Johnson & Johnson Acquires French Surgical Tech Firm Orthotaxy
On February 20, 2018, Johnson & Johnson Medical Devices Companies announced the acquisition of Orthotaxy, a privately-held developer of software-enabled surgery technologies, including a differentiated robotic-assisted surgery solution. According to Johnson & Johnson, this technology is currently in early-stage development for total and partial knee replacement, and the Johnson & Johnson Medical Devices Companies plan to broaden its application for a range of orthopaedic surgery procedures.
Orthotaxy was founded in Grenoble, France, in 2009 by robotics entrepreneur Stéphane Lavallée and has focused on surgical planning software that allows surgeons to plan implant placement on preoperative CT or MRI images. Orthotaxy has also developed patient-specific surgical guides that enable surgeons to insert surgical instruments and perform surgery in accordance with a planned strategy.
Orthotaxy currently has 3 pending published patent applications: U.S. Patent App. Nos. 14/667,623, 15/032,223, and 15/032,225. The ’623 application and the ’223 application are directed to methods for constructing a patient-specific surgical guide (e.g., element 1 in FIG. 4 of the ’623 application reproduced below) based on a patient’s 3-D medical image.
The ’225 application is directed to a method for planning a surgical intervention that comprises computing and displaying a pseudo-radiographic images along with the representation of an implant in a patient’s anatomical structure, as illustrated in FIG. 2 of the ’225 application reproduced below.
Regarding the acquisition, Company Group Chairman Ciro Roemer stated: “Our goal is to bring to market a robotic-assisted surgery technology that is an integral part of a comprehensive orthopaedics platform, delivering value to patients, physicians and healthcare providers across the episode of care. The team at Orthotaxy has significant expertise and passion in developing this platform, and we aspire to bring to market a differentiated technology that helps improve clinical outcomes and increases patient satisfaction.”
According to Johnson & Johnson, financial terms of the acquisition will not be disclosed.
First-Ever De Novo Clearance by FDA’s Orthopedic Branch
According to IlluminOss Medical, Inc.’s recent press release, the company has successfully obtained the first-ever de novo clearance from the FDA’s Orthopedic Branch for its minimally invasive bone stabilizaion system (the “IlluminOss System”). According to the FDA, the de novo clearance is reserved for new, novel devices whose type has not been previously classified.
IlluminOss, a privately held commercial-stage medical device company based in East Providence, Rhode Island, describes itself as being involved in the development and commercialization of minimally invasive fracture fixation techniques. The company explains that the newly-approved IlluminOss Bone Stabilization System is used for the treatment of impending and actual pathological fractures of the humerus, radius, and ulna resulting from metastatic bone disease.
Traditional bone stabilization procedures utilizing invasive techniques and intramedullary rods can risk causing extensive soft tissue damage and reduced patient mobility. Moreover, the metal plates and rods may increase patients’ risk of cortical porosis, delayed bridging, and refractures upon removal. Regarding its IlluminOss System, IlluminOss states:
The IlluminOss System was developed with an aim to provide improved patient experiences and outcomes when treating pathologic fractures. There is a critical need to make less invasive orthopedic fracture repair options available to an aging and underserved market segment.
In contrast to traditional fixation techniques, the IlluminOss explains that its System uses a small-diameter PET balloon and visible light fiber, each of which may be threaded through a 4.5 mm pathway into the medullary canal through a small incision in the patient’s skin. Once inserted, the PET balloon is filled with a photoactive liquid monomer, causing the balloon to expand and conform to the specific shape of the patient’s bone. With the liquid-filled balloon in place, the photoactive monomer is polymerized utilizing the visible light fiber, resulting in a hardened implant which conforms to the patient’s specific bone structure within 90 seconds. The hardened implant stabilizes the fracture by providing both longitudinal and rotational stability across the length of the implant.
The IlluminOss System has been available internationally since 2010. IlluminOss reports success in international markets: surgeons have reported smaller incisions, shorter procedure times, and a faster return to the patient’s daily living activities. Reduced complication rates, and shorter hospital stays have also been observed.
With marketing clearance in hand, IlluminOss plans to initiate U.S. commercialization efforts in the second quarter of 2018.
Isto Holdings Acquires Arteriocyte To Form Isto Biologics
Isto Holdings, the parent company of Isto Technologies, has acquired Massachusetts based Arteriocyte Medical Systems Inc. and the two companies will be combined under the name Isto Biologics under the current CEO of Isto Technologies, George Dunbar.
According to its website, Isto Technologies is a medical device company involved with bone and cartilage repair and regeneration. Public records indicate that there are several pending patent applications listing Isto as the applicant. According to its website, Arteriocyte focuses on improving surgical outcomes and there are several patents and applications listing Isto as the applicant covering a number of technologies, such as centrifuge systems and autologous fibrin sealants, to name a few.
Accordingly, Isto Biologics’s expanded product portfolio will now include Arteriocyte’s MAGELLLAN autologous platelet separator with Isto’s bone-growth and cell therapy products including InQu bone graft extender and substitute, Influx natural bone-grant material, and CellPoint concentrated bone marrow aspirate system.
Thompson Street Capital Partners, which acquired the commercial operations of Isto in June of this year, provided capital for the transaction. According to Anthony Chambers, Director at Thompson:
We’re excited to bring together two great organizations under the Isto umbrella and build upon their leading biologics platforms.
At this time, the terms of the acquisition deal have not been disclosed. While the combined company will be headquartered in St. Louis under CEO George Dunbar, Isto’s base of operations, they will maintain operations in Massachusetts.
Stryker Acquires Stanmore Implants
Stryker Corporation recently announced the purchase of United Kingdom-based Stanmore Implants from SIW Holdings Limited for £35.6 million (about $52 million USD) in an all-cash transaction. According to Stanmore’s website, it is a highly specialized organization, focusing on orthopaedic oncology and complex primary and revision cases in the upper limb, lower limb and pelvis. Stryker notes that Stanmore has a significant focus on serving the needs of the orthopaedic oncology market, including making custom implants for adults and juveniles suffering from cancer.
David Floyd, group president of Stryker Orthopaedics, stated:
The acquisition of Stanmore Implants provides Stryker with differentiated technologies designed to provide the most effective solutions for orthopaedic oncology surgeons. This addition underscores Stryker’s commitment to our core joint replacement business and expands our presence in the global orthopaedic oncology market.
Stanmore’s online portfolio of products for adult patients includes modular implant solutions for the femur, tibia, knee, and humerus as well as oncology implants for the upper and lower limbs, and the pelvis. Stanmore’s portfolio also includes minimally-invasive prostheses for juvenile patients that can be adjusted, e.g., until the patient reaches full skeletal maturity, and what Stanmore calls its “non-invasive extendable implants” that are designed to be lengthened periodically by an external drive unit.
The purchase of Stanmore is the latest in a string of acquisitions for Stryker: in February, 2016, Stryker acquired Physio-Control International (in a $1.28 billion all-cash transaction); in February, 2016, Stryker agreed to acquire Synergetics’ neurology portfolio; in March, 2016 Stryker agreed to acquire Sage Products (in a $2.775 billion all-cash transaction); in April, 2016, Stryker acquired SafeWire’s minimally-invasive surgical portfolio; and in April, 2016, Stryker acquired CareFusion vertebral compression fracture (VCF) portfolio of products (in another all-cash transaction).
Life Spine Announces FDA Clearance of PROLIFT Expandable Interbody System
The U.S. Food and Drug Administration (FDA) has granted 510(k) clearance to the PROLIFT Expandable Interbody System of Life Spine. Accordoing to its website, Life Spine is a medical device company based in Huntley, Ill., that designs, develops, manufactures and markets products for the surgical treatment of spinal disorders.
According to press releases, the PROLIFT system is the latest addition to the company’s platform of expandable interbody technologies. According to Life Spine, PROLIFT is an all-titanium system restores disc height, in-situ, for minimally invasive Posterior Lumbar Interbody Fusion (PLIF), Transforaminal Lumbar Interbody Fusion (TLIF) and oblique approaches. Once implanted, the system can expand cephalad to caudal to accommodate disc height ranges from 8mm to 16mm for varying patient anatomy.
According to Life Spine, “When paired with the CENTERLINE™ Midline Thoracolumbar Screw System, PROLIFT creates the optimal hyper-minimally invasive solution.” “The PROLIFT Expandable Interbody System allows for simplified, contracted insertion with minimal anatomical disruption and retraction,” said Rich Mueller, Chief Operating Officer of Life Spine.
Life Spine plans to launch a limited release of the PROLIFT system in the second quarter of 2016, and full product release is expected later in the year.
FDA Issues Draft Guidance for the Use of UHMWPE in Orthopedic Devices
On February 12, 2016, the FDA issued draft guidance for the use of ultrahigh molecular weight polyethylene (UHMWPE) in orthopedic devices. The draft guidance is open for public comment for the next 90 days. According to the draft guidance, the recommendations apply to “class II and class III devices intended for orthopedic applications.” The guidance applies to four types of UHMWPE materials: conventional UHMWPE, highly crosslinked UHMWPE (XLPE), Vitamin E highly crosslinked UHMWPE (VEPE), and non-conventional UHMWPE.
The draft guidance provides FDA recommendations on the “information and testing to submit in pre-market notifications (510(k)s), de novo requests, premarket approval (PMA) applications, humanitarian device exemptions (HDEs), and investigational device exemptions (IDEs).” The draft guidance provides recommendations on reporting material characterization, biocompatability, and shelf life when submitting those documents. A brief summary of some of these recommendations follows.
Material Testing:
[The FDA recommends characterizing] the following properties of the material: crosslink density, trans-vinylene index (TVI), oxidation index (OI), crystallinity, melting temperature, and free radical concentration. If the measured values lie within the normal range, determined by comparison to literature (i.e., for de novo, PMA, HDE, or IDE) or a predicate device with the same intended use (i.e., 510(k)), no additional information will typically be requested. However, for some properties, FDA recommends that certain results be achieved.
The draft guidance provides examples of properties where certain results should be achieved. The draft guidance notes that some properties “are comparative in nature. When submitted in a 510(k), the results should be compared to a predicate device with the same intended use.”
Biocompatability:
For Class II devices, if the subject device has identical UHMWPE materials and manufacturing processes as a predicate device, with the same type and duration of patient contact, [the FDA] recommend that you identify the predicate device as part of your biocompatibility evaluation in lieu of providing specific testing.
For other class II devices, de novos, and class III devices, the guidance directs the applicant to evaluate the device’s material based on Blue Book Memorandum #G95-1.
Shelf Life:
The FDA recommends not packaging “UHMWPE materials containing unstable free radicals in air-permeable packaging because shelf-aging may degrade the mechanical properties of UHMWPE.”
FTC Approves Tornier and Wright Medical Merger
The U.S. Federal Trade Commission (FTC) recently issued a final order that conditionally approves the merger between Amsterdam, Netherlands-based Tornier N.V. and Memphis, Tennessee-based Wright Medical Group, Inc. Reuters reports that the all-stock transaction is valued at about $3.3 billion. Plans for the merger were first announced in October 2014, and approved by the shareholders of both companies in June 2015, subject to receipt of clearance by the FTC. Progress on the transaction was suspended when the FTC expressed concerns that the merger would reduce competition for total ankle replacements and total silicone rubber (silastic) toe replacements in the U.S. market.
The FTC’s Bureau of Competition enforces U.S. antitrust laws and works with the Bureau of Economics to investigate alleged anticompetitive business practices. On occasion, the Bureau urges the Commission to take law enforcement action. In this case, the FTC’s concerns were the final obstacle to the proposed merger. The recent final order, which follows a mandatory public comment period, settles the FTC’s allegations of anticompetitive behavior.
The order calls for Tornier to sell a portion of its U.S. assets and IP rights to Integra Lifesciences Corporation (NASDAQ: IART), a competitor in the U.S. orthopedics space, which is based in Plainsboro, New Jersey. The newly combined company will be required to provide Integra with ankle and toe replacement products for up to three years. Through this arrangement, the FTC seeks to foster competition in the affected market.
In addition to its upper and lower extremity portfolio, the merged companies will maintain a presence in the growing biologics market. Wright Medical recently obtained FDA approval on the Augment bone graft material (left), which is as an alternative to autograft in a variety of arthrodesis procedures. Tornier has developed a line of biologics that includes its BioFiber line of absorbable scaffolds and its Conexa reconstructive tissue matrix, both of which are used for soft tissue repair.
The U.S. market for cell-based therapies for musculoskeletal injuries (orthobiologics) is valued at over $1.5 billion and is expected to grow significantly in 2016. Other market participants in the orthobiologics space include Dublin, Ireland-based Medtronic (NYSE: MDT), San Diego, California-based NuVasive (NASDAQ: NUVA), Kalamazoo, Michigan-based Stryker (NYSE: SYK), and Johnson and Johnson’s West Chester, Pennsylvania-based DePuy Synthes (NYSE: JNJ). Orthobiologics are part of the growing field of regenerative medicine, which includes bioprinting and stem-cell based therapies, and is projected to be worth $6.5 billion in the U.S. by 2019. Bioprinting, itself, has received recent investment and growth.
Following the merger, the resulting company will be renamed Wright Medical Group, N.V. and will be incorporated and headquartered in the Netherlands.
Wright Medical Technology Files for Inter Partes Review of Orthophoenix Patents
On June 6, 2014, Wright Medical Technology, Inc. (“WMT”) filed first and second petitions with the Patent Trial and Appeal Board requesting inter partes review of both U.S. Patent No. 6,440,138 (“the ‘138 Patent”) to Reiley et al., and U.S. Patent No. 6,863,672 (“the ‘672 Patent”) to Reiley et al. According to the ‘672 Patent’s New Application Transmittal at page 9, the ‘672 Patent is a divisional of the ‘138 Patent.
According to the U.S. Patent and Trademark Office assignment database, the ‘138 and ‘672 Patents were previously assigned to Kyphon Inc., which was acquired by Medtronic in 2007 for $3.9 billion. The database also includes a recorded assignment, executed on April 25, 2013, from Medtronic, Inc., Kyphon SARL, and Warsaw Orthopedic, Inc. to Orthophoenix, LLC. Orthophoenix’s signatory was Erich Spangenberg (listed as the CEO). Spangenberg is also the owner and founder of IPNav, according to IPNav’s website. IPNav describes itself as a patent monetization firm.
The ‘138 Patent is entitled “Structures and Methods for Creating Cavities in Interior Body Regions.” According to the ‘138 Patent, it relates to tools that carry structures that are deployed inside bone and, when manipulated, cut cancellous bone to form a cavity. Figure 1 of the ‘138 Patent, described as a side view of a rotatable tool having a loop structure capable of forming a cavity in tissue, with the loop structure deployed beyond the associated catheter tube, is shown below left:
The ‘672 Patent is also entitled “Structures and Methods for Creating Cavities in Interior Body Regions.” According to the ‘672 Patent, it relates to tools that carry structures that are deployed inside bone and, when manipulated, cut cancellous bone to form a cavity. Figure 27 of the ‘672 Patent, described as a side view of a vertebra with the tool deployed to cut cancellous bone by moving the blade structure in a linear path to form a cavity, is shown below right:
The petition regarding the ‘138 Patent relies on a single prior art reference: U.S. Patent No. 5,015,255 to Kuslich, which the petition alleges was not before the Examiner during prosecution of the ‘138 patent. The petition seeks review of Claims 1-26 (all claims) of the ‘672 Patent and requests cancellation of each Claim. By contrast, the petition regarding the ‘672 Patent relies on two separate prior art references: U.S. Patent No. 5,439,464 to Shapiro and U.S. Patent No. 6,371,968 to Kogasaka et al. The petition alleges that neither prior art reference was before the Examiner during prosecution of the ‘672 Patent. The petition seeks review of Claims 1-12 (all claims) of the ‘138 Patent and requests cancellation of each Claim.
The petitions disclose that Orthophoenix has sued WMT in the U.S. District Court for the District of Delaware. Orthophoenix, LLC v. Wright Medical Tech., Inc., Civil Action No. 13-10007-LPS (D. Del.). Orthophoenix filed its complaint on June 5, 2013 alleging direct and indirect patent infringement of both the ‘138 and ‘672 Patents (the “Patents in Suit”) by WMT.
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