Blog Articles

J&J Acquires Abiomed for $16.6 Billion

Johnson & Johnson (“J&J”) announced on November 1, 2022, that it will acquire Abiomed for an upfront payment of $380.00 per share in cash, which equates to about $16.6 billion.  The acquisition is expected to be completed in the first quarter of 2023.  According to reports, after the acquisition, Abiomed “will operate as a standalone business within J&J within Johnson & Johnson MedTech, becoming one of the company’s dozen ‘priority platforms,’ defined by annual sales of at least $1 billion.”

Joaquin Duato, Chief Executive Officer of Johnson & Johnson, stated that “[t]he addition of Abiomed is an important step in the execution of our strategic priorities and our vision for the new Johnson & Johnson focused on Pharmaceutical and MedTech,” and he further stated the acquisition will continue to enhance J&J’s “position in MedTech by entering high-growth segments. The addition of Abiomed provides a strategic platform to advance breakthrough treatments in cardiovascular disease and helps more patients around the world while driving value for our shareholders.”  The acquisition follows reports earlier this year that J&J intended to “get active on the medtech M&A front.”

Abiomed was founded in 1981 “for the purpose of developing the world’s first artificial heart. ”  Abiomed currently makes the Impella heart pump, which is “a support system of percutaneous catheter-based technology offering hemodynamic support to the heart.”  Abiomed also offers the Breathe OXY-1 System, which is a “cardiopulmonary support system with an integrated oxygen concentrator.”  Last year, Abiomed acquired the start-up preCARDIA and its catheter technology.  Recently, “Abiomed reported revenue of $266 million, up 7% and up 11% in constant currency year over year, the seventh consecutive quarter the company posted double-digit revenue growth in constant currency.”

The press release may be accessed here.

Report: Medical Device Market Expected to Grow Over Next Seven Years

An article from October 2022 states that the global medical device market is projected to jump by seven billion dollars in 2022 and leap to $223 billion over the next seven years, to reach a valuation of around $719 billion by 2029. A report by consulting firm Fortune Business Insights anticipates a 5.5% compound annual growth rate (CAGR) over this period.

The report identifies several factors contributing to the industry’s growth.  These factors include a global rise in prevalence of chronic diseases, increased healthcare spending in developed and emerging countries, and a new emphasis on early detection and treatment by healthcare agencies.  This is reported to be resulting in more and more patients undergoing diagnostic and surgical procedures.

According to AdvaMed, the U.S. occupies about 40% of the global medical device market. In segmenting the U.S. market share, Fortune Business Insights found that in-vitro diagnostics (IVD), cardiovascular devices and orthopedic devices are the largest segments.  The report expects the IVD segment will grow at a higher CAGR due to the increased use of real-time diagnostics tests for the diagnosis of diabetes, cancer, and HIV/AIDS. The report also notes an uptick in the market for portable and wearable devices for treatment of chronic conditions due to a shift in preference among the elderly for home healthcare services following the COVID-19 pandemic.

The report also states the European market is anticipated to grow at an increased CAGR, due to the region’s increased spending on healthcare, well-established infrastructure, and increased adoption of advanced diagnostic devices. As with the U.S., Europe is reported to have seen a shift in focus to at-home medical care that suggests portable equipment will play a large role in their anticipated market growth.

Increased prevalence of cardiovascular disorders, diabetes, infectious disorders and dental diseases are all demand factors contributing to the forecasted growth in Asia Pacific, according to the report, causing more global medical device players to expand their presence in the region.

The three top-earning medical device companies globally in 2021 – Medtronic, Abbott, and Johnson & Johnson – are among those companies set to benefit highly from the industry’s predicted growth. However, the increasing demand for the medical device market as a whole guarantees that the future is looking bright for many companies in the space.

The report by Fortune Business Insights is available here.

FDA Grants Breakthrough Device Designation for EndoStim’s GERD Treatment

EndoStim announced on October 25th that the FDA granted a breakthrough device designation for the company’s implantable neurostimulation treatment for drug refractory gastroesophageal reflux disease (GERD).

EndoStim states that its EndoStim System is the first-in-class implantable neurostimulation treatment for GERD. While traditional surgery for the treatment of GERD requires wrapping the stomach around the lower esophagus to strengthen a patient’s lower esophageal sphincter muscle (LES), this system attempts to provide long-term reflux suppression by automatically delivering small electrical signals to the LES. EndoStim states the system accomplishes this through use of a neurostimulator and an implantable bipolar lead, and that the lead is placed within the patient through a minimally invasive laparoscopic procedure, and a physician then programs the neurostimulator using a wireless external programmer.

While the EndoStim System is not yet approved for sale in the U.S., multiple long-term studies, such as a University of Vienna study and a German study, on electrical implants aiding GERD using this system have been reported to have found a sustained improvement in GERD outcomes post-procedure. In discussing the announcement, EndoStim’s chief executive officer, Eric Goorno, stated:

We are pleased that the FDA has recognized the therapeutic potential of the EndoStim System as a new treatment in development for drug refractory GERD.… Our goal is to bring this new therapy to patients as quickly as possible. We look forward to working closely with the FDA to expedite the review of the EndoStim System.

The breakthrough device designation program is designed to provide patients and health care providers with timely access to medical devices for more effective treatment or diagnosis of life-threatening or irreversibly debilitating diseases or conditions by speeding up their development, assessment, and review. The FDA recently updated its draft guidance for its breakthrough device designation program to focus on reducing health and healthcare disparities based on race, sec, ethnicity, and access to care.

This year it is reported that the FDA granted 120 breakthrough device designations through August 3, 2022. Since the program’s inception in 2015, the breakthrough device designation program is reported to have seen 54 devices receive marketing authorization.

FDA Approves LimaCorporate’s 3D-Printed Reverse Shoulder Replacement System

The FDA recently approved LimaCorporate’s fully 3D-printed glenoid baseplate and humeral stem for use in reverse shoulder replacement.

The shoulder includes the glenohumeral joint, which is the ball-and-socket joint where the head of the humerus (i.e., the ball) joins the glenoid (i.e., the shoulder socket in the scapula).  However, when the associated tendons are damaged, reverse shoulder replacement or arthroplasty may be used to repair the joint.  In reverse shoulder replacement, the ball and socket of the glenohumeral joint are replaced in opposite positions.  As such, the ball is placed on the socket side of the joint and the socket is placed on the ball (i.e., arm) side where it is typically supported by a stem that is implanted in the humerus.  LimaCorporate reports that its new PRIMA TT Glenoid system includes a 3D-printed convertible short stem and a fully 3D-printed glenoid replacement for Reverse Shoulder Arthroplasty.

According to a press release, LimaCorporate’s PRIMA TT Glenoid system uses trabecular titanium (TT), which is lightweight biomaterial containing titanium and having a regular three-dimensional hexagonal cell structure that imitates trabecular bone morphology, which is designed to encourage strong primary fixation and secondary bone ingrowth.  In response to the FDA’s approval of the PRIMA TT Glenoid system, LimaCorporate’s CEO Massimo Calafiore stated “Today’s FDA approval for PRIMA TT Glenoid represents an exciting opportunity to accelerate our market growth in key regions. The new PRIMA shoulder platform will support our surgeons to bring the emotion of motion to even more patients!”

LimaCorporate states it is planning to launch the PRIMA TT Glenoid shoulder replacement system in 2023.

Cambridge Cognition Acquires eClinicalHealth, Targets Improved Virtual Clinical Trial Offerings

Cambridge Cognition Holdings PLC announced on October 12, 2022 that it acquired eClinicalHealth Ltd. (eCH) for about $1.9 million. eCH offers the Clinpal platform, which facilitates virtual clinical studies. Per the announcement, Cambridge Cognition acquired eCH to “enhance” Cambridge Cognition’s capabilities within the virtual clinical study space. According to Cambridge Cognition, the addition of eCH allows coverage of “all modules from recruitment through to clinical reporting.”

Founded in 2012, eCH is a digital technology provider. eCH’s Clinpal is an end-to-end clinical study platform. Clinpal allows researchers to configure a study, market to and recruit potential study patients, gather data from enrolled patients, and store and access study data. According to eCH, several studies involving a “top 10 pharma” company have already used Clinpal.

Cambridge CognitionCambridge Cognition is a tech company that develops digital solutions for clinical cognitive studies. More specifically, the company offers several different digital platforms intended for use at various stages of a clinical study, such as patient recruitment, study design, and data analysis. According to Cambridge Cognition, virtual clinical study is suitable for many different central nervous system disorders—for example, depression or Alzheimer’s disease. Such studies can run regular cognitive assessments at home. In this vein, Cambridge Cognition’s CANTAB platform enables remote assessment. CANTAB can administer cognitive tests to a patient via a mobile device.

Zooming out, the expansion of the virtual clinical trial market may have been accelerated by the COVID-19 pandemic. As of 2022, 89% of clinical study sponsors use decentralized technologies and methods in their studies.

FDA to Collaborate with Veterans group on Medical Device Innovation

On September 28, 2022 the FDA announced a collaboration with the Veterans Health Administration (VHA), in particular the VA Ventures Innovation Institute. According to the FDA, the intent of the collaboration is to “help accelerate American medical device innovation to further improve and benefit public health. One goal of the collaboration is providing innovators with “straightforward, reproducible, and cost-effective testing methods throughout the product development cycle.”

Jeff Shuren, M.D., J.D., the director of the FDA’s Center for Devices and Radiological Health stated in the FDA’s announcement of the collaboration that:

This strategic alignment between our organizations creates a unique environment to achieve shared objectives for accelerating patient access to safe, innovative and effective medical devices.

The VHA will host staff from the FDA at the VA Ventures Innovation Institute in Seattle. According to the announcement, the FDA staff will be focused on the regulatory science while the VA staff will provide “clinical context for test development and provide hands-on training and other immersive experiences.”

The initial collaboration is described by the FDA as focusing on systems which can “exchange health information automatically for the diagnosis and treatment of patients.” While future areas of collaboration may include “the development of test methods for devices that can be used at a distance through, for example, 5G networks.”

Dr. Shereef Elnahal, the VA’s Under Secretary for Health, stated in the FDA announcement:

By working side by side, VA and FDA will leverage our combined strengths and expertise to bring the most promising health care technology innovation to Veterans – and Americans at large – faster than before.

The announcement by the FDA is available here.

 

 

 

 

 

 

 

 

FDA Publishes Draft Ethical Consideration Guidance to Protect Children Participants in Clinical Trials of Medical Products

On September 23, 2022, the Food and Drug Administration (FDA) published a draft guidance aimed to protect children who participate in clinical trials, titled Ethical Considerations for Clinical Investigations of Medical Products Involving Children.  The draft guidance describes the FDA’s current position regarding ethical considerations for clinical investigations of drugs, biological products, and medical devices involving children.  The guidance explains the fundamental concepts for the ethical framework that institutional review boards (IRBs), sponsors, and the industry should consider when reviewing or conducting clinical trials involving children.

Of note, the guidance outlines additional considerations and recommendations IRBs should assess when enrolling children in clinical investigations of medical products.  The guidance explains that, in principal, the risk of the clinical investigations must be balanced by the prospect of direct and potential benefits and must at least be as favorable as any available accepted alternative treatment.  Accordingly, the guidance suggests medical product developers need to use a dose or treatment level expected to be effective for the child which should also have a positive impact on the child’s life.

The FDA’s Office of Pediatric Therapeutics noted that “the best way to provide children with safe and effective treatment options is by including them in clinical research.”  The Office of Pediatric Therapeutics further noted that children are afforded additional safeguards when participating in a clinical investigation since they are a vulnerable class who cannot provide informed consent for themselves.  The FDA’s guideline comes at an important time.  By way of example, although 48.2% to 72.6% of parents are willing to vaccinate their children against the COVID-19 virus, a lower rate of parents allow their children to participate in clinical trials.

The FDA’s draft guidance is available here, and is available for comments until December 27, 2022.

Medtronic Completes Acquisition of Cardiac Mapping Company Affera

Medtronic recently announced that its acquisition of Affera, Inc. has been completed. The acquisition was previously announced to be for $925 million with a $250 million contingency, as reported by MedCity News. Medtronic had previously been a strategic investor in Affera and, prior to the acquisition, owned a 3% interest in Affera as stated in a prior press release dated January 10, 2022.

Affera develops an integrated platform to deliver therapy to cardiac arrhythmia patients. The platform is referred to as Affera Prism-1™ cardiac mapping and navigation platform, per the announcement. Additionally, Affera also develops catheters, such as the pulmonary vein isolation pulsed field ablation catheter, as previously announced on July 27, 2021.

In the latest announcement, Rebecca Seidel, president of Medtronic’s Cardiac Ablation Solutions business, stated:

We’re incredibly proud to have led the industry with the introduction of the proven safe and effective cryoablation technology; and now these new additions to our portfolio help support a leap forward in our commitment.

Founder and chief executive officer of Affera, Doron Harlev, also expressed excitement to be joining Medtronic by stating that “the acquisition enhances and accelerates our ability to treat millions of patients around the world suffering from cardiac arrhythmia with our innovative technology.”

This acquisition would be the second acquisition completed by Medtronic this year.  Earlier this year, Medtronic completed the acquisition of Intersect ENT, the developer of sinus implant technology, for $1.1 billion, as reported by MassDevice.

FDA Publishes New Monkeypox and Medical Devices Web Page

The FDA has published new web pages about Monkeypox and medical devices. The new web page, titled Monkeypox and Medical Devices, includes information on diagnostic testing, Laboratory Developed Tests (LDTs), and information for test developers. With more than 22,000 confirmed Monkeypox cases in the U.S., the new Monkeypox Medical Devices web comes as FDA takes significant actions to increase Monkeypox testing capacity nationwide following the Secretary of Health and Human Services’ August 9th announcement of public health emergency.

The FDA’s guidance issued for test developers under Policy for Monkeypox Tests to Address the Public Health Emergency describes, among other things, review priorities of Emergency Use Authorization (EUA) requests for monkeypox diagnostic tests. And, on the same day as the FDA guidance was issued, the FDA also issued the first EUA to a commercially available monkeypox test in the United States to Quest Diagnostics for its Quest Diagnostics Monkeypox Virus Qualitative Real-Time PCR device. “With this FDA emergency authorization, Quest is positioned to complement the response of public health laboratories and help fight the spread of the virus,” said Jay G. Wohlgemuth, M.D., Senior Vice President, R&D, Medical and Chief Medical Officer, Quest Diagnostic.

Quest Diagnostics is not the only company that has been working on monkeypox diagnostic test kits. Earlier in June, Becton Dickinson announced partnership with CerTest Biotec to collaborate on molecular diagnostic test for monkeypox. Several other healthcare and pharmaceuticals companies have also been linked with this effort. This comes at a time when many of these companies are preparing for a drop in revenue from COVID-19 testing as the threat of COVID-19 reduces.

AI and Cancer Diagnostics

Rather than simply reading radiological scans, Ibex Medical Analytics is employing its artificial intelligence (AI)-powered cancer detection solutions to assist pathologists in the lab. Ibex’s Galen Platform is a clinical-grade, multi-tissue platform that helps pathologists detect a variety of cancers and grade their malignancies.  Ibex states that the platform can also “detect more than a hundred other clinically relevant diagnostic features in multiple tissue types.” Ibex leverages data extracted from millions of pathology slides along with AI and machine learning to perform its platform’s diagnostic functions.

Ibex wins European approval for breast cancer-spotting AI pathology tool | Fierce BiotechIbex reports that its breast cancer diagnostic tool, Galen Breast, delivered clinical grade accuracy in diagnosing multiple breast cancer types in a recent multi-site clinical study conducted at Institut Curie in France and Maccabi Healthcare Services in Israel. The study compared the performance of pathologists using Ibex AI against pathologists using traditional microscopes to diagnose multiple types of breast cancer. The study results showed the Galen Breast tool could detect various forms of breast cancer at a level of accuracy on par with trained pathologists. According to an Ibex press release, Galen Breast technology has shown the ability to detect both invasive and in-situ cancers in breast biopsies, distinguish between multiple sub-types of cancer (e.g., lobular versus ductal carcinoma), grade cancer severity in situ, and identify rare tumors. The Galen Platform additionally offers AI solutions for the detection of prostate and gastric cancers, which Ibex states also deliver clinical grade accuracy.

Ibex Logo

More recently, the company announced the launch of its latest Galen Platform version, Galen 3.0.  Ibex reports that Galen 3.0 provides expanded detection capabilities and a broader set of features to support pathologists in diagnosing breast, prostate, and gastric cancers.

 

Federal Circuit Upholds Lower Court Decision in Par Pharmaceutical, Inc. v. Eagle Pharmaceuticals, Inc.

By Rory Lootsma

(August 18, 2022)  The Federal Circuit has affirmed that Eagle Pharmaceuticals, Inc. did not infringe Par Pharmaceutical, Inc. patents, easing Eagle’s path to market a generic competitor to Par’s Vasostrict®

product.  Par had alleged that Eagle’s abbreviated new drug application (ANDA) infringed U.S. Patent Nos. 9,744,209 and 9,750,785, both titled “Vasopressin formulations for use in treatment of hypotension.”  An example molecular structure is shown here:

Some of Par’s arguments had alleged that because the pH of Eagle’s products would be so close to Par’s claimed ranges for pH, inevitable drift in pH would occur over time, causing infringement.  In affirming, Chief Judge Moore explained that the District Court had not committed clear error in finding otherwise.  The infringement inquiry “begins and ends” with Eagle’s ANDA specification, so predicting future drift cannot show infringement.

Thus, the Federal Circuit upheld the District Court’s decision against Par Pharmaceutical and affirmed the finding of no infringement. The Federal Circuit’s decision is available here.

Teleflex to Acquire Standard Bariatrics

Teleflex announced on August 22, 2022 that it has reached an agreement to acquire Standard Bariatrics. Teleflex agreed to acquire Standard Bariatrics for a cash payment of $170 million at closing and could pay up to an additional $130M if Standard Bariatrics reaches certain commercial milestones.

Standard Bariatrics is a Cincinnati-based company that makes the Titan SGS® surgical stapler for bariatric surgery, among other products.

Teleflex claims to have a well-developed existing bariatric surgeon call point and a portfolio of surgical devices, including products for interventional cardiology, urology and vascular access. As part of the announcement, Liam Kelly, Chairman, President and Chief Executive Officer of Teleflex, stated the following regarding the acquisition:

The acquisition of Standard Bariatrics adds an exciting and differentiated product serving the large and growing sleeve gastrectomy market, which we estimate to be approximately 120,000 procedures annually in the U.S.

The announcement states that the deal is expected to close in the fourth quarter of 2022, subject to regulatory approval. Teleflex plans to finance the acquisition at closing through borrowings under its revolving credit facility based on the announcement.

Boston Scientific Acquires Embolization Gel Developer Obsidio, Inc.

Boston Scientific announced on August 15, 2022, that it acquired Obsidio, Inc. for an undisclosed fee.  Obsidio has technology called the Gel Embolic Material (GEM™), which is used in minimally invasive blood vessel embolization.  According to its press release, Boston Scientific intends to expand its interventional oncology and embolization portfolios.

An embolization treatment procedure uses a material to obstruct or reduce blood flow through a blood vessel. The treatment may be used to stop hemorrhaging, to stabilize blood vessel malformations, or to reduce blood flow to tumors, which are often highly vascularized.

Founded in 2019, Obsidio initially sought to commercialize technology relating to NIH-funded research on hemorrhage control and aneurysm treatment. Obsidio subsequently obtained FDA approval for GEM™ on July 1, 2022, claiming equivalence to Biosphere Medical’s EmboCube™ Embolization GelatinAccording to Obsidio, GEM™ is a semi-solid made up of bioresorbable gelatin, layered silicate, and tantalum powder. The material is delivered to a target vessel via catheter. As a semi-solid, the material is supposed to conform to the shape of the target vessel. Additionally, GEM™ is supposed to be shipped in a ready-to-use form, which, according to Boston Scientific, may save some preparation time relative to other embolization materials.

Boston Scientific is a multinational biomedical engineering company. In 2021, Boston Scientific spent over $4 billion across five acquisitions. Obsidio is the second of Boston Scientific’s acquisitions in 2022, the other being a $230 million deal for Synergy Innovation’s majority stake in M.I.Tech, a developer of a conformable, self-expanding metal stent called HANAROSTENT®.

USPTO Issues Notice Regarding Patent Examinations and FDA Submissions

On July 29, 2022, the United States Patent and Trademark Office (USPTO) issued a Notice by Director Kathy Vidal that may be relevant to those seeking or holding patents on medical devices that require Food and Drug Administration (FDA) approval.  The Notice relates to certain duties owed to the USPTO with regard to statements and documents submitted to the FDA and other government agencies. The duties include a duty to disclose certain information and a duty of reasonable inquiry.

The Notice states “[t]he duty of candor and good faith in dealing with the USPTO includes the duty to disclose to the USPTO information material to the patentability of a claimed invention.” Further, “[e]ach party submitting a paper to the USPTO has an additional duty to perform an inquiry that is reasonable under the circumstances, including reviewing documents to identify information that is material to the patentability of a claimed invention.”  The Notice states it “is intended to clarify the duties, including as to materials or statements material to patentability or statements made to the USPTO that are inconsistent with statements submitted to the FDA and other governmental agencies.”

The Notice was issued against the backdrop of an Executive Order by President Biden regarding competition in the economy, specifically in the pharmaceutical industry.  Additionally, U.S. Senators sent a letter to the USPTO requesting “that the Office ‘take steps to reduce patent applicants’ making inappropriate conflicting statements in submissions to the [USPTO] and other federal agencies.'”  Regarding the letter, the Notice further states:

The letter provided a specific example in which “inconsistent statements submitted to the Food and Drug Administration (FDA) to secure approval of a product—asserting that the product is the same as a prior product that is already on the market— can then be directly contradicted by statements made to the [USPTO] to secure a patent on the product.” The Letter noted that such inconsistent statements “should be cause for rejecting the application and, when made knowingly and with bad intent, potentially other sanctions.”

Against this background, the Notice states it “is part of the USPTO’s efforts to put into effect the Administration’s goals and address the Senators’ concerns.”

The Notice thus discusses which parties have a duty to disclose information to the USPTO in various patent examinations and proceedings, and what material information must be disclosed.  For example, the duty to disclose “applies to positions taken by applicants or parties involving the claimed subject matter. For instance, in PTAB proceedings, parties should not take a position about the patentability of challenged claims that is inconsistent with positions taken in submissions to other Government agencies regarding the same subject matter.”  An example PTAB proceeding is cited which resulted in “suspending a practitioner for four years for failure to correct the written record after learning of inaccuracies in a declaration the practitioner had filed.” The Notice discusses similar duties in the context of patent examination and prosecution.

In addition to the duty to disclose, the Notice discusses the duty of reasonable inquiry and when these two duties arise in dealings with other government agencies besides the USPTO.  For example, the Notice cites a Federal Circuit decision “affirming a district court’s determination of inequitable conduct because the patent owner’s Chief Science Officer failed to provide to the USPTO submissions he made to the FDA about the prior art that were inconsistent with positions taken before the USPTO during the prosecution of a pending patent application.”  In another case, the Federal Circuit “inferred intent to deceive and found inequitable conduct occurred when an official involved in both the FDA and the USPTO submissions chose to disclose material prior art to the FDA but not to the USPTO.”

The Notice provides further detail on these and other relevant issues, and the full text may be found here.

3M to Spin Off Health Care Business

The 3M Company announced on July 26th that it will spin off its health care business into a separate, publicly-traded company. The health care business will focus on wound care, oral care, healthcare IT, and biopharma filtration. The current health care business lines include bandages, skin adhesives, oral aligners, air purifiers, optical lenses, and the Bair Hugger™ surgical warming system that is currently the subject of nearly 6,000 lawsuits.

3M’s health care business generated $8.6 billion in 2021, which amounted to about one-quarter of the company’s total revenue. 3M confirmed that the non-healthcare main company will retain liability for all non-healthcare-related litigation, including the Combat Arms Earplugs litigation and PFAS litigation.

3M expects the move to increase the companies’ agility and focus to better position both companies for long term success and ability to tailor capital allocation strategies. In discussing the proposed move, 3M chairman and chief executive officer Mike Roman stated:

Disciplined portfolio management is a hallmark of our growth strategy. Our management team and board continually evaluate the strategic options that will best drive long term sustainable growth and value. The decision to spin off our Health Care business will result in two well-capitalized, world-class companies, well positioned to pursue their respective priorities.

This move comes off a string of similar moves from multi-national conglomerates, including General Electric Co.’s separation of its power, aviation, and healthcare businesses; Johnson & Johnson’s spin-off of its consumer health company; and United Technology’s spin-off and subsequent merger with Raytheon. The trend towards spinning off various businesses within these conglomerates comes as consensus grows among investors that businesses perform best when streamlined, according to Reuters.

Apple Watch Found to Infringe AliveCor ECG Patents

AliveCor, Inc., a company focused on cardiac data and remote medicine, successfully convinced an International Trade Commission (ITC) judge that Apple, Inc. infringed multiple AliveCor patents related to electrocardiogram (ECG) technology.  AliveCor asserted that the Apple Watch (Series 6 and 7) infringes multiple AliveCor ECG patents and seeks to ban the watches from importation into the U.S.

In a June 27, 2022 Notice of Initial Determination, an ITC Administrative Law Judge (“ALJ”) agreed with AliveCor, determining Apple had violated Section 337 of the Tariff Act of 1930 (19 U.S.C. § 1337), related to “Unfair practices in import trade.”  The ALJ found the ECG functionality of the Apple Watch Series 6 and Series 7 (pictured below) infringed multiple, valid claims of two AliveCor patents: U.S. Patent Nos. 10,638,941 (titled “Discordance Monitoring”) and 10,595,731 (titled “Methods and Systems for Arrhythmia Tracking and Scoring”).

AliveCor is the complainant in ITC Investigation No. 337-TA-1266 (the “1266 Investigation”), captioned Certain Wearable Electronic Devices with ECG Functionality and Components Thereof.  A public version of the ALJ’s complete Initial Determination should be released soon.  By October 26, 2022, the full ITC is expected to issue a final decision in the 1266 Investigation.  If the Commission affirms the ALJ’s findings, the Apple Watch Series 6 and Series 7 could be banned from importation into the United States.

Medical Device Patentee Petitions Supreme Court Regarding On-Sale Bar and Price Quotes

A medical device patentee has asked the U.S. Supreme Court to save his design patent, related to an introducer sheath handle, from invalidity based on application of the “on-sale” bar, which prohibits patenting an invention if it has been for sale for over one year prior to the patent filing.

On July 6, 2022, in Junker v. Medical Components Inc., inventor Larry Junker filed a petition for certiorari asking the Supreme Court to review the Federal Circuit’s finding of invalidity of his design patent under the on-sale bar.  Mr. Junker alleged that Medical Components, Inc. and Martech Medical Products, Inc. (collectively “MedComp”) infringed U.S. Design Patent No. D450,839 (the “D’839 patent”), entitled “Handle for Introducer Sheath.”  An introducer sheath is a device used to place catheters.  The D’839 patent covered the design of the introducer sheath’s handle with rounded “Mickey-Mouse-shaped ears” that made the device easier to grasp when inserting the catheter and when peeling apart and removing the sheath.  Figure 1 from the D’389 patent is reproduced below:

Introducer Sheath

Mr. Junker and MedComp filed cross-motions for summary judgment debating whether the D’839 patent was invalid under the “on-sale bar” of  35 U.S.C.  § 102(b) (pre-AIA).  Under 35 U.S.C. § 102(b) (pre-AIA), a patent claim is invalid if “the invention was . . . on sale in this country, more than one year prior to the date of the application for patent in the United States.”  The parties disputed whether a 1999 letter regarding a price quotation, sent more than one year before the D’839 patent was filed, constituted a commercial offer for sale.  The letter was sent by a third party manufacturer to Boston Scientific.

The district court concluded that the letter was not a commercial offer for sale and accordingly granted Mr. Junker’s motion for summary judgment of no invalidity.  After a bench trial, the court awarded Mr. Junker $1.25 million in damages.  On appeal, the U.S. Court of Appeals for the Federal Circuit disagreed, finding that the letter contained sufficient terms to constitute a commercial offer for sale rather than a mere quotation.

In his petition for certiorari, Mr. Junker urges the Supreme Court to review the Federal Circuit’s ruling, arguing that the Federal Circuit misapplied contract law because the 1999 letter was sent by a third party who had no right to sell the invention, and the letter expressly stated it was a quotation rather than a price list.

Mr. Junker’s petition for certiorari is available here.

 

First closing of Acutus’s sale of its left-heart access portfolio to Medtronic completed

On July 1, 2022, Acutus Medical (”Acutus”), an arrhythmia-based medical device company, reported that it completed the first of its two closings in its left-heart access portfolio sale to Medtronic.  Acutus, the maker of the AcQCross™ line of sheath-compatible septal crossing devices and systems, first announced this deal in late April 2022, and it includes an upfront $50 million cash payment to Acutus Medical upon the initial closing of the transaction.  The sale of Acutus’s portfolio comes after Acutus’s restructuring announcement that resulted in layoffs in early January 2022, and Acutus’s recent FDA clearance of its expanded suite of additional left-heart access products such as AcQCross™ Qx system for use with the TruSeal™ and FXD™ delivery system for the Watchman™ LAAC Device.

Left-atrium access procedures require a multi-step process that often involves the exchange of wires and needles through the septum all while trying to obtain a proper angle and location.   “Crossing the septum at the proper location is important when doing any left-sided heart procedure, but it can be especially critical to the success of delivering Watchman to the left atrial appendage,” says Dr. Tom Waggoner.  “With AcQCross, I can easily reposition without withdrawing or exchanging needles or wires, so its new compatibility with Watchman has made my procedures much safer for my patients and far more efficient for me and my team.”

As stated in Acutus’s release, “US Left-atrial appendage closure procedures are expected to total over 50,000 in 2022…With this clearance, Acutus now offers sheath-compatible transseptal access devices that cover 409,000 electrophysiology and structural heart procedures in the US.”

It still is not clear when the entire deal between Medtronic and Acutus will be finalized.  The final closing details are also tied to another $35 million deal with Deerfield Management Company to refinance Acutus’ existing debt.

Medtronic’s acquisition of the portfolio follows Boston Scientific’s $1.75 billion acquisition of Baylis Medical and its transseptal puncture systems.

Boston Scientific Agrees to Purchase Majority Stake in M.I.Tech as M&A Deals Are Expected to Pick Up

On June 15, 2022, Boston Scientific entered into a definitive agreement to purchase a majority stake in M.I.Tech Co., Ltd, a publicly traded Korean medical device company in the field of endoscopic and urological procedures. The agreement includes a purchase price of approximately $230 million.  According to the announcement, M.I.Tech is the creator of the HANAROSTENT® technology, a family of conformable, non-vascular, self-expanding metal stents.  Non-vascular stents can be used in gastrointestinal applications and in airways to clear obstructions or constrictions in areas such as the biliary tree, pancreatic duct, esophagus, colon, and duodenum.

Boston Scientific’s Art Butcher, executive vice president and group president, MedSurg and Asia Pacific, stated:

M.I.Tech is an innovator in non-vascular stent development, with product offerings that complement our existing stent portfolio, including the differentiated AXIOS™ Stent and Electrocautery Enhanced Delivery System and the flexible and conformable Agile™ Esophageal Stent System.  We are committed to investing in technologies that advance care for patients around the world and are eager to work more closely with M.I.Tech to expand their international footprint.

Under the agreement, Boston Scientific will be purchasing a 64% stake in M.I.Tech from Synergy Innovation Co., Ltd, whose website identifies M.I.Tech as a subsidiary and a top 5 player in global non-vascular stents.  M.I.Tech’s website also describes other products such as lithotripter baskets, polypectomy snares, veterinary stents, and glucometers.  The transaction is expected to be completed in the second half of 2022.

According to PwC, semi-annualized M&A deal value in the medical device sector is down 85% this year in comparison to the same period in 2021 when $76.4 billion was invested across 93 deals.  PwC attributes the slow-down to acquirers shifting their focus to integration and value capture activities, while the sector deals with regulatory headwinds and semiconductor shortages.  PwC expects deals to pick up across all pharmaceutical and life science sectors in the second half of 2022, with the medical device sector searching for alternative forms of revenue, particularly from new consumer-centric technologies.

WTO Agrees to Partial Patent Waiver for COVID-19 Vaccines

On June 16, 2022, the World Trade Organization (WTO) agreed to a partial waiver of intellectual property rights related to COVID-19 vaccines.  The agreement came on the heels of an all-night negotiating session.  The agreement followed years of proposals and negotiations among the WTO members.

Ultimately, the WTO members agreed to a waiver that was limited to “the subject matter of a patent required for the production and supply of COVID-19 vaccines.”  The United States had previously expressed its support for a vaccine-only TRIPs waiver.  Previous proposals by South Africa and India also included COVID-19 tests and treatments, as well as including access to trade secrets.

The agreement allows member countries to “authorize the use of the subject matter of a patent … without the right holder’s consent through any instrument available in the law of the Member.”  However, any country making such a waiver must provide “adequate remuneration” to the patent holder.

WTO Director-General Ngozi Okonjo-Iweala praised the agreement: “[N]ow we have something in hand,” “[i]t’s really exciting now to go to those factories that are starting to set up all over the developing world and start to work with them about how this will actually be made real.”

However, the agreement did not meet with universal praise.  Indian Trade Minister Piyush Goyal stated:

[W]hat we are getting is completely half baked and it will not allow us to make any vaccines. They have no intentions of allowing therapeutic and diagnostics and if at all they try to say that we are the cause for its collapse, I think we should unanimously speak to the world and tell them that no, ideally we want a holistic solution including therapeutic and diagnostics.

Pharmaceutical industry organizations also criticized the WTO agreement, as did some members of the U.S. Congress.

The full text of the agreement is available on the WTO’s website.