Showing all posts written by Raj Pai

Raj Pai
Raj Pai
Raj D. Pai's practice focuses on patent prosecution and litigation in the pharmaceutical, biotechnology, and the medical device sectors.
Prior to joining the firm, Raj worked as a post-doctoral fellow at the University of Southern California and the University of California-Los Angeles. His work included analyzing signaling pathways in leukemic cells, parasitology studies, and biofuel production. He holds a Ph.D. from the University of California Berkeley, where he carried out biochemical and structural studies on the bacterial ribosome.
Raj attended the University of California Davis School of law. While in law school he served as an articles selection editor for the Business Law Journal and served as President of the King Hall Intellectual Property Law Association.
Raj worked as a summer associate at the firm in 2016 and joined the firm in 2017.

Veterans Association and IBM Watson Extends Oncology Partnership

On July 19th, 2018, the United States Department of Veterans Affairs (VA) and IBM Watson Health announced an extension of their ongoing partnership to interpret cancer data in patients.

According to the press release, the partnership was originally announced two years ago with the goal of providing precision care for veterans. Oncologists and pathologists receive tumor samples from patients nationwide. The DNA is sequenced from these samples. Watson then interprets the genomic data and identifies relevant mutations. Once the mutations are identified, Watson suggests potential targeted treatment options. Watson accomplishes this by cross-referencing the findings against medical literature on potential and FDA approved therapies.

The partnership builds upon other genomic efforts by the VA. One such program is the VA’s Million Veteran Program.   Starting in 2011, this program aimed to create a massive medical and genomic database by collecting blood samples from 1 million volunteers. The VA noted that by taking baseline and subsequent readings based on military experiences, health and lifestyles, the information contained in the database could hold the key to preventing and treating diseases.

According to press releases, the VA currently treats 3.5% of the United State’s cancer patients. This makes the VA the largest health care provider treating cancer in the United States.  According to the National Cancer Institute, in 2018, an estimated 1,735,350 new cases of cancer will be diagnosed in the United States.

In its press release, Dr. Kyu Rhee, chief health officer for IBM Watson Health. “It is incredibly challenging to read, understand and stay up-to-date with the breadth and depth of the medical literature, and link them to relevant mutations for personalized cancer treatments. This is where AI can play an important role in helping to scale precision oncology, as demonstrated in our work with VA, the largest integrated health system in the U.S.”

 

Theranos Charges Provide Perspective for Medical Device Companies, Biotechnology Companies, and Investors

On March 14, 2018, the Securities and Exchange Commission (SEC) announced it filed charges against the founder and CEO of Theranos Inc., Elizabeth Holmes, and its former president, Ramesh Balwani.

Theranos describes itself as a privately held technology company based in Palo Alto focused on developing lab-on-a-chip technology for blood testing.  By 2014, Theranos raised more than $400 million and had an estimated value of $9 billion.

As reported by CNN, Theranos’ investors included high profile individuals such as Larry Ellison (Oracle), current Secretary of Education Betsy DeVos, and Rupert Murdoch.  Additionally, Theranos’ Board of Directors has included at one point: Secretary of State Henry Kissinger, Secretary of State George Schultz, Senator Bill Frist, Senator Sam Nunn, and current Secretary of Defense James Mattis.

According to the SEC’s complaint, Elizabeth Holmes and Ramesh Balwani “raised more than $700 million from late 2013 to 2015 while deceiving investors by making it appear as if Theranos had successfully developed a commercially-ready portable blood analyzer that could perform a full range of laboratory tests from a small sample of blood.”  The complaint further alleges that Theranos “modif[ied]
commercially-available analyzers and [ran] misleading demonstrations” and made false or misleading statements to the Department of Defense.

Theranos and Holmes have neither admitted nor denied the allegations.   According to an SEC press release, Theranos and Holmes have agreed to settle the fraud charges levied against them.  Reportedly, the settlement includes Holmes paying a $500,000 penalty and being barred from serving as an officer or director of a public company for the next 10 years.

While Theranos was not a publicly traded company, Steven Peikin, the Co-Director of the SEC’s enforcement division stated the actions make “clear that there is no exemption from the anti-fraud provisions of the federal securities laws simply because a company is non-public, development-stage, or the subject of exuberant media attention.”

As reported by the Silicon Valley Business Journal: “In depositions filed as part of a lawsuit by an investor last year, former Secretary of State George Schultz and retired U.S. Navy Admiral Gary Roughead said they didn’t feel qualified to question the technology. They said they were unaware that Theranos’ equipment could not run all the tests being touted by Holmes — even as news reports started appearing that suggested its capabilities were exaggerated.”

A fundamental principle of corporate law is the role of the Board of Directors.  Under Delaware General Corporation Law §141(a), “The business and affairs of every corporation organized under this chapter “shall be managed by or under the direction of a board of directors….”  While the Directors do not directly manage the day-to-day responsibilities of running a corporation, they are ultimately responsible for the management of the corporation.

A Board of Directors may rely on the Business Judgment Rule, which is a presumption that, in making business decisions, the directors of a corporation acted on an informed basis and in good faith that the actions taken were in the best interest of the company and its shareholders. 

Wright Medical Group N.V. announces $88 million Acquisition of IMASCAP SAS

Wright Medical Group recently announced the acquisition of IMASCAP SAS for $88 million. According to the press release, Wright Medical Group (NASDAQ: WMGI) is a publicly traded company focusing on extremity joint replacement and bio-orthopedic material development. IMASCAP SAS focuses on developing software for preoperative joint replacement surgery.

According to the press release, the companies have had a previous relationship where Wright Medical Group used IMASCAP’s Genosys technology in its BLUEPRINT 3D planning software. The technology is said to allow surgeons to visualize potential movement in a shoulder joint so as to determine the best type of implant to use. The program is reported to use data provided entirely from a computed tomography scan. The press release notes that using the program allows surgeons to save time during surgery by adjusting their strategy beforehand. Since Genosys’s release in 2014, the company lists its use in 3800 pre-operative planning procedures, by over 1000 surgeons, in 21 countries .

The press release notes that the deal includes approximately $46.9 million in cash, $15.6 million in ordinary shares, and approximately $26.3 million, in potential earnouts and milestone payments for new software and implant systems.

In the press release, Robert Palmisano, President and Chief Executive Officer of Wright Medical Group, stated, “Software-enhanced solutions are the future, and with the acquisition of IMASCAP, we have the opportunity to take a significant lead in this area”.

In a statement by IMASCAP’s Jean Chaoui, President and Chief Executive Officer, “We believe that Wright, with its global leadership position in the extremities market and expertise in medical education and product development, is the ideal partner to realize the full potential of IMASCAP’s technology and product pipeline”.

In its press release, Wright Medical Group also expressed interest in a variety of other technologies under development that could potentially help the company expand into other joint replacement areas. Currently, the company has plans to offer the software free of cost to physicians currently using its shoulder joint replacement technology.