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Masimo Gets European OK on Monitor, Analyst’s Nod

Masimo Corp., the Irvine-based maker of patient monitoring devices, said late last month that it received European regulatory clearance for its SedLine brain-function monitor.

The device maker said that offering SedLine “represents a critical advancement for the practice of anesthesia in Europe—more complete data for a more complete picture of brain function and sedation.”

SedLine measures the effects of anesthesia and sedation on patients by analyzing, quantifying and displaying both sides of the brain’s electrical activities. Hospitals that use the monitor include Loma Linda University Medical Center, Stanford University Medical Center in Palo Alto and Columbia Presbyterian Hospital in New York.

Masimo got the monitor through its July 2010 buy of SedLine Inc., an Irvine-based startup. Masimo had invested in SedLine with $3.5 million in startup money before acquiring the company.

SedLine originally bought the monitor in early 2010 from Lake Forest, Ill.-based diversified device and drug maker Hospira Inc.

When it made the deal, Masimo said that buying SedLine would allow it to enter the market for brain-function monitors and make them more widely available.

Separately, analyst Lawrence Keusch of Memphis, Tenn.-based Morgan Keegan & Co. highlighted Masimo as a potential pick for long-term medical device investors in a research note.

Masimo has gone through “significant multiple compression, despite attractive long-term fundamentals,” Keusch said.

Keusch’s note also touched upon two other device makers with Orange County operations. He gave an “outperform” rating to Baxter International Inc., a Chicago device maker with about 330 workers in the area and Bermuda-based Covidien PLC, which owns Ev3, a maker of devices to treat blood vessel diseases with about 420 workers in Irvine.

“In (these companies), we believe that reasonable growth is on deck, even if there is some continued softness in general surgical procedure trends or challenges to government reimbursement,” Keusch said.

The analyst said that he liked companies that have a strong sales base outside the U.S., noting that global demand for healthcare is expected to keep rising.

Global demand, combined with increasing spending on hospital supplies in emerging markets, is expected to contribute to continued revenue and earnings growth for the next several years, according to Keusch.

CoreValve, Too

In other overseas regulatory news, Medtronic Inc., a Minnesota device maker with an estimated 675 workers in Irvine and Santa Ana, just received European approval for its 31-millimeter Medtronic CoreValve less-invasive replacement heart valve.

Besides the 31-millimeter, Medtronic also has 26-millimeter and 29-millimeter CoreValves that are currently on the market in Europe.

CoreValve originated with CoreValve Inc., an Irvine-based startup that Medtronic paid $700 million for in 2009. Medtronic competes with Edwards Lifesciences Corp., also in Irvine, in the market for replacement heart valves that don’t require major surgery to implant them.

Edwards, whose Sapien valve is approved in Europe and awaiting Food and Drug Administration decision, is considered to have a head start on Medtronic in the U.S.

Medtronic CoreValve has yet to receive domestic approval, and enrollment is ongoing in its pivotal U.S. trial.

The company said the recent approval means it now will be able to treat a larger number of patients who suffer from severe aortic stenosis, or a narrowing of arteries, who are at high risk or ineligible for open-heart surgery.

Medtronic has seen “robust growth” from the adoption of CoreValve in international markets and the acquisition of a Minnesota startup ATS Medical Inc. last year, according to Zacks Investment Research.

But Zacks also said Medtronic faces tough competition in the U.S. from Natick, Mass.-based Boston Scientific Corp. in addition to Edwards. Boston Scientific bought Los Gatos-based startup Sadra Medical Inc. at the end of 2010. Boston Scientific is planning to start a European clinical trial of the Lotus valve, which it got in the Sadra buy, in this year’s fourth quarter.

New Lab in Irvine

MDxHealth SA, which is based in Belgium, has signed a lease to open a laboratory and office in Irvine.

MDxHealth, which also has an office in Durham, N.C., is a molecular diagnostics company that develops and commercializes oncology-based molecular diagnostic testing and companion diagnostics for personalized medicine. The company said it expects to launch its first test for prostate cancer in 2012.

The laboratory is at 15279 Alton Parkway in the Irvine Spectrum, according to real estate website LoopNet. It has 13,448 square feet of space.

MDxHealth said that it has hired several executives for the Irvine laboratory, including Miriam Reyes, senior director of laboratory operations, and Beth Davis, senior director of managed care.

MDxHealth also said that it’s filed for Clinical Laboratory Improvement Amendments certification of the site from the Centers for Medicare & Medicaid Services. Clinical laboratories require certification in order to receive Medicare and Medicaid payments.

MDxHealth collaborates with several well-known cancer research centers, including the University of California, Los Angeles, the Cleveland Clinic, Johns Hopkins University, Harvard Medical School and Duke University.

It also said it has commercial and collaborative partnerships with companies such as Burlington, N.C.-based Laboratory Corporation of America, Germany’s Merck KGaA and New York-based Pfizer Inc.

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