Austin’s Apollo Endosurgery Responds to FDA Note After Patient Deaths

Austin—Two years after gaining FDA approval to market a minimally invasive gastrointestinal balloon to combat obesity, Apollo Endosurgery (NASDAQ: APEN) is now dealing with fallout from patient deaths following implantations of the device.

In a letter to healthcare providers dated Aug. 10, the FDA stated that seven deaths occurred in patients with liquid-filled intragastric balloon systems between January 2016 and August 2017. Five of the deaths involved patients with Apollo’s Orbera Intragastric Balloon System, the FDA stated. Two deaths involved patients with the ReShape Integrated Dual Balloon System, which is manufactured by ReShape Medical.

“At this time, we do not know the root cause or incidence rate of patient death, nor have we been able to definitively attribute the deaths to the devices or the insertion procedures for these devices (e.g., gastric and esophageal perforation, or intestinal obstruction),” the FDA wrote.

Also, the FDA noted that two of the seven deaths—one involving Apollo’s device and the other involving ReShape’s device—were “related to potential complications associated with balloon treatment (one gastric perforation with the Orbera Intragastric Balloon System and one esophageal perforation with the ReShape Integrated Dual Balloon System.)”

In a conference call with analysts held on Aug. 11, Todd Newton, Apollo’s CEO, said the company is not aware of any evidence that suggests the deaths were the result of the devices’ manufacture or failure. “Patient safety is a key priority,” he said.

In a company statement released that same day, Newton said that the FDA letter “does not indicate that the patient deaths were related to the Orbera device or the insertion procedures. … Apollo has received no product liability-related claims in connection with these five cases.”

The Orbera device sold by Apollo is inserted through a patient’s mouth, through the throat, and into the stomach, where it is inflated and filled with saline to reach the size of a grapefruit. Dennis McWilliams, Apollo’s founder, president, and chief commercial officer, told me in 2015 that the device is a sort of mid-point therapy to combat obesity—in between diet and exercise, and more invasive procedures such as gastric bypass surgery.

“We are continuing to monitor the use of these devices in clinical settings to learn more about any risks and will communicate publically when we have new information to share,” Deborah Kotz, an FDA spokeswoman, wrote to Xconomy in an e-mail Monday.

In the Aug. 11 analyst call, Newton said: “We take our reporting obligations very seriously to ensure as much transparency as possible in patient safety.”

Newton added that if all of the procedures that have been done from January 1, 2006, to March 31, 2017—a total of 277,000 devices implanted—were reviewed, the incidence of death is less than 0.01 percent. “That is especially low,” he added, when compared to the rate for other more interventional treatments for treating obesity.

On Sunday, Jen Cook, an Apollo spokeswoman, wrote in an e-mail to Xconomy that the company did not have any comment beyond the Aug. 11 statement and analyst call.

Once the FDA letter was posted, Apollo’s stock decreased from $5.66 per share on Aug. 9 to $4.20 Aug. 10. The stock rebounded and declined during the week, and closed at $4.29 on Friday. The stock was trading at $3.96 at 2:25 pm CST Monday.

Founded in 2006, Apollo specializes in translumenal surgery, therapeutic endoscopy, and minimally invasive devices for GI procedures. The Austin company acquired for $110 million the Lap-Band business from Allergan, a California-based pharmaceutical company best known for its Botox product line. Orbera, which is used in about 80 countries around the world, was part of that Lap-Band product line.

Apollo went public in December 2016 after it acquired California-based Lpath in a reverse merger.

Angela Shah is the editor of Xconomy Texas. She can be reached at ashah@xconomy.com or (214) 793-5763. Follow @angelashah

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