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 Medtech’s Top 20 Report Slower Growth in 2006
An analysis of 2006 financial performance among the 20 largest publicly traded medical device manufacturers reveals that growth at many companies slowed compared with prior-year rates. Unlike 2005, when more than half of the top-20 medtech companies reported double-digit revenue gains, the latest annual analysis of financial performance reveals that only six firms achieved that kind of growth in 2006. And for two of those companies—Abbott (Abbott Park, IL) and Boston Scientific Corp. (Natick, MA), which both posted year-to-year revenue increases of 24%—the gains were attributed primarily to the acquisition of Guidant by Boston Scientific and Guidant’s vascular business by Abbott, rather than organic growth. [More]
FDA Panel Endorses Corin’s Hip Resurfacing System
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Paling
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In a meeting held late last month, FDA’s panel on orthopedic and rehabilitation devices recommended approval of the Cormet 2000 hip resurfacing system, manufactured by Corin Group plc (Gloucestershire, UK). If approved as recommended, the Cormet 2000 would be the second such device to gain access to the U.S. market. The Birmingham hip replacement system, manufactured by Smith & Nephew plc (London), received FDA approval last May.
“We are now poised, subject to final FDA approval, to be able to supply the world’s largest orthopedic market with our leading hip resurfacing product,” said Ian Paling, Corin’s chief executive officer. “We are very confident that the opportunities for Cormet in the United States are substantial, as all our market research points to significant demand for this hip resurfacing technology, which is especially attractive to the younger, active baby-boomer generation.” [More]
Orthopedic Manufacturers Out in Force at
Annual AAOS Meeting
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Matson
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The orthopedic sector’s robust level of competition was evident at last month’s meeting of the American Academy of Orthopaedic Surgeons (AAOS; Rosemont, IL), which hosted 470 exhibiting companies. Generally regarded as one of the largest AAOS meetings in the 74-year history of the event, the gathering at the San Diego Convention Center featured what many analysts described as some of the most elaborate product displays and demonstrations ever seen at the show.
Michael S. Matson, senior medtech analyst with Wachovia Capital Markets LLC (New York City), noted that although there was a significant number of product introductions at this year’s AAOS meeting, there were few surprises. “Many of the new product offerings were evolutionary rather than revolutionary,” he said. Regarding sector growth going forward, the Wachovia analyst said, “Although we do not expect the market to return to 2004 levels of growth (near 20%), we expect 2007 growth to be on par with the sector’s long-term average of 9–11%.” [More]
FDA Panel Rejects Medtronic Remote Monitoring System
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Gunderson
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In what some industry observers saw as a setback for at-home patient monitoring, FDA’s panel on circulatory system devices rejected the premarket approval application for the Chronicle implantable hemodynamic monitoring system, manufactured by Medtronic Inc. (Minneapolis). Medtronic cited the device’s clinical efficacy as its ability to reduce a patient’s number of hospitalizations or visits to emergency rooms or other urgent-care centers. And although use of the device resulted in a 22% reduction in these areas, the panel cited a lack of clinical effectiveness when voting 9–2 to reject the application.
Thomas Gunderson, a managing director and senior medtech analyst at Piper Jaffray & Co. (Minneapolis), said the panel’s decision was only a mild surprise. “The Chronicle is an invasive implant, and the panel simply saw the device as not meeting the established endpoint of significantly reducing hospitalizations or other emergency interventions,” he said. “Overall, it’s only a minor setback for Medtronic. The company is making serious headway with this technology. Its ultimate goal is to market its pacemakers and implantable cardioverter-defibrillators with sophisticated onboard patient monitoring.” [More]
Manufacturers Demonstrate Device Interoperability
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Zambuto
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Major medtech manufacturers took significant strides toward enabling device interoperability at this year’s Healthcare Information and Management Systems Society (HIMSS) conference, held in New Orleans last month. During the conference, the interoperability initiative known as Integrating the Healthcare Enterprise (IHE) demonstrated its first profile designed to enable communication among patient care devices. As part of IHE’s interoperability showcase, device manufacturers including GE Healthcare, Philips Medical Systems, B. Braun Medical, Welch Allyn, and Draeger Medical demonstrated the seamless communication of information among their devices in a simulated hospital setting.
“It is rewarding to see these truly fierce competitors working on a common platform,” says Raymond Peter Zambuto, president of Technology in Medicine Inc. (Holliston, MA) and cochair of the IHE Patient Care Device domain. “I think that IHE represents the best chance that we have in the United States and around the globe to put into place a true framework for interoperability.” [More]
Attorneys: J&J’s Improper Payments Point to Need for Enhanced Compliance Plans
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McAnaney
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Last month, Johnson & Johnson Inc. (J&J; New Brunswick, NJ) voluntarily disclosed to the U.S. Department of Justice and the Securities and Exchange Commission that some of its subsidiaries outside the United States made improper payments in connection with the sale of medical devices in two small-market countries. In making this announcement, the company reported that Michael J. Dormer, worldwide chairman for medical devices and diagnostics for J&J, had retired from the company.
“This situation demonstrates the continuing maturation of the compliance process in the healthcare field, spurred by exposure to both the False Claims Act and Sarbanes-Oxley Act,” says Kevin McAnaney, an attorney who specializes in healthcare fraud and abuse issues. “The Foreign Corrupt Practices Act (FCPA) wasn’t even on anyone’s radar three years ago, and now it is a regular component of the compliance auditing of the large global players. More importantly, the disclosure puts manufacturers on notice that they cannot ignore their foreign business practices.” [More]
MassMedic Launches Coaching Program to Support Device Start-Ups
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Allen
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The Massachusetts Medical Device Industry Council (MassMedic; Boston) has launched a new business coaching program designed to increase the number and sustainability of early-stage medical device companies in New England by linking start-up companies with expert mentors. The free program, MedTech IGNITE—an acronym for Inspiring Growth in New Innovative Technology Enterprises—will be tested during the first year on between four and six partnerships.
“The chief areas of focus will be helping the entrepreneurs to hone their business models; create effective strategic business plans; and develop concise, compelling business cases to engage investors, board members, and company leaders,” says Laura Allen, executive director of MedTech IGNITE. “We expect that our ability to leverage the collective strength of the wisdom and expertise embedded in the thriving device industry in Massachusetts will help to not only accelerate the development curve for medical technology start-ups, but to spin out stronger, better companies.” [More] |
