Yesterday Saddle Brook, NJ-based CircuLite announced it received a $950,000 grant to develop a device for patients whose hearts have been weakened by pulmonary arterial hypertension, a rare and potentially fatal disease. The award, which came from the Cardiovascular Medical Research and Education Fund, was the latest vote of confidence in CircuLite’s core technology—a miniscule, implantable pump that’s designed to boost the heart’s ability to circulate blood.

The grant followed close on the heels of CircuLite’s latest financing, a $30 million Series D funding round that was oversubscribed. The financing, announced November 30, brought the total amount raised by the device maker to $99 million.

CEO Paul Southworth says CircuLite will funnel the new money into an ambitious list of goals he has established for 2012. The company expects to gain approval for its device, called Synergy, in Europe and to begin marketing it there for patients with chronic heart failure. CircuLite is also planning its first U.S. trials. And it’s developing a second generation of Synergy that can be implanted without major surgery.

CircuLite was founded in 2004 in a startup incubator called Accelerated Technologies Inc. (ATI), which was run by cardiologists. They recognized a hole in the cardiac-devices market: So-called ventricular assist devices were great for very sick patients. But those in the earlier stages of heart failure had no good treatment options. “There was an opportunity to get to patients before they got so sick,” Southworth says. “These are patients who have run the course on drugs or heart-rhythm management. There’s no place for them to go but to continue to worsen and fall into that late stage.”

Synergy works by supplementing the heart’s natural ability to pump blood. The device, about the size of a AA battery, is implanted by heart surgeons in a 90-minute procedure called … Next Page »

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The price of shares at San Diego’s Gen-Probe, Amylin Pharmaceuticals, and Optimer were clipped for various reasons over the past week, but several local startups successfully raised capital. Our good news, bad news briefing begins here.

—Rempex Pharmaceuticals, a San Diego biopharmaceutical startup developing a new approach to antibiotics resistance, said it raised $67.5 million in Series B venture funding—bringing total funding for the company to $76 million since its founding less than five months ago. The startup is on a fast track, and plans to use the capital to accelerate the commercialization of its therapies for treating gram-negative bacterial infections. Rempex said it plans to file a new drug application for its first drug candidate in the second half of 2012. New investors Frazier Healthcare Ventures and Vivo Ventures joined existing investors SV Life Sciences, OrbiMed Advisors, and Adams Street Partners in the latest round.

—Cambridge, MA-based Vertex (NASDAQ: VRTX) has held the high ground in hepatitis C therapies since the FDA approved its protease inhibitor drug telaprevir (Incivek) last year. But two rivals are gaining ground. The price of Vertex shares have fallen with the rise of Alpharetta, GA-based Inhibitex (NASDAQ: INHX) and Princeton, NJ-based Pharmasset (NASDAQ: VRUS). Vertex, which has operations in San Diego, hit a 52-week high of $58.87 on May 12, but it has been trading around $31 in recent days.

—Adding to the competition in hepatitis C drugs, San Diego-based iTherX Pharmaceuticals raised almost $3.2 million to advance its development of a prophylactic treatment for Hepatitis C, according to a regulatory filing earlier this week. The startup said in March that its drug candidate TX-5061 appears to prevent the hepatitis C virus from entering liver cells, and has shown “potent preclinical antiviral activity against all HCV genotypes.” Former UCSD virologist Flossie Wong-Staal is a co-founder and chief scientific officer. The company raised $2.8M in 2010.

—San Diego-based Amylin Pharmaceuticals (NASDAQ: AMLN) agreed to pay Eli Lilly more than $1.5 billion as it gradually reassumes responsibility for global commercialization of its best-selling diabetes drug in a deal that ends its 10-year partnership with Lilly. Under their agreement, which also ends litigation with Lilly, Amylin will take over sales of exenatide (Byetta) in the U.S. by the end of this month—and global sales of both Byetta and an experimental, extended release version (Bydureon) over the next two years. Amylin shares, which hit a 52-week high of $16.65 on Jan. 27, have been trading around $10 a share over the past few weeks.

—Xconomy east coast biotechnology editor Arlene Weintraub profiled PharmaSecure, a four-year-old startup in Lebanon, NH, with operations in San Diego, Michigan, and India. The company provides machines to drug-makers that print unique bar codes and serial numbers on drug packaging. PharmaSecure raised $3.9 million last month from Innovation Endeavors, Gray Ghost Ventures, Healthtech Capital, and angel investors. The Tech Coast Angels (TCA) participated in … Next Page »

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Perminova, a San Diego startup developing Web-based software for use in cardiology centers, says today it has raised $7 million in a combination of equity and credit financing. The company says it is pioneering healthcare’s move from outdated client-server technology to secure cloud-based computing.

The company was founded several years ago by Gregory Feld, a professor of medicine at the University of California, San Diego, and director of UCSD’s cardiac electrophysiology program. What began as a database for tracking electrophysiology procedures and patient care, though, has evolved into a more comprehensive workflow system provided as software-as-a-service for everything from patient scheduling to post-procedural documentation and billing.

The company’s first product, Perminova EP, is being used by the UC San Diego Health System and at New York’s Mount Sinai Hospital.

In a statement this morning, the company says its financing includes $3 million in Series A equity funding and a $4 million credit facility that can be accessed by the company as needed. Perminova CEO Craig Collins declined to identify the company’s investor, saying, “We have a large institutional investor and they don’t want to have their name out there.” He characterized the investor, though, as a super angel.

Collins says the funding will be used to expand product development, and for working capital, product development, sales, and marketing. “This round of funding provides us with an ample runway to gain market traction and market acceptance while creating a clear path to sustainable growth,” Collins says in the statement from the company.

“We now have the resources to expand our product offering, which will ultimately establish Perminova as the market standard in web-based software and cloud computing in healthcare,” added Collins. “This round of funding provides us with an ample runway to gain market traction and market acceptance while creating a clear path to sustainable growth.”

Perminova has been based at EvoNexus, the free startup incubator operated by CommNexus, the San Diego nonprofit technology industry group, since mid-2010. Securing financing, however, usually signifies that a fledgling EvoNexus company is ready to move out on its own. Collins indicated the company would likely move into its own commercial office space sometime in January.

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Late Friday, the FDA approved rivaroxaban (Xarelto), a blood-thinning drug made by New Brunswick, NJ-based Johnson & Johnson (NYSE: JNJ) and Bayer. The approval came just two months after an advisory panel to the FDA posted a negative review of the drug, which suggested the companies should have to perform new trials to gain approval for reducing stroke risk in patients with atrial fibrillation. The agency didn’t go so far as to mandate that trial, but it did slap the drug with a “black box”—a prominent warning saying that patients who stop taking it may face an increased risk of stroke. The label also says there is little evidence that rivaroxaban works better than the well-known (and inexpensive) blood thinner warfarin.

The J&J/Bayer product—which is already on the market to reduce the risk of blood clots, deep vein thrombosis, and pulmonary embolism following knee or hip-replacement surgery—will have a significant head start in the atrial fibrillation market over a competing product being developed by New York based drug giants Pfizer (NYSE: PFE) and Bristol-Myers Squibb (NYSE: BMY). That drug, called apixaban (Eliquis) charted positive Phase 3 trial results in August. Bristol and Pfizer plan to apply for FDA approval by the end of this year.

Apixaban and rivaroxaban are in a new class of drugs called “factor Xa inhibitors.” Factor X is an enzyme that promotes clotting, so blocking it helps to prevent strokes or embolisms. Both drugs were developed with the goal of offering alternatives to warfarin, a 60-year-old drug that can cause side effects such as severe bleeding.

No doubt there will be a marketing war among all these New York area companies—and Wall Street analysts are already making bets on how it will shake out. Today Barclays Capital analyst C. Anthony Butler put out a report predicting that Pfizer and Bristol-Myers’ drug would outperform the J&J/Bayer contender despite being late to the market. Apixaban, he wrote, “is the only novel anticoagulant thus far that has demonstrated a significant mortality benefit as compared to warfarin in a clinical trial setting.”

Shares of J&J dropped 1 percent today to $63.56.

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I spent the early part of this week attending the Cleveland Clinic Medical Innovation Summit and, despite the fact that the Cleveland Clinic stubbornly insists on holding its conference in Cleveland (aka The Mistake on the Lake), it was well worth attending.

Cleveland is an interesting town. Once upon a time, when old white men roamed the earth in cars driven by chauffeurs, Cleveland was the nation’s fifth largest city and had the highest number of Fortune 500 headquarters of any US city. Today, the Cleveland Clinic is the largest employer in the city, which is known also for a river that used to spontaneously combust and the Rock and Roll Hall of Fame (the perfect song for this occasion is clearly Smoke on the Water). In a way Cleveland is the perfect place to honor aging rock stars, as they can pick up a statuette and an angioplasty on the same trip. By the way, the river doesn’t catch fire anymore I’m told. I was worried because the Clinic hosted a pretty impressive fireworks display over Lake Erie for their 1500 guests and no doubt most of us expected to see even more of a show as the embers hit the water.

Each year the conference has a specific clinical theme. This year’s theme was supposedly cardiology, but that was just a cover. The real theme of the conference, while not explicitly stated, was how the healthcare system is changing and how challenging the environment for innovation has become when it comes to medical devices. Yes, there were several talks about new approaches to treating heart patients and also those with peripheral vascular disease, but the most interesting discussions were focused elsewhere.

The conference audience, in addition to featuring lots of people from the Clinic itself, included the who’s-who of medical device companies, large and small, as well as many healthcare investors and innovators. Because there was so much content at the conference, I’m going to highlight just a few notable discussions and quotes, many of which were made by some pretty high profile folk.

One of the most prevalent themes of the conference was how the confluence of policy changes and economic drivers has changed the locus of control in healthcare from the providers to the payers. It’s not unusual to hear a bunch of doctors complaining how the payers, by which I mean mainly the large insurance companies and CMS, are taking control of the world and ruining medicine. I am pretty sure that this is what physicians who are romancing other physicians whisper in each others’ ears, “Darling, I love you, and don’t health insurers piss you off!?” What was weird was that there was not a single such payer in the room to debate this issue or even defend their alleged hijacking of the system. Not one. No United Healthcare, no Aetna, no CMS (from the payment side-the Innovation Center got to speak at the end of the last day), no one. I thought this was a pretty big oversight.

Moreover, there was not a meaningful acknowledgement by any of the very large employers there, except Xerox and GE, that they themselves are really the large payers that are getting murdered by rising healthcare costs. The CEOs of Medtronic, St. Jude, Pfizer, Abbott and Merck, all of whom were there, must have to fight to keep their own heads from exploding when it comes to how they think about rising healthcare costs. Selling more stuff at high prices grows their top line revenue but … Next Page »

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Yesterday I wrote about apixaban (Eliquis), a drug that Bristol-Myers Squibb (NYSE: BMY) and Pfizer (NYSE: PFE) are developing to prevent strokes in patients with the heart-rhythm disorder atrial fibrillation. The folks at Bristol were paying close attention to a meeting at the FDA yesterday, during which an advisory panel to the agency voted on whether it should approve a stroke-prevention drug developed by Johnson & Johnson (NYSE: JNJ) and Bayer.

After the stock market closed, the panel handed down its verdict—and it was a good one for J&J and Bayer. The panel voted nine-to-two in favor of approval. (There was one abstention.) It was a surprisingly good outcome: Just two days earlier, the FDA posted a scathing review of the drug, rivaroxaban (Xarelto), on the Web. Shares of Bayer, which had dropped 7.5 percent on the Frankfurt exchange on Tuesday, recovered on Friday. J&J shares were unchanged in pre-market trading.

The FDA doesn’t have to follow the advice of its panels, but it usually does. J&J and Bayer expect to get a decision from the FDA on rivaroxaban in early November. Bristol and Pfizer, meanwhile, expect to file for approval of apixaban by the end of this year, which would mean a potential approval in the second half of next year. Both drugs are in a class known as “factor Xa inhibitors”—they block an enzyme that causes clotting.

What all these Big Pharma players are trying to do is develop alternatives to warfarin, a 60-year-old anti-clotting drug that’s effective and extremely affordable as a generic—but that also presents major challenges for patients. There are about 2.6 million Americans with atrial fibrillation, a condition that causes heart pounding and breathlessness, and that greatly increases … Next Page »

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In 2007, New York-based pharmaceutical giants Bristol-Myers Squibb (NYSE: BMY) and Pfizer (NYSE: PFE) formed a deal to develop Bristol’s anti-clotting drug, apixaban (Eliquis). The partnership hit a high point on August 28, when the two companies announced positive results from a Phase 3 trial of the drug in patients with the heart-rhythm disorder atrial fibrillation—data that will be key when they apply for FDA approval later this year.

But an event happening today at the FDA may be equally important to the future of apixaban. An advisory panel to the agency is meeting to discuss rivaroxaban (Xarelto), an anti-clotting drug that Johnson & Johnson (NYSE: JNJ) and Bayer developed. They are hoping to win FDA approval in November to market rivaroxaban to patients with atrial fibrillation.

Both apixaban and rivaroxaban are in a new class of drugs known as “factor Xa inhibitors.” Factor X is one of the enzymes that promotes clotting, so inhibiting it helps to prevent strokes or embolisms—common risks in patients with atrial fibrillation. The two drugs were developed with the goal of offering alternatives to warfarin, a 60-year-old anti-clotting product that can cause dangerous side effects such as severe bleeding.

In an interview yesterday, Jack Lawrence, a VP at Bristol and development lead for apixaban, said he was looking forward to the FDA’s discussion on J&J and Bayer’s competing drug. “There are always learnings in how other sponsors approach the FDA’s questions,” he says. “It will be a fascinating discussion. And sometimes it helps not to be the first to go through that process.”

The FDA review is shaping up to be a painful process for J&J and Bayer. On September 6, the FDA posted a nasty review of rivaroxaban on the Web, the upshot of which was to … Next Page »

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Boston Scientific just made a move into one of the fields of cardiology with growth potential by acquiring Los Gatos, CA-based Sadra Medical.

The Natick, MA-based device giant (NYSE: BSX) already owns 14 percent of Sadra, and today said it is paying $193 million upfront to acquire the rest of the company, and may shell out another $193 million if the company hits regulatory and sales goals through 2016. The acquisition, potentially worth a total of $386 million, is expected to close late this year, or in early 2011, Boston Scientific said.

By taking over Sadra, Boston Scientific is making a play in one of the few areas of cardiology still considered a growth market. Sadra is developing technology for percutaneous aortic valve repair, in which interventional cardiologists seek to thread a catheter through the femoral artery of the leg, and up into the chest to repair the heart’s aortic valve without cracking open the chest and doing surgery. The technology is attractive because it’s a new market, in which elderly people generally considered too frail for heart surgery can become candidates for a minimally invasive valve repair procedure. As many as 3 million people in U.S. have narrowing of their aortic valves, Sadra says on its website.

One of Boston Scientific’s rivals, Medtronic (NYSE: MDT) made a splash in this area in February 2009 when it paid $700 million upfront, plus milestones to acquire Irvine, CA-based CoreValve. Steve Salmon, a medical device venture investor at Latterell Venture Partners in San Francisco, told Xconomy in September that percutaneous valve repair is one of the hot areas companies and investors were watching at this year’s Transcatheter Cardiovascular Therapeutics Conference.

“Percutaneous aortic valve replacement is a fast-growing market within structural heart therapies, and we expect it to be an important part of our growth plan,” Boston Scientific CEO Ray Elliott said in a statement. “Sadra’s innovative technology is a natural fit with Boston Scientific’s core competencies in stents and catheter-based delivery systems, allowing us to leverage our clinical expertise and existing sales channels.”

Sadra was founded in 2003. Besides Boston Scientific, its crew of venture backers included Accuitive Medical Ventures, Finistere, Firstmark Capital, Oakwood, Onset Ventures, and SV Life Sciences. The company raised $30 million back in May 2009.

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Big competitors don’t scare Drew Fromkin. The CEO of Clinical Data says that the small Newton, MA-based drug developer (NASDAQ:CLDA) is willing to take on industry giants in the multibillion-dollar U.S. market for antidepressants.

The company sent in its application for approval of its experimental antidepressant, vilazodone, to the FDA in late March. It’s too early to tell whether the agency will approve the company’s application to start selling the drug in the U.S., but if Clinical Data can pass FDA scrutiny, it could have its first drug on the market by early 2011, Fromkin says.

Clinical Data is open to forming partnerships with larger drug companies to potentially co-market vilazodone, but the scrappy firm is preparing to market the product on its own in the U.S. if need be, Fromkin says. The go-it-alone strategy would pit Clinical Data, which has about 160 employees, against pharmaceutical behemoths such as Indianapolis-based Eli Lilly (NYSE:LLY), London-based GlaxoSmithKline (NYSE:GSK), and New York-based Pfizer (NYSE:PFE).

Fromkin, however, doesn’t think that Clinical Data would have to match the marketing might of large players in the $12 billion U.S. market for antidepressants.

With a lean sales force of about 150 people, the CEO says, the company could focus on specialty physicians such as psychiatrists who prescribe most of the antidepressants in the country. In fact, he adds, 13 percent of U.S. doctors who prescribe the drugs order about 70 percent of the prescriptions for antidepressants, meaning his firm wouldn’t have to call on the bigger pool of general practitioners and primary care doctors who write prescriptions to target those who order the most scripts. Also, he’s expecting some major companies in the market to reduce their sales efforts for drugs that no longer have patent protections, leaving them open to competition from generic drugs that cost less.

“The market will very rapidly need much less … Next Page »

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Boston Scientific has agreed to pay $716 million to Johnson & Johnson to settle 14 lawsuits related to patent disputes in the field of interventional cardiology. Both companies make products in that field that seek to be less invasive alternatives for patients with cardiovascular disease, who otherwise might be headed toward open-heart surgery.

Natick, MA-based Boston Scientific (NYSE: BSX), said the money for the settlement will come out of its existing cash reserves, which stood at $1.19 billion at the end of June, when the company issued its most recent quarterly report with the Securities and Exchange Commission. The legal disputes go at least as far back as 1997, according to company filings. Despite the size of the payment, Boston Scientific didn’t get rid of all its legal issues with one fell swoop.

“We are pleased we have been able to significantly reduce the amount of outstanding litigation we have with Johnson & Johnson,” said Ray Elliott, Boston Scientific’s CEO, in a statement. “We continue to work with them to resolve other outstanding matters.”

Boston Scientific has been bracing itself for a big legal payout for some time. The company accumulated $1.27 billion as of June 30 for its estimated legal payments, after it lost a court ruling this year to J&J for an estimated $237 million and a $50 million settlement payment to inventor Bruce Saffran. Both of those disputes were related to stent products.

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Tom Steinke says he founded San Diego’s Minnow Medical out of an abiding conviction of the limitations of the medical stent, a mesh tube inserted in arteries to help prop open clogged blood vessels.

Steinke came to this view after spending 20 years developing medical devices in the cardiovascular industry. His previous startup was San Diego-based Reva Medical, which he founded in 1998 around a novel slide-and-lock design for a metal stent that does not deform as it expands. Before that, he was a product group director for Medtronic, director of engineering for Sonotek, and a development engineer at Advanced Cardiovascular Systems, which became Guidant, the maker of heart pacemakers and defibrillators.

“I know the industry,” Steinke says. With a metal stent, he says, “you’re going to have an ongoing inflammation to a foreign body… Even a [stent with a] drug coating doesn’t last forever; eventually the coating dissolves.” As Denise has reported, drug-coated stents represented a major innovation for the industry, and one that caught Reva off-guard. As the industry shifted to drug-coated stents, Steinke helped Reva reinvent itself in 2003 by developing a bio-absorbable stent that fully dissolves over time.

By the end of 2003, though, Steinke had moved on.

Tom Steinke

He founded Minnow Medical that year, and tells me the company sprang from his “altruistic desire to improve health care for the masses.” Now, after six years of development, Steinke is working to commercialize the technology that sprang from his convictions.

Steinke tells me that during his first couple of years at Minnow, he searched for alternatives to vascular stents. The founder and CEO says he self-funded Minnow until he had identified a way to improve the medical device used in balloon angioplasty to treat arteries that have narrowed and hardened due to atherosclerotic disease, the build-up of waxy plaque along the inside walls of an artery. In the process, Steinke also focused on … Next Page »

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San Diego’s new West Wireless Health Institute today announced its first clinical research program, saying it will oversee randomized clinical trials of wireless heart monitoring technology developed by San Jose, CA-based Corventis.

The institute, which announced its presence less than three months ago, was established to advance healthcare by helping medical device makers and others developing new wireless technologies pass regulatory muster. Corventis has been developing remote cardiovascular monitoring technology. The multi-center trial will be supervised by Eric J. Topol, a cardiologist who is the institute’s chief medical officer. Topol also is the chief medical officer at Scripps Health in San Diego.

Topol told me in May that remotely monitoring patients diagnosed with congestive heart failure is one of the obvious applications in the convergence of healthcare and new wireless technologies. He says a recent study of Medicare cases found that 26.9 percent of the patients hospitalized for heart failure are readmitted within 30 days, at an overall cost to the health system of $10 billion a year.

In its statement, the institute says the ability to continuously monitor heart rhythm, respiratory rate, and other factors remotely poses an opportunity to markedly reduce the need for hospital readmissions among such patients. The institute’s collaboration with Corventis is intended to validate remote wireless monitoring technology in proactively managing heart failure patients and reducing hospital readmissions.

The institute’s announcement coincided with a keynote address that Topol is delivering today at the U.S. Capitol in Washington D.C. at a technology and policy forum on mHealth solutions hosted by CTIA, a wireless industry association.

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Jeff Carbeck walked away from a promising career in academia four years ago to co-found Arsenal Medical, to apply advances in materials science to the healthcare market. Carbeck and I talked last week about his work at Watertown, MA-based Arsenal (originally named WMR Biomedical), which Xconomy reported last week raised $8.2 million in a third round of venture capital. In addition to the advances in biomaterials development at the firm, we discussed his recent award of a fellowship with the New England Clean Energy Council.

Carbeck, who is also chief scientist at Cambridge, MA-based nanotech research firm Nano-Terra, is not as recognized in the Boston area as some of his Arsenal co-founders, such as Harvard’s George Whitesides or MIT inventor Bob Langer. Still, Carbeck is very much on the leading edge of translating discoveries in material science for use in medical products, clean technology, and a variety of other disciplines. (Nano-Terra, in fact, is open to tackling R&D challenges in multiple industries except for life sciences.)

He’s also one of the top chemical engineers to come out of the Harvard lab of Whitesides, the chairman and initial inventor at Nano-Terra. (Whitesides’ other protégés include North Bridge Venture Partners general partner Carmichael Roberts and John Rogers, a professor of chemical engineering at the University of Illinois Urbana-Champaign.)

At Arsenal, Carbeck oversees development of biomedical devices in the fields of cardiology and ophthalmology. He guarded some of the fine details of the products under development, but he shed new light on some of the problems they hope to solve.

The startup is developing devices with materials that can treat arterial disease at the molecular and cellular level—rather than simply dealing with the problem mechanically with an arterial stent to prop open clogged arteries. It’s also studying materials that could deliver drugs to different regions of the eye. The company is exploring multiple other medical uses for proprietary materials at the firm, he says. Interestingly, Arsenal was not founded around a specific technology, yet subsequent to its launch has developed its own materials and gained rights to other technologies from Langer’s lab at MIT as well as research institutions not affiliated with the firm.

“I guess I see the world through the eyes of a … Next Page »

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Ischemix, a Maynard, MA-based developer of drugs intended to prevent tissue damage that occurs after heart attacks and other cardiac events, says that it has appointed board member Robert “Duffy” DuFresne to be its new CEO. He will replace former chief executive Reinier Beeuwkes, who is remaining president and chairman of the company. By the middle of 2009, Ischemix expects to begin mid-stage clinical trials of its lead drug for preventing ischemia-reperfusion injury. Xconomy contributor David Stipp wrote last year that the drug, dubbed “CMX-2043,” could draw big drug companies to startup in search of rights to the treatment.

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Clinical Data, the Newton, MA-based maker of diagnostic tests, said today it has acquired Adenosine Therapeutics to expand its roster of drug candidates in cardiology, diabetes, inflammatory diseases, and sickle cell anemia. Clinical Data (NASDAQ: CLDA) agreed to pay $11 million in cash for the Charlottesville, VA-based Adenosine, and also entered into a $22 million, five-year promissory note and a separate $3.2 million, 32-month promissory note. Clinical Data also agreed to pay as much as $30 million more in cash if certain regulatory and commercial goals are met.

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Christmas has come in July for Pathway Medical Technologies. The privately-held maker of medical devices in Kirkland, WA, has won FDA approval to market its first product in the U.S., a drill that cuts and vacuums out blockages in leg arteries.

CEO Tom Clement had an antsy look on his face last Wednesday, like a kid waiting for Christmas morning. “We’re so close, I can taste it,” he said on a visit to his office. The FDA approval letter arrived two days later, Xconomy has learned.

It’s a remarkable turnaround story. Pathway ran out of cash and literally closed its doors in November 2004. It was re-born four months later when it stopped trying to treat the heart, and switched its focus to a less crowded market of companies that treat the legs. Pathway’s device, the Jetstream Atherectomy System, works the same way in either part of the anatomy. It’s a tiny stainless-steel drill mounted on a catheter that snakes inside clogged arteries, where it cuts up and vacuums out fatty buildups.

The approval means Pathway can now market its device specifically to doctors who treat peripheral artery disease. An estimated 8 to 12 million people in the fast-food loving U.S. have blockages in the legs, and about one-fourth have sought some sort of treatment, complaining of pain when they walk.

“This is one of the most exciting companies in medical technology in the country, much less just here in the region,” says David Auth, a director of Pathway and the former CEO of Heart Technology, a Redmond, WA-based company that developed a previous-generation device in the 1990s for drilling out heart blockages. The market for such a device? It “could easily top $150 million in annual sales,” Auth says. “If they execute well, they will easily top $200 million.”

Pathway’s FDA application was based on a study of 172 patients in Europe, which found that its device sliced through rock-hard calcium and squishier blockages without tearing or poking any holes in vessel walls. Three patients developed clots or debris that required treatment, which contributed to a serious adverse event rate of 2.9 percent. The effectiveness was eye-opening. Arteries of patients went from 89 percent blocked on average at the beginning of the study to 39 percent clogged after the Pathway device was used, according to data presented in October at the Transcatheter Cardiovascular Therapeutics conference in Washington D.C.

The arteries apparently stay open, too. After six months of follow-up, only about 14 percent of patients required a second procedure, Clement says, compared with about half of patients after traditional balloon angioplasty.

Pathway doesn’t plan to begin selling its device immediately, however. The company first needs … Next Page »

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The world’s leading pharmaceutical and medical device companies are going to be in town this week for a meeting known as Summer in Seattle, and they’re not just here to catch some scenery and sun.

The eighth annual conference, running Thursday through Sunday, is drawing 350 cardiologists, heart surgeons, radiologists, neurologists, and industry representatives from around the world to the Seattle Science Foundation to learn state-of-the-art techniques for treating diseased hearts. The list of sponsors, which runs 28 deep, says a lot about the importance of “thought leaders” who influence other doctors, and can therefore make or break a new technology. Natick, MA-based Boston Scientific (NYSE: BSX), Abbott Laboratories, Pfizer, and Medtronic will be in town, vying to get their products in the doctors’ hands.

Summer in Seattle has traditionally featured live surgeries demonstrating technologies, such as insertion of drug-coated stents to prop open clogged arteries. This year, doctors will also get an unusual amount of hands-on work with cadavers and pig hearts to test new minimally-invasive devices designed, for example, to fix heart valves, said Mark Reisman, director of Cardiovascular Research and Education at Swedish Medical Center, and the conference’s co-director.

“This is very powerful for the companies to have people with national prominence to demonstrate their technologies,” Reisman says.

A couple of receptions are planned at the swanky W Hotel in downtown Seattle, but the doctors have a fair bit of time at the end of the day for wining and dining on their own. They are encouraged to get out and enjoy the city, but in terms of extra-curriculars, “We leave that up to the individuals,” Reisman says. No doubt those individuals will be courted well after-hours by the folks who want them to bless their technologies.

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Summer in Seattle (SIS) focuses on the most pertinent and controversial issues in the field of cardiology, vascular, and neurovascular therapeutics. Utilizing small group formats to maximize interaction between faculty and attendees, SIS 2008 will feature concurrent four-hour educational sessions. These sessions will include didactic lectures, hands-on Cadaveric training and live case presentations transmitted simultaneously from several catheterization laboratories. All of these activities will take place at the state-of-the-art Seattle Science Foundation.

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Abiomed got a healthy boost this morning. The FDA cleared the company’s new heart pump for sale in the U.S., enabling it to potentially reach a market of about 14,000 interventional cardiologists. Shares of the Danvers, MA-based company (NASDAQ: ABMD) shot up 13 percent to $16.75 at 12:14 p.m. Eastern Standard time.

The Impella 2.5 Cardiac Assist Device, which is already approved in some 40 other companies, is designed to help very sick patients’ hearts keep blood circulating for short periods of time. The pump can move as much as 2.5 liters of blood a minute, and it cleared for use for up to six hours, the company said. Like standard heart-helping pumps it’s threaded into the heart through an artery in the leg, but the Impella is different because it can deliver more blood volume, and it unloads blood from the left ventricle, relieving stress on the heart.

The Impella costs $20,000 per disposable unit, and is reimbursed by Medicare, said Michael Minogue, the company’s chief executive officer, on a conference call this morning with analysts. He didn’t offer a specific sales forecast.

“This marks a great day for the company and for heart failure patients in the U.S.,” Minogue said.

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No doctors thwart the Reaper more often than cardiologists, who routinely pull heart-attack victims back from the brink with artery-opening procedures. But their god-like powers suddenly fade after coronary arteries are unblocked. In fact, much of the harm from heart attacks occurs at that point due to “reperfusion injury,” which occurs when blood flow is restored to oxygen-starved tissues—just when things are looking up, the phenomenon unleashes gusts of cell-trashing “oxygen free radicals” and induces deadly calcium overload within cells. The inexorable heart-muscle destruction that follows can give the Grim Guy the last laugh, leading to fatal second heart attacks within days or the prolonged agony of congestive heart failure. But now Maynard, MA-based Ischemix thinks it’s found a way to block much of the damage and prevent cardiac miracles from turning into Pyrrhic victories.

Ischemix says its experimental drug CMX-2043 has consistently reduced reperfusion injury by 30 to 40 percent in extensive, placebo-controlled rodent tests. You heard it here first: If the drug shows similar efficacy in people—a big if, given that dozens of promising drugs for reperfusion injury have failed—Ischemix will be transformed from one of the Boston area’s least-known biotechs into a Big Pharma mob scene as drug makers scramble to secure rights to the new medicine.

Heart researchers have struck out for over three decades trying to develop reperfusion-injury blockers. Indeed, all the flailing on the reperfusion front threatens to lead to “therapeutic nihilism” concerning the problem, according to a sweeping 2004 report on the problem by scientists at the National Institutes of Health. Arguably, reperfusion injury is already the dirty little secret in cardiology: Animal studies indicate that it causes up to 50 percent of the tissue damage after heart attacks. Further, the controlled blood-flow interruption during cardiac procedures, such as coronary artery bypass surgery, or CABG (pronounced “cabbage”), also can trigger reperfusion injury—that’s probably why some 13 percent of the 500,000 U.S. patients who undergo CABG each year suffer major complications within 30 days of their operations.

All this adds up to the kind of blockbuster potential that’s increasingly scarce in drug research. Ischemix’s first goal with CMX-2043 is to cut post-CABG complications, including potentially fatal heart-beat irregularities—that indication alone represents a $500 million “market opportunity,” says CEO Reinier Beeuwkes. Following a successful safety trial with CMX-2043 last year, the company plans to launch a “proof of principle” efficacy trial in CABG patients later this year. But the plan is contingent on whether the company can raise the $15 million it needs to fund the trial, he adds.

You’d think venture investors would already have perfused the startup’s coffers. But so far Ischemix has funded CMX-2043′s development with a mere $14 million supplied by Beeuwkes himself and Ischemix’s medical director, Geoffrey Clark. Before taking a flyer on Ischemix, the two co-founded Braintree Laboratories, a leading maker of “gastrointestinal lavage” products ingested before colonoscopies. A former heart researcher, Beeuwkes served on Harvard’s faculty in the 1970s, then went on to become director of renal and cardiovascular pharmacology at Smith Kline and French Laboratories, now part of GlaxoSmithKline, before founding Braintree.

Ischemix has purposely kept a low profile during CMX-2043′s initial development, compiling considerable data on the drug before trying to sell the story to outside investors, explains Beeuwkes. One reason is the long history of withered hopes in the effort to develop reperfusion-injury blockers—potential investors aren’t easily convinced that substantial progress is now finally in the offing. Ischemix also has had a special reason to keep quiet while building the case for its new drug: A few years ago, its predecessor company, CereMedix, made an ill-fated foray under previous management into the hype-ridden world of anti-aging dietary supplements, or “nutraceuticals,” whose snaky aura can be the kiss of death for an aspiring biotech trying to raise money from hard-headed VCs.

CereMedix sprang from research on antioxidants discovered by biologist Victor Shashoua, who co-founded the company in 1999 while associated with McLean Hospital in Belmont, MA. Shashoua had developed a suite of compounds with antioxidant properties that raised hopes of blocking the damage by free radicals that appears to be a central part of the aging process. CereMedix’s plan of developing an anti-aging nutraceutical proved untenable, however, and in late 2005 Beeuwkes, a long-time investor in the startup, stepped in as CEO to develop some of Shashoua’s compounds as reperfusion-injury blockers. Though retired, Shashoua still holds a stake in the company, and his son, a physician, serves on its board.

Renamed Ischemix, the company set about tinkering with the antioxidants to give them a second key property besides the power to mitigate the free-radical damage of reperfusion injury: the ability to block its cell-killing calcium overload. Veteran pharmaceutical chemist Steven Kates, Ischemix’s vice president of research, led the effort, which yielded a family of promising candidates, the best of which was CMX-2043. While details of the drug’s mechanism remain murky, says Beeuwkes, in rat studies it appears to exert, as hoped, a two-pronged defense against reperfusion injury—a novelty that might finally break the logjam in efforts to minimize the injury. In the Phase 1 safety trial in humans last year, says Beeuwkes, “even at the highest dose we used, we didn’t see adverse effects” that seemed related to the drug. Further, the doses ranged up to about five times “what we think we may need to work in CABG patients, based on our animal studies.”

With the promising data in hand, the company is now trying to get on venture capitalists’ and Big Pharma’s radars. It just launched a new website, and Beeuwkes recently began presenting at biotech meetings. “If you’d asked me for an interview a year ago, I’d have said ‘No, thank you,’” he says. “But now it’s time to put on the slippers and go to the ball.”

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