On August 23, 2018, Dthera Sciences announced that the Food and Drug Administration granted Breakthrough Therapy designation to its Alzheimer’s disease therapeutic device. According to the FDA, Breakthrough Therapy designation is intended to help patients have more timely access to breakthrough technologies that provide treatment for diseases for which no approved treatment exists or which offer significant advantages over existing treatments. A therapy that receives Breakthrough Therapy designation will be reviewed within 60 days of receipt.
Dthera Sciences chief executive officer Edward Cox stated:
We commend the FDA for recognizing this significant unmet medical need as well as the critical importance of providing innovative new treatments to patients with Alzheimer’s and their caregivers.
According to Dthera Sciences, the therapeutic device, termed DTHR-ALZ, is a prescription digital therapeutic for patients with Alzheimer’s disease. The device digitally delivers ReminX, a reminiscence therapy, to patients with Alzheimer’s disease and automatically optimizes the therapy using biofeedback. Reminiscence therapy is a behavioral intervention that involves introduction of familiar pictures, music, or other materials to help patients reminisce about past experiences.
According to the press release, Alzheimer’s disease is a neurodegenerative disease that is among the ten leading causes of death in the United States. In addition, it is one of the most financially costly diseases. According to Dthera Sciences, DTHR-ALZ mitigates the symptoms of agitation and depression associated with Alzheimer’s disease with minimal investment of time and resources.
Boston Scientific recently announced an agreement to acquire privately-held VENITI, Inc. for $160 million. According to the press release, VENITI submitted a pre-market approval application with the U.S. Food and Drug Administration in June 2018 for the VICI stent system for treating obstructive venous disease. The VICI stent system received CE Mark approval in 2013.
According to the press release, venous obstructive disease affects more than 1.1 million people in the United States and Western Europe annually. Jeff Mirviss, Senior Vice President and President of Peripheral Interventions at Boston Scientific, commented:
Along with our leading AngioJet thrombectomy platform and venous product pipeline, we look forward to meeting the needs of physicians treating both chronic and acute venous disease.
According to the Worcester Business Journal, Boston Scientific announced over $1.5 billion in acquisitions this year alone. Other notable Boston Scientific acquisitions in 2018 include Millipede ($540m), NxThera ($306m), nVision Medical Corporation ($275m), Claret Medical ($270m), and Cryterion Medical ($202m).
Boston Scientific expects the acquisition of VENITI to be immaterial to adjusted earnings per share (EPS) in 2018 and 2019, and accretive thereafter. Nonetheless, shares of Boston Scientific opened trading the day of the announcement up more than 3 percent.
BioSig Technologies Receives FDA 510(k) Clearance for Its Noninvasive Electrophysiology Information System
The Los Angeles-based medical device company BioSig Technologies, Inc. announced in a press release the FDA 510(k) clearance of its PURE EP System, which is designed to aid electrophysiology procedures, such as cardiac ablation for treating atrial fibrillation.
According to the company’s website, existing cardiac signal acquisition technology results in loss of vital information in the signal. The company states that the PURE EP system incorporates “proprietary hardware and software . . . designed to effectively eliminate noise, artifact and baseline wander in real-time to present clearer signals during EP studies and catheter ablation” and “developed to enhance clinical decision making by revealing the most important parts of the signals.”
Kenneth L. Londoner, Chairman and CEO of BioSig Technologies, Inc. commented:
Our PURE EP System is the culmination of many years of scientific research and business development efforts. It is our goal to provide tangible benefits to electrophysiologists and improve the current standards of EP procedures in the clinical setting. We are excited to bring the advanced platform to the U.S. market.
According to a previous BioSig press release about the completion of a private placement, an FDA 510(k) application for the PURE EP system, the company’s first product, was submitted in late March 2018. According to public records, BioSig is the listed assignee of, among others, a pending U.S. patent application directed to “evaluation of electrophysiology systems.”
MaxQ-AI (previously known as MedyMatch) recently filed for an $8 million IPO. According to Nasdaq, MaxQ-AI filed confidentially on February 13. The prosepectus filed with the SEC describes MaxQ-AI as “a clinical stage artificial intelligence, or AI, company specializing in improving diagnostic accuracy through deep learning technology.” MaxQ-AI is currently classified as an “emerging growth company” under the 2012 JOBS Act (meaning it had revenues of less than $1.07 billion last fiscal year). MaxQ-AI’s CEO is Gene Saragnese.
According to it’s website, MaxQ-AI focuses on “artificial intelligence driven diagnostic tools.” Its goal is “to deliver A.I. based patient specific clinical decision support applications to improve quality outcomes and reduce healthcare costs.” MaxQ-AI says this will reduce the misdiagnosis rate in the medical industry. MaxQ-AI is currently focused on “continuing to build out capability in the acute care ER setting with a natural extension into trauma.”
MaxQ-AI recently received CE mark approval for its Accipio software platform, which is used for “detection of intracranial hemorrhage” by analyzing non-contrast head CT images. In addition, MaxQ-AI received a “breakthrough device” designation from the FDA for its Accipio software platform. According to the prosepectus, MaxQ-AI has not submitted the Accipio products for FDA approval, but plans to do so in the third quarter 2018.
Last year, MaxQ-AI unveiled partnerships with GE Healthcare, Samsung, and IBM. According to the press releases, each of these companies plans to integrate the Accipio software into existing technology.
MaxQ-AI’s IPO comes on the heels of the busiest quarter for IPOs in three years, according to MarketWatch. In the second quarter of 2018, sixty companies raised $13.1 billion in IPOs.
On July 20, 2018, SingHealth, a Singapore healthcare institution consisting of four public hospitals, five national specialty centers and a network of nine polyclinics, reported that it had been the target of a cyberattack resulting in the information of around 1.5 million individuals being compromised.
This is not an isolated incident as statistics compiled from the U.S. Department of Health and Human Services (HHS) indicate that more breaches involving healthcare data were reported in 2017 than any other year since records first started being published. In Experian’s 2018 Data Breach Industry Forecast, Experian noted that from January through June of 2017, 233 healthcare data breach incidents were reported to HHS, the media or state attorney generals. For the 193 attacks for which there are numbers, 3,159,236 patient records were affected. In a 2016 Data Breach Industry Forecast, Experian predicted that healthcare companies remain one of the most targeted sectors by attackers, driven by the high value that compromised data can command on the black market, along with the continued digitization and sharing of medical records.
Forbes reported that, on the black market, the going rate for a social security number is 10 cents and a credit card number is 25 cents, while electronic medical health records could be worth hundreds or even thousands of dollars because such medical data contains a wealth of exploitable information, such as names, addresses, work history, family member names, financial information, as well as more sensitive information relating to medical history.
The Food and Drug Administration (FDA) has announced a medical device innovation challenge to help address opioid abuse and misuse. With the FDA Innovation Challenge: Devices to Prevent and Treat Opioid Use Disorder, the FDA intends to encourage development of medical devices that will help to combat the ongoing opioid crisis.
According to the announcement, diagnostic and therapeutic devices at any stage of development are eligible for submission to the Challenge. The FDA also indicates that currently marketed devices may be submitted if developers are interested in demonstrating that their device has an improved benefit-risk profile as compared to opioids in the management of pain. Non-limiting examples of suitable medical devices provided by the FDA include diagnostic devices that identify patients at increased risk for addiction, opioid-sparing or opioid-replacement therapies for acute or chronic pain, and devices that monitor the use and prevent diversion of prescription opioids.
According to the announcement, Challenge submissions should describe:
- The novelty of the medical device/concept,
- The development plan for the medical device,
- The development team, and
- The anticipated benefit of the device used by patients and the impact on public health as compared to other available alternatives.
The FDA has indicated that they will work directly with selected applicants during a collaboration phase to accelerate the development and review of new devices, similar to the process under the existing Breakthrough Devices Program. The announcement also reports that selected devices will also be granted Breakthrough Device designation without requiring a separate application. Challenge applications will be accepted through September 30, 2018. The FDA will be hosting a webinar on July 25, 2018 to provide further information.
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.”
Envision Healthcare Corporation (“Envision”) recently announced an agreement to be acquired by KKR & Co. L.P. (“KKR”) for about $5.5 billion in cash. The transaction is valued at $9.9 billion, including the assumption or repayment of debt. The transaction remains subject to regulatory and shareholder approvals, but is expected to close in the fourth quarter of 2018.
Envision, based on Nashville, TN, is a national physician staffing company and provider of physician services, including post-acute care and ambulatory surgery. KKR is a global private equity firm headquartered in New York, NY. The agreement to acquire Envision follows KKR’s 2017 acquisition of American Medical Response, an ambulance business subsidiary of Envision, for $2.4 billion.
It has been reported that other private equity firms including a consortium of Carlyle Group LP and TPG global competed for Envision. According to a report by Bain & Co., the value of private equity deals in healthcare across the globe reached $42.6 billion in 2017, up 17% from $36.4 billion in 2016.
Regarding its acquisition of Envision, Jim Momtazee, Head of KKR’s Health Care investment team states:
Envision has a very strong reputation for delivering high-quality, patient-focused care through its network of 25,000 clinical professionals at thousands of hospitals, surgery centers and alternate sites of care across the country. We are excited to partner with the outstanding team lead by Chris Holden to help build upon the strong foundation in place and accelerate Envision’s growth going forward.
According to its website, SafeAir specializes in smoke evacuating diathermy pencil products. Diathermy pencils are used in electrosurgical procedures such as cauterization. Such procedures generate smoke, and SafeAir’s Smoke Pencil products have an integrated smoke evacuation function to remove such surgical smoke from its source.
The acquisition of SafeAir AG is highly complementary to the Surgical business of Stryker’s Instruments division , and strengthens our smoke evacuation portfolio in both the U.S. and Europe.
Regarding how this acquisition fits into Stryker’s medical device portfolio, Mr. Scannell went on to report:
This acquisition aligns with Stryker’s focus of providing solutions that result in a higher quality of care and level of safety for both healthcare professionals and patients.
Stryker’s forthcoming acquisition may indicate the company’s understanding of the growing smoke evacuation system market that is expected to grow at a compound annual growth rate of 5.6% and reach $180M within 18 months.
President Donald Trump’s 25 percent tariffs on Chinese imports went into effect on July 6, a move that, according to industry experts, could have wide-ranging effects on American medical device manufacturers. In early April, RBC Capital Markets estimated the proposed tariffs could cost the entire medical device industry up to $1.5 billion each year. A more recent survey conducted by the Medical Imaging and Technology Alliance (MITA), an organization that represents medical imaging and radiopharmaceutical manufacturers, projected that the tariffs will cost American medical manufacturers more than $138 million this year. According to MITA, CT scanners and other radiographic imaging devices could be impacted the most by the new tariffs.
The Trump Administration’s original tariff list included more than 1,300 items, of which 30 were finished medical device products, including pacemakers, ultrasounds, CT scanners, needles, catheters, radiation therapies.
Patrick Hope, Executive Director of MITA stated:
“These tariffs on imaging products or their components will harm the American medical technology sector’s ability to stay competitive and will adversely affect the U.S. economy in ways that could compromise patient access to care. Though the Administration has stated that it will implement an exemption process, we have not yet seen any information about how or when it will do so. Policymakers should act quickly to ensure that patient access to innovative life-saving technology is not compromised.”
MITA has commented to U.S. Trade Representatives that many medical imaging products undergo “inter-company transfers,” meaning the products are imported from a manufacturer in China to a facility in the U.S., where they are transformed and re-exported, sometimes to China. In these cases, the tariffs present a major disincentive to manufacturing the products in the United States.
MITA hopes it can convince U.S. Trade officials to develop a “robust exemption process” for medical imaging products and components. Patrick Hope stated:
“[W]hile we are encouraged that the Administration has shown openness to making adjustments to the list, we first need a clear explanation of the process we should use to make our case to the government to ensure that American innovation can continue to thrive.”
Although AdvaMed, an international trade association for medical technology, claims to have successfully lobbied to remove some types of medical devices from the tariff list, an AdvaMed representative declined to reveal which devices had been removed.