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MX: Issue Update

June 2005

Is J&J Rethinking Guidant Acquisition?

In late May, Guidant Corp. (Indianapolis) acknowledged that it had failed to properly inform physicians and patients about a potentially fatal flaw in one of its implantable cardiac defibrillator (ICD) models that resulted in the death of a 21-year-old college student. Since then, new disclosures have continued to deepen the company’s problems . Recalls of the company’s ICD devices have been expanded to include 11 different models totaling approximately 109,000 units. And the continued drumbeat of negative publicity is threatening to inflict potentially serious market damage on the company’s entire line of cardiac rhythm management products.


Apart from the damage to Guidant’s prestige and reputation as a premier manufacturer of innovative medical devices, industry analysts have begun to speculate about potential effects on the company’s pending $25.4 billion acquisition by Johnson & Johnson Inc. (J&J; New Brunswick, NJ). When Guidant’s ICD problems were first disclosed, J&J issued a press release stating that it expected the deal to close on schedule. The world’s largest medical device maker has reportedly been in close consultation with Guidant regarding the ICD issue, but has had no further public comment. Meanwhile, industry analysts increasingly appear to believe that J&J may want to revisit the terms of the deal.
[ More ]

Dollens
 Guidant CEO Dollens:  Working closely with FDA.

Stent Wars: Boston Scientific and Cordis Both Get Victories

Watching the latest court rulings in the coronary-stent patent infringement suits brought by Boston Scientific Corp. (Natick, MA) and Cordis Corp. (Miami Lakes, FL), a Johnson & Johnson company, is a little like watching a tennis match with no end. In mid-June, the U.S. district court in Wilmington, DE, found that Boston Scientific’s Taxus drug-eluting stent and two of the company’s bare-metal stent platforms—the Taxus Express and its next-generation counterpart, Liberté —infringe on patents held by Cordis. But just nine days after the jury verdict in its favor, Cordis found itself on the losing end of a decision from the same Delaware court. The court ruled that the company’s Cypher drug-eluting stent infringes on Boston Scientific’s drug-coating technology patent. The court also ruled that Cypher and Cordis’s Bx Velocity, Bx Sonic, and Genesis stents violate Boston Scientific’s stent-d esign patents.

LaViolette
 LaViolette: Fundamental  IP.

Company responses to the latter decision were predictably very different. Paul A. LaViolette, Boston Scientific’s chief operating officer, expressed the company’s satisfaction with the verdict. “We are very pleased with the jury’s verdict. It confirms our belief that we have fundamental intellectual property covering drug-eluting stent technology and stent design.” Meanwhile, Cordis said it would seek to have Delaware district court judge Sue Robinson reverse the most recent ruling and, if it was not overturned, would take its case to the court of appeals for the federal circuit, in Washington, DC . [ More ]

Competition Showcases Student Product Innovation

Winners of the inaugural Biomedical Engineering Innovation Design and Entrepreneurship Awards (BMEidea) competition—a new showcase competition for students involved in developing medical products—were announced during the recent Medical Design Excellence Awards ceremony in New York City. The BMEidea competition recognizes excellence in student biomedical innovation. Winning teams at this year’s competition were selected from a pool of entries submitted by some of the nation’s top biomedical engineering departments, and were judged by a panel of experts in medicine, engineering, patent law, and business.

BMEidea winners
 Accepting the inaugural BMEidea
 awards on behalf of their teams (from
 left): Elizabeth Tran (Washington
 University, St. Louis), Ashkon
 Shaahinfar (Johns Hopkins University,
 Baltimore), and Amy Lee (Stanford
 University; Palo Alto, CA).


The first-place team, from Stanford University (Palo Alto, CA), received a $10,000 cash prize in recognition of its work. The team has developed the Embolune, a novel treatment for cerebral aneurysms. The microporous balloon device helps reduce the risk of aneurysm treatment. The team also developed a method to create a permanent clot that prevents further aneurysm growth. At the awards ceremony, team member Amy Lee said that the competition offered “a nice culmination of a year of working on the project and trying to find ways to promote it and to raise funding. The students involved in this project do it all on their own time. It’s nice to be recognized for all our work.” [ More ]

FDA Panel Rules against Artificial Heart

In one of recent times’ most closely watched and widely reported decisions in the medical device regulatory approval process, FDA’s circulatory system devices panel ruled against granting a humanitarian device exemption (HDE) for the AbioCor artificial heart by Abiomed Inc. (Danvers, MA). Although the panel voted against recommending a “not approvable” determination, a subsequent motion asserting that the AbioCor device does not meet the requirements of an HDE passed with a vote of 7–6, with one abstention. Abiomed chairman, president, and CEO Michael R. Minogue said, “While we are disappointed in the panel's recommendation, there is more work to be done to clarify our submission and HDE requirements.” [ More ]

Minogue
  Minogue: More work to be
  done.

Kyphon Prevails in Patent Dispute with Disc-O-Tech

In a June jury trial, a federal district court in Delaware ruled that Disc-O-Tech Medical Technologies Ltd. (Herzliya, Israel) had infringed the patents of Kyphon Inc. (Sunnyvale, CA), a manufacturer of medical devices to treat and restore spinal anatomy using minimally invasive techniques. The court also granted Kyphon a permanent injunction against Disc-O-Tech, which prevents the company from selling or importing its SKy bone expander in the United States, effective July 22. Disc-O-Tech’s patent-infringing product is a polymer that is injected into the spine to stabilize collapsed vertebrae. [ More ]

MX: Issues Update is a monthly e-supplement prepared by the editors of MX: Business Strategies for Medical Technology Executives and sent to you as a benefit of your on-line registration with Canon Communications. To become a regular subscriber to this monthly medtech business update, click here.

The editors welcome your suggestions for future content in MX: Issues Update. Please feel free to contact us with your comments and ideas.Steve Halasey, Editor in Chief, MX

MX: Issues Update is a monthly e-supplement prepared by the editors of MX: Business Strategies for Medical Technology Executives and sent to you as a benefit of your on-line registration with Canon Communications. To become a regular subscriber to this monthly medtech business update, click here.
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