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BioWorld MedTechJune 6, 2018
Volume 22, No. 109
© 2018 Clarivate Analytics
The news source of record covering the latest advances in medical technology Actionable Intelligence • Incisive Analysis
Inside
Appointments and advancements, page 2
Financings, page 2
Daily M&A, page 3
Product briefs, page 8, 9
Other news to note, page 9
Teladoc goes global with virtual health care in $352M acquisition of Advance MedicalBy Stacy Lawrence, Staff Writer
Multinational employers are a major market for virtual health care providers. Now, with its acquisition of Advance Medical, Teladoc Inc. expects that it will have the global reach to appeal to the very largest global multinational corporations. The Purchase, N.Y-based company paid about $292 million in cash and $60 million in stock for Advance Medical. Wall Street embraced the combination, driving up Teladoc shares up by about 5 percent in the first few days of trading on news of the deal. Teladoc’s
AAHomecare says it backs prior authorization for new DME itemsBy Mark McCarty, Regulatory Editor
CMS has released a list of durable medical equipment items that will henceforth require prior authorization, converting a pilot program for power mobility accessory preauthorization into a permanent program. While the news would seem certain to rankle industry, Tom Ryan, CEO of the American Association for Homecare, told BioWorld MedTech, “as long as it’s not utilization management, I think we’re good with it.”CMS reported the news in the June 5 issue of the Federal Register, listing 31 HCPCS codes that
See VC trends, page 3
See AAHomecare, page 4
See Canary Medical, page 7
See ASCO, page 6
Head-neck undertreated in women vs. men; query HPV, choices by patientsBy Randy Osborne, Staff WriterCHICAGO – One of the more eye-opening data rollouts at the American Society of Clinical Oncology (ASCO) involved an analysis of registry data from a California hospital system showing that women with head and neck cancer were, compared to men, less likely to receive intensive chemotherapy (35 percent vs. 46 percent) and radiation (60 percent vs. 70 percent) relative to men. But, controlling for age and other serious medical conditions, a mathematical model demonstrated that the ratio of cancer to noncancer mortality was two times higher for
See Teladoc, page 5
Canadian med tech, venture capital firm go global with medical implant analyticsBy David Godkin, Staff Writer
The global orthopedic implants market valued at $47 billion in 2016 is expected to grow to $75 billion by 2023. To get a piece of that action, lead investors at Vancouver, B.C.-based Quark Venture Inc. are investing $10 million in Chirp
BioWorld MedTech’s Oncology Extra
Regulatory Editor Mark McCarty andSenior Science Editor Anette Breindl on one of med-tech’s key sectors
Read this week’s edition
BIO 2018
Panel explores VC trends in digital healthBy Liz Hollis, Staff Writer
BOSTON – What are the trends in venture capital funding for digital health? That was the question posed during a session at the Biotechnology Innovation Organization’s (BIO) 2018 Conference taking place here this week. “The bottom line is an immense amount of money has gone into this sector over the last five to seven years – well north of $20 billion,” noted Wainwright Fishburn Jr., founding partner of Cooley’s San Diego office, in kicking off the session. He added that the first quarter of 2018 marked an all-time high
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Staff writers: Liz Hollis, Bernard Banga, David Godkin, Stacy Lawrence, Nuala Moran, Alfred Romann, Tamra Sami
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Wednesday, June 6, 2018 BioWorld MedTech Page 2 of 9
Appointments and advancements
Financings
Tenet Diagnostics, of Kenilworth, N.J., appointed Sean Farrell as vice president, sales and strategy. Carlsbad, Calif.-based Vertiflex Inc., reported that it appointed Ray Baker and Richard Mott to its board.
Genetesis LLC, of Mason, Ohio, closed an oversubscribed series A financing round of $7.5 million. Cincytech led the round with participation from existing investors, including Mark Cuban’s Radical Investments, and new investors Ohio Innovation Fund and Raptor Group. The financing will enable the company to build and install additional Cardioflux Magnetocardiograph systems, launch new clinical trials, and prepare for commercial launch. Cardioflux is a noninvasive system that measures and displays the magnetic signals produced by the electric currents in the heart to enable rapid and accurate chest pain triage.Optinose Inc., Yardley, Pa.-based provider of ear, nose and throat products, reported a proposed underwritten public offering of 4.5 million shares of its common stock. The offering is expected to consist of 2.25 million shares to be offered by Optinose and 2.25 million shares to be offered by certain selling stockholders. In addition, Optinose and the selling stockholders are expected to grant the underwriters of the offering an option for a period of 30 days to purchase up to an additional 675,000 shares at the public offering price, less the underwriting discount. Optinose will not receive any proceeds from the sale of shares by the selling stockholders. Jefferies and Piper Jaffray will act as the lead joint book-running managers for the offering. Bmo Capital Markets and Rbc Capital Markets will also act as joint book-running managers for the offering. Cantor will act as sole lead manager.
T2 Biosystems Inc., of Lexington, Mass., closed its underwritten public offering of 7 million shares of common stock, including 915,000 shares of common stock pursuant to the underwriters’ exercise in full of their option to purchase additional shares, at a public offering price of $7.50 per share, before underwriting discounts, for gross proceeds of approximately $52.6 million. All of the shares of common stock sold in the offering were offered by T2 Biosystems. Leerink Partners LLC acted as the book-running manager for the offering. Canaccord Genuity LLC acted as passive book-running manager. Janney Montgomery Scott LLC, Jonestrading Institutional Services LLC and Wbb Securities LLC acted as co-managers for the offering. T2 Biosystems is an in vitro diagnostics company developing the T2 Magnetic Resonance technology to detect pathogens, biomarkers and other abnormalities in a variety of unpurified patient sample types, including whole blood, plasma, serum, saliva, sputum and urine. The company is initially targeting sepsis and Lyme disease.
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Wednesday, June 6, 2018 BioWorld MedTech Page 3 of 9
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VC trends Continued from page 1
Daily M&A
of money going into the sector during a first quarter. Investors are increasingly attracted to genomics and are becoming more comfortable with $100 million to $200 million rounds. He showed a slide presenting the number of digital health companies in 2012 that had raised $50 million to $100 million, $100 million to $150 million, and more than $200 million. That number was very small compared with today. During a panel discussing the trend, Andrew Hedin, vice president of Bessemer Ventures, noted that there were 100 investors in digital health in 2011. That number had ballooned to more than 500 in 2017.Despite the increasing number of companies raking in high numbers, Fishburn noted there has been “sector crowding,” leading to a “survival of the fittest” environment. A good example is telemedicine, as there were a fair number of companies in this arena a few years ago. That number has since dropped.Still, there are examples of success, such as San Carlos, Calif.-based Helix, a personal genomics company that was founded in 2015 with support from Illumina. Fishburn said the company represented “a great example of . . . patient investors with a longer-range view of building a company.” Helix raised $200 million in a series B round during the first quarter. The round was led by DFJ Growth, with participation from all its founding investors which include Illumina, Kleiner Perkins Caufield & Byers, Mayo Clinic, Sutter Hill Ventures, and Warburg Pincus. As a result of this round, the company expects to bolster its go-to-market strategy.
Panel discussionFishburn was joined by Hedin, A.G. Breitenstein, a partner at Optum Ventures, and Michael Greeley, of Flare Capital. It was noted that the sector was like a funnel, with a large number of companies launched, but few flourishing. Greeley said that about 2,000 companies had been launched in the last five years, and it is a challenge to identify and push forward those that might meet with success. “Every sector went through this over the last 20 years” in terms of overfunding the category, he noted. Greeley expressed optimism, particularly as there are a handful of cash-flow positive companies that have emerged, and investors can see how there model can lead to success. Breitenstein noted that Optum was a “massive buyer in this market,” as “the innovation curve is actually continuing to get steeper and steeper.” For that reason, she views the funnel mentioned earlier is wide at the top, but also becoming wider at the bottom. Optum has had to make so many acquisitions because it takes so much more effort to innovate.
Examples of successWhen asked for examples of companies that may be “breakouts,” Breitenstein discussed one in Optum’s portfolio, Buoy Health. Boston-based Buoy is aiming to displace Google as the first place patients turn to find out about their symptoms. The founder was an emergency room physician who saw many of his patients coming in with Google printouts that made them come in for the reasons. He asked whether
he could “take the corpus of diagnostic medicine and build an [artificial intelligence] AI out of it.” Patients enter their symptoms, and Buoy considers every possible illness, with an eye toward reducing uncertainty in diagnosis.Greeley discussed another Boston-area company, Iora Health, which focuses on improving primary care for Medicare patients. Specifically, the company has developed a medical record system that it says prioritizes patients through a collaborative care platform. This platform allows for patient access to records and a place to share notes. The company reported May 21 that had secured $100 million in funding for growth and improving technology. The series E financing was funded by investors, including .406 Ventures, Devonshire Investors, F-Prime Capital, Flare, GE Ventures, Humana, Khosla Ventures, Polaris Partners and Temasek. s
“The bottom line is an immense amount of money has gone into this sector over the last five to seven years — well north of $20 billion.
Wainwright Fishburn Jr. Founding partner, Cooley’s San Diego office
Biomerics LLC of Salt Lake City acquired Athens, Texas-based Futurematrix Interventional Inc., a firm that specializes in the design and manufacture of interventional catheters for cardiovascular and urinary applications. Biomerics said the acquisition will establish the company as a leader in the attractive minimally invasive interventional segment of the medical device market.Concord Medical Services Holdings Ltd. of Beijing said one of its subsidiaries, Beijing Concord Medical Technology Co. Ltd., has entered into an equity interest transfer agreement with Tibet Allcure Information Technology Ltd. The transaction, which took place June 5, will entail a sale of 16 percent of equity to Tibet Allcure. Further details were not available.Corelink LLC of St. Louis acquired Expanding Orthopedics Inc. (EOI) of Or Akiva, Israel, which gives Corelink ownership of several devices in EOI’s portfolio, including the Flxfit series of titanium interbody systems. Corelink said it has it also acquired “a broad array of patents and in-development products addressing the expandable interbody and spinal fusion market” in the agreement.Fujifilm Corp. of Tokyo completed its acquisition of Irvine Scientific Sales Co. Inc. of Santa Ana, Calif., and Is Japan Ltd., two companies in the cell culture media business, for the sum of about $800 million. Fujifilm said it closed the agreements June 1, and that the acquisitions will allow it to provide a broad product portfolio from biopharmaceuticals to in vitro fertilization and cell therapy.
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AAHomecare Continued from page 1
would require prior authorization within 90 days of the FR announcement, a delay intended to give providers of these items time to get their systems up to speed. The items are those that appear in the K0816-0855 series HCPCS codes, and CMS noted that unlike the demonstration project for this series of items, a failure to obtain prior authorization would ding the provider by 25 percent, assuming the agency finds the claim payable. In contrast to the pilot, this program now applies to all suppliers of these products across the nation rather than to just the DME providers in fewer than two dozen states.Prior authorization has a checkered history behind it in the eyes of some stakeholders, such as those involved in the debate over high-cost medical imaging services. CMS had repealed a competitive bidding program related to power mobility accessories last year after hearing from Capitol Hill about concerns related to potential issues of access, a move that was welcomed by providers of these accessories. (See BioWorld MedTech, June 28, 2017.)
AAHomecare’s Ryan said the news was not a big surprise for the association. “I think we saw it coming because this is a prior authorization that the industry embraced,” Ryan said, adding that industry and CMS have examined the notion over a period of time, which was necessary to work through the details, “At the end of the day, I think it proved to be a success for beneficiaries, suppliers and the agency,” he said of the pilot.“We were advocating behind the scenes to have it be extended,” Ryan said, stating that there had been no prior authorization for these items until the pilot was underway.
“. . . This is a prior authorization that the industry embraced.
Tom Ryan CEO, AAHomecare
CMS: White House seeks broader prior authorization authorityBy Mark McCarty, Regulatory Editor
The Government Accountability Office (GAO) issued a May 21 report to Congress on prior authorization in connection with accessories for power mobility equipment (see related story), urging CMS to continue the program for the related items. CMS oddly indicated to GAO it was uncertain whether it would sustain the pilot, but according to CMS, the Trump administration had proposed in its fiscal 2019 budget to seek legislative authority to extend prior authorization to “all Medicare [fee-for-service] items and services,” a move the agency said would help to tamp down on audits of the related providers.The well-known backlog of appeals of those audits – cases that are awaiting a hearing from an administrative law judge (ALJ) – is still the stuff of legend among providers of various stripes, prompting a lawsuit by the American Hospital Association in December 2016. The case has gone back and forth as the Department of Health and Human Services had argued that the ALJ system does not have sufficient capacity to comply with an order to clear out the backlog by 2020, but the department suffered a setback in the District Court for the District of Columbia in which the judge instructed HHS to come up with a backlog-clearing plan of attack before the end of the first week of July 2018.DME providers make up a large share of those appeals, according to some sources, so prior authorization programs that ensure payment in exchange for a prior authorization mandate would at least be presumed to relieve the influx of cases filed with the ALJ office.The GAO report said DME providers encountered some difficulties in complying with the preauthorization requirements, including in some instances in which the prescribing physician failed to provide all the necessary documentation. There have been headaches associated with how the MACs handle the claims as well, but the GAO report said CMS “has not made plans” to extend prior authorization to other areas of durable medical equipment. GAO recommended CMS keep the prior authorization program going where these power mobility accessories are concerned, and Matthew Bassett, assistant secretary for legislation at HHS, said in a March 30 response to GAO’s inquiry that CMS “continues to evaluate ways to improve the program” related to the power mobility accessories.Bassett said little more about this particular program, however, other than that CMS will take the GAO recommendations into consideration “when developing plans in this area.”Bassett’s response also covers other areas of Medicare where preauthorization is required or is the subject of a pilot program, but he said HHS has limited statutory authority to roll out additional mandatory preauthorization programs. However, Bassett noted that the White House’s budget proposal for FY 2019 had included “a legislative proposal to extend that authority to all” items and services covered under Medicare fee-for-service programs, in particular those items and services the department believes “are at high risk for fraud, waste and abuse.” By providing assurances that the money goes to “the right provider for the appropriate service,” CMS and providers can “avoid future audits on those payments,” Bassett said, audits that stakeholders insist continue to bloat the ALJ backlog to the dismay of all interested parties.
See AAHomecare, page 8
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Teladoc Continued from page 1
business is U.S.-focused, while Advance Medical has aimed primarily for an ex-U.S. presence. The combination is expected to create the largest, global virtual health care provider, which is designed to appeal to major multinationals looking for a way to provide quality health care to employees around the world.
More markets, products“The significant majority of their revenue is derived from insurers outside the U.S. who incorporate Advance Medical services into their products, similarly to how U.S. health plans use Teladoc services today,” said Teladoc CEO Jason Gorevic on a June 4 conference call about the deal. “The remaining revenue comes primarily from large, U.S.-based multinational employers who turn to Advance to provide care for their employees the world over.”He continued, “Notably, with less than 5 percent customer overlap, we believe there is ample opportunity to cross-sell the offerings to both customer bases. Additionally, this acquisition will allow us to be more aggressive in going after Fortune 1000 companies, as we’ll now be able to meet the needs of their global workforces by providing the highest quality medical care on a consistent platform around the world.”Teladoc already has more than 300 Fortune 1000 customers already and works with more than 35 health plan clients. Last year, Advance Medical reported $63 million in revenues, about 70 percent of that was in Euros, 5 percent from Asia and the remainder in U.S. dollars. That was an increase of 15 percent over the prior year. In 2018, Advance Medical is expected to have $74 million in revenues.For its part, Teladoc reported $233 million in 2017 revenue and has guided to $355 million for this year. That puts it on track for a multi-year compound annual growth rate of 66 percent.“If you have watched Teladoc evolve and grow over the past few years, you’ve seen that we have a track record of identifying, executing and integrating acquisitions that either enhance our solutions offering, like better health in the behavioral health space and best doctors and expert medical opinions, or that deepen our relationships in particular segments of the market as Healthiest You did in the small business market and Stat Doctors did in the provider market,” said Gorevic.“Today’s acquisition of Advanced Medical is particularly exciting because it does both: brings new solutions to our customer base and dramatically strengthens our global footprint,” he added. “Advance Medical’s philosophy of bringing a comprehensive virtual care solution to the consumer aligns closely with Teladoc’s, and our combined solution will allow for our complimentary suite of offerings to address the needs of a global market.”
Deal detailsTeladoc sees its business as split between critical, complex and episodic care that it is able to provide within and outside the U.S. Advance Medical brings to the table the complex and episodic care capabilities that it was missing ex-U.S.; it
also offers a chronic care management program that Teladoc plans to bring to the U.S. It’s based on pairing a chronically ill patient with a physician who is always available for medication management or other questions.Founded in 1999, Advance Medical has more than 300 customers in over 125 countries. It has 800 staff, including more than 330 physicians who are mostly part-time, with international offices in the U.K., Spain, Hungary, Portugal, Brazil and China.There are expected to be substantial operational synergies. Teladoc aims to provide updated guidance including the deal during its next earnings call in early August, with details forthcoming on the synergy specifics during a Sept. 27, 2018, Investor Day.Teladoc anticipates that the international Advance Medical locations will be able to bring up their revenue growth to about 20 percent to 30 percent.“We have some overlapping operations and a footprint in the U.S. and in Europe. Additionally, we were looking to expand our services in Canada, the U.K., Australia for the traditional Teladoc services into existing, what were previously Best Doctors geographic locations,” said Teladoc COO and CFO Mark Hirschhorn. Now that we have the Advance Medical suite of solutions, we will be able to accelerate that advance into those respective countries. And, of course, there will be operating synergies in both the U.S. and in Spain, where both companies have a significant presence.”Teladoc financed the cash payment in the deal from its existing holdings, but it still has more than $100 million in cash after the acquisition. The transaction already closed on May 31.Advance Medical co-founders Carlos Nueno and Marc Subirats will join the Teladoc team and will continue to lead the ex-U.S. Advance Medical business. The deal included 22 employee stock options for 102,401 Teladoc shares and restricted stock unit awards for 264,244 shares. The options have an exercise price of $50.90. The equity awards vest over the next three or four years, with the bulk going to Nueno and Subirats.“With the ability to harness the rapid pace of medical innovation, deliver an unsurpassed commitment to clinical quality, and maintain our unwavering patient-centric vision, there is no doubt we will have a profound consumer impact as we continue to expand access to high quality care,” summed up Subirats.Added Nueno, “We share Teladoc’s belief that a virtual care solution should be comprehensive in nature, and provide answers and outcomes for people regardless of their location or medical condition. Our clients have increasingly demanded high-quality virtual care at scale, and now we have the ability to bring this meaningful change to the health care system.” s
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ASCO Continued from page 1
women than the ratio for men. Head and neck cancers account for about 4 percent of all tumors in the U.S. and are more than twice as common among men as they are among women. When considering treatment options, oncologists take into account a patient’s activity level and other medical problems. Those with good performance status may be offered more intense treatments such as platinum-based chemo with radiation therapy; those who can’t tolerate intensive chemo may get targeted drugs such as Erbitux (cetuximab, Eli Lilly and Co.) with radiation, radiation by itself, or no treatment at all.Human papillomavirus (HPV)-related head and neck cancer is more common in men than in women. Among other factors in play is the question of whether the disease is caused by HPV and thus more responsive to treatment. Senior study author Jed A. Katzel, a medical oncologist at Kaiser Permanente in Santa Clara, Calif., and his colleagues found in a prior analysis of patients in northern California that only about 22.6 percent of HPV-related cancers occurred in women, compared with 77.4 percent in men. Researchers in the study detailed at ASCO evaluated health outcomes for 223 female and 661 male patients with stage II to stage IVB head and neck cancer treated at Kaiser Permanente Northern California. The odds of receiving intensive cancer treatment were estimated using logistic regression models and adjusting for factors such as age, gender, tumor stage and the Charlson Comorbidity Index, along with history of smoking and alcohol use. A mathematical tool called the generalized competing event (GCE) model – which controls for disparities in age, gender, tumor site and Charlson score – was brought aboard to compare the risk of dying from cancer to the risk of dying from other causes. The study found that the odds of receiving intensive chemo were 35 percent for women vs. 46 percent for men, and the odds of receiving radiation were 60 percent for women vs. 70 percent for men. At a median follow-up of 2.9 years, 271 patients died of cancer and 93 from other causes. While men and women were more likely to die of cancer than of other causes, the ratio of cancer deaths vs. noncancer deaths was 1.92 times higher for women than for men.Katzel said researchers “are going to need to do another step, which is a chart-by-chart by review to really look into this,” in hopes of gaining knowledge about, among other things, “why some patients may elect to have aggressive treatment or may choose to decline aggressive and potentially very burdensome treatments.” Asked to speculate about the differences, ASCO expert Joshua Jones, assistant professor of clinical radiation oncology at Penn Medicine in Philadelphia, said “that is exactly what we’re thinking about with the next analysis” to be done by Katzel. “It could be related to HPV status,” he said. But it could also “be related to patient preferences that weren’t captured elsewhere. What is striking about this study is that when you control for
the other medical problems, when you control for age and other factors, we don’t have a good explanation.”Katzel said his group “looked at patients that got both combined intensive chemotherapy and radiation therapy as one group, with a second group that was just any radiation, with or without another treatment, and then we had a third group which was surgery. We did find that, compared with men, for the group that got both – in a retrospective manner, chemotherapy and radiation therapy – less women had intensive therapy compared with men. Now, we acknowledge that our study had fewer women than men. That’s typical, because head and neck cancer is more common in men than in women. However, it was statistically significant that there were less women in our trial than men.”Asked whether the physicians’ treatment preferences might have influenced results as well as patients’, Katz said finding out is “the next step for our research,” adding that one key point and a confounding factor is the much lower rate of oropharyngeal cancer in women (38 percent) vs. men (55 percent). HPV-related cancers occur most frequently in the oropharynx. The gap might be chalked up to HPV, but “GCE analysis is designed to take into account tumor location, so that should be factored into the model,” he said. The GCE itself is undergoing further evaluation in a study called NRG-HN004. GCE model “has been validated in a number of cancers,” including head and neck, breast, prostate and endometrial, he noted. “I would say we are confident in our findings.” s
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data analytics software developed by Vancouver-based Canary Medical Inc. That investment, Canary Medical CEO Bill Hunter told BioWorld MedTech will provide real-time feedback on the performance of orthopedic medical implants.“We can say to a knee implant manufacturer, for example, ‘You’ve got a lot of dead space in your knee, and we can put a self-contained analytics device in the stem of your knee or hip that reports back for 20 years.’ So the money that we’ve raised will be used to contribute our part of that technology.”A physician by training, Hunter said a major drawback of current wearable health and fitness monitors is that patients forget to wear them or stash them away in their night table drawer. In a study of 92 knee replacement patients, Hunter confirmed what his own medical practice told him, that “25 percent of people never even wore it once; 25 percent wore it for the full 90 days and half wore it sometimes and not at other times.”“We wanted to have a system in which the patient really didn’t have to do anything,” said Hunter. “The device is on, monitoring the implant all the time and for long periods of time.” Canary Medical has achieved that, Hunter added, through “a medical grade, super data set from the Canary implant and connected informatics network,” including sensors, pacemaker-grade batteries “and a way to transmit collected data from inside to the outside of the body.” “If you’ve had a total knee replacement, an Iwatch can tell you how many steps you took, but what’s going on at your left wrist doesn’t necessarily correlate with what’s going on in your right knee,” Hunter explained. “By having that sensor capability within the knee itself, we can monitor your cadence or your stride length and tell if the knee is healing or loosening.”
Data: the new oilThe $10 million to Canary Medical is not the first time Quark Venture has invested in innovative biotechnology. Its Global Health Sciences Fund is a relatively diversified portfolio of biotechnologies that include investments in the measurement of hemodynamic severity in coronary lesions and in wearable biosensors that give doctors direct access to vital patient data. Quark Venture CEO and partner Karimah Es Sabar told BioWorld MedTech Canary Medical’s Chirp system embedded in an artificial knee implant is a first for her company. “It’s really cool because you’re really talking about AI combined with a medical device. I really think you’re going to see more and more of this in the future: converging technologies, digital health, genomics and AI.”In short, data is the new oil, Es Sabar said. What she found particularly compelling about Canary Medical was the ability of data management “to drive patient care.” That means digitally triaging implant patients across a spectrum of medical severities, improving overall patient outcomes, managing the doctor’s time “but also saving a huge amount of money.”“Knee implants require a lot of replacement surgery. What this does is systematize and optimize when and how and where this should be done.”
Not just for orthopedicsEs Sabar called Bill Hunter a very “savvy, experienced and thoughtful leader, the right person to lead a company like this.” She expects his reputation to help him navigate the next step in the use of Chirp: as monitoring technology following vascular implant surgery. “It’s a platform that can be used following cardiovascular procedures, hearing and visual implantation. There are many applications for it as we stretch our imaginations.” Hunter expects the Chirp’s cost of goods to be $250-$300, plus the cost of a home base station to transmit the data from patient to doctor, “which might be another hundred bucks, but will last 15 to 20 years.” Before that can happen, the Chirp system must first be approved for use in the U.S. Assuming all goes well, Hunter expects the technology “to be market-ready in two to two and a half years.” s
“It’s really cool because you’re really talk-ing about AI combined with a medical device. I really think you’re going to see more and more of this in the future: converging technologies, digital health, genomics and AI.
Karimah Es Sabar CEO and partner, Quark Venture Inc.
Chirp components for total knee arthoplasty; Canary Medical
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AAHomecare Continued from page 4
Jay Witter, VP for public policy at AAHomecare, said the pilot program was rolled out in 2012, and that CMS was not sure at the time whether it was statutorily empowered to impose a full-blown prior authorization program for these items. The pilot program was initially undertaken without much input from a broad swath of stakeholders, Witter said, although he added that the pilot “turned into a very productive program” as the agency worked through some of the glitches with stakeholders.Ryan said the time required by Medicare administrative contractors (MACs) to authorize these products in the pilot program “was fine,” but that prior authorization is a stickier administrative problem when it comes to items such as oxygen and hospital beds. “I think the agency at this point doesn’t think it has the capability to turn around prior authorization in hours,” as would be needed for such supplies and equipment.Witter said the demo program for these power mobility accessories provided greater certainty that a claim would be paid, a feature that is popular among suppliers. “When it first started, there were issues with timing and appeals,” Witter said, but the association worked with CMS to iron out those snags.Ryan said that prior to the demonstration program, MACs had rejected a substantial number of claims for the affected items, and Witter said the appeals process for denied claims could devour as many as five years. “We win most of those appeals,” he said, but the front-end approach allows providers and MACs to address any problems with a claim before the claim becomes the subject of a long-running dispute. This allows providers to avoid a hearing with an administrative law judge, a process that is notorious for harboring a backlog of cases that numbers in the hundreds of thousands.Witten said that AAHomecare members were initially frustrated with problems that cropped up in connection with the pilot, but added, “once those things were turned around, I was surprised at how much they embraced it.” s
Aesculap Implant Systems LLC, of Center Valley, Pa., reported that government managed health insurance Tricare now covers the company’s Activl artificial disc for active duty and retired military members and their families in need of lumbar total disc replacement (TDR). In late 2017, Aesculap met with the U.S. Defense Health Agency and provided updated long-term evidence supporting the broader adoption of lumbar TDR for single-level degenerative disc disease. Evidence presented included level 1a meta-analytic data demonstrating the superiority of lumbar TDR to fusion in this patient population and five-year adjacent segment disease data from the Activl artificial disc investigational device exemption study. The Tricare policy is retroactive to November 2017.Emboline Inc., of Los Altos, Calif., reported the successful completion of its initial series of human cases using the Emboliner embolic protection catheter during transcatheter
aortic valve replacement (TAVR) procedures. The initial procedures were performed at the Heart Center and the University of Dresden Hospital in Dresden, Germany, as part of the Safepass trial. The Safepass trial will include up to 60 patients at up to five medical centers throughout Germany, the Netherlands and Israel. The trial will assess the safety and technical performance of the Emboliner and the data will be used to submit the device for CE mark approval.Paris-based Eos imaging SA received 510(k) clearance from the U.S. FDA for its Hipeos 3.0 surgical planning software. Hipeos 3.0 is the latest generation of the surgical planning software for total hip arthroplasty and is part of the Eosapps suite of online 3D surgical planning solutions. The Eosapps automatically select and best-position implants in 3D. Specifically, Hipeos 3.0 simulates the patient’s hip range of motion based on Eos functional standing and seated exams allowing physicians to visualize and anticipate impingement and dislocation risks based on the position of the implant components.Royal Philips NV, of Amsterdam, received U.S. FDA 510(k) clearance for its Ingenia Elition 3.0T MR solution and two clinical applications, Philips Compressed Sense and 3D Apt. According to the company, this integrated suite enables clinicians to perform exams up to 50 percent faster, increase diagnostic confidence and improve the patient experience. The first commercial installation of the Philips Ingenia Elition in the U.S. was recently completed at Hennepin Healthcare in Minneapolis.
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Other news to note
Mason, Ohio-based Atricure Inc. has partnered with Baheal Pharmaceutical Group in China to distribute Atricure’s surgical ablation devices. This new multi-year agreement establishes Baheal as the exclusive distributor for Atricure, and replaces the company’s previous distributor in China. Atricure has been selling its surgical ablation devices in China for the past 14 years.
Thermo Fisher Scientific Inc., of Waltham, Mass., said its serum biomarker assays will be used in the STATIN trial to evaluate pravastatin in the potential prevention of preeclampsia. The STATIN trial (RandomiSed conTrolled trial with prAvasTatin vs. placebo for preventIoN of preeclampsia) is a European interventional trial, steered by the Fetal Medicine Foundation and the Fundación para la Formación e Investigación Sanitaria, to evaluate possible preventive effects of pravastatin in women at high risk of developing late-onset preeclampsia. During routine hospital pregnancy visits in Spain, Italy, Belgium, Romania and the U.K. more than 23,000 pregnant women at 35+0 to 36+6 weeks’ gestation will be screened to identify high-risk participants for subsequent development of preeclampsia. During this routine visit, maternal characteristics and medical history will be recorded, mean arterial pressure and maternal serum biomarkers, PlGF and sFlt-1, will be measured for a multifactoral assessment of the individual risk for late-onset preeclampsia. The concentrations of the two biomarkers will be measured using Thermo Fisher’s assays, Brahms PlGF plus Kryptor and Bahms sFlt-1 Kryptor. Screened positive women with a high risk for developing preeclampsia will be invited to participate in the randomized STATIN trial. These biomarker assays are not FDA cleared but CE marked.
Product briefs Ibio Inc., of New York, reported a joint product development, manufacturing and revenue sharing agreement with Oneway Diagnostica of Brazil for point-of-care diagnostic products initially focused on Zika and Chikungunya virus infections. Ibio will provide antigen and antibody manufacturing for product prototype development, regulatory approval, commercial launch and ongoing commercial exploitation. Oneway Diagnostica will manage marketing, distribution and sales in Brazil. According to the agreement, Ibio will receive fees for services and will participate in sales revenues.Livingston, N.J.-based Milestone Scientific Inc., a developer of computerized drug delivery instruments that provide painless and precise injections, signed agreements with two additional independent distributors for its Compuflo epidural system covering territories within the Southwest and additional markets in the Midwest. Reshape Lifesciences Inc., a San Clemente, Calif.-based developer of minimally invasive medical devices to treat obesity and metabolic diseases, provided an explanation and clarifying details to a letter dated June 4, 2018, that the U.S. FDA posted on its website addressed to health care providers. The FDA letter updates the agency’s August 10, 2017, letter regarding the potential risks of death associated with liquid-filled intragastric balloons manufactured by Apollo Endosurgery and Reshape Lifesciences. The agency said it has data indicating 12 deaths have occurred since 2016, and that physicians should instruct patients regarding symptoms associated with the related device complications. The company said there has been one reported death of a patient implanted with a Reshape Balloon since the August 10, 2017, letter from the FDA and that the patient death was due to a pulmonary embolization secondary to a surgical repair of a gastric perforation. Reshape also said it has received no product liability-related claims in connection with this case.
Wednesday, June 6, 2018 BioWorld MedTech Extra Page 1 of 2
Keeping you up to date on recent developments in oncology By Mark McCarty, Regulatory Editor, and Anette Breindl, Senior Science Editor
Oncology Extra
Continues on next page
Gallium 68 scores for bone metastases derived from thyroid cancerMedullary thyroid cancer (MTC) routinely shows up again in nearby tissues after surgical excision, even when total thyroidectomy is invoked, and it would be more efficient and friendlier to patients to devise a means of scanning all the sites of interest in one procedure. A recent study set out to determine whether PET/CT imaging with Gallium 68 could serve that purpose, but this approach did not meet the bar for a one-stop imaging check, although 68Ga PET/CT offered some interesting returns where metastases to bone are concerned. A prospective study of 30 patients with medullary thyroid cancer, 14 of whom were diagnosed with metastatic disease, used 68Ga PET/CT to evaluate several sites for signs of metastasis, including the chest, abdomen and spine, and compared those findings with other modalities, such as CT, CT/MRI and ultrasound, and all the findings were checked via one or more alternative methods. With the exception of bone scans, 68Ga PET/CT came up short against standard imaging studies with the exception of bone imaging. The Gallium PET/CT scored 100 percent sensitivity in detecting bone metastases, but only nine percent sensitivity when it came to metastases to the liver, although it fared somewhat better for metastases to the neck lymph nodes (56 percent). One of the reasons for this poor performance in softer tissues might be that the study radiotracer was not strongly associated with expression of somatostatin receptors. The authors concluded that while 68Ga PET/CT “does not provide optimal whole-body imaging as a single procedure in patients with” medullary thyroid cancer, this approach is “highly sensitive [in] detecting bone lesions and could substitute bone scan and MRI.” The article explaining these findings, which appeared May 28, 2018, in the Journal of Clinical Endocrinology & Metabolism, is titled “Comparison of 68Ga PET/CT to other imaging studies in medullary thyroid cancer: superiority in detecting bone metastases.”
CAR T cells: Better mileage offeredInhibiting the epigenetic enzyme methylcytosine dioxygenase TET2 (TET2) could be a way to improve the effectiveness of chimeric antigen receptor (CAR) T cells. Researchers at the University of Pennsylvania undertook a detailed analysis of a single patient who had a strong and durable response after CAR T-cell treatment for chronic lymphocytic leukemia. They discovered that almost 95 percent of active CAR T cells in that patient descended from a single ancestral CAR T where the CAR gene had inserted itself into the TET2 gene and disrupted its functioning. “TET2-disrupted CAR T cells exhibited an epigenetic profile consistent with altered T-cell differentiation and, at the peak of expansion, displayed a central memory phenotype. Experimental knockdown of TET2 recapitulated the potency-enhancing effect of TET2 dysfunction in this patient’s CAR T cells,” the authors reported. “These findings suggest that
the progeny of a single CAR T cell induced leukemia remission and that TET2 modification may be useful for improving immunotherapies.” The researchers reported their findings in the May 31, 2018, issue of Nature.
Inhibiting SHP sinks KRAS-driven tumorsThree separate groups have identified the protein tyrosine phosphatase SHP2 as important for the downstream effects of KRAS-mutated tumors. KRAS is among the most frequently mutated oncogenes across the solid tumor landscapes, and although there has been some encouraging progress in recent years, so far, there are no direct KRAS inhibitors in clinical trials. Now, three separate teams have shown that SHP2 inhibition could inhibit KRAS-driven tumors in vivo. One group was led by scientists from the Germany Technical University of Munich, one from the Netherlands Cancer Institute, and one from the Dana-Farber Cancer Institute. SHP2 has already been identified as a signaling node that can be targeted for ALK-driven tumors that have developed resistance to ALK inhibitors. In stark contrast to the more frequent scenario in drug development, SHP2 inhibition was a more successful strategy in vivo than in vitro. The three papers describing SHP2 inhibition in different types of KRAS-driven cancers appeared back to back in the May 28, 2018, issue of Nature Medicine.
Complement induces apoptosis-like processesMore is not better for synapses, the points of connection between neurons – insufficient pruning of synapses during development is associated with neurodevelopmental disorders such as autism. Neurodegeneration, on the other hand, is accompanied by excessive pruning, which can lead to disordered signaling and memory loss. In both cases, the innate immune complement cascade plays an important role, and the complement protein C1q is a tag on synapses that get pruned. Researchers from the Hungarian ELTE Eötvös Loránd University have shown that C1q sets off apoptosis-like processes in synapses, including increased expression of annexin and the apoptosis protease caspase-3. “Understanding the molecular aspects of complement-mediated synapse elimination is of high importance for developing effective therapeutic interventions in the future,” the authors wrote. “Our results unveiled that C1q label-based synaptic pruning is triggered by and directly linked to apoptotic-like processes in the synaptic compartment.” They published their findings in the May 28, 2018, online issue of the Proceedings of the National Academy of Sciences.
CD98 as a vector for colon cancer treatmentBreast cancer is not the only cancer for which chemotherapy is deemed a less-than-desirable therapeutic approach, and a recent research effort into a replacement for chemotherapy
Wednesday, June 6, 2018 BioWorld MedTech Extra Page 2 of 2
Oncology ExtraContinued from previous page
in colon cancer suggests there are plausible alternatives. This research revolves around the fact that biopsy specimens for CRC indicate a considerable expression of CD98, a large glycoprotein that serves as an amino acid transporter, and researchers in Singapore and the American state of Georgia loaded both camptothecin (CPT) and CD98 small interfering RNA (siCD98) into a fabricated functionalized nanoparticles to check for the viability of this vector. These particles averaged roughly 270 nanometers in diameter, and demonstrated “good” monodispersity and an electrokinetic potential of -24 mV. The authors embedded a hydrogel with these nanoparticles to treat a mouse with orthotopic colon tumors, which the authors said demonstrated “a significantly better therapeutic efficacy” compared to single drug-loaded nanoparticles or non-functionalized versions of the siCD98/CPT nanoparticles. The authors concluded that their functionalized nanoparticles delivered via a hydrogel offer “a notable potential for clinical applications in colon cancer-targeted combination therapy.” The article explaining this research appears in the June 4 issue of ACS Nano under the title “Silencing of intestinal glycoprotein CD98 by orally targeted nanoparticles enhances chemosensitization of colon cancer.”
Probing the limits of fluorescent agentsThe search for better fluorescent probes has taken on a new urgency over the past few years, particularly in the area of probes that can operate in the so-called second near-infrared window (NIR-II), and researchers in China believe a new form of tetraxetan has a lot to offer. The NIR-II window encompasses energies at wavelengths of 1,000 to 1,700 nanometers, which offers greater depth of tissue penetration than NIR-I (700-900 nanometers) but most of the currently reported fluorophores are excreted at some length and are often retained within the reticuloendothelial system. However, this new tetraxetan,
dubbed Nd-DOTA, is rapidly excreted, with half the substance processing through the kidneys within three hours of administration, thanks in part to a molecular mass of only slightly greater than half a kilodalton. The authors said the imaging quality of Nd-DOTA “was far superior” to indocyanine green (ICG), and offered “good photostability” and tissue penetration of up to seven millimeters. The resulting tumor-to-normal tissue ratio provided characterization of abdominal ovarian metastases with sufficient precision to allow surgical excision of metastases smaller than a single millimeter under imaging guidance, the authors claimed. They also stated that the Nd-DOTA chemical structure is sufficiently similar to gadolinium-DOTA, which will “speed up the clinical translation for this novel kind of NIR-II probes in the future.” The article explaining this development appears in the June 5 online issue of Analytical Chemistry under the title “A rapidly excreted small-molecule lanthanide complexes probe for second near-infrared window bioimaging.”
EMA eases back on Keytruda, TecentriqThe European Medicines Agency said it is in possession of “early data” from two clinical trials that suggest reduced survival of some patients with urothelial carcinoma when Keytruda (pembrolizumab) and Tecentriq (atezolizumab) are used as first-line treatments. The agency said patients with cancers of the bladder and/or urinary tract who demonstrate low levels of expression of PD-L1 may not benefit from either of these treatments as much as they do from chemotherapy, and thus the agency is restricting the use of these drugs as first-line treatment to those whose tumors express high levels of PD-L1. EMA said it would permit the studies in question to continue, but enrollment has been capped, and that it will advise health care professionals in the European Union as to the recommendations.
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