Sound familiar? Look for more acquisitions and a renewed focus on safety issues in 2006.
That’s the word from medical device sector analysts, echoing two themes from 2005.
The Associated Press looked at the topics in an article that reviewed 2005 and looked ahead to this year.
Sometimes the two issues intertwined, as with Johnson & Johnson’s pending buy of Guidant Corp., the Indianapolis-based device maker with operations in Temecula.
J & J; first offered $25.4 billion for Guidant and lowered its bid to $21.4 million after recalls of some of Guidant’s devices.
Guidant eventually accepted a $24 billion offer from J & J;, but not long after Boston Scientific Corp. emerged with a rival $27 billion bid.
2005 was a “banner year” for device mergers and acquisitions, Thomas Gunderson, an analyst with Minneapolis-based US Bancorp Piper Jaffray, told AP.
The flurry of big device activity reflects a five-year harvest cycle in which technologies mature, making a company desirable enough to acquire, he said.
Irvine-based Edwards Lifesciences Corp. is among one of the companies that Gunderson follows.
This quarter, Allergan Corp., the Irvine drug maker, plans to close its $3.2 billion buy of Inamed Corp., a Santa Barbara-based device maker that’s awaiting Food and Drug Administration word for silicone gel-filled breast implants.
Allergan’s bid to get a larger foothold in the cosmetic-surgery market trumped an earlier $2.8 billion offer for Inamed from Medicis Pharmaceutical Corp. of Arizona.
Growth rates for several core device markets, such as drug-coated stents, defibrillators and orthopedics, are slowing down, said John Calcagnini, medical device analyst for CIBC World Markets. That is prompting a need for big companies to find ways to grow.
Viasys Healthcare Inc., which has a large respiratory device operation in Yorba Linda, is among the companies Calcagnini covers.
The safety issue was spotlighted last year with Merck & Co.’s withdrawal of its Vioxx arthritis drug and a slew of resulting lawsuits.
Nobody questioned whether Vioxx worked, according to Gunderson. But risks came to outweigh the drug’s benefit and forced Merck to withdraw it.
“For devices, we generally talk about safety and efficacy, and Wall Street just assumes safety but looks at efficacy. What happened in 2005 was that the safety issues were raised up and re-examined,” Gunderson said.
CIBC’s Calcagnini said he believes that device makers likely would have to start disclosing lower failure rates of devices.
“It’s good in that it will probably raise the bar for quality control,” he said.
Nationwide Health Facilities Sold
Brookdale Senior Living Inc., a Chicago-based operator of retirement and assisted living facilities, said earlier this month it was paying $124 million for 18 owned and leased senior healthcare and housing facilities from American Senior Living LP, a privately held company from Naples, Fla.
Newport Beach-based Nationwide Health Properties Inc., a healthcare real estate investment trust, owns 10 of the leased facilities.
The facilities have 2,239 units or beds and are in California, Alabama, Delaware, Florida, Georgia, Louisiana, Ohio, Tennessee, Virginia and Washington state. Brookdale, which went public in November, has bought or agreed to buy $533 million in senior facilities.
Europe Gets Ista Application
Ista Pharmaceuticals Inc., an Irvine-based eye drug maker, said European regulators accepted an application seeking approval of Vitragan for the treatment of vitreous hemorrhage, or back-of-the-eye bleeding.
Vitragan sells as Vitrase in the U.S.
The company expects the review process could bring a decision by the first half of 2007, Chief Executive Vicente Anido Jr. said in a statement.
The filing was based primarily upon existing clinical trial data that showed a statistically significant reduction in vitreous hemorrhage density as early as one month after usage, according to Ista.
Vitrase has Food and Drug Administration approval for use as a spreading agent for other drugs.
U.S. regulators issued an “approvable letter” for Vitrase for treating bleeding in 2003, but requested more analysis and clinical data.
Bits and Pieces:
Ev3 Inc., Plymouth, Minn., completed its acquisition of the remaining shares of Micro Therapeutics Inc., Irvine. Ev3 said that Micro Therapeutics, which makes devices for neurovascular diseases, would continue operations as an Ev3 subsidiary CalOptima, Orange, said more than 15,100 patients have enrolled in OneCare, its new health plan. OneCare is designed for people who are eligible for both Medicare and Medi-Cal and includes prescription drug coverage Ron Mason, a principal in consultant Towers Perrin Tillinghast’s Irvine office, presents “Impact of Medicare Part D” at the Feb. 9 meeting of the Orange County Employee Benefit Council. The meeting runs from 7:30 a.m. to 9:30 a.m. at the Beckman Center on the University of California, Irvine, campus. Information: (714) 593-0873 Refractec Inc., Irvine, said it is working with Eyemaginations Inc., Towson, Md., on a 3-D presbyopia patient education animation program. Refractec makes laser devices used to treat near vision loss associated with presbyopia Dynamic Healthcare Systems, Irvine, expanded its Voyager software package for clients that participate in Medicare managed care plans, and said Oakland-based Arcadian Health Plan Inc. signed a contract for software to manage its Medicare plans.
