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.
Digital Currencies and Blockchain in the Medical Arena
Recently, digital currencies, such as bitcoin, have greatly increased in popularity. Some of this popularity may be attributed to digital currencies’ many purported advantages over traditional currencies, such as that blockchain technology allows for a distributed and cryptographically secure ledger without the use of traditional banking institutions. Newer and more advanced digital currencies have recently been introduced with the added advantage of smart contracts, which are said to be self-executing contractual clauses that may be programmed into a digital currency transaction. As such, many new digital currencies have been appearing with individuals investing in Initial Coin Offerings (ICOs), which are somewhat akin to the Initial Public Offerings (IPOs) of a traditional corporation.
Even more recently, a few companies have begun to make use of digital currencies and blockchain technology in the medical arena. Many have found blockchain technology uniquely suited to secure patient records, and have found that the smart contracts of digital currencies may allow individuals greater control of their medical data. Below is a summary of a few fields of medicine and companies within those fields in which digital currencies and blockchain are already being developed.
Medical Records and Health Data
According to The Merkle, Bowhead Health is the first medical device company using their AHT digital currency tokens with smart contracts to create a new medical data market. The company plans to allow individuals with Bowhead’s digital currency to control the dissemination of their medical data, and also to compensate those individuals if and when they choose to share with research institutions. Bowhead’s AHT tokens are said to allow 70% of research fees to be distributed to users with the other 30% going to token holders.
According to Blockchain News, Medicalchain is a UK-based company using blockchain technology to allow patients to securely store and send their medical records to their healthcare professionals. Medicalchain is said to allow patients to have a centralized medical record accessible from anywhere in the world, and allow individuals the ability to control medical institutions’ access to their records.
The Medical Society of Delaware has partnered with the company Medscient, and they are using blockchain technology to create a proof-of-concept platform to allow insurers and medical care providers to access patient records, according to The Cointelegraph. The article further states that this partnership was made possible when the state of Delaware became the first state to pass a law allowing the use of blockchain technology in business for stock trading and record-keeping.
Medical Licenses
The Illinois Blockchain Initiative has partnered with Hashed Health to create a pilot program to streamline the process of issuing and tracking medical licenses, according to The Cointelegraph. The goal of this partnership is said to give patients and healthcare providers a transparent license registry system that uses smart contracts to automatically update information.
Medicine and Artificial Intelligence (AI)
According to news sources, Doc.ai is a collaboration between developers from the universities of Stanford and Cambridge, and is said to be creating a platform built on blockchain technology and using AI to create a resource to answer patient’s specific questions regarding their personal health records and their physician’s analysis.

Medical Device Compared to ‘Star Trek Tricorder’ Presented at AACC
Basil Leaf Technologies recently presented their DxtER device at the 69th AACC Annual Scientific Meeting & Clinical Lab Expo in San Diego. The DxtER device has been compared to the Star Trek medical Tricorder, winning first place in the Qualcomm Tricorder Xprize competition, a global contest inspired by the popular science fiction series.
According to Basil Leaf Technologies, the DxtER device weighs less than five pounds and is designed to enable consumers to monitor five real-time health vital signs and diagnose 34 diseases using artificial intelligence. Basil Leaf Technologies reports that the DxtER device is currently undergoing clinical trials for FDA approval.
According to AACC CEO, Janet B. Kreizman, “DxtER is the first consumer-friendly mobile health device to combine vital sign monitoring with an extensive diagnostic testing menu, and it could lead to a huge leap forward in patient care.” While the DxtER device may not be available in the immediate future, Dr. Gene Friedman, assistant professor of biomedical engineering at Johns Hopkins University School of Medicine, estimates that “in the next 10 to 20 years it’s going to be a big revolution in personal healthcare.”
Trump Administration Policy Statement Calls for FDA Premarketing Activities to be Funded Entirely by Industry Fees
The Trump White House released a Statement of Administration Policy on Wednesday in response to the House of Representatives’ passage of H.R. 2430, a bill that would reauthorize the use of four FDA user fee programs: the Prescription Drug User Fee Act, the Medical Device User Fee Amendments, the Generic Drug User Fee Amendments, and the Biosimilar User Fee Act.
The Trump Administration’s Statement includes the following recommendation:
“The Administration urges the Congress to provide for 100 percent user fee funding within the reauthorized programs. In an era of renewed fiscal restraint, industries that benefit directly from FDA’s work should pay for it.”
This call for the FDA to be fully funded by user fees paid by medical-device and pharmaceutical companies echoes previous statements from the Trump White House. In May, the Trump Administration released its budget proposal for Fiscal Year 2018, which called for the elimination of federal funding of premarketing review programs at FDA. Trump’s budget proposed that FDA user fees should be recalibrated from approximately $1.2 billion in 2017 to over $2.4 billion in 2018. The FDA currently receives about 60% of its funding for premarketing review from user fees.
Scott Gottlieb, the newly confirmed FDA commissioner, has expressed his support for increasing user fees as a way for funding FDA activities. FDA’s budget request for 2018 seeks $3.2 billion in user fees—a reported increase of 68 percent from 2017 levels.
Some industry experts have expressed concern that a large increase in FDA user fees could discourage innovation and keep smaller companies such as digital startups from entering the market. Increasing FDA user fees would also complicate existing user fee agreements that FDA negotiated with the medical device industry last summer.
While the future of user fees remains uncertain, the Trump Administration and FDA’s persistence in calling for higher user fees suggests that fee hikes could be looming—a development that could have major effects on the medical device industry.

Philips Buys RespirTech for Undisclosed Amount
Dutch conglomerate Philips recently announced that it will purchase Respiratory Technologies Inc. (RespirTech). According to its website, RespirTech describes itself as a St. Paul, Minnesota-based provider of inCourage vests, which help fight respiratory disease. According to a news release, the terms of the deal were not disclosed.
RespirTech’s website states that the inCourage vest uses high-frequency chest compression to help loosen and move mucus through the lungs. According to RespirTech’s website, the inCourage technology was developed by Pediatric Pulmonologist Warren Warwick, M.D., and Leland Hansen, MPH, in the early 1990’s to provide more effective secretion clearance for University of Minnesota cystic fibrosis patients.
According to Philips’ website, the conglomerate has primary divisions in the areas of healthcare, lighting, and home electronics. Philips’ 2016 annual report states that sales in its HealthTech portfolio increased 4% and topped $19 billion. In contrast, news sources state that RespirTech was founded in 2004 and reportedly had nearly $37 million in revenue in 2015.
Regarding the acquisition, John Frank, Philips’ business leader for sleep and respiratory care, said in a news release:
With this transaction, we will broaden our portfolio with a proven therapy to enable patients with chronic respiratory disorders manage their condition and receive the care they need in the home.
According to Philips’ CEO, Franz van Houten, Philips has transformed itself over the last five years into a differentiated global health tech leader. Mr. van Houten stated that the markets Philips’ serve have attractive growth and attractive profitability. According to news sources, GE Healthcare, Siemens Healthineers, and Toshiba Medical Systems are other conglomerate divisions competing with Philips in the healthcare space.
As one analyst notes, the Twin Cities have produced a number of competing companies that make vests for treating lung conditions, including New Prauge-based ElectroMed Inc., and St. Paul-based Hill-Rom.

Medical Device Investor Forum – Oct. 27-28 in Irvine, CA
OCTANe, an Orange County-based non-profit life sciences and technology accelerator organization, has announced the agenda for its 11th Annual Medical Device & Investor Forum (MDIF), which will be held on October 27-28, 2016, in Irvine, California. The speakers for this year’s MDIF include Mike Mussallem, Chairman and CEO of Edwards Lifesciences; Tom Burns, President and CEO of Glaukos; Jim Mazzo, Global President of Ophthalmology, Carl Zeiss Meditec; Brett Wall, Sr. VP and President of Brain Therapies, Medtronic; and Geoff Martha, EVP and Group President of Restorative Therapies Group, Medtronic. A number of companies will also present new strategies for maximizing funding options. The forum is expected to attract over 600 attendees.
According to its website, OCTANe fosters a successful ecosystem that accelerates the flow of ideas, talent, and capital by creating an infrastructure where entrepreneurs, academia, company executives, and business advisors build and grow sustainable organizations. OCTANe’s members include Orange County technology executive leaders, entrepreneurs, investors, venture capitalists, academicians, and strategic advisors, all working together to fuel innovation in the OC. OCTANe has helped more than 800 companies via the LaunchPad™ Small Business Development Center (SBDC) accelerator. LaunchPad™-certified companies are reported to have received more than $1.7 billion in investment and equity exits.
The agenda for this year’s MDIF includes a keynote address by Dr. Wallace Walrod, Chief Economic Adviser of the Orange County Business Council, and Herm Cukier, Sr. VP of Eye Care, Allergan, on Allergan’s economic impact on Orange County. A panel moderated by Clay Wilemon, CEO and Chief Strategy Officer of DevicePharm, will discuss using big data to improve patient outcomes and reimbursement. Sabing Lee, a Partner at Knobbe Martens, will host a panel discussing medical device security. And, U.S. Congresswoman Mimi Walters will address the importance of innovation in Orange County, and healthcare legislative and policy expert Jeff Kimbell will provide his views on the upcoming elections from a Washington D.C. perspective.
OCTANe annually welcomes more than 7,000 people to its programs and events, and more than 2,000 business leaders throughout the Orange County region are OCTANe members. Bill Carpou, CEO of OCTANe, describes the MDIF as “the most important event of the year when it comes to medical technology and Orange County.”
Increase in Funding to Med Device Startups
Despite a drop in the second quarter of 2016, medical device funding is expected to finish stronger this year than in 2015. CB Insights has released a report on the funding and deal activity within the medical device industry since 2012. CB Insights reports that “after hitting a 4-year high of $1.5 billion in the second quarter of 2014, funding to medical device startups has sobered considerably.” Funding in 2014 was elevated by a $172 million Series G round secured by California based Proteus Digital Health. Overall, the medical device industry is on track for a modest increase in deals and dollars to private companies in 2016, after seeing a decline in both in 2015.
As of August 8, 2016, funding and deal activity have reached $2.1 billion and over 288 deals. At the current rate, total year funding would reach $3.5 billion and total year deal count would reach 476 deals. The funding has been bolstered by $75 million in Series C funding secured by California based Acutus Medical in March 2016 and recent funds raised by Minneapolis based CVRx, $93 million in August 2016.
The first and second quarters of 2016 are among 5 of the last 10 quarters to have 120+ deals. Funding in the first quarter of 2016 managed to break $1 billion, a feat that didn’t occur in 2015. However, the second quarter’s slip to $757 million saw the first sub $800 million quarter since the first quarter of 2015.
The deal and dollar share by stage for 2016 looks to be similar to those for the last four years with early-stage deals, including Seed/Angel and Series A, making up 29% of total deal share to-date. The top three “Most Active Early-Stage Medical Device Investors” are reported as Germany based High Tech Gruenderfonds, Memphis based ZeroTo510, and Philadelphia based Ben Franklin Technology Partners. Interestingly, “Other” funding rounds have been trending up and currently represent the largest share of deals at 42%. “Other” includes corporate minority rounds, VCs, and convertible notes. The top medical device investor overall is reported as New Enterprise Associates with Versant Ventures a close second.
CB Insights reports the top most well-funded medical device startup as Theranos, securing $400 million in total funding. Theranos was recently sanctioned by the U.S. Centers for Medicare & Medicaid Services (CMS) and banned from receiving Medicare and Medicaid payments.
Each of the top five has raised upwards of $250 million. However, the funding figures exclude debt rounds and lines of credit.
Shift Labs Continues Trend Toward Consumer Wireless Healthcare Devices
The medical device market is expanding into more private healthcare products in hopes of bringing healthcare directly to the user. For example, the increase in popularity of wearable diagnostic devices, such as FitBit, and Apple’s recently released ResearchKit, turning iPhones into medical devices, illustrate that users are ready to look after their own health.
According to founder Koji Intlekofer:
The places where healthcare is growing fastest is outside of traditional hospital settings.
Shift Labs aims to pioneer a new “middle class” of medical device offerings, and provide products outside the hospital setting. According to founder Beth Kolko,
There is no reason why we can’t make products for nurses and medical practitioners that they enjoy using. But no one is building products for the people who are going to be providing the care.
According to its website, Shift Labs’s first product is the DripAssist, a simple, low-cost take on an infusion pump for monitoring IV drips, which runs on a single AA battery. By contrast to typical infusion pumps, which can cost anywhere from $5,000 to $15,000, this patent-pending pump has a suggested retail price of only $225. The DripAssist does not pump fluid in the conventional sense. Instead, it monitors the rate of an IV drip and sounds an alarm if the pace is outside particular threshold values.
The DripAssist is currently being sold in select international markets and for veterinary usage. Shift Labs is still in the process of securing FDA clearance to sell the DripAssist in the United States. USA Today reports that Shift Labs’s next projects in the pipeline are an oxygen monitor, a cooling system for vaccines, and a device to pasteurize breast milk.
Shift Labs states that it received initial startup capital from Y Combinator, which provides seed funding and mentorship for early-stage startups. Other notable companies seeded by Y Combinator include Reddit, Airbnb, Hipmunk, and Dropbox.
Scanadu: the Medical Tricorder from Star Trek
For those familiar with the television show Star Trek, many may remember the Tricorder, a device that Dr. “Bones” McCoy used to wirelessly scan a patient to assess the individual’s medical status.
The California start-up Scanadu‘s website touts that a real-world and functional version of the famous prop is now available for those who backed it on the international crowdfunding site Indiegogo. The company’s website states that it began shipping its test version earlier this month and users have been posting images of the device on social media.
Designed by Walter De Brouwer, a Belgian entrepreneur, the device is called the “Scanadu Scout.” According to Scanadu’s website, this hockey puck-shaped device provides “valuable data about your body . . . just by placing it on your forehead.”
- US Patent Application No. 14/374,515 “Spatial Resolution Enhancement in Hyperspectral Imaging”
- US Patent Application No. 14/374,518 “Hyperspectral Imaging Systems, Units, and Methods”
- US Patent Application No. 14/350,798 “Automated Personal Medical Diagnostic System, Method, and Arrangement”
- US Design Patent Application No. 29/450,721 “Diagnostic Test Paddle”
J&J Expands Space for Startups
MedCityNews reports that Johnson & Johnson (J&J) recently added space to its San Diego innovation center, a shared laboratory space that gives startups access to lab space without having to commit to additional capital. Startups rent the space and wet lab units they need on a short term basis and can expand when they have the ability to do so.
According to MedCityNews, the open plan design of the “concept lab” is designed to spark interaction between entrepreneurs and help J&J identify opportunities for investment:
Janssen Labs is part of a wider effort by J&J to enlist creative deal making strategies, to position itself to spot opportunities early. It also helps make the medical device and big pharma business appear more welcoming to innovation and early stage companies, who face the daunting challenge of convincing private investors and companies to invest in their business.
J&J reportedly plans to open similar labs for startups in Boston, China and Europe, staffing the centers with experts who will identify early stage innovations.