarching trends and forces that are changing medical technology and the markets for them on a grand scale.

Stem Cell Research
The debate about stem cell research was no more likely to end as a result of President Bush’s restriction on federal funding as it was that the established cell lines would be sufficient or appropriate for research (they weren’t) or that the case would abate (as they have not) for the use of stem cells in the treatment of diabetes, Parkinson’s, spinal cord injury or other disease and disorders. Here, we make no ethical case for or against embryonic or somatic stem cell research — the debate is likely to become wholly moot in a matter of time — we only comment on the inevitability of the science moving forward one way or another. In June, Harvard University’s Harvard Stem Cell Institute confirmed that two projects focused on cloning to produce embryonic stem cells will move forward under private funding. The projects employ the same general type of research, somatic cell nuclear transfer, that is underway at the University of California at San Francisco and at the University of Connecticut’s Center for Regenerative Biology. Aside from these approaches, a cursory review of the state of cell research in general and stem cell research in particular will reveal that researchers have both the innovation and the willingness to pursue cell therapeutics that lead to treatments heretofore not possible. It seems fairly certain that, looking back at progress in the development of the range of cell therapies, the Bush administration’s federal funding restriction will be seen to have produced a momentary hitch rather than the obstacle it was originally portrayed as producing.

Nano- and Microscale Juggernaut Forces
There are as many different functions — maybe even more — being provided by technologies designed around nanoscale or microscale level as there are different types of these technologies. The sole criteria for technologies grouped into the nano and micro categories is size. Aside from their size, there is then little common among these technologies, which represent an incredible array of devices, molecules, materials and other products that achieve functions not possible on the macro scale, even if one only considers nano- and microscale medical applications. These range from products that are largely nanoscale materials (e.g., silver nanoparticles as antimicrobials in wound management) to those providing functions such as artificial retinas, cancer diagnostics, drug delivery and biosensors. As an industry, nanotechnology (more so than MEMS, which has found considerable realized success) has been plagued by a combination of inflated promise and underestimated technical hurdles, but while MEMS (microelectromechanical systems) has found bigger initial commercial success, nanotechnology has begun scoring commercial success that will ultimately result in markets that will eclipse MEMS products by orders of magnitude.

Open Surgery in Decline, or the Rise of the Minimally Invasive, Less Invasive, Interventional, Percutaneous and Other Alternatives to Surgery
Often stated, but never emphasized enough, is the compelling drive for treatments (that were all too recently delivered exclusively via surgery) to be associated with, or replaced by, ever-decreasing invasiveness. Device manufacturers have well established records for producing devices that not only minimize the trauma of surgery (e.g., laparoscopy) but also promise to make open surgery obsolete (e.g., percutaneous procedures like coronary anastomosis). Driving this trend is the persistent recognition that “collateral damage” in achieving clinical outcomes is unacceptable, whether from the perspective of the physician seeking to optimize results, the healthcare system seeking to minimize the costs of healthcare (or optimize revenue streams by being able to market the latest less-invasive techniques) or the patient seeking to minimize the impact of surgery on his/her busy lifestyle.

Disease State-Centered Marketplaces
Certain technologies in certain clinical areas remain the predominant if not exclusive option for treatment in those areas. However, in 2006, any legitimate competitive analysis of a market considers a multitude of different technology types. Case in point: any treatment for coronary artery disease will of necessity consider the competitive threat of bare versus eluting stents, angioplasty, atherectomy (waning but not gone), products for identification/treatment of vulnerable plaque, traditional coronary artery bypass, MIDCAB, OPCAB and other bypass variants (e.g. robotics), percutaneous bypass, atherosclerosis-reversing drugs and others. Compelling arguments must be created through the intrinsic advantages of new technologies in order to secure sought-after shelf space in the cost-fixated healthcare system armamentarium.

Materials Science Creating/Upending Markets
Underlying a stunning number of new technologies, from biodegradable/resobable stents, cellular scaffolds and a wide arrange of other implant types are the advances in materials sciences that are leading to the ability to engineer implants that now go well beyond providing solely structural roles. Driving these advances are the needs to improve upon the function of implants as static, inert devices that do not fully reflect the in situ need upon implantation, fail to adapt to changing conditions or otherwise do not provide the functions that optimize the end results of the implants’ use. Whether by impregnation with different substances or by the nature of the implant material employed, implants have improved considerably in being able to not induce an anti-inflammatory response, to provide anti-microbial function to the device, to minimize formation of blood clots and to avoid the effects like restenosis of vasculature following interventional procedures. With the need for implants frequently changing at some point after their implantation, more devices — biodegradable/bioresorbable stents, matrices/scaffolds for tissue engineering and others — are being developed that are either resorbed completely by the body or just enough to be expelled in whole or in part once their purposes have been served. Lastly, materials science and implant engineering in general have also been able to simply produce implants that are more easily deployed through tortuous twists in vessels or through narrow channels in endoscopic devices. Expectations are that more complex functions will be served by implants as a result of these trends and forces in development, from the increasing sophistication of drug delivery in various passive and active forms, to the ability of implants to respond via biofeedback to changing conditions in situ, and to providing increasingly sensor-like functions. Increasing demands are being made of the medical product marketplace — cost, competitive technologies, financial performance of public companies, etc. — but it seems clear that these demands are driving the proliferation of technologies that indeed satisfy them, sometimes with each advance creating ever greater demand in an endless progression. It also seems apparent that this “technology burst” is taking place simultaneously with the increasingly strident need for healthcare costs to get under control. The focus in the U.S. Congress on the need for Medicare reform, and reform in the U.S. healthcare system overall (up to an including the increasing drive toward universal healthcare), is gaining greater intensity and may well yield more than nominal changes to the system. The medical product industry is likely to both respond to these changes and facilitate solutions that we can scarcely imagine even now.

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Categories on medtech companies tracked

Not a great picture, I know, but this is partly due to technology limitation (mobile phone pic sent to go@mobile.com). But this is a screenshot of the one of the database data entry forms used in our internal company database, which in turn is used to track medtech companies (and other entities (e.g., VCs, providers, etc.) active in medtech. The categories include technology type (biopharm, device, pharm, biotech), major clinical applications (cardio dx, cardio tx, surgery, orthopedics, cell therapy, tissue engineering, patient monitoring, minimally invasive therapies, etc., etc.). We also segment by manufacturer, distributer, healthcare provider, etc.

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“Medical Guesswork” Exposing the Ugly Truth

I have always had a rather sanguine understanding of medicine, having been sensitized to its practical limitations for most of my life. Having been the son of a general surgeon and the nephew of a pediatrician, I saw many aspects of medicine that have tempered my thinking about treatment alternatives in the medical device industry. For this reason, when I came across the article in the May 29, 2006, issue of BusinessWeek Online, asserting that healthcare professionals really know little about which treatments actually work, I found agreement with the idea, and in some cases strongly so, but in other cases I felt the premise misses a few big boats.

From BusinessWeek: “The problem is that we don’t know what we are doing,” says Dr. David Eddy (the“mathematician and health-care economist” who coined the term “evidence-based medicine”), arguing that, bluntly, there isn’t very much of this in healthcare today. Further, according to BusinessWeek, “even today, with a high-tech health-care system that costs the nation $2 trillion a year, there is little or no evidence that many widely used treatments and procedures actually work better than various cheaper alternatives.”

The point at which I agree with this is that physicians have always been given wide latitude in determining therapeutic choices, by virtue of their education, their consideration of many different variables affecting patient condition and the suitability of any given treatment. What drives the physician’s decision-making is the availability of a reimbursible therapeutic option that specifically addresses the clinical problem to address the medium term need of the patient. By “medium term” I mean the need to solve the problem now, get the patient back on their feet and keep them that way not in any permament sense, but in a medium term sense. Does any cardiothoracic surgery think CABG is a permenent solution? Perhaps long term, but not permanent. Does any interventional cardiologist believe even a drug-eluting coronary stent is a permanent solution? Perhaps more likely to be permanent than bare stents or angioplasty alone, but certainly not permanent. So, doctors are applying the available therapeutic option for the longest solution that is viable. There are many stakeholders interested in the more expensive option — medical product manufacturers, physicians, even patients (who want the high-tech quick-fix). There are not many stakeholders advocating for cheaper options — perhaps HMO’s — but who is listening to them?

However, medical devices and drugs are already aggressively evaluated for their efficacy against controls, so the premise of this article, however well-founded, overstates the case when it comes to the use of medical products. The upshot of this article otherwise is to suggest that the upward spiraling U.S. healthcare costs are attributable to expensive treatments alone, when indeed the focus should be on clinical decisions themselves. Physicians are the ones who have been given the latitude to apply them or not, and until they have a different incentive system or until the evidence is much stronger for alternative treatments, absolutely nothing will change.

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Organ Printing

The process of engineering tissues is advancing to the point where researchers actually consider such possibilities as organ printing. The formation of organs proceeds, at least in principle, on the formation of tubes, which then fuse after incubation in a bioreactor. It was described this way in Wired.Of course, organ complexity in terms of differentiated morphogenic function, shape, etc., will complicate the ability to produce organs that can even be considered for clinical trial. Hence, exceedingly optimistic assessments of when organ printing may reach trials are at least five years away (ten years is probably pushing it).

However, the ability to form the simple structures like sheets in bioengineered skin grafts or fill voids for regeneration of bone through extracellular matrices is already an established skill (see Tissue Engineering, Cell Therapy & Transplantation).

There are many, many questions to be answered, and many hurdles crossed, before bioartificial organs can be produced at the push of a button, but the possibility of success is just the sort of stimulant that feeds entrepreneurs (and drains VCs).

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Diabetes complications

Long term studies, performed with the goal of capturing more data that will enable more confident conclusions, sometimes become moot when more recent studies eclipse their premise.In the May issue of the Journal Diabetes, researchers at the University of Pittsburgh Graduate School of Public Health reported on the Pittsburgh Epidemiology of Diabetes Complications (EDC) Study’s findings (see press release) that long term complicatons including heart disease and eye disease have not improved over the past 25-30 years for type 1 diabetes juveniles and adolescents treated at Children’s Hospital of Pittsburgh between 1950 and 1980.Now, I certainly respect long term studies, because arguably there are far too few of them and far too many studies that are not only too short term, but also too narrowly focused to reveal all the implications of treatment options. Short term data is awfully compelling, especially if you are a manufacturer seeking marketing approval or just a market edge.

But long term data can lose much of its relevance when it is eclipsed by more recent research that also passes the “long-term” test. Clearly, the EDC study is undercut by the Diabetes Control and Complications Trial conducted from 1983 to 1993, which showed very clear improvement in the risk and severity of complications associated with eye, kidney and nerve disease when Type 1 diabetes had their glucose more tightly controlled:

  • Eye disease
    76% reduced risk
  • Kidney disease
    50% reduced risk
  • Nerve disease
    60% reduced risk

Now, even though patients in the DCCT trial were not expected to have heart-related problems at the beginning of the trial, since they were on average only 27 years old, cardiograms, BP and blood fat were assessed during the trial, revealing at the end of the trial that those with tight glycemic control had significantly lower risk of developing high cholesterol, a significant indicator of risk for developing heart disease.

Therefore, one must seriously question findings of a type 1 study that did not specifically factor the level of glycemic control in a consideration of heart disease or eye disease risk. Almost as significantly, the patients included in this study were type 1 individuals who, at the latest, were patients 13 years before the end of the DCCT trial.

Further, in discussion of the findings, it is noted that “many of the guidelines currently used for managing type 1 diabetes are derived from what we know about people with type 2 diabetes. We need to recognize that they are two different conditions with different processes involved. Therefore, some of the complications we see in type 2 diabetes do not occur in type 1 and vice versa.”

I am struggling to not be harshly critical of statements like this. Type 1 and Type 2 are well known to be starkly different, the only common denominator being a problem of one sort or another with insulin and therefore the need to keep an eye on blood glucose (again, the omission of the level of glycemic control being a glaring omission).

Fast forward to today (read “modern technology”). A type 1 diabetic diagnosed in 2006 faces an order of magnitude difference in treatment than one diagnosed between 1950 and 1980. Research should therefore focus on what we know now, and how we can enhance treatment, rather than what we knew almost 60 years ago.

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As a matter of obligation, I must note that my 11 year old daughter has type 1 diabetes, having been diagnosed over four years ago. So yes, maybe I’m biased, but I’m also extremely well informed on this topic. Her most recent HbA1c was 7.4.

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Cardiovascular Drug-Eluting Stent Developers, Products, Status

Developers of Cardiovascular Drug-Eluting Stents

Company Stent Drug Status
Abbott Vascular Devices ZoMaxx Zotarolimus In clinicals; ZOMAXX II trial approved 6/05
Avantec Vascular (Goodman) Duraflex Pimecrolimus In development
Biosensors International BioMatrix Biolimus A9 In trials; Expects CE Mark in 2006
Boston Scientific Taxus Express2 Paclitaxel CE Mark 1/03; FDA approval 3/04
Boston Scientific Taxus Liberté Paclitaxel CE Mark 9/05 (launched 1/05); FDA approval expected mid-2006
Conor Medsystems CoStar Paclitaxel CE Marked 2/06
Conor Medsystems (Next-generation CoStar) Pimecrolimus Pimecrolimus licensed from Novartis in 3/06; Testing two devices: one loaded with pimecrolimus and another with both pimecrolimus and paclitaxel
Cordis (J&J) Cypher Sirolimus CE Mark; FDA approved, U.S. launch 4/03
Cordis Cypher Select Sirolimus CE Mark in 2003
Cordis Cypher Neo Sirolimus In development
CorNova (Undisclosed) (Undisclosed) In development
Devax Axxess Plus (bifurcated) Biolimus A9 In clinicals (positive first-in-man data reported 11/05)
DISA Vascular Stellium Paclitaxel In development
Estracure/Medivas/Picarus (Undisclosed) 17-(beta)-Estradiol In development
Guidant Xience V Everolimus CE Mark 1/06; European launch pending
Medtronic Endeavor Zotarolimus CE Mark 7/05; U.S. launch planned in 2007. RESOLUTE trial began 12/05
Occam International (subsidiary of Biosensors International) Axxion Paclitaxel CE Mark 7/05
Relisys Medical Devices (Undisclosed) Paclitaxel In clinicals
Sahajanand Medical Technologies (SMT) Infinnium Paclitaxel CE Mark 12/05
Sorin Biomedica Cardio Janus Flex Tacrolimus CE Mark; launched in Europe 2/06
Terumo Nobori Biolimus A9 Clinical trial launched 6/05
X-Cell Medical Ethos 17-(beta)-Estradiol In clinicals
Xtent Xtent Biolimus A9 In clinicals; European launch planned in 2007, U.S. in 2009

Note: CV Therapeutics and MIV Therapeutics (among others) are developing coatings for coronary drug stents.Source: MedMarket Diligence, LLCRelated Tags: , ,

More Drug-Eluting Stents Nearing Market; Biotech Market Progress — April MedMarkets

In our April issue of MedMarkets, we cover the current and forecasted market for drug-eluting stents, considering the pending introductions of a number of competitors to established players J&J and Boston Scientific. We also look at the hard successes of biotech in bringing products to market and the growing success the industry is having in once again attracting invesment. Below is our outline of coverage:

  • Biomedtech, Combo Technologies Bolster Growth in Device Markets
  • Flurry of Cardiovascular Drug-Eluting Stents Nearing Market
  • MedMarket Outlook: Opportunities in Common Technology Threads
  • Early Stage Companies:
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    • Intraoperative Determination of Tumor Margin
    • All -Polymer Hip Implant European Trial
    • Ultrasound-Assisted, Transdermal Insulin Delivery
  • Early Stage Company Financings: Active Implants, AngioScore, Aptus Endosystems, BlueBelt Technologies, CryoFluor Therapeutics, Ultradian Diagnostics
  • Recent Medtech Startups
  • Biotech Update: Carbon Nanotube Scaffolding Fosters Proliferation of Bone Cells
  • Drivers: California Judge OKs Stem Cell Research Agency
  • Leading Clinical Edge:
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    • Measuring EPCs: A new Test for Heart Disease?
    • Artificial Nuscle Stronger Than Natural Muscle
    • “Neuro-chip” Leads to Improved Communication
    • U.K. Researchers to Produce Wound Monitor
    • Online (HTML) Only:
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        • Articular Cartilage Paste Grafting Shows Promise
        • New Knee Repair Technique Introduced
        • Stent-Graft Improves Aneurysm Repair
        • Better Outcomes with Less-Invasive AAA Repair
        • CRT Devices Linked to Better Outcomes
        • Esophageal Stenting Found Effective
  • Developments
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    • ISSYS Awarded Patent for Wireless Sensors
    • WorldHeart’s LVAS Enters Key Phase in Animal Testing
    • Sorin to Launch Cobalt Chrome Carbostent
    • ATS Announces First Implant of Annuloplasty Ring
    • Medtronic’s AAA Stent Receives FDA Approval
    • FDA OKs DexCom’s Glucose Monitoring System
    • FDA Clears Bone Graft Product
    • Regeneration Technologies Launches New Implant
    • Online (HTML) Only:
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        • MicroCHIPS Develops Wireless Drug-Delivery System
        • Cordis to Develop Cardiac and Vascular Institute
        • Nanogen Receives Clearance for CHF Test
        • Crestor Reverses Heart Disease
        • Biomet for Sale?
        • Orthopedic Companies Promote Knee Implants for Women
        • Pioneer Surgical, Encelle to Work on Spinal Fusions
        • FDA Approves St. Jude Closure Device
        • Protege by ev3 Receives FDA Approval

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High Growth Medical Technologies — Add’l Opportunities

Last week, I wrote the white paper, High Growth Medical Technologies, based on looking at different technologies I have seen and believe have excellent prospects for growth in the near term. I have since edited the white paper to not only clean up some typos but to also add a section on additional opportunities and to add a set of conclusions I see based on the nature of high growth technologies (where/how they derive, etc.). Nothing earth-shattering, but a few useful insights.

In the white paper, I also make reference to the Institute for Systems Biology, which I became aware about some time ago and for which I have great respect. This is the institute founded by Leroy Hood. In any event, I only made passing mention of this institute, but urge readers who aren’t already aware of this multidisciplinary approach to biology to drill down further.

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CMS Medicare Cuts for Cardiac Devices Won’t Fly (This Time)

The proosal by CMS to reduce by up to 30% the reimbursement to hospitals for cardiac devices arises from a compelling need to reduce the clearly high costs associated with these devices (stents, defibrillators, etc.). Given the size of the proposed cuts, however, and their impact on device makers and hospitals, their negative reaction (see Boston Globe) was anything but surprising. The reality is twofold: the proposal will get scaled back moderately to significantly before a final rule, likely in October, and this CMS proposal is only the first shot fired in a volley regarding device costs. As I noted in my publisher’s letter in the April MedMarkets, device manufacturers and healthcare systems alike have to recognize that the writing is on the wall.

Nanotech/MEMS in medicine (nanomedicine) companies

This is preliminary(!) list of the companies involved in nanotech and/or MEMS with at least a minimum level of activity in applying the technologies to medical applications. This list was updated from a previous report by MMD, but still may included a number of companies (not yet edited out) who ultimately were unable to sustain the rampant, rabid optimism needed to drive investment in support of R&D in this area. We also will likely have a moderate to significant number of additional companies profiled.

Advanced Photonic Systems GmbH

Amersham Biosciences Corp

Anson Nano-Biotechnology Company Ltd

Aphios Corp

Aquamarijn MicroFiltration BV

Avidimer Therapeutics

Biocristal Ltd

Biodelivery Sciences International

Bio-Gate Bioinnovative Materials GmbH

Bionova Inc

Biophan Technologies

Biospectrum

C Sixty

Capsulation Nanoscience AG

CardioMEMS Inc

Digital BioTechnology Co Lts

DIOLAS Diodenlaser GmbH

Fairfield Sensors Ltd

Flamel Technologies SA

Genencor International

HealPlus International Inc

IGI Inc

ImaRx Therapeutics Inc

iMEDD Inc

Improvita Health Products Inc

Insert Therapeutics Inc

JenLab GmbH

JR Nanotech plc

Kereos Inc

Kliendieck Nanotechnik

Liplasome Pharma A/S

Magforce Applications GmbH

MagnaMedics GmbH

ManoMedica Inc

Micralyne Inc

Micromet AG

Micronics Inc

MicroTec Geselschafft fur Mikrotechnologie GmbH

MIV Therapeutics Inc

Molecular Profiles

Nanobac Pharmaceuticals Inc

NanoBio Corp

Nanobiotics

Nanobiotix

Nanocarrier Co Ltd

Nanocopoeia Inc

Nanogate Technologies

Nanogen Inc

NanoMed Pharmaceuticals Inc

Nanomix Inc

NanoPharma AG

Nanostream Inc

Nanosyn Inc

Nanotherapeutics Inc

Nanovax Inc

Newco Surgical

NOSE

Novosom AG

Nucryst Pharmaceuticals

Nutralease Ltd

Petnet Pharmaceuticals Inc

Pharmosol GmbH

Precision Optics Corp

Psvidia Ltd

Silex Microsystems AB

Skyepharma plc

Solubest Ltd

Spherics Inc

Spire Corp

Spinelix

Starpharma Pooled Development Ltd

Tecan Group Ltd

The report is about a week away, depending on how much additional content we feel meets the “absolutely-have-to-include-this” test.

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