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Results Published from New InSpace Studies

InSpace reduces pain and improves function in patients with rotator cuff tears.

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Stryker to Acquire Entellus

The $662 million deal expands SYK's ENT presence.

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Results Published from New InSpace Studies

OrthoSpace Ltd. (“OrthoSpace” or “the Company”) today announced that results from two studies evaluating the use of the InSpace™ biodegradable balloon spacer to treat massive, irreparable rotator cuff tears have been published in the journals Musculoskeletal Surgery and Acta Bio Medica. Massive, irreparable rotator cuff tears (RCTs) are associated with severe pain and disability, and patients with RCTs of this magnitude have historically had few treatment options.

The two publications reported the following results, respectively:

  • In an independent, prospective, single-arm study, 44 patients (46 shoulders) with massive, irreparable RCTs were treated with the InSpace System. At one year of follow-up, patients reported a mean reduction in pain scores of 3.5 points (on a scale of 0 to 10), with 74% of patients achieving a difference of 2 points, which was considered the threshold for minimal clinical importance. Shoulder function, as measured by the Oxford shoulder score (OSS) and Constant–Murley shoulder score, improved significantly in this treatment cohort, and the authors noted that 80% of patients reported that they were satisfied with their outcome. Notably, this study also included a subset of 11 patients (24%) who were concurrently treated with a partial repair of the rotator cuff. The authors found no differences in outcomes of these patients in regard to pain or function compared to the patients who received InSpace alone. (Piekaar et al, 2017)
  • In an independent, retrospective study of 30 patients with irreparable rotator cuff tears treated with the InSpace System, authors Ricci et al reported statistically significant increases in Constant Scores in a cohort of patients evaluated at 6 months (from 39.89 to 62.33 points) and in a separate cohort evaluated at 12 months (from 41.66 to 65.38 points) after surgery. Range of Movement and Activity of Daily Living measures significantly improved with the reduction of VAS and pain scores at 12 months. The authors reported a further increase in functional performance with the reduction of pain at 24 months post-operatively. Additionally, the authors analyzed X-ray and MR imaging to observe that all patients had a pre-operative acromiohumeral distance less than 6 mm and lesion grades of 3 to 4 according to the Goutallier classification, while, post-operatively, each case was observed to have an acromiohumeral distance of greater than 7 mm at all imaging timepoints. MRI also confirmed the complete degradation of the spacer in each patient by 24 months. (Ricci et al, 2017)

“We are pleased to see the publication of these positive results from Drs. Piekaar and Ricci and colleagues, which demonstrate the compelling benefit of InSpace to patients with massive rotator cuff tears,” said Itay Barnea, CEO of OrthoSpace. “We note in particular the promising outcomes from the addition of InSpace to partial repair of the tendon, which helps to demonstrate the versality of the InSpace System. These results add to the growing body of evidence favoring the use of InSpace as a novel, minimally invasive treatment for patients who have failed conservative therapy or otherwise have few options to treat painful, irreparable RCTs.”

The InSpace System is deployed in the subacromial space between the acromion and the humeral head, allowing smooth gliding and frictionless movement between the two bones and emulating the function of the original bursa. It is usually placed arthroscopically in a procedure that requires only 10 minutes to perform, and the balloon is believed to fully degrade within 12 to 24 months.

The InSpace System is CE Marked in Europe and Israel and is investigational in the U.S. and Canada, where it is currently being evaluated in a prospective, single-blinded, multi-center, randomized, controlled study that will enroll up to 184 patients.


Posted December 12, 2017

Stryker to Acquire Entellus

On Thursday, December 7th Stryker Corp (SYK) announced that they would acquire Entellus Medical (ENTL) for $662 million. Stryker is paying a significant premium of roughly 50 percent to where Entellus closed on Wednesday and approximately a 7.1x estimated 2017 revenues. According to Stryker, the deal will be dilutive to 2018 adjusted net earnings by approximately 4 cents per share.

Entellus markets a balloon sinus dilation system called XprESS for the treatment of chronic and recurrent sinusitis. The procedure can be performed in the office as well as in a hospital setting. They also market the MiniFESS line of surgical instruments for use in general sinus surgeries. In July, Entellus announced an acquisition of their own – a $25 million deal to buy Spirox, which makes an absorbable nasal implant that can be implanted using MIS techniques to treat nasal airway obstruction.

The acquisition highlights Stryker’s increasing strategic focus on the ENT market, which we at InnovaHealth Partners estimate is a $16 billion market growing around 5 percent per annum.


Posted December 07, 2017
Device Company CEOs on Innovation and M&A

Our new video series focuses on medical device technology and trends.

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Regentis Enrolls First Patients in IDE Cartilage Trial

The study will compare GelrinC to microfracture.

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Device Company CEOs on Innovation and M&A

We’re excited to launch the InnovaHealth Partners video series with interviews from thought-leading medical device CEOs on innovation, improving patient outcomes, meeting hospital expectations for value and what strategic acquirers are looking for in the companies they target. What’s most important in medical device innovation? How do medical device companies differentiate from their peers? How do innovative companies address the cost constraints of hospitals? We sat down with Stavros Vizirgianakis, President and CEO of Misonix, Paul Nichols, President and CEO of Bio2 Technologies and Philip Sawyer, President and CEO of Invuity to learn more.


 

Many thanks to Stavros G. Vizirgianakis, Paul Nichols and Philip Sawyer for their time and insight.


Posted December 04, 2017

Regentis Enrolls First Patients in IDE Cartilage Trial

Regentis announced that the first three cases have been performed in their IDE study for GelrinC, a novel hydrogel that is applied after standard microfracture for the treatment of focal knee cartilage defects. The liquid formulation becomes solid after exposure to UV light, conforming to the size and shape of the lesion. The company says the implant acts as a scaffold for the growth of new cartilage and that it completely degrades within 6-12 months.

The first three patients were treated at two U.S. sites (Peninsula Orthopaedic Clinic in Salisbury, Maryland and Mansfield Orthopaedics at Copley Hospital in Morrisville, Vermont) and one Danish site (Aarhus University Hospital in Aarhus). The study’s ClinicalTrials.gov page reports that 181 subjects will be enrolled overall. Safety and efficacy endpoints for patients who receive the GelrinC treatment will be compared to a historical microfracture control arm. The company says this study design will enable faster enrollment and thus faster approval.

GelrinC has CE mark approval and is sold in Europe; in the U.S., the ongoing clinical trial will support a PMA in the U.S.


Posted December 01, 2017
Amgen Invests in Fortuna Fix

It's the company's first investment in the regenerative medicine space.

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Mazor Releases Impressive Early Data from Spine Study

Robotic guidance was linked to lower complication and revision rates.

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Amgen Invests in Fortuna Fix

Amgen is participating in a $25 million Series B round for Fortuna Fix, a regenerative medicine company based in Canada that is developing an autologous neural stem cell treatment for the replacement of lost neuronal tissue. The treatment is clinical-stage and uses direct reprogramming of somatic cells into neural precursor cells, which can be further optimized for specific indications. The technology uses no fetal or embryonic cells (i.e., pluripotent cells, which have been associated with safety issues, including development of tetromas) and no animal, viral or bacterial components. Further, the cells, called drNPCs, are believed to be safe to deliver without immunosuppression.

Funds will be used to conduct Phase I/IIa clinical trials in Parkinson’s Disease and Spinal Cord Injury, as well as to expand Fortuna’s automated robotic manufacturing capabilities. FierceBiotech reports that when the cell therapy will be ready for human testing and the exact patient populations where the treatment will be evaluated have not been determined, but the company is in discussions with clinical advisors and the FDA to further those decisions.


Posted November 14, 2017

Mazor Releases Impressive Early Data from Spine Study

Mazor released early results from their ongoing MIS reFRESH study, which is comparing robot-guided thoracic, lumbar or lumbosacral spinal fusions to freehand or fluoro-guided techniques based on endpoints like intraoperative X-ray exposure, surgical complications and need for revision. Among the 379 patients analyzed in this cohort (of a planned total enrollment of 2000), investigators found lower rates of complications and revisions among the patients who had robot-guided procedures. Specifically, the risk of adverse events or complications was 5.3 times higher in the fluoro-guided group (92 subjects at the time of analysis) compared to the robot-guided arm (287 subjects). Further, relative risk for revision surgery was 7.1 times higher in the fluoro-guided group. Both results were statistically significant.

If these results are maintained over the larger study cohort, they will represent compelling evidence for the benefit of robot-assisted techniques in orthopedic and spine surgery.

The company has a strategic partnership with Medtronic for the worldwide distribution of the Mazor X system that has been in place since 2016, though Mazor has said they plan to keep their technology open and compatible with any devicemaker’s implants. Medtronic recently invested an additional $40 million in the company, which was accelerated based on “the early achievement of certain sales and marketing milestones by both companies, as well as higher than expected global market acceptance and demand for the Mazor X system.” Medtronic has now invested a total of $72 million in Mazor.


Posted November 08, 2017
TELA Bio Raises Up to $25M

TELA's scaffolds are used for hernia repair and abdominal wall reconstruction.

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TPG Capital to Acquire Exactech

The transaction is valued at $625 million, or 2.4x revenues.

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TELA Bio Raises Up to $25M

TELA Bio announced that Pacira Pharmaceuticals, Inc. will invest up to $25 million in the company, with $15 million provided up front and up to an additional $10 million upon fulfillment of certain milestones. TELA Bio, which is led by former Orthovita CEO Antony Koblish, has developed the OviTex line of soft tissue scaffolds, which are manufactured in a range of sizes and thicknesses as well as in permanent and resorbable formulations. This enables multiple configurations to address a variety of hernia repair and abdominal wall reconstruction needs. Notably, the company says the scaffolds feature a unique design that combines “biologic and synthetic materials in a unique embroidered construction that allows free movement of fluid and cells through the construct.”

The company will use funds from the Pacira financing to expand clinical and commercial efforts for their existing products and indications as well as  develop new OviTex products for additional soft tissue procedures, including breast reconstruction.


Posted November 02, 2017

TPG Capital to Acquire Exactech

Orthopedic devicemaker Exactech announced that they agreed to be taken private by TPG Capital for $42.00/share in cash, valuing the transaction at $625 million in total. This represents a 31% premium over the close on October 20 and a 2.4x revenue multiple. The company will continue to be headquartered in Gainesville, Florida, and the transaction is expected to close in 1Q:18.

TPG Capital was part of the consortium that acquired Biomet in 2007, later selling it to Zimmer for more than $13 billion.


Posted October 24, 2017
J&J to Acquire Surgical Process Institute

SPI is a German company that develops surgical checklist software.

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FDA Clears TransEnterix's Robotic Surgery System

The Senhance is the first new abdominal surgical robotic system cleared since 2000.

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J&J to Acquire Surgical Process Institute

J&J announced plans to acquire Surgical Process Institute, a German developer of software for the “standardization and digitalization of surgical workflows in the operating theatre.” Surgical checklists have been demonstrated to improve safety and reduce the rate of complications in surgical cases, and the acquisition is particularly timely, as reimbursement hinges increasingly on metrics associated with quality of care. In addition to patient safety and surgical team coordination, J&J says that the SPI technology reduces operating time, another important benefit for hospitals.

SPI’s products are already in use in several hospitals in Germany and other EU locations. Use of the software will expand throughout EMEA in 2018, and J&J reports that they will start conducting pilot programs in other regions in 2018, with full worldwide availability expected in 2019.

The transaction is expected to close in 4Q:17. Financial terms were not disclosed.


Posted October 23, 2017

FDA Clears TransEnterix's Robotic Surgery System

TransEnterix announced last week that the FDA cleared their Senhance surgical robotics system for use in gynecologic and colorectal laparoscopic surgical procedures. The device has already received the CE mark.

Building on the known benefits of robotic surgery to reduce pain, scarring and recovery time after surgery, the Senhance’s differentiating features include haptic feedback and eye-sensing camera control. The Senhance also utilizes an open architecture, which allows hospitals to integrate the system into existing operating room equipment. TransEnterix also emphasizes the economic benefits of their system, which will compete with Intuitive’s da Vinci, by noting that the Senhance is operated with fully reusable instruments.

Also in development at TransEnterix is the SurgiBot System, a single-port robotic surgical platform. That system is not yet available in any market.


Posted October 18, 2017
CartiHeal Treats First Patients on Agili-C IDE Study

The company is developing a knee implant for cartilage defects.

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Alphatec Accelerates Business Transformation

The company announced additional spine-experienced leadership appointments.

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CartiHeal Treats First Patients on Agili-C IDE Study

Israel-based CartiHeal announced last week that they have opened a multi-center IDE study that will evaluate the use of their Agili-C implant against microfracture and debridement for the treatment of cartilage or osteochondral defects. Seventeen subjects have been enrolled and treated at three EU centers so far, and the company is in the process of opening additional sites in the EU, U.S. and Israel. The study will enroll a minimum of 250 subjects overall and be used to support a U.S. PMA application. The device is CE marked in Europe.

Agili-C is described as a cell-free, off-the-shelf implant that aims to regenerate damaged hyaline cartilage, thus preventing progression to osteoarthritis. The implant is biphasic, consisting of modified aragonite and hyaluronic acid in the cartilage phase and calcium carbonate in the bone phase, and is implanted in a press-fit, single-stage procedure.


Posted October 09, 2017

Alphatec Accelerates Business Transformation

  • Patrick Miles to lead company as Executive Chairman
  • Quentin Blackford appointed to Board of Directors
  • Miles and Blackford to make equity investments totaling more than $3.5 million

Alphatec Holdings, Inc. (Nasdaq:ATEC), a provider of innovative spine surgery solutions with a mission to improve patient lives through the relentless pursuit of superior outcomes, announced that Patrick Miles has been appointed as Executive Chairman and Quentin Blackford as a member of the Board, effective today.  Miles will lead the organization, and Terry Rich, Alphatec‘s Chief Executive Officer, will continue in his role, reporting to Miles. In conjunction with these appointments, Miles and Blackford are personally investing in Alphatec common stock in an aggregate amount in excess of $3.5 million.

“Today’s announcement marks continued execution of our vision to reposition Alphatec as the most respected, fastest-growing company in U.S. spine,” said Mr. Rich. “Pat and Quentin have decades of industry experience and well-deserved reputations that speak for themselves. Their personal financial commitments are a powerful testament to their personal commitments to increase shareholder value; a conviction that has been expressed by our entire leadership team.”

Rich continued, “Pat is a globally recognized spine visionary and a proven driver of market-share expansion.  His passionate belief that our most important business is in the operating room aligns absolutely with the Alphatec value system, and positions him extraordinarily well to lead the organization. I have great confidence that Pat’s influence on daily operations, product development decisions, and surgeon engagement will accelerate the business transformation that we are driving. I look forward to partnering with him to advance Alphatec’s growth trajectory by executing our mission to improve patient lives.”

Miles brings a wealth of orthopedics and innovation expertise, with over 25 years of industry experience, and as a named inventor on close to 100 industry patents. In his capacity as Executive Chairman, he will be fully engaged, focusing primarily on further defining and implementing Alphatec’s strategic initiatives, expanding and fortifying the Company’s relationships with surgeon customers, and leading Alphatec’s new technology development.  Miles joins Alphatec following a 17-year tenure at NuVasive, Inc., where he was a central figure in the company’s expansion from a start-up business to a global spine corporation with close to $1 billion in revenues.  He most recently served as NuVasive’s Vice Chairman; prior to that, he was its President and Chief Operating Officer, and President of Global Products and Services.  Before joining NuVasive, Mr. Miles held sales and marketing roles with Medtronic Sofamor Danek and Smith & Nephew.

“I am thrilled to work closely with Terry once again to reposition Alphatec as the next great growth story in spine. Together, we share roughly 50 years of spine and orthopedics expertise – a level unrivaled in spine leadership – which will guide us in determining how best to serve this market.  I look forward to driving toward improved surgical outcomes and market share expansion,” said Miles. “Alphatec has a broad and impressive product portfolio, improving surgeon engagement, and great access to hospitals; all of which position the Company exceptionally well to take market share in today’s environment. This is a high-caliber team driving an important mission, and I feel incredibly lucky to be a part of it.”

Blackford joins the Alphatec Board of Directors with 17 years of experience in the medical device industry.  He is currently Executive Vice President and Chief Financial Officer of DexCom, Inc. Prior to joining Dexcom, Blackford was Executive Vice President, Chief Financial Officer, Head of Strategy and Corporate Integrity for NuVasive.  In that role, he led the Finance, Strategy and Corporate Development, Compliance and Regulatory functions. Before joining NuVasive in 2009, Mr. Blackford held various leadership roles with Zimmer Holdings, Inc., including Director of Finance and Controller for Zimmer Dental.

“Alphatec has assembled an exceptional team of spine industry leaders who are already transforming the business.  I am excited to help shape the Company’s strategic direction as Alphatec evolves into a leading spine player,” said Blackford.

In connection with these appointments, Mortimer Berkowitz III, Alphatec’s Chairman since December 2016, will transition into the role of Lead Director. In addition, Stephen O’Neil has resigned from his position as a member of the Company’s Board of Directors, effective immediately.  Mr. Rich will also remain a key member of the Alphatec Board.

Mr. Berkowitz, said, “I would like to thank Steve for his 12 years of dedicated service to Alphatec, and for being a trusted colleague and counselor. I also enthusiastically welcome Pat and Quentin to the Alphatec family, and thank Terry for his efforts in bringing them aboard. They share the optimism and the vision that we have for the future of this Company, and I look forward to serving with them in the Lead Director role.”

Inducement Award
As an inducement to accepting employment with the Company, and in accordance with applicable NASDAQ listing requirements, the Board of Directors has also approved an award to Mr. Miles of 1,000,000 restricted stock units (RSUs).

The RSUs will be granted following registration of the common stock underlying the RSUs and will vest in equal annual installments on each of the first three anniversaries of Mr. Miles’ date of employment if he remains continuously employed by Alphatec as of such vesting date. In addition, the RSUs will fully vest upon a change in control of Alphatec.

The Board approved an amendment to Alphatec’s 2016 Employment Inducement Award Plan to increase the shares reserved for issuance thereunder by 1 million shares, effective October 2, 2017.

Equity Investments in Alphatec Common Shares
Mr. Miles has agreed to purchase 1.3 million shares of common stock and Mr. Blackford has agreed to purchase at least 220,000 shares of common stock and up to 440,000 shares of common stock, all at a purchase price of $2.26 per share (the consolidated closing bid price of Alphatec common shares on September 29, 2017), for gross proceeds to the Company of between $3.5 million and $4 million. The share purchases are expected to close on or before January 1, 2018. In connection with his purchase of Alphatec common stock, at the closing, Mr. Miles will also receive a five-year warrant to purchase up to 1.3 million shares of common stock at a purchase price of $5.00 per share which, if exercised, will generate additional gross proceeds to the Company of $6.6 million.

About Alphatec Holdings, Inc.
Alphatec Holdings, Inc., through its wholly owned subsidiary Alphatec Spine, Inc., is a medical device company that designs, develops, and markets spinal fusion technology products and solutions for the treatment of spinal disorders associated with disease and degeneration, congenital deformities, and trauma. The Company’s mission is to improve lives by providing innovative spine surgery solutions through the relentless pursuit of superior outcomes. The Company markets its products in the U.S. via independent sales agents and a direct sales force.

Additional information can be found at www.alphatecspine.com.


Posted October 02, 2017
Optinose Receives FDA Approval & Plans IPO

EXHANCE is a novel inhaler used for the treatment of nasal polyps.

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FDA Announces "Critical to Quality" Pilot

The new program aims to streamline the PMA process.

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Optinose Receives FDA Approval & Plans IPO

Optinose received FDA approval for their EXHANCE device for the treatment of nasal polyps and their symptoms, a condition that may affect up to 10 million adults. The product utilizes the company’s novel Exhalation Delivery System (EDS) to deliver a steroid (fluticasone propionate) deep into the nose. The unique design requires the patient to actuate the pump spray into one nostril while simultaneously blowing into the mouthpiece of the device.

The development program for XHANCE included five clinical trials evaluating over 1,500 adult patients, including two randomized, double-blinded, placebo-controlled Phase 3 pivotal trials in adults with nasal polyps (NAVIGATE 1 and NAVIGATE 2) and two open-label Phase 3 clinical trials in adults with chronic sinusitis with and without nasal polyps (XHANCE-12 and XHANCE-3). In their last release of data from NAVIGATE II, the company delivered positive results including reduction in the co-primary endpoints of nasal congestion/obstruction and endoscopically measured total polyp grade. Further, XHANCE-12 showed improvement in patient-reported symptoms.

On the heels of FDA approval comes the announcement that Optinose plans to join fellow ENT and sinusitis companies Intersect ENT and Entellus on the public markets. Optinose seeks to raise $100 million in an IPO, which the company will use to fund the launch of XHANCE in 2Q:2018, to run a pediatric study on the use of the device and for general working purposes.


Posted September 26, 2017

FDA Announces "Critical to Quality" Pilot

The FDA is taking applications for its Critical to Quality PMA initiative, which will test a model of early, proactive engagement between PMA applicants and the Agency to identify elements that are key to “product and process quality.” The pilot is aligned with the FDA’s efforts to make the PMA process more efficient and reflects specific device industry feedback that “many of the risks for devices reside in product and process design and post-production activities.”

Over the course of the program, applicants will collaborate with the FDA to define how product design elements elements are controlled in design and manufacturing. Involving the FDA earlier in the marketing process may give devicemakers the opportunity to develop and refine their quality control procedures while assisting the Agency in its manufacturing review. As a result of this effort, participating companies will undergo only a “more focused” post-market inspection, not the standard preapproval inspection, which can be an unwieldy and time-consuming process. Further, the FDA hopes that by implementing and refining quality processes sooner, there may be fewer device failures and recalls. This could ultimately lead to a more efficient marketing process for both applicants and FDA.

This project, which reflects the FDA’s effort to create a more transparent, predictable regulatory pathway, will ramp up quickly. The FDA will accept the first nine applicants who meet the pilot’s criteria into the program, which will run from September 29, 2017, to December 31, 2018.


Posted September 22, 2017
NuVasive Launches LessRay

LessRay is a software platform that aims to reduce OR radiation exposure.

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Cooper Buys Teva's ParaGard IUD for $1.1B

The announcement follows Teva's decision to divest its women's health business.

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NuVasive Launches LessRay

NuVasive announced last week the market launch of their LessRay product, a software platform that enhances low-dose images acquired intraoperatively to full-dose quality. This allows for less radiation exposure in the OR, which is critical for spine and orthopedic surgeons, who may receive a lifetime occupational exposure to radiation with the first decade of their careers. LessRay, which was acquired from SafeRay Spine in September 2016, also marks the entry of NuVasive into capital equipment sales.


Posted September 19, 2017

Cooper Buys Teva's ParaGard IUD for $1.1B

CooperSurgical announced this week that they would acquire Teva’s ParaGard intrauterine contraceptive device for $1.1 billion in cash. Bloomberg notes that the product recorded $168.0 million in sales over the last 12 months, suggesting a 6.5x revenue multiple for the transaction. ParaGard is copper-releasing and is the only non-hormonal IUD on the market in the U.S. The device is approved for marketing only in the U.S., and the transaction includes Teva’s ParaGard manufacturing facility in Buffalo, New York. The deal is expected to close by the end of the year, pending antitrust approval.

Teva has been selling assets to pay down debt, and intends to pursue the sale of the remaining assets of its global Women’s Health business, in addition to its Oncology and Pain businesses in Europe. The company expects to generate a total of $2B from the sale of these assets.


Posted September 14, 2017
Smith & Nephew Announces Knee Surgery Research Project

SNN will partner with Imperial College London to develop new surgical techniques.

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Book Review: Immunity by William E. Paul, MD

We like and recommend this primer on one of the hottest topics in the life science field.

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Smith & Nephew Announces Knee Surgery Research Project

Smith & Nephew announced last week a partnership with Imperial College London to develop “enhanced surgical techniques” to address ligament function, biomechanics and soft tissue injuries of the knee. The project, which is funded by a three-year, $1 million grant from Smith & Nephew, aims to improve treatment for common knee injuries, such as torn menisci and anterior cruciate ligaments. The company announced a similar effort at the University of Hull in July, where GBP 3 million (approximately $4.0 million) in funding will be used to develop novel treatments in wound care.


Posted September 12, 2017

Book Review: Immunity by William E. Paul, MD

One of the hottest topics in the life science field is the immune system.  Treatment modalities from vaccines to antibiotics to cancer immunotherapy have been developed from centuries of study of this complex subject.

We found the book Immunity by the late William E. Paul, MD to be a useful primer for general readers looking to familiarize themselves with the immune system.  Practitioners seeking to brush up on immunity’s latest research developments will also find Immunity worthwhile.

Dr. Paul, who was the chief of the Laboratory of Immunology at the National Institute of Allergy and Infectious Diseases of the National Institutes of Health, is an authority on the topic.  By presenting the three laws of the human immune system – universality, tolerance, and appropriateness – he provides a comprehensive blend of science, history, and autobiography.

Perhaps most interesting to us were Paul’s useful futuristic suppositions about new immunological technologies and research frontiers.  These include the use harnessing the immune system for cancer therapy, epigenetics, genetic engineering and the like.

Much of this work relates to medical devices in areas such as designing miniature implantables that are be ignored by the immune system (e.g. less scarring), developments in diagnostic tools such as immunodiagnostics, real-time immune system imaging that helps in efficient disease management and so forth.

We like and recommend this book.


Posted September 05, 2017
MiMedx Divests Stability Biologics

MiMedx will divest the bone graft subsidiary to focus on its biopharma strategy.

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Year-to-Date Medtech M&A

More than $33B in combined transaction values have been announced for the sector.

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MiMedx Divests Stability Biologics

MiMedx announced last week that they would divest their subsidiary Stability Biologics LLC to the stockholders from whom MiMedx acquired the company in January 2016. This move will enable the company to focus on their biopharma strategy, which is based on further developing their human placental tissue platform technology.

Stability developed and processed bioactive bone graft products and tissue allografts, including structural/particulate bone, structural allografts, demineralized bone matrix (DBM), skin products for burns and traumatic wound care and the bone grafting material Physio. As MiMedx developed its plan to transition fully to a biopharma company, which it intends to complete by 2020, they concluded that Stability was no longer a strategic fit.

MiMedx is now focusing on completing BLA submissions for AmnioFix Injectible, their lead product candidate, for the treatment of muscloskeletal pain. The company recently announced that it has submitted INDs for phase III plantar fasciitis and achilles tendonitis clinical trials, with the BLAs expected to be submitted in 2019 and launches projected for mid-2020. The company is also performing clinical investigations into the use of the treatment for osteoarthritic knee pain, with a BLA in that indication expected to be filed in 4Q:20. And while the company is primarily focused on the wound healing and orthopedic therapeutic areas, they have publicly announced potential applications in other sectors as well, including pain management, respiratory and cardiac.


Posted August 29, 2017

Year-to-Date Medtech M&A

Medtech M&A is continuing at a brisk pace well into 2017, as we report some trends in the 37 deals announced so far this year. Notably, 12 of 37 announced transactions, or 32%, were in orthopedics. The remainder of the deals were distributed relatively evenly between sectors, as depicted below:

Unsurprisingly, the biggest transaction announced in 2017 is the proposed acquisition of C.R. Bard by Becton Dickinson for $24B, or about 6x revenues. More remarkable is evidence of the increased interest in the Aesthetics space, growth in which has been attributed in part to more consumer awareness and acceptance as well as increased adoption of these treatments and services among men. There have been three transactions announced in the Aesthetics space this year, including Allergan’s $2.5B acquisition of Zeltiq and Hologic’s $1.7B acquisition of Cynosure, which happen to be the second- and third-highest-value deals of the year. Neuro was also an active space, with three transactions announced, the most significant being Integra LifeScience’s planned acquisition of J&J’s Codman Neurosurgery business for $1.1B.

J&J/Ethicon completed a rare transaction in its purchase of Torax Medical. Torax describes itself as developing and manufacturing minimally invasive treatments for digestive, incontinence and obesity disorders, and their lead product is the Linx System for the management of gastroesophageal reflux disease. The terms of the transaction were not announced.

Among orthopedics companies, Stryker remains an active acquirer, having recently announced its $700 million bid for Novadaq, which offers real-time perfusion imaging intraoperatively. With their clear commitment to growth via M&A and more than $3.6B in cash on their balance sheet, we expect Stryker to continue their acquisitive strategy, particularly in the general surgery space, where they’ve been most active of late. We also note a number of spine companies (Interventional Spine, Spinal Elements, Medyssey) among the dozen transactions in orthopedics announced so far in 2017.

These acquisitions are consistent with what we have observed about medtech M&A in the past: acquisitions are executed largely by strategic acquirers, the industry leaders who prioritize novel technologies that can enhance their current offering and that they can integrate into their established commercial organizations. The recent volume of activity – and at strong valuations – provides evidence of the long-term growth and innovation in medtech.


Posted August 15, 2017
Year-to-Date Medtech Funding Recap

Trends in medtech private placements so far in 2017.

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Richard B. Emmitt Joins InnovaHealth Partners as Senior Advisor

He will contribute to Firm strategy, transaction sourcing and value maximization.

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Year-to-Date Medtech Funding Recap

We took a look at funding activity at medical technology companies so far in 2017 and counted 134 deals as of August 1, 2017, raising a reported $900 million.

The majority of those deals (63%) occurred in five sectors: orthopedics (29 transactions), neurology (19), cardio (15), vascular (12) and general surgery (10). The full distribution of those 134 transactions is depicted below:

While orthopedics attracted the greatest number of investments, it also recorded some of the highest-value deals during 2017 so far. Specifically:

  • Moximed raised $50M in March from Advent LifeScience, NEA and Morgenthaler Ventures, among other investors, to support development of its shock absorbing implants for knee OA;
  • Active Implants, which is developing a meniscus replacement technology, closed the first tranche of an expected $40M financing round led by LS Health Science Partners;
  • Vertiflex raised $40M from Endeavour Vision, H.I.G. BioHealth Partners and NEA to fund U.S. commercial expansion of the company’s Superion Indirect Decompression System for spinal stenosis;
  • Vertos Medical closed a $28M round led by MVM Life Science Partners to expand commercialization of the company’s mild procedure for spinal stenosis; and
  • Simplify Medical, which we previously highlighted here, raised $21M in a round led by LSP to support pivotal clinical trials of its MRI-compatible artificial cervical disc.

Outside of orthopedics, Outset Medical closed a $76.5 million round led by T. Rowe Price Associates, who were joined by Fidelity Management & Research Company, Partner Fund Management LP, Warburg Pincus, Perceptive Advisors and The Vertical Group. The company is using the funds to support commercialization of its novel Tablo Hemodialysis System. And BioStar and Boston Scientific were among the participants in a $45M round that Corindus Vascular Robotics will use to grow its robot-assisted percutaneous coronary intervention technology.

We will update this report at year-end for a full look at 2017 private placements, and we are looking forward to those results: fundraising activity so far has highlighted how innovation continues to drive the sector and affirms the investor interest in our space.


Posted August 08, 2017

Richard B. Emmitt Joins InnovaHealth Partners as Senior Advisor

Veteran medical device investor Richard (“Dick”) Emmitt has joined InnovaHealth Partners (“InnovaHealth”) as Senior Advisor. Mr. Emmitt will continue as a General Partner of The Vertical Group, which he co-founded in 1988.

Mr. Emmitt is one of the most experienced and successful investors in the medical device industry. His career spans the industry’s transition from just a few companies in the early 1970’s to thousands of companies today, with global sales of over $500 billion. Drawing on his deep experience and industry network, Mr. Emmitt will contribute to InnovaHealth’s established core competency in medical device investing by contributing to the firm’s strategy development, research capabilities, transaction sourcing and value maximization.

Mortimer (“Tim”) Berkowitz III, InnovaHealth President and Chief Executive Officer, said, “I’m very pleased to welcome Dick to the InnovaHealth team as we continue to advance our long established private equity investment strategy that is responsive to the opportunities of a growing and fast changing medical device industry.  Dick brings a successful track record and an extensive network of physician and industry management relationships that will be instrumental in executing our investment strategy.  The entire InnovaHealth team looks forward to working with Dick as we invest in high growth medical device companies on a global basis.”

Recognized as one of the medical device industry’s most strategic investors, Mr. Emmitt’s experience includes all stages of private equity and venture capital.  Among his former investments and board of director memberships are companies in virtually all major sectors of the medical device industry: American Medical Systems (acquired by Endo Pharma); ENTrigue Surgical (acquired by Arthrocare); ev3 (acquired by Covidien/Medtronic); Galil Medical (acquired by BTG); Lifecell (acquired by KCI); OsteoBiologics (acquired by Smith & Nephew); SciMed Life Systems (acquired by Boston Scientific); Tornier (acquired by Wright Medical); Velocimed (acquired by Saint Jude); Wright Medical Group (NASDAQ: WMGI); and Xomed Surgical (acquired by Medtronic).  Mr. Emmitt currently serves on the Boards of Directors of Biorez, MicroVascular Tissues, Monteris Medical and Tepha Medical.

Mr. Emmitt commented, “I am pleased to be working with the InnovaHealth team.  Their success and proven track record in orthopedics, biomaterials and biologics is a superb fit for me and is an excellent platform for future investments which will create value for shareholders, physicians and their patients.”


Posted August 01, 2017
Simplify Medical Raises $21M

The company is developing an MRI-compatible artificial cervical disc.

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Boston Scientific Drawing Consumers with TV Ads

For the first time, Boston Scientific uses TV marketing to reach potential patients.

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Simplify Medical Raises $21M

Simplify Medical announced the closing of a $21 million Series B round of financing. The round was led by LSP (Life Sciences Partners), who were joined by Sectoral Asset Management and returning investor M.H. Carnegie. Funds will be used to support two ongoing U.S. pivotal clinical trials of the Simplify artificial cervical disc. The studies are currently enrolling patients with cervical degenerative disc disease to undergo treatment at one level and two adjacent levels of the spine.

The Simplify disc is unique because it is constructed from PEEK endplates and a ceramic composite core, so there is no risk of metal wear. Further, metal artifact from artificial discs with metal components can make the spine challenging to evaluate on MRI after surgery, meaning patients would require CT and thus be exposed to ionizing radiation. The materials used in the Simplify disc are MRI-compatible.

The Simplify disc has received the CE Mark, and the company notes that the device has been used to treat more than 700 patients outside the U.S. over the last three years. Simplify has not announced when they expect to receive FDA approval for the device.


Posted July 25, 2017

Boston Scientific Drawing Consumers with TV Ads

Boston Scientific launched a marketing initiative this spring designed to reach potential patients for a stroke prevention device – TV ads, which ran in Tampa, Detroit, San Diego and Phoenix, the first of their kind in the company’s 38-year history. The Boston Globe first reported on the effort, which is notable because devicemakers, unlike drug companies, do not often run direct-to-consumer television ads.

The ad was for the Watchman, a device targeting patients with atrial fibrillation who are susceptible to blood clots. The device seals the left atrial appendage, where 90% of stroke-causing clots that come from the heart are formed, so clots can’t migrate. Watchman is being positioned as an alternative to warfarin or other blood thinners, which are associated with bleeding risk. The company’s chief medical officer, Ian Meredith, describes the commercial as presenting an alternative for patients who can’t take anti-coagulants or are struggling with their side effects, adding, “And a lot of primary care doctors don’t realize this option’s available.” Further, the Watchman is a highly differentiated device – it’s the only product of its kind on the market in the United States and the fastest-growing of all of the company’s products – which means that increased education and awareness can support the company’s position in a more competitive market for hospital sales.

The company says they are reviewing the ad’s performance in their initial markets before deciding whether to roll it out to other geographies.


Posted July 20, 2017
House Re-Authorizes Medical Device User Fees

The bill will re-authorize user fees, which support the FDA's review budget, through 2022.

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Dune Medical Raises $12.3M

The company will expand MarginProbe beyond breast cancer.

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House Re-Authorizes Medical Device User Fees

Last week the House voted to pass the FDA user fee re-authorization act, which allows for the collection of fees from drug and device manufacturers to support the FDA in its review activities. This latest iteration of the legislation would update the target base user fees collected from devicemakers to $130.2 million in FY2017, $183.3 million in FY2018 and reaching $213.7 million in FY2022.

An infographic produced by AdvaMed, the medical device lobby which is supportive of the re-authorization act, summarized some of the commitments the FDA is offering under the renewed agreement. They include shortening review times for 510(k) applications and PMAs, incorporating novel study designs and attributes, such as the use of real-world data and patient-focused endpoints, into submissions and providing more specifics in deficiency letters, so that companies may better understand the issue and how to remedy it.

Now that the bill has passed the House, the next step is the Senate to vote on their version of the bill. Congress has until September 30 to finalize the legislation, at which point the prior user fee agreement expires.


Posted July 17, 2017

Dune Medical Raises $12.3M

Dune Medical Devices announced the closing of a $12.3 million financing round led by Canepa Healthcare, ATON Partners and the Kraft Group. The company has received $66.5 million in funding to date, with the most recent round planned to support product expansion beyond the company’s initial breast cancer indication.

The MarginProbe System, the company’s first product, utilizes radiofrequency spectroscopy technology to detect microscopic residual cancer in real time during a surgical procedure. As clean margins are critical in preventing disease recurrence, the device enables the surgeon to remove additional tissue during the primary procedure while the patient is still under anesthesia, greatly reducing the costs and potential complications associated with multiple surgeries. The device was first developed for use in breast lumpectomy procedures, where the company estimates 20-30% of women need additional surgical procedures to remove residual cancerous tissue. Across three large pivotal randomized control trials and several other peer reviewed studies, Dune Medical reports that 2,500 women were found to have a 79% reduction in re-excision procedures when the MarginProbe System was implemented.

With this latest funding announcement, the company is now planning on expanding the use of the MarginProbe to prostate, colon, lung and pancreatic cancers. Further, in August 2016, Dune Medical received the European Union Horizon 2020 Research Grant to develop their biopsy system, which the company says will allow radiologists and surgeons to immediately characterize tissue abnormalities along the tip of a biopsy needle.


Posted July 13, 2017
Medtech Performance Outshines S&P

Strengthened by innovation, demographics and value, medtech rises 9% since April.

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Smith & Nephew Launches NAVIO for Total Knee

The new application expands the use of the NAVIO robotics platform from partial knees.

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Medtech Performance Outshines S&P

We’re kicking off July with a look back at the medical technology sector’s strong performance in the public markets over the past three months, particularly when compared to the S&P 500. We reviewed the performance of a representative sample of medtech leaders – Medtronic, Stryker, Boston Scientific et al – against the S&P 500 and noted a 9% gain in market cap from April through June compared to the S&P’s 3% increase. While the recent biotech rally has been driven in part by the news cycle, including some clarity into potential drug pricing policy decisions, we believe medtech’s recent performance is attributable to investors taking notice of the sector’s potential for steady, long-term growth and its favorable positioning in a value-oriented healthcare system. Several factors stand out:

  • Innovation: medical devices continue to evolve to treat patients less invasively and earlier in their disease states, as well as to enhance disease management (e.g., continuous blood glucose monitoring in diabetes). Medtech is also witnessing the emergence of entirely new classes of products, as with the development of robotic platforms. Robotic surgery has the potential to make surgery safer and less invasive, and despite the rapid growth of companies like Intuitive Surgical, which markets their robots for general surgery, gynecology and urology procedures and estimates 12-14% procedure growth in 2017, only about 4% of surgical procedures use a robot, leaving a lot of room for continued adoption. Orthopedics has been moving into this high-growth segment via M&A, with Stryker buying knee replacement robot manufacturer MAKO Surgical in 2013, Smith & Nephew acquiring Blue Belt Technologies’ handheld NAVIO system for knee replacements in 2015 and Zimmer acquiring the French spine robot company Medtech SA in 2016.
  • Demographics: the aging population is one of the key drivers of medical device utilization. In 2012, 43.1 million Americans were aged 65 or older; in 2050, that will nearly double to 83.7 million. Increased disease incidence associated with an aging population, particularly those associated with the obesity epidemic, such as osteoarthritis (already affecting 10-13% of people aged 60 or older) and diabetes (affecting 9% of the population), will further drive demand for medical devices. Emerging markets will also provide substantial growth opportunities (with some analysts predicting that emerging markets will outpace developed market growth by 2-3x).
  • Value: medical devices represent a small portion of healthcare spend, and they have not undergone increases in price (attracting both scrutiny and pricing pressures) the way drugs and biologics have. This contributes to a stable pricing environment for medical devices, even amid a shift toward value-based healthcare. As devices are generally a component of the cost of a surgical procedure, cost considerations are intrinsic to the development of new devices, and device manufacturers have institutionalized their methods for developing evidence to support the efficacy, quality and cost-effectiveness metrics that shore up a value-based heathcare system.

Medical technology’s recent performance against the S&P 500 reflects a heightened appreciation for this sector, which is positioned at a confluence of innovation, demographics and value – factors that help to insulate it from political and market pressures and ensure steady, reliable long-term growth. We will continue to track the unique attributes and performance of the medtech sector as it evolves, in the coming quarters, years and beyond.


Posted July 10, 2017

Smith & Nephew Launches NAVIO for Total Knee

Smith & Nephew announced the launch of the NAVIO handheld robotics-assisted total knee arthroplasty (TKA) application. This expands the NAVIO platform from partial knee replacement, where it has been in use since 2014, to total knees. The press release notes that TKAs comprise 80% of all knee replacement surgeries globally.

The company describes the benefits associated with the use of the NAVIO system, including the platform’s ability to help surgeons with implant alignment, ligament balancing and bone preparation, all of which contribute to patient satisfaction. Further, the NAVIO is portable, handheld, easy to set up and allows patients to avoid a pre-operative CT for surgical planning. The new NAVIO TKA application supports Smith & Nephew’s JOURNEY II, LEGION Primary and GENESIS II Total Knee Systems.

Smith & Nephew acquired Blue Belt Technologies, developer of the NAVIO technology, from HealthpointCapital for $275 million in 2015.


Posted July 07, 2017
OrthoSpace Announces the Publication of Positive InSpace™ Study

Shoulder pain, function were significantly improved at up to three years of follow-up.

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Bonesupport Listed on NASDAQ Stockholm

The company develops and markets injectable bioceramic bone graft substitutes.

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OrthoSpace Announces the Publication of Positive InSpace™ Study

OrthoSpace Ltd. (“OrthoSpace” or “the Company”) today announced the publication of positive data on the use of the InSpace™ subacromial spacer for the treatment of massive rotator cuff tears. The case series of 39 shoulders (37 patients) was published in Arthroscopy and demonstrated improved function and reduced pain in patients treated with the InSpace System.

“Patients who fail conservative therapy for massive rotator cuff repair have historically had few options for further treatment of this debilitating, painful condition,” said Julien Deranlot, M.D., principal investigator of the study and an orthopedic surgeon at Clinique Drouot in Paris, France. “The InSpace provides a safe and reliable surgical alternative that can improve shoulder pain and function, allowing patients to have a better quality of life post-operatively.”

The InSpace System consists of a biodegradable balloon spacer deployed in the subacromial space between the acromion and the humeral head, allowing smooth gliding and frictionless movement between the two bones and emulating the function of the original bursa. It is usually placed arthroscopically in a procedure that requires only 10 minutes to perform.

This study assessed clinical, functional and radiographic outcomes for all patients with symptomatic massive irreparable rotator cuff tears who were treated with the InSpace at the Clinique Drouot between January 2011 and December 2014. Patients included in this study had a minimum of one year and up to three years of follow-up at the time of analysis.

The investigators reported the following results:

  • Range of motion was significantly increased for all patients in anterior elevation, abduction and external rotation.
  • The mean Constant score, which measures pain, activity level and function, improved from 40 (±14.6) (45 [±15.2] when adjusted for age and gender) at baseline to 59 (±13.7) at one year, and up to 64 (±13.6) (adjusted = 76 [±17.1]) (P < 0.0001) at last follow-up. Notably, there was a significant improvement between the one-year follow-up and three-year follow-up regarding the adjusted Constant score (P=0.02).
  • At last follow-up, adjusted Constant score was excellent (greater than 100 points) for three shoulders (9%), good (86-99 points) for eight (23%), fair (65-85 points) for sixteen (45%), and poor (fewer than 65 points) for eight shoulders (23%).
  • Among the radiographic outcomes, when assessing for Hamada score (a measure of osteoarthritis), four shoulders progressed by one radiographic stage (15%), and two shoulders progressed by three stages (4%). 32 shoulders had no progression during follow-up.

“We continue to be encouraged by the compelling clinical improvements we see in patients treated with the InSpace System, which are in line with the strong results demonstrated in previous studies,” OrthoSpace CEO Itay Barnea commented. “The system offers a safe, minimally invasive option that can be effectively used to relieve pain and improve shoulder function for patients, especially in elderly patients with chronic pain and disability, poor tissue quality or other health issues, who may not have alternative treatment options.”

The InSpace System is CE Marked in Europe and Israel and is investigational in the U.S. and Canada, where it is currently being evaluated in a prospective, single-blinded, multi-center, randomized, controlled study that will enroll up to 184 patients.


Posted June 30, 2017

Bonesupport Listed on NASDAQ Stockholm

Last week Swedish orthobiologics company Bonesupport AB was listed on NASDAQ Stockholm. Bonesupport (BONEX) is part of an IPO hot streak on the Nordic markets – it was the 63rd company to be listed in 2017, and one of five companies (Sedana Medical among them) to be listed on the NASDAQ Stockholm on June 21. Five companies to go public on the same day is a record for the listing.

Bonesupport will use proceeds from the offering to fund the company’s growth strategy, including sales and marketing efforts in the U.S. and Europe, collection of clinical data, the Fortify IDE study and investment in their product pipeline. The FORTIFY trial, which enrolled its first patient last month, will support a PMA application in the U.S. for CERAMENT G, an injectable antibiotic-eluting bone graft substitute. The company is pursuing approval for CERAMENT G in open tibial fractures, which are associated with infection and fracture non-union as well as long-term disability.

The first formulation of CERAMENT was 510(k)-cleared in 2008 as a synthetic bone void filler comprised of hydroxyapatite and calcium sulfate. Indications for use include gaps and voids in bone, such as those occurring from trauma and benign bone tumors. The antibiotic-eluting versions of the material, CERAMENT G (gentamicin) and CERAMENT V (vancomycin), have been CE-marked and are available for sale in Europe.


Posted June 26, 2017