By Amanda Pedersen, Senior Staff Writer
Wednesday was a great day for the diabetes community, Richard Bergenstal, a research clinician at the International Diabetes Center at Park Nicollet, told Medical Device Daily, soon after the FDA approved the first commercial device often referred to as an artificial pancreas.
Medtronic plc's Minimed 670g hybrid closed loop system is now approved for patients 14 years of age and older with type 1 diabetes. The device is designed to adjust insulin levels with little or no input from the user by measuring glucose levels every five minutes.
The regulatory milestone came about three months after Medtronic submitted the pre-market approval (PMA) application for the Minimed 670G in late June and the company said at the time it expected approval sometime next year, with plans to launch the product next spring.
Jeffrey Shuren, director of the FDA's Center for Devices and Radiological Health, said the first-of-its-kind technology can provide people with type 1 diabetes greater freedom to live their lives without having to consistently and manually monitor baseline glucose levels and administer insulin.
Currently the system includes a glucose-monitoring sensor that attaches to the body under the skin; an insulin pump strapped to the body; and an infusion patch connected to the pump with a catheter. While the device automatically adjusts insulin levels, users need to manually request insulin doses to counter carbohydrate (meal) consumption, the FDA noted.
The company gained access to the artificial pancreas technology through a $3.7 billion acquisition of Minimed Inc. about 15 years ago. Minimed's main product at the time was an external pump, worn on a patient's belt, to administer insulin continuously to people with type 1 diabetes. Since then, Medtronic has advanced the technology by adding an integrated insulin pump and continuous glucose monitoring (CGM) and a low glucose suspend feature.
The CDC estimates that about 5 percent of people with diabetes have type 1 diabetes, also known as juvenile diabetes. This form of the chronic disease is usually diagnosed in children and young adults. Because the pancreas does not make insulin in type 1 diabetes patients, this patient population has to monitor their glucose levels throughout the day and manually give themselves insulin through injection with a syringe, an insulin pen, or insulin pump to avoid becoming hyperglycemic (high glucose levels).
Patients grew impatient
Interest in an artificial pancreas system has been so extraordinary among the diabetes community that some patients, frustrated by how long it has taken for the technology to reach the market, have built their own kits and shared tutorials about it online. At the American Diabetes Association's (ADA) annual meeting in June, the patient-driven Open Artificial Pancreas System project, featured in a late-breaking poster session, reported quantitative and qualitative measures of 40 do-it-yourself diabetes patients.
"I've been having conversations with patients asking 'where is the artificial pancreas' and 'where is the closed-loop system' ... literally for decades," Bergenstal said. "So I was excited to see the community say 'we're going to push ahead with this' but I was equally excited to see the major companies weren't waiting either."
Bergenstal, who served as principal investigator on the study that supported Medtronic's PMA application, said the technology will likely continue to evolve as the community pushes the industry to deliver an even better system, but FDA approval of the Minimed 670G is "really a major advancement" in the management of type 1 diabetes, he said. "It's one of those events that some of us have been waiting for 30 years."
Patients and doctors alike have waited decades for industry to introduce better insulin pumps, better glucose-monitoring sensors, and – finally – a system that allows the two to communicate with each other to adjust the insulin to keep a patient's blood sugar in the target range more consistently, Bergenstal said.
FDA approval was supported by data from 123 participants with type 1 diabetes. For the first two weeks of the trial, participants did not use the system's hybrid closed loop. After two weeks, patients in the trial used the hybrid closed loop feature as often as possible for the three months. The trial demonstrated safety, the agency noted, as no serious adverse events, diabetic ketoacidosis, or severe hypoglycemia (low glucose levels) were reported.
According to results presented at ADA, patients spending three months on the hybrid closed loop system saw a 0.5 percent reduction in A1c; a 44 percent reduction in time spent with low blood glucose; and a 40 percent decline in the time spent in dangerous hypoglycemia. The ADA noted that about 80 percent of trial patients wanted to keep using the device through the FDA's continued access program.
The agency is requiring the Dublin, Ireland-based company to run a post-market study to better understand how the device performs in real-world settings. Medtronic also has ongoing studies to evaluate the device in younger diabetic children, ages 7 to 13. The FDA said the Minimed 670G would not be safe for children age 6 or younger or in patients who require less than eight units of insulin a day.
One of Bergenstal's biggest learning take-aways from his experience with the 15 trial patients enrolled at his center was that the doctors participating in the study were more concerned about numbers and wanted to see if they could get more blood sugar levels within the target range safely while patients just enjoyed the quality of life they achieved with the device.
"We're all about numbers and they're all about 'I can finally live my life and let the system do some of the work'," he said.
Throughout the trial, Bergenstal repeatedly heard from parents of 14-year-old diabetes patients who said the Minimed 670G allowed them to get a full night's sleep for the first time in 10 years. Parents who have spent the last decade waking up to check their child's blood sugar were able to let the system take over that night monitoring duty, he said.
"We also saw people say 'I can have a few minutes of the day where I'm not constantly thinking about my diabetes'," Bergenstal added. "This is the first step of a closed loop system we've been waiting for and it's only going to get better as refinements are made and younger populations are studied ... my only hope is that those who need it will get access to it that will really let a large number of people take advantage of this system."
Asking patients for more patience
Patients will have to be patient for just a while longer, however, as Medtronic said it will not release the Minimed 670G until next spring, with system availability increasing over time from that point forward. The company said that timeline ensures payer coverage, market and manufacturing readiness, and appropriate training of employees, clinicians, educators, and patients on the new system.
As it moves toward that initial launch, however, Medtronic said Minimed 630G system users will be eligible for a priority access program to the 670G system because those patients are already familiar with the Minimed hardware platform, which will make it easier for them to transition to the new system. The company expects to get regulatory approval for the device outside the U.S. market next summer.
Wells Fargo Securities' Larry Biegelsen said he expects the latest Minimed system to help drive an acceleration in Medtronic's U.S. diabetes growth from the low-single-digits seen in the first quarter. The analyst currently models U.S. diabetes growth of 10 percent for the second half of fiscal year 2017, driven primarily by the 670G launch.
Abbott's CGM also approved
Medtronic's approval shifted some attention away from Abbott Laboratories on Wednesday when the FDA also approved Abbott's Freestyle Libre Pro CGM. While Abbott's approval is for a device that will only be used by doctors, rather than patients, as a way of spotting patterns and trends within a patient's glucose levels.
Biegelsen said in a research note on Abbott's approval that the professional CGM market is relatively small – less than $100 million – but is growing fast at a rate of about 65 percent to 70 percent. The analyst said the FDA approval of Libre Pro without factory calibration is a positive read-through for Abbott's more important consumer version of Libre, which the company recently filed for the FDA to review. Even so, Biegelsen said the agency likely has a higher bar for approving a consumer product than it does for a health care professional device.
Abbott is expected to launch the Libre Pro in the coming weeks with a significantly discounted price tag compared to other CGMs on the market. Doctors will only need to buy one reader for about $65 to scan an unlimited number of patients. This is a notable departure from the current CGM paradigm in which each patient is required to have a CGM – representing a large upfront investment for doctors, Biegelsen said.
The analyst added that Libre is Abbott's most important diabetes pipeline product and that adoption in Europe has been strong so far. He predicted Abbott's diabetes sales will come in around $1.138 billion this year and increase to $1.209 billion in 2017.
With Abbott's Freestyle Libre Pro, a small, round sensor is placed on the back of a patient's upper arm in a clinic setting and the sensor is held in place with a self-adhesive pad for up to 14 days. The patient does not need to interact with the device or draw blood via a fingerstick to calibrate the sensor.
The sensor is designed to continuously measure glucose in interstitial fluid through a filament inserted just under the patient's skin, recording glucose levels every 15 minutes, capturing up to 1,340 glucose results for up to 14 days, giving the patient's doctor comprehensive data for a complete glycemic profile of that patient. After 14 days, the doctor uses a Freestyle Libre Pro reader to scan the sensor and download the data during a follow-up office visit.
By Liz Hollis Staff Writer
SILVER SPRING, Md. – Can the development of antimicrobials and susceptibility tests be coordinated more effectively? Yes, according to attendees of an FDA workshop Thursday on challenges and opportunities for getting clearance for antimicrobial susceptibility tests (ASTs) shortly after antimicrobial drug approval.
"It takes a village," was a phrase tossed out several times during the event, in which clinicians, laboratory representatives, regulators, and members of the pharmaceutical and medical device industries offered potential solutions.
The meeting came about a week after the release of draft guidance that is intended to give the FDA recommendations on interactions between pharmaceutical companies and device companies for coordinated development of a new microbial drug and an AST.
Ribhi Shawar, branch chief of the general bacteriology and antimicrobial susceptibility branch within Center for Devices and Radiological Health (CDRH), set the stage by emphasizing that "this is not co-development," or companion diagnostics. Rather, it is coordinated development to bring drug approval and test clearance closer together.
Shawar said other key messages from the draft document are that the FDA is encouraging joint meetings involving the drug sponsor and device manufacturer, as well as representatives from the Center for Drug Evaluation and Research and CDRH. Either the AST device manufacturer or drug sponsor may request these meetings.
He also stressed that review of the new antimicrobial drug product and AST device will remain independent. ASTs are class II devices, subject to a 90-day review cycle.
Amy Mathers, associate professor at the University of Virginia, put the issue in perspective, noting that patient safety is paramount. She described her experience treating patients without the benefit of susceptibility data. She told the story of a woman in her 20s with cystic fibrosis with an infection. Lacking a susceptibility test, Mathers started one treatment, but within a few days, the patient developed neurological toxicity.
Trying another treatment proved futile, demonstrating to Mathers that "it is really difficult to use a drug" without susceptibility data. Indeed, as several presenters noted, doctors often are reluctant to use new antimicrobials without such data.
"We really need to close the [development] gap," said Mary Motyl of Merck & Co., adding that two- to three-year delay between the two processes has not decreased, remaining the same as it was 15 years ago.
Motyl said internal delays in getting agreements signed between drug and device companies are "interminably long," with lawyers on each side taking months to come to an agreement. Darcie Carpenter of Beckman Coulter Inc. agreed, adding that lawyers also must redraw contracts if the pharmaceutical company sells an antimicrobial agent to another firm.
She also highlighted the complexity of device development, particularly as many rely on software during the interpretation process. While the device may be cleared, the company may need to wait for the software update before it can be used, she said.
Merck's strategy for working with AST developers involves using a company-established susceptibility testing development team for Zerbaxa, an antibacterial drug product approved in 2014 to treat complicated intra-abdominal infections and complicated urinary tract infections. The team meets with each device manufacturer to follow progress and expedite any delays, according to Motyl. She said the company also plans to review basic information about future antibiotic development with all of the device manufacturers simultaneously.
Looking at the issue as a whole, she recommended there be incentives for device makers to develop tests for new antibiotics – a point with which many participants agreed.
Unlike on the drug side, there is the lack of incentives for developing these tests. For example, under the Generating Antibiotics Incentives Now Act, antibacterials and antifungals intended to treat serious or life-threatening infections may be designated as a qualified infectious disease product. This designation allows a candidate to gain priority review and fast track review status.
Two presenters came armed with suggestions for the FDA. Carpenter and Bill Brasso, senior staff scientist at BD Diagnostic Systems, part of Becton, Dickinson, and Co., recommended the agency continue to have meetings to gain stakeholder input.
In addition, they said, antimicrobial drug sponsors should give AST device manufacturers access to clinical trial isolates. These isolates can serve as a significant part of AST device manufacturers' data collection.
Speaking on behalf of the Susceptibility Testing Manufacturing Association, the two also provided some suggestions on the draft guidance. They suggested clarifying whether it would change when the AST device manufacturer can submit an FDA 510(k) application.
Further, they asked about breakpoint changes, which are used to define susceptibility and resistance, and whether the document could be changed to address them.
Steve Gitterman, deputy director of the Division of Microbiology Devices, Office of In Vitro Diagnostics and Radiological Health within CDRH, tried to get participants to think beyond regulatory solutions, as they are not enough to spur development.
"We're not impotent, but we're not omnipotent," Gitterman said. He encouraged the audience to look at the draft guidance through the regulatory, legislative, and advocacy perspective.
Regarding the suggestions made in Basso and Carpenter's presentation, he said FDA officials, "have talked about moving forward on every one of these issues, but it's really tough."
In particular, he emphasized that the draft guidance is about tearing down barriers and allowing AST developers to submit applications while drugs are still in development.
By Liz Hollis, Staff Writer
Boston Scientific (NYSE: BSX) has agreed to buy Endochoice Holdings, an Alpharetta, Ga.-based company focused on endoscopy, in a deal valued at about $210 million.
Endochoice (NYSE: GI) develops single-use devices, such as resection and retrieval devices, needles, graspers and infection control kits. The company also is a player in pathology services and imaging technologies.
Upon the completion of the deal, Endochoice will become part of Marlborough, Mass.-based Boston Scientific's endoscopy business. The companies hope to wrap up the transaction before the end of the year.
"The addition of Endochoice products and services to our portfolio supports our strategy to provide comprehensive solutions to gastroenterology caregivers and the patients they serve," said Art Butcher, senior vice president and president, Boston Scientific, endoscopy. "We expect the acquisition to expand our leadership into new categories in the endoscopy market, and to drive strong, continued growth of our endoscopy business."
Word of the deal comes a couple of months after Stifel analyst Rick Wise identified Endochoice as one of several potentially attractive small cap assets. (See Medical Device Daily, July 15, 2016.)
In June 2015, the company went public, raising about $94.9 million in its offering.
Boston Scientific spokeperson Catherine Brady told Medical Device Daily the company looks forward to being able to expand its product offerings through the buyout. "Upon completion of the transaction, we will launch a joint integration team to evaluate and determine what plans make sense for the business including addressing the use of facilities and ongoing management," she added.
Larry Biegelsen, senior analyst at Wells Fargo, wrote in a note that the deal "makes sense given the strong strategic fit and reasonable price." He added that the buy should boost Boston Scientific's presence in the ambulatory surgery center market, as its existing endoscopy portfolio is more hospital-oriented.
William Blair analyst Margaret Kaczor added that the acquisition should benefit both sides. "For Boston Scientific, Endochoice's platform of Fuse and single-use products (with more than 2,500 customers) should be synergistic on the top and bottom line with Boston Scientific's endoscopy business, which currently sells ancillary gastrointestinal (GI) devices. For Endochoice, Boston Scientific can provide the necessary resources and capital to expand the reach of Endochoice's large single-use products business globally."
She added that Boston Scientific was probably eyeing access to Endochoice's single use product and pathology businesses in making the deal.
Founded in 2008, Endochoice, which saw about $75 million of total sales in the 12-month period ended June 30, has an imaging portfolio that includes the full spectrum endoscopy, or Fuse, colonoscope. The company said the device allows doctors to better see anatomy and find more lesions during colonoscopies.
Early last month, the company announced that the FDA had cleared its Lumos product with adaptive matrix imaging to use with the Generation 3 Fuse system.
However, as founder and CEO Mark Gilreath noted in a recent financial release, Fuse placements did not meet company expectations in the second quarter of the year. "[T]here was weakness in certain European markets and some domestic customers paused their purchase decisions to evaluate the new Gen 3 product," he added.
The company launched its Generation 3 Fuse product in May, ahead of expectations, a move that seems to have thrown a wrench into sales. Gilreath explained that the company saw an opportunity to launch during the Digestive Disease Week meeting, as thousands of gastrointestinal physicians would be on hand.
The debut came two-thirds of the way through the quarter, thereby not allowing enough time to deliver enough demo units to the company's sales team, Gilreath explained.
While touting his company's performance versus established competitors, Gilreath said it could take until the end of the third quarter to fully equip the company's salesforce with the Gen 3 product. That delay could affect Fuse sales for the rest of the year.
At the same time, Endochoice reported lower-than-expected second-quarter results, prompting management to lower 2016 revenue guidance to $80 million to $82 million, down from $86 million to $93 million.
Still, Gilreath remained optimistic. "Fuse continues to see strong win rates against key competitors in the GI space and during the second quarter, the majority of our system placements were head-to-head wins against Olympus," he said during the call.
While acknowledging that the Fuse system appeared to be "disruptive technology that can and should be a large player in the $3 billion endoscopy tower market over time," Kaczor wrote that recent quarterly results "suggest the process to convince physicians to switch from the large incumbent manufacturers is taking longer than expected."
In a statement on the Endochoice buy, Boston Scientific said it will evaluate strategic options related to the Fuse colonoscope and provide additional clarity when the transaction closes.
'Bullish' about its future
Endoscopy has been one of several strong spots for Boston Scientific this year. For the second quarter, the company reported net sales of $361 million in endoscopy, up 11 percent over 2Q15's total of $326 million.
Growth in this division was bolstered by the Spy Glass DX visualization system, the Axios stent system, and the launch of the next-generation Resolution 360 hemostasis clip.
While announcing its quarterly results, Boston Scientific upped its guidance for the year, estimating revenue in the range of $8.270 billion to $8.370 billion. It previously forecasted between $8.075 billion to $8.225 billion.
Earlier this month, CEO Mike Mahoney and CFO Dan Brennan spoke at the Morgan Stanley Global Healthcare Conference, during which they highlighted the successes Boston Scientific has experienced this year. Boston Scientific has grown "significantly faster than our peers," Mahoney said, adding that endoscopy is bright spot as it looks to make surgical procedures less invasive.
"[We're] really bullish about the future of this company," Mahoney added.
By Amanda Pedersen, Senior Staff Writer
Natus Medical Inc.'s stock (NASDAQ; BABY) slipped 9.73 percent ($4.28) after the company said it expected a revenue shortfall for the third quarter, primarily due to a shipping hold, but also shared plans to buy GN Otometrics from GN Store Nord A/S in a $145 million cash deal.
Natus, of Pleasanton, Calif., said the acquisition of Otometrics, which makes hearing diagnostic and balance assessment equipment and has contributed about $110 million in annual revenue to Taastrup, Denmark-based GN, will expand its offering with "very little overlap." The deal is expected to close by the end of the year.
But the news was tempered by the company's updated third quarter revenue guidance of $89 million to $91 million, down from the company's previously-expected $97 million to $98 million revenue for the quarter. Natus said most of the shortfall is due to a voluntary hold on certain products produced in its Seattle facility, and the rest is due to lower demand in the international markets.
The ship hold is not related to any product safety issue, the company said, rather it is in place while Natus fixes deficiencies in its engineering and manufacturing quality processes to bring the facility up to regulatory standards. Natus said it expects to resume shipments of the affected products over the next two quarters.
In the meantime, CEO Jim Hawkins told conference call listeners Monday that the company will continue to take orders, but will not ship those products until the remediation process is complete.
"It's a short-term setback that we expect to [resolve] during our first quarter next year," Hawkins said.
On a lighter note, he said the addition of Otometrics should boost Natus' 2017 revenue to $500 million, which he said would be "a major milestone" for the company. The acquisition is expected to be accretive to 2017 earnings with a non-GAAP contributing operating margin goal for the year of 10 percent and a 2018 goal of 20 percent, he said.
While the anticipated shortfall in the company's third quarter revenue is disappointing, said Chris Lewis, of Roth Capital Partners, the Otometrics deal is a meaningful positive, based on the potential 2017 revenue impact and the expanded product offering.
Still, other analysts seemed more concerned with the downward trend in international sales, which may not be such a short-term setback. Brian Weinstein, of William Blair & Company, said during Natus' call that the third quarter will mark 12 straight quarters of year-over-year decline. He asked Hawkins what the company is doing to reverse that trend.
Hawkins questioned Weinstein's number, thought he didn't know off-hand what the correct number is regarding the consecutive quarters in which international sales have been down. To answer the analyst's question, however, he said the company is looking at its sales organization and wants to "really help drive in-country products in a harder way than we are doing now, with more focus." He also acknowledged that it is, overall, a "challenging time" in that regard.
Acquisitions 'core' to BABY's growth
Both Hawkins and CFO Jonathan Kennedy said during the call that acquisitions have been and will continue to be a core part of Natus' growth strategy.
Integrating Otometrics will certainly keep Natus busy for a while, Hawkins said, but he hinted that the company is keeping tabs on "multiple opportunities" in complementary businesses that could turn into future deals.
"While we have been very active with small tuck-in acquisitions and organic development of our service initiatives, our last significant transaction was the acquisition of Nicolet Neurodiagnostic business from Carefusion back in 2012," Kennedy said. "As you may recall, at the time of acquisition, Nicolet was a well-respected leader in their market, but lacked operational focus and profitabilities part of a large organization."
Today, Nicolet and Natus' operational margin is more than 30 percent, Kennedy said, adding that the company expects Otometrics to be a similar success story, and has set operating margin profitability goals of 10 percent in 2017 and 20 percent in 2018.
[caption id="attachment_4791" align="alignleft" width="221"]The eventual fate of the camel 510(k), right?[/caption]
Never a dull moment in the world of medical devices and the Food and Drug Administration, is there? Sometimes the FDA is on the march, other times it seems the agency is about to be eclipsed by other forces. Don't be fooled by the picture on the left, though. There is no FDA airline, or any intent by the agency to regulate airlines (none that we know of, anyway) other than the food they serve on board.
A case of regulatory leapfrog?
Device flight is the term used to describe a U.S. Device maker's decision to go overseas with a new product offering in the expectation that the non-U.S. market would be run by a less stringent regulatory regime. Devices that flew from Europe to the U.S. may be heading back to the American market soon if recent developments are any indication.
As described in a recent edition of Medical Device Daily, the rewrite of the European Union's Medical Device Directives is going to require that device makers re-examine their technical files and their quality systems, but existing CE authorizations will also expire sometime over the next four to five years. However, the notified bodies are not off the hook, either, as they will have to undergo re-certification.
If there's an upside to all this, it might be that clinical trials will now be subject to more uniform requirements across the member nations, which might make it easier to use data from outside of the U.S.for FDA regulatory filings.
Obviously there's no guarantee that devices will suddenly “go home” like some spacefaring naif with an oversized cranium, but it certainly can't hurt the prospects for manufacturing in the U.S., can it?
Tissue regs: FDA in bend-but-don't-break mode?
The FDA has its hands full with the reaction to four guidances dealing with tissues for therapeutic uses. During the first of a two-day meeting on the subject, one speaker predicted the agency would face a legal challenge for a couple of the guidances. Mary Ann Chirba of the Boston College School of Law said the draft guidance for adipose tissue does not allow for the use of adipose tissue for non-structural purposes, a slight she said is egregious enough to undercut any presumption of deference by a court, presumably the District Court of the District of Columbia, where most cases involving the FDA are heard.
Maybe more damaging was the fact that Janet Marchibroda of the Bipartisan Policy Center said the FDA had on more than one occasion disregarded the statutory and regulatory meaning of “minimal manipulation.” This in addition to the Regrow Act, which would eliminate the need for phase III studies, is a mighty sure sign that the agency will have to play its hand carefully, especially given the widespread patient advocacy for regulatory forbearance.
What will the FDA do? No way to know, but I'm betting it does not pull the draft guidances. Stay tuned for this one.