Atricure gains on earnings, rev beat

AtriCure (NSDQ:ATRC) announced its 2nd quarter earnings, beating street estimates for both earnings and revenue.

Atricure saw losses of $4.9 million on total sales of $32.6 million for the 3 months ended June 30, $10 million up from their 2014 2nd quarter numbers.

The company reported 81.7% higher losses, but grew revenue 22.9% compared to the same period last year.

Adjusted to exclude 1-time items, losses per share were 18¢, beating analyst loss estimates by 5¢.

The company’s shares rose in response to the news, up 4.51% as of 5:00 p.m., EST.

“We are pleased by our results this quarter which reflect continued stability in our business and the solid foundation AtriCure is building for future growth. With our long term investments in clinical trials, innovation, and physician training and education, we look forward to continuing to advance the treatment of atrial fibrillation,” CEO Mike Carrel said in a press release.

In March, AtriCure announced a new indication for its cryoablation device – temporary pain relief for some cardiac surgery patients.

AtriCure said its CryoIce ablation probe is designed to temporarily manage pain through cryoanalgesia, or ablating the affected nerves. The technique can pause the transmission of pain impulses to the brain for days or even weeks, the company said.

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FDA warns on Hospira Symbiq pumps

The FDA today released a safety communication warning about cybersecurity vulnerabilities with Hospira‘s (NYSE:HSP) Symbiq infusion system.

The Symbiq infusion system can potentially be accessed remotely through a hospital’s network, which could allow for unauthorized changes to the dosage delivered by the pump, according to the federal watchdog. The issue was confirmed by Hospira and an independent researcher.

Currently, no adverse events or unauthorized accesses in a health care setting have been reported, according to the FDA and Hospira. The U.S. Dept. of Homeland Security’s Industrial Control Systems Cyber Emergency Response Team is also aware of the issue, according to the FDA.

Hospira said it plans to phase out the Symbiq system in May, after the FDA warned on cybersecurity vulnerability issues with its remotely-programmed LifeCare PCA3 and PCA5 devices.

“As previously announced as part of Hospira’s broader global device strategy, the Symbiq infusion device is being removed from the market. After evaluating reported vulnerabilities, we are communicating with customers at the limited number of sites where Symbiq remains in use. We have worked with them to deploy an update to the pump configuration to close access ports and put additional cybersecurity protections in place. This option provides our Symbiq customers with another layer of security for the devices while they remain in the market for another few months,” Hospira said in a release about the issue.

The FDA encouraged hospitals and facilities using the system to disconnect it from the network, but warned that this would require manual entry of drug libraries for each pump. It suggested facilities also close specific network ports and monitor all network traffic to prevent any unauthorized access.

The federal watchdog encouraged users to transition away from the system, saying it “strongly encourages health care facilities to begin transitioning to alternative infusion systems as soon as possible.”

Hospira reiterated that there have yet to be any instances of cybersecurity breaches of the system. The company said that exploiting the vulnerability would require access of networks that generally lie behind layers of network security.

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MassDevice.com +3 | The top 3 medtech stories for July 31, 2015

Say hello to MassDevice +3, a bite-sized view of the top three medtech stories of the day. This feature of MassDevice.com’s coverage highlights our 3 biggest and most influential stories from the day’s news to make sure you’re up to date on the headlines that continue to shape the medical device industry.

 

3. Tandem Diabetes inks Dexcom deal, beats Q2 estimates

Tandem Diabetes Care reported a couple of wins, announcing a deal to integrate its insulin pumps with Dexcom’s continuous glucose monitors and beating expectations with its 2nd-quarter results.

“Integrating Tandem’s next generation pump platform with Dexcom’s future CGM systems is an important step in aligning our technologies to be used in automated insulin delivery applications,” president & CEO Kim Blickenstaff said in prepared remarks. “We are committed to continue advancing the clinical applications of Tandem’s technology and are pleased to expand our relationship with Dexcom in support of this effort.” Read more

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2. ResMed buys China’s Curative Medical, gains on Q4 beat

ResMed said it paid an unspecified amount to acquire Chinese respiratory device maker Curative Medical and reported fiscal 4th-quarter results that beat Wall Street’s expectations.

San Diego-based ResMed said Curative will operate under its own banner under founder & CEO Jason Sun. Curative’s vascular business was not a part of the deal, which is expected to close by the end of the year, ResMed said. Read more

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1. GAO: Medtech’s profits jumped 44% in a decade

Profits for medical device companies rose 44% between 2004 and 2014 on 43% sales growth, according to the U.S. Government Accountability Office, which tallied the results from 102 medtech firms at the request of Senate minority leader Harry Reid (D-Nev.).

Profits for the companies included in the report (which excluded firms like Johnson & Johnson that make products other than medical devices) rose from about $11.4 billion in 2005 to about $16.5 billion in 2014 at an average annual increase of roughly 4%. Profits declined during 3 periods, according to the report, falling from $11.4 billion to $9 billion from 2005 through 2006, from $14.0 billion to $10.4 billion from 2007 through 2009, and from $17.5 billion to $13 billion from 2011 through 2012. Read more

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Sorin claims its new CRT-P is the world’s smallest

Sorin Group (BIT:SRN) said today it launched its Reply CRT-P cardiac resynchronization therapy pacemaker, claiming it to be the world’s smallest of its kind.

The Reply CRT-P is 11.3 cc in volume, 3.7 cc smaller than Boston Scientific‘s (NYSE:BSX) Intua and 0.2 cc smaller than St. Jude Medical‘s (NYSE:STJ) Anthem CRT-P, according to their respective sites.

The device also features the ability to adapt to heart rate due to exercise and avoid inappropriate reactions, Sorin said. The 1st device was implanted at the Papworth Hospital in Cambridge, UK by Dr. Brian Gordon, Sorin said.

“The small size of the device is very impressive. Size is an extremely important consideration for many patients alongside battery longevity and Reply CRT-P is setting the standard for the former without compromising the latter,” Gordon said.

The pacer also features a sleep apnea monitoring algorithm to detect severe sleep apnea through a ventilation sensor, Sorin said.

“Sorin Group is dedicated to developing solutions for heart failure that enable optimal management of comorbidities such as sleep apnea. Reply CRT-P is another example of this, providing state-of-the-art cardiac resynchronization therapy for HF patients while at the same time enabling the intuitive screening and monitoring of sleep apnea,” cardiac rhythm mangement unit president Stefano Di Lullo said in a press release.

Sorin said yesterday that its 2nd-quarter profits plunged nearly 80% , largely due to costs from its pending, $2.7 billion merger with Cyberonics (NSDQ:CYBX).

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Greatbatch Q2 earnings release lifts shares

Greatbatch (NYSE:GB) shares climbed with the announcement of its Q2 results, growing from last year but narrowly missing analysts expectations

The Frisco, Texas-based company reported profits of $9.2 million, or 35¢ per share, on sales of $174.9 million for the 3 months ended July 3.

That amounts to a 24.8% bottom-line loss on sales growth of 1.6% compared with 2014.

Adjusted to exclude 1-time items, earnings per share were 64¢, falling short of analysts expectations by 5¢. The company also fell short on the street’s revenue expectations by $10 million.

Shares have climbed after release of the earnings, up roughly 4.3% as of mid-day trading.

“I am very satisfied with our results for the 2nd quarter, which were consistent with our expectations. During the quarter we continued to drive the implementation of our strategic plan with investments in technology, capacity and capabilities. We expect to finish the year strong based upon new and existing customer business pipelines and carry this momentum into 2016.” CEO Thomas Hook said in a press release.

“We are pleased with our second quarter results highlighted by four percent organic constant currency sales growth which was led by our cardiac and neuromodulation and orthopaedic product lines. The quarter also saw us deliver $0.64 adjusted diluted EPS which grew 5% for the quarter. Based on our first half results, as well as our expectations for the remainder of the year, we are maintaining our 2015 revenue and adjusted diluted EPS guidance ranges for 2015,” CFO Michael Dinkins said in a prepared statement.

Along with its Q2 reports, Greatbatch said that director Joseph Miller announced he would be leaving the company to head a spin-off of its QiG Group subsidiary, which will be known as Nuvectra Corporation. The move is slated for Q4 of 2015, according to the company.

“Earlier today, we filed a Form 10 registration statement with the U.S. Securities and Exchange Commission for our proposed spin-off from our QiG Group neuromodulation device business, now named Nuvectra. Nuvectra will be initially focused on the development and commercialization of the Algovita spinal cord stimulation system, the first application of this neurostimulation technology platform,” Hook said.

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Acelity announced Q2 earnings, beats 2014

Wound care and regenerative medicine company Acelity reported its Q2 earnings this week, beating its revenue and sales marks the same quarter last year.

The San Antonio, Texas-based company said it brought in $461.6 million this quarter, beating last year’s revenue by a meager 0.5%.

The company significantly pared losses, bringing them down to $17.6 million from $153.8 million last year, totaling an 88.5% reduction since 2014.

“We delivered a strong financial performance in the 2nd quarter, reflecting the power of Acelity’s growing global scale, innovative product portfolio and robust sales and service infrastructure. On a consolidated basis, we delivered another consecutive quarter of year over year revenue growth. We have extended our leading position in North America and have also generated strong growth in emerging markets with double-digit increases across Latin America, China and India. In addition, we successfully introduced new products including Nanova, Tielle and Revolve as well as negotiated future sales channels and distributors,” CEO Joe Woody said in a press release.

Acelity said saw revenue from its advanced wound therapeutics devices grow significantly as well, led by significant volume increases compared to 2014.

“Looking ahead, we believe we have the right strategies in place to ensure a resilient platform for sustainable growth. We continue to invest in innovation, further penetration within emerging markets, and development of markets served by our focus products in order to generate long-term value creation,” Woody said.

Last week, Acelity won a 5-year National Blanket Purchase Agreement with the Department of Veterans Affairs to supply it with negative pressure wound therapy supplies and devices. Through the deal, Acelity will supply the VA with devices that help promote wound healing for acute and chronic wounds.

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Amendia buys Custom Spine

Amendia said Tuesday it acquired New Jersey-based spinal technology company Custom Spine. Amendia did not disclose the details of the acquisition.

Marietta, Ga.-based Amendia said the acquisition would further its focus on the spinal market and that Custom Spine’s Pathway articulating vertebral interbody technology was of specific interest to Amendia.

“I’m looking forward to adding Custom Spine’s technologies to Amendia’s comprehensive product offering. Custom Spine’s rich IP portfolio, engineering know-how, skilled sales force, and customer base makes this transaction an easy fit for both companies. Custom Spine brings the rights to 40 patents to Amendia, which instantaneously increases the breadth and depth of our R&D pipeline. This is very exciting for the company and also for patient care,” Amendia CEO Jeff Smith said in a press release.

The Pathway AVID provides structural support during spinal fusions, and includes 3 intra-linked Peek cages, inserted with a standard transforaminal procedure, and provides sequential articulation to each segment.

“The business combination of Amendia and Custom Spine brings together 2 highly complementary companies. It creates an organization uniquely qualified to meet the needs of today’s ever-evolving healthcare market, to the benefit of patients, surgeons, distributors, hospitals, and payers,” Custom Spine CEO Mahmoud Abdelgany said in prepared remarks.

Last month, Amendia acquired transforaminal lumbar interbody fusion system assets from SpineSelect. The system assets purchased by Amendia include 2 product families – the Marquise MIS channel system and the Turbo MIS TLIF system, the Marietta, Ga.-based company said.

Amendia gained a total of 20 spinal technology patents from SpineSelect, the company said.

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Cisco Report: Hackers staying 2 steps ahead of security

Technology giant Cisco released its 2015 mid-year security report earlier this week, expressing concerns over the increasing proficiency of hackers and the use of varied exploit kits.

Cisco said that hackers are becoming more sophisticated in their attacks and security teams aren’t quite keeping up with them, as a whole, and hackers are making more than ever in their attacks.

“At a high level, we’re seeing big changes in attack behavior. Our adversaries are becoming more agile and are adapting faster to the security industry than ever before. We’re seeing this with exploit kits, ransomware and others. The reason for this, we think, is that it’s so much easier to monetize malware these days,” Cisco security outreach manager Craig Williams told eWEEK.

Crypto-currencies, like Bitcoin, are creating an environment where it is significantly easier for intrusive hackers to monetize their attacks, especially around the use of ransomware, Cisco said.

“At a minimum, ransomware is now a couple hundred dollars (to pay the ransom and get the data back). Instead of a couple hundred dollars per 1,000 users, it’s a couple hundred per user,” Williams told eWeek.

At the center of the issue is the wealth of security tools users have that operate poorly with eachother and leave holes that can be exploited. And exploiting these holes is getting easier as exploit kits and ransomware become easier to acquire.

Cisco gave direct attention to exploit kits, easy to pick-up software packages that enable more users to engage in attacks. One particular kit, called Angler, received special attention from the group.

“Angler’s use of Flash, Java, Microsoft Internet Explorer, and even Silverlight vulnerabilities makes this exploit kit the “1 to watch,” say Cisco researchers,” Cisco said in the report.

Ransomware is also seeing incresed use, Cisco said, which involves files being encrypted and held until a fee is paid to release the data.

Hackers are still hiding behind Tor and other anonymous browsing tools as well, making it easier for them to communicate under-the-radar, Cisco said.

On the other end, attacks through Java-related exploits are on the decline, Cisco said, but flash vulnerabilities are still at the heart of many attacks.

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Healthcare profits surge for Siemens in Q3

Profits surged more than 23% during the fiscal 3rd quarter for the healthcare business at Siemens (NYSE:SI) on double-digit sales growth, even as the German industrial conglomerate’s overall bottom line slid nearly -2%.

Siemens Healthcare reported profits of €549 million ($608.3 million) on sales of €3.25 billion ($3.60 billion) during the quarter, for a bottom-line addition of 23.4% on sales growth of 16.4% despite softer demand in China.

Siemens posted overall profits of €1.38 billion ($1.52 billion), or €1.65 ($1.83) per share, on sales of €18.84 billion ($20.88 billion), taking a -1.6% profit hit on sales growth of 7.6%.

Orders and revenue up in all businesses, led strongly by imaging and therapy systems businesses and benefiting from currency translation tailwinds

“We do not doubt that we are on the right track as we have seen since July,” CFO Ralf Thomas told analysts during a conference call.

Siemens has already announced plans to cut about 12,000 jobs, many of them in Germany where it employs about a third of its staff, at a cost of up to €1 billion. It booked severance charges of €274 million in the 3rd quarter, without which its industrial profit margin would have been 10.4%, and said it expected another €200 million to €400 million of charges this quarter.

Siemens shares closed up 2.4% at €96.15 apiece yesterday on the Börse. The stock was up 2.4% today on Wall Street, trading at $107.71 per share in mid-morning activity.

Material from Reuters was used in this report.

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Sorin’s Q2 earnings plunge on Cyberonics merger costs

Sorin Group (BIT:SRN) said yesterday that its 2nd-quarter profits plunged nearly 80% , largely due to costs from its pending, $2.7 billion merger with Cyberonics (NSDQ:CYBX).

Milan-based Sorin said profits were €2.1 million ($2.3 million), down -79.0% from €10.0 million ($11.1 million) during Q2 2014. The merger with Cyberonics into a new entity called LivaNova cost €16.6 million ($18.4 million) during the 3 months ended June 30, Sorin said.

Sales grew 13.1% to €215.6 million ($238.9 million)during the quarter, the company said. The news pushed SRN shares down -3.1% to €2.59 apiece yesterday. The stock was trading at €2.60 ($2.88), up 0.3%, in late-day trading on the Borsa today.

“Our 2nd-quarter revenues exceeded our expectations, supported by robust revenue growth from the cardiac surgery business unit, driven by strong momentum in all cardiopulmonary product segments, and solid results in cardiac rhythm management. Adjusted net earnings were in line with our expectations, taking into account our continued investments in growth initiatives,” CEO André-Michel Ballester said in prepared remarks. “We continue to make good headway towards the completion of our merger with Cyberonics and we are actively progressing the integration of the two companies.”

Sorin said it expects to post constant-currency revenue growth of 3% this year, but discontinued its profits forecast in light of the Cyberonics merger and disavowed its earlier guidance.

The Cyberonics deal hit a snag this week after the state’s attorney of Milan moved to enjoin the deal, alleging that it’s “intended to insulate Sorin from potential liability related to pending environmental litigation” against Sorin’s former owner, SNIA.

Yesterday Sorin said asked an Italian court to speed up the case, which has an initial hearing slated for August 17.

“Sorin believes that the allegations made by the Italian State’s Attorney are without merit, and has commenced expedited proceedings to challenge the action brought by the Italian state’s attorney,” the company said. “Sorin continues to work with the relevant Italian authorities to facilitate their understanding of the structure of the pending transaction with Cyberonics in order to achieve a satisfactory resolution of the matter. Sorin remains hopeful that the objection can be resolved expeditiously and without delay on the expected closing timetable for the proposed transaction.”

The deal to create LivaNova, which won approval from U.S. anti-trust regulators in April, was slated to close by the end of the 3rd quarter.

Sorin also said Italian authorities ordered it and other parties July 28 to “promptly commence environmental remediation efforts at the affected sites” in the SNIA environmental probe.

“Sorin expects to file imminently a response brief outlining Sorin’s objection to such order and seeking to have execution of the order stayed,” the company said.

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Globus Medical’s Q2 sales top estimate

Globus Medical (NYSE:GMED) yesterday posted 2nd-quarter sales that topped expectations and met Wall Street’s profit forecast, sending share prices up today.

Audubon, Pa.-based Globus reported profits of $25.1 million, or 25¢ per share, on sales of $133.6 million for the 3 months ended June 30, for a bottom-line gain of 21.3% on sales growth of 17.6% compared with Q2 2014.

Adjusted to exclude 1-time items, earnings per share were still a quarter, in line with expectations on The Street, where analysts were looking for sales of $128.4 million.

The news sent GMED shares up 2.0% to $28.42 each in early trading today.

“During the second quarter, we also launched 5 new products and made further progress on integrating our two most recent acquisitions. We remain confident in our long term growth prospects and our ability to sustain our industry leading profitability by the continued execution of our strategy of introducing innovative products, expanding our U.S. and international sales footprint, and controlling our expenses,” chairman & CEO David Paul said in prepared remarks.

Globus raised its outlook for the rest of the year, saying it now expects to post EPS of $1.04 on sales of $524 million, up from prior guidance for $1.01 on $214 million.

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Tandem Diabetes inks Dexcom deal, beats Q2 estimates

Tandem Diabetes Care (NSDQ:TNDM) yesterday reported a couple of wins, announcing a deal to integrate its insulin pumps with Dexcom‘s (NSDQ:DXCM) continuous glucose monitors and beating expectations with its 2nd-quarter results.

“Integrating Tandem’s next generation pump platform with Dexcom’s future CGM systems is an important step in aligning our technologies to be used in automated insulin delivery applications,” president & CEO Kim Blickenstaff said in prepared remarks. “We are committed to continue advancing the clinical applications of Tandem’s technology and are pleased to expand our relationship with Dexcom in support of this effort.”

The deal calls for Tandem’s t:slim and t:flex to be integrated with Dexcom’s G5 and G6 CGM devices.

“Using CGM data to direct insulin delivery is fundamental to offering the diabetes community an artificial pancreas solution,” added Dexcom’s Steve Pacelli, executive vice president for strategy & corporate development. “Our efforts with Tandem began with the display of CGM data on their pump and we are pleased to take this next step in the integration of our future products to support automated insulin delivery.”

Tandem also posted 2nd-quarter losses of -$19.5 million, or -65¢ per share, on sales of $15.7 million. Analysts on The Street were looking for losses of -71¢ on sales of $14.9 million.

“Our strong sales momentum continued in the second quarter, which was highlighted by our successful launch of the t:flex Pump,” Blickenstaff said. “This launch marks our achievement of a strategic company goal to leverage our infrastructure by offering multiple products that address different needs of the diabetes community.”

Tandem said it still expects to post sales of $70.0 million to $75.0 million this year, but raised its estimate for t:flex sales to between $4.0 million and $6.0 million from prior guidance for $1.0 million to $3.0 million.

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Ten Steps to Comply with FDA UDI Requirements

By David Lennarz, Vice President and Co-Founder of Registrar Corp

The September 24, 2015 Unique Device Identifier (UDI) compliance date is quickly approaching. Life-supporting and life-sustaining device labelers, as well as most contact and intraocular lens labelers, have only two months left to comply with the U.S. Food and Drug Administration’s (FDA) UDI labeling and Global Unique Device Identification System (GUDID) requirements. Implantable device labelers must also obtain UDIs for their devices and enter information into the GUDID by this date.

To assist device labelers through the UDI compliance process, Registrar Corp compiled a list of the top ten things to do to comply with FDA’s UDI requirements.

1. Determine the UDI compliance date for each device

Compliance dates for FDA’s UDI requirements are spread out over the course of six years and depend on a device’s classification. For most devices, the compliance date for direct marking is different than for the other requirements. It’s important to keep up with FDA’s extensions, as some compliance dates have changed since FDA issued its final rule. Registrar Corp stays up to date on FDA’s UDI regulations and can help device labelersdetermine the compliance date for a particular device.

2. Obtain a DUNS number

All device labelers must obtain a Data Universal Numbering System (DUNS) number, as they are used to identify labeler organizations in GUDID. Labelers do not supply their name and address to the GUDID. This information is pulled from the DUNS database.

3. Obtain the GMDN term for devices

Device labelers are required to identify a Global Medical Device Nomenclature (GMDN) preferred term code for each device they submit to the GUDID. It’s prudent to identify a device’s GMDN code well before its compliance date, as it can take a substantial amount of time to obtain.

4. Calculate how many UDIs are needed

Each type of device and every version or model of each type of device will require a separate UDI. A different UDI is also needed for each size, color, material, style, and package size of a single device type. See an example here.

5. Obtain DIs from an FDA accredited issuing agency

Every UDI must contain a device identifier (DI). The DI portion of a UDI must be issued by an FDA accredited agency. There are currently three accredited issuing agencies to choose from: GS1 in New Jersey, HIBCC in Arizona, and ICCBBA in California.

6. Select a PI

UDIs for all devices, except class I devices, must contain a production identifier (PI). The labeler can choose one or more of the following to make up the PI portion of a UDI:

•     The lot or batch number
•     The serial number
•     The expiration date
•     The date manufactured
•     The distinct identification code for a human cell, tissue, or cellular and tissue-based product (HCT/P) regulated as a device

7. Decide how to submit data to the GUDID

Data can either be submitted to the GUDID through FDA’s web interface, which allows one submission at a time, or through the Health Level 7 (HL7) option, which allows multiple submissions at once. Labelers must complete testing using a GUDID test account to be able to submit through HL7.

8. Create a GUDID account

Once a labeler has decided how they will submit data to the GUDID, they should create the appropriate GUDID account. FDA encourages those who choose to submit through the web interface to familiarize themselves with the system by creating draft submissions. Drafts are not visible to FDA.

9. Organize device information and submit data to the GUDID

Labelers will need to gather various information about each device to enter into the GUDID, including the description of the devices, their DIs, their brand names, their version or model numbers, their GMDN codes, their FDA listing numbers, and more.

10. Appoint a Regulatory Contact

Device companies must designate a Regulatory Contact for UDI and GUDID purposes. As a company’s Regulatory Contact, Registrar Corp will setup the company’s GUDID account, help determine the UDI requirements applicable to the company’s specific products, and facilitate communication between FDA and the company.

Along with serving as a company’s Regulatory Contact, Registrar Corp can submit information to the GUDID on behalf of a device company. For questions regarding FDA’s UDI and GUDID regulations, contact Registrar Corp at +1-757-224-0177 or help is available 24-hours a day at http://ift.tt/WI6JkO.

This blog was originally published as a press release.

The opinions expressed in this blog post are the author’s only and do not necessarily reflect those of MassDevice.com or its employees.

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ResMed buys China’s Curative Medical, gains on Q4 beat

ResMed (NYSE:RMD) yesterday said it paid an unspecified amount to acquire Chinese respiratory device maker Curative Medical and reported fiscal 4th-quarter results that beat Wall Street’s expectations.

San Diego-based ResMed said Curative will operate under its own banner under founder & CEO Jason Sun. Curative’s vascular business was not a part of the deal, which is expected to close by the end of the year, ResMed said.

“Curative’s strong clinical, innovation and market reputation in China, combined with ResMed’s global leadership in sleep and respiratory medicine, will help many millions of people in China suffering from sleep-disordered breathing and chronic obstructive pulmonary disease,” CEO Mick Farrell said in prepared remarks. “By partnering with Curative we will jointly invest to accelerate our growth while improving patient quality-of-life and reducing total healthcare system costs in China. This is all part of our global goal of improving 20 million lives by 2020.”

“We are very happy to join with ResMed to help even more people who suffer from sleep-disordered breathing or chronic respiratory diseases,” Sun added. “Curative has a history of using the best global and Chinese technologies in a locally Chinese manufactured product. Together with ResMed we will leverage global and local operating expertise to improve many more lives in China and to reinforce ResMed’s strength in the respiratory space globally.”

Fourth-quarter sales, earnings top expectations

ResMed posted fiscal 4th-quarter profits of $87.5 million, or 61¢ per share, on sales of $453.1 million for the 3 months ended June 30, for a-0.3% profit slip on sales growth of 9.1% compared with Q4 2014.

Adjusted to exclude 1-time items, earnings per share were 68¢, 3¢ ahead of the consensus forecast on The Street, where analysts were looking for revenues of $436.7 million.

Full-year profits came in at $352.9 million, or $2.47 per share, on sales of $1.68 billion. That amounts to a bottom-line gain of 2.2% on sales growth of 8.0%. Adjusted EPS were $2.57 for fiscal 2015.

“We finished the year with strong double-digit constant currency revenue growth and greater than 50% flow generator growth in the Americas during the 4th quarter. As expected, we have also achieved a solid return to growth in our mask business. We have continued our active share repurchase program and the board has also declared an increase in our dividend,” Farrell said in prepared remarks. “This quarter we grew our healthcare informatics capability with the acquisition of CareTouch and earlier today, we announced the acquisition of Curative Medical, an investment in China that will provide a complementary brand with a robust respiratory care and sleep apnea product portfolio. We will continue to invest in R&D and manufacturing for the Curative brand in China as we grow our new ResMed-Curative business.”

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GAO: Medtech’s profits jumped 44% in a decade

Profits for medical device companies rose 44% between 2004 and 2014 on 43% sales growth, according to the U.S. Government Accountability Office, which tallied the results from 102 medtech firms at the request of Senate minority leader Harry Reid (D-Nev.).

Profits for the companies included in the report (which excluded firms like Johnson & Johnson (NYSE:JNJ) that make products other than medical devices) rose from about $11.4 billion in 2005 to about $16.5 billion in 2014 at an average annual increase of roughly 4%. Profits declined during 3 periods, according to the report, falling from $11.4 billion to $9 billion from 2005 through 2006, from $14.0 billion to $10.4 billion from 2007 through 2009, and from $17.5 billion to $13 billion from 2011 through 2012.

The companies reviewed also saw the top line rise from a collective $95 billion in 2005 to about $136 billion in 2014, also an average annual rate of increase of about 4%. But the largest players dominated, with the 30 largest companies accounting for at least 95% of the total in each year of the study. Thirty-five medium-size companies accounted for 4%, with 37 smaller firms taking about 1%, the GAO said.

“Much of the growth in reported net sales from 2005 through 2014 was driven by large- and medium-sized medical device companies, which experienced average annual rates of increase in net sales of about 4% and 6%, respectively. Specifically, net sales increased for large-sized companies from $90.8 billion to $129.3 billion (about 42% over the period) and increased for medium-sized companies from $3.5 billion in 2005 to $6.1 billion in 2014 (about 72% over the period). In contrast, small-sized companies experienced a decrease in net sales, with an average annual rate of decrease of about 1% and a decrease in sales from $700 million in 2005 to $616 million in 2014 (about a 12% decrease over the period),” according to the report, which Reid requested to help gauge the impact of the medical device tax enacted as part of Obamacare.

Similarly, the larger companies took the lion’s share of the profits, with the 35 medium- and 37 small-sized companies posting net losses each year. The large firms’ profits rose about 43%, from $11.8 billion to $16.9 billion, an average annual rate of increase of about 4%.

“The extent of the reported net loss decreased for medium-sized companies over the time period from a net loss of $267 million in 2005 to a net loss of $191 million in 2014 (about 28% over the period), an average annual rate of decrease in net losses of about 4%. The extent of the net loss reported for small-sized companies increased from a net loss of $112 million to a net loss of $155 million (about 38% over the period), an average annual rate of increase of about 4% in net losses,” according to the report. “The net losses reported for both medium- and small-sized companies fluctuated between 2010 – when PPACA was passed – and 2014, but they decreased overall from 2010 through 2014.”

The report found that profit margins varied from a low in 2006 of 9% to a high of 14% in 2011.

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EU Publishes New List of Standards for Medical Device Directives

By Stewart Eisenhart, Emergo Group

European officials have published an updated list of recognized and harmonized standards in the Official Journal of the European Union, including standards pertaining to their medical device and IVD Directives.

The first 50 pages of the new list deal with the Medical Devices Directive, In Vitro Diagnostics Directive and Active Implantable Medical Device Directive.

In addition, European regulators have included several standards for the first time that have relevance to some medical device and IVD manufacturers. The standards published for the first time include:

• EN ISO 11990-1:2014 and EN ISO 11990-2:2014 pertaining to laser resistance of tracheal tubes
• ISO 10993-3:2014 pertaining to cytotoxicity
• EN 13060:2014 on steam sterilizers
• EN 13748-2:2015 on air ambulances
• EN 60601-1:2006/A1:2013 and IEC 60601-1:2005/A1:2012 on general safety electrical equipment

These standards play a major role in CE Marking certification and compliance in Europe, so manufacturers active in the EU or considering commercializing there should be aware of the new list.

Stewart Eisenhart covers medical device regulatory affairs for Emergo Group.

The opinions expressed in this blog post are the author’s only and do not necessarily reflect those of MassDevice.com or its employees.

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Teleflex updates on Q2 earnings, FDA clearances, acquisitions, deals & study data.

Teleflex (NYSE:TFX) yesterday released a slew of new information on the company, including its fiscal 2nd quarter results, new FDA clearances, the acquisition of Australian distributor assets, details on a new group purchase agreement and data from a set of new studies.

 

Teleflex shares slide on Q2 report

Teleflex’s shares dropped nearly 5% today after the medical device company released fiscal 2nd quarter results that just squeaked by expectations.

The company reported profits of $44.5 million, or 93¢ per share, on sales of $452.1 million for the 3 months ended June 29.

That amounts to a 7.9% decline in profits and a 3.4% slide in sales compared to 2014. Adjusted to include 1-time items, earnings per share were $1.42, down 9¢ from last year and directly inline with analyst expectations.

In light of the news, shares have fallen roughly 5% today as of 4:00 p.m. EST.

“During the 2nd quarter of 2015, Teleflex continued its solid operating performance, building upon the results realized earlier this year. Once again, we generated mid-single digit constant currency revenue growth and achieved adjusted earnings per share ahead of our previous expectations. In fact, adjusted earnings per share would have been higher during the second quarter of 2015 had it not been for foreign exchange, which impacted results negatively by approximately 20% as compared to the second quarter of 2014,” CEO Benson Smith said in a prepared statement.

Teleflex wins 510(k) for Arrow Endurance catheter system

Teleflex said it won FDA 510(k) clearance for its Arrow Endurance extended dwell peripheral catheter system, according to a release published yesterday.

The Arrow Endurance device is cleared to dwell up to 29 days, which allows hospitals to avoid using multiple peripheral IVs or peripherally inserted central catheters.

“The Arrow Endurance extended dwell peripheral catheter system is yet another offering from Teleflex that helps vascular access professionals provide the right line for the right patient at the right time. This is the ideal solution when patients need IV therapy for more than the few days that a traditional PIV allows but don’t require a PICC,” vascular access division prez Jay White said in a press release.

The company said it plans to launch the catheter system in the U.S. later this year.

Teleflex acquires Australian distributor assets

Teleflex said yesterday it acquired certain assets of its Australian distribution partner N. Stenning & Co.

Included in the deal are N. Stenning’s surgical customer relationships and a surgical sales team who are now direct employees of Teleflex, the company said. N. Stenning has been distributing for Teleflex for 35 years.

“Combining the experienced N. Stenning team with our existing direct distribution organization in Australia will strengthen and leverage the Teleflex sales platform to support new surgical product growth. At the same time, this accretive acquisition allows us to capture additional margin and to better understand the needs of our customers, enabling us to grow our surgical products business more effectively,” CEO Benson Smith said in a press release.

Teleflex said it continues to execute a strategy of converting select diestributors to direct sales models, which enables the company to sell on a direct basis with its end-customers.

Teleflex inks new group purchase agreement

Teleflex said yesterday it signed a group purchasing agreement with HealthTrust for its Weck EFx portfolio of port closure products, slated to begin August 1 this year.

The company’s Weck EFx products are designed for closing laparoscopic port sites and provide a range of options for different procedures, the company said. The portfolio includes Teleflex’s Weck EFx Shield fascial closure system, which it says is the only shielded port closure device on the market.

“Teleflex has built a comprehensive port-site closure portfolio created around the need for increased patient safety, procedural efficiency and reduced cost. Teleflex’s latest innovation, the Weck EFx Shield fascial closure system, introduces the industry’s 1st and only shielded device for enhanced patient safety. We are pleased to sign an agreement with HealthTrust and have the opportunity to bring these solutions to its members,” Teleflex surgical prez John Tushar said in prepared remarks.

Teleflex touts data from 2 new studies

Teleflex released the results of 2 new studies yesterday, involving its Arrow system Central Venous Catheter and its Arrow EZ-IO intrasosseous vascular access system.

The peer-reviewed, retrospective study of its Arrow CVC compared the company’s antimicrobial catheter with unprotected CVCs, and was published in the American Journal of Infection Control.

The study examined 871 catheters over 6,040 days of use and found a zero infection rate with the Arrow catheter, lower than the 1.4% infection rate with unprotected catheters.

The study also reported the Arrow catheter provided longer catheter-related bloodstream infections-free periods than unprotected catheters, with dwell times up to 30 days without infections occurring.

“This study, when combined with the 2 earlier independent studies by the same team, shows that using an Arrow CVC with antimicrobial protection from Teleflex makes sense from many perspectives. This study is further evidence that using an unprotected catheter may put both patients and a hospital’s bottom line at unnecessary risk. The Arrow CVC with Arrow+ard Technology has been repeatedly shown to improve patient safety even when the risk of infection is low, and it more than pays for itself in the process,” vascular access division prez Jay White said in a prepared statement.

The Arrow catheter also displayed lower CVC related costs compared to unprotected catheters, Teleflex said, with the cost being significantly lower per-day in comparison.

“Our research had previously established that the antimicrobial catheter justified itself both clinically and in cost-effectiveness when inserted in sites associated with higher CRBSI rates. Would the same thing be true if the catheter was used in sites with a low risk of infection? The answer is ‘yes’ according to our data, making the protected catheter a prudent choice in many circumstances – especially for hospitals that have an above-benchmark rate of CRBSIs,” study head Dr. Leonardo Lorente of Tenerife, Spain’s Hospital Universitario de Canarias said in a press release.

Another study, involving the company’s Arrow EZ-IO intraosseous vascular access sytem, compared the system against central venous catheterization during medical emergencies involving adult patients.

Intraossesous vascular access refers to administering medications or fluids into bone marrow.

A peer-reviewed article on the study, published in the Critical Care Medicine journal, involved 79 adults, 31 of which received intraosseous access and 48 who received a CVC. First-pass success rates with the Arrow EZ-IO were at 90.3%, significantly higher than the 37.5% rate associated with CVC.

Overall success rates were also higher, at 96.8% for the Arrow and 81.3% for CVC. The time spent during the procedure was faster with the Arrow EZ-IO, taking on average 1.2 minutes compared to 10.7 minutes with CVC.

“As the market leader in vascular access, we continue to partner with clinicians to expand their options for vascular access. Our full line of vascular access solutions provides clinicians with the ability to select the right line for the right patient at the right time, optimizing patient outcomes. This study has done an excellent job demonstrating the benefits of the ARROW EZ-IO System during inpatient medical emergencies,” White said in prepared remarks.

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Lombard purchases endograft developer Altura

Lombard Medical Technologies (NSDQ:EVAR) said today it acquired endovascular stent graft developer Altura Medical.

Altura develops ultra-low profile endovascular stent graft technology intended for the treatment of abdominal aortic aneurysms, in line with Lombard’s own technologies and their flagship Aorfix endograft.

The terms of the transaction between Irvine, Calif.-based Lombard and Silicon Valley-based Altura medical included the issuance of $15 million of Lombard stock at $4 per share, the assumption of $5.5 million in debt and $2.5 million in liabilities and transaction related costs, Lombard said.

“The acquisition of Altura and the launch of its new AAA stent graft will provide a near-term and substantial increase in revenues. In fact, we believe this innovative technology could account for up to 20% of our 2016 total revenue. The combination of Altura’s technology with our flagship Aorfix platform creates a truly patient driven platform that we believe will allow us to capture share from our competitors. The Altura device offers a simple, safe and efficient treatment option for standard AAA anatomy, while Aorfix offers the only on-label solution for patients with Aortic neck angulation up to 90 degrees,” CEO Simon Hubbert said in a prepared statement.

Another $27.5 million may be paid for the deal, based on commercial and regulatory milestones reached over the next 5 years, payable in either cash or stock, Lombard said.

“The Altura device offers a new ultra-low profile stent graft system without compromising the robustness and durability of the wire and graft fabric. The added benefits of this smart system are the ability to reposition during deployment and place each graft accurately to each renal artery enabling physicians to utilize all the available aortic neck. It also removes the need for cannulation and therefore provides a simple, intuitive, safe and consistent deployment system with predictable and shorter procedure times,” Dr. Dierk Scheinert of Leipzig, Germany’s University Hospital said in a press release.

Altura’s endograft system won CE Mark approval in the European Union this year and Lombard said it plans to initially launch the device in Europe early next year with a larger roll-out later in 2016. Lombard  plans to file for investigational device exemption from the FDA in 2016 and will begin recruitment for a clinical study the same year.

“Many patients who present for AAA repair can be treated quickly and efficiently with minimal hospital stay and recovery times. The introduction of an easy-to-deploy AAA stent graft that offers enhanced safety and accuracy on an ultra-low profile delivery system will allow physicians to treat a large percentage of AAA patients more efficiently in the future,” vascular surgeon Dr. Stuart Harlin of Pensacola, Fl.’s Coastal Vascular & Interventional said in prepared remarks.

Earlier this week, CEO Hubbert said the company was looking to grow out of being a 1-product company either via acquisition or a distribution deal with a larger medical device company.

Discussing Lombard’s 2nd-quarter results July 27, Hubbert referenced the $110 million buyout of Aptus Endosystems by Medtronic (NYSE:MDT) last month, observing that the crowded and competitive abdominal aortic aneurysm repair market is driving consolidation.

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Baxter beats the The Street, CEO Parkinson to bow out

Baxter (NYSE:BAX) managed to beat expectations on Wall Street with its 2nd-quarter results, despite a more than 36% bottom-line slide, saying longtime CEO Robert Parkinson Jr. plans to step down now that the spinout of its Baxalta pharmaceuticals division is complete.

Deerfield, Ill.-based Baxter posted profits of $332 million, or 60¢ per share, on sales of $3.89 billion for the 3 months ended June 30, for a profit slide of -36.2% on a -6.3% sales decline compared with Q2 2014.

Adjusted to exclude 1-time items, earnings per share were $1 even, a nickel ahead of The Street, which was expecting sales of just $2.4 billion.

“The spin-off of Baxalta was a historic event for the company, and we are excited to embark on this new chapter for Baxter with a newfound focus and vision that furthers our mission to help save and sustain lives,” Parkinson said in prepared remarks. “As the new Baxter evolves, we are intensely focused on accelerating profitable growth and expanding margins through disciplined portfolio management, implementation of cost reduction initiatives and the near-term launches of innovative new products. These efforts will drive meaningful value, both in the near and long terms, for our shareholders, partners, employees, and the patients and healthcare providers we serve.”

Baxter said it expects to post adjusted EPS of 58¢ to 62¢  for the rest of 2015, on constant-currency sales growth of 3%. Third-quarter adjusted EPS are pegged at 29¢ to 31¢, again on constant-currency sales growth of 3%.

In a conference call with analysts yesterday, Parkinson said the time is right for retirement, given his impending 65th birthday and 11 years at the helm of Baxter.

Calling the decision to find a successor a “front-burner issue” for the board, Parkinson said succession talks began several years ago but were put on the back burner until the Baxalta deal was done.

“Our board has had in place, through the governance committee, an established succession plan process for a long time. And in fact, just to provide a little color for everyone, we had discussions on this going back over the last few years. But clearly as we approach the spinoff, we kind of took the notion of succession and set it up on the shelf a little bit,” he said, according to a Seeking Alpha transcript. “I will say the decision to spin off [Baxalta] clearly wasn’t a result of any succession planning, but the reality is, as a result of the spinoff, it did answer the succession question for that big piece of the business.

“It also allows the board to go forward now and evaluate succession in the context of a medical products/medical device company which, in terms of experience and so on, can be a much more focused search,” Parkinson added. “So now, given the fact that the spin has taken place, recognizing the progress and the momentum that’s building at new Baxter, as I said, this has now become a new priority.”

BAX shares closed up 3.9% at $40.01 apiece today.

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MassDevice.com +3 | The top 3 medtech stories for July30, 2015

Say hello to MassDevice +3, a bite-sized view of the top three medtech stories of the day. This feature of MassDevice.com’s coverage highlights our 3 biggest and most influential stories from the day’s news to make sure you’re up to date on the headlines that continue to shape the medical device industry.

 

3. Abbott drops $250m on Tendyne, backs Cephea in mitral valve play

CEO Miles White proved today that he wasn’t just blowing smoke last week when he said that Abbott has powder to burn and is ready to use it.

Abbott today revealed a pair of investments aimed at building out its presence in the mitral valve replacement market, saying it put another $225 million on top of the stake it already owns in Tendyne Holdings and announcing an unspecified strategic investment in Cephea Valve Technologies. Read more

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2. Zimmer Biomet surprises with Q2 earnings beat

Zimmer Biomet surprised analysts with its 2nd-quarter earnings in the 1st quarterly report since closing the $14 billion merger with Biomet last month.

Despite a swing to red ink, Warsaw, Ind.-based Zimmer Biomet posted adjusted earnings per share of $1.59 for the 3 months ended June 30, 4¢ ahead of expectations on Wall Street. That excludes 1-time items, including $390.6 million in merger-related expenses. Read more

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1. GE Healthcare to drop $1B on healthcare provider education

GE Healthcare said it is investing $1 billion in healthcare provider education and training over the next 5 years.

GE Healthcare said the enhanced training will reach more than 2 million healthcare professionals by 2020 and help more than 300 million patients. The program will deliver localized offerings and include technology-enabled training solutions. Read more

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UPDATE: NuVasive beats The Street, closes DoJ probe

UPDATED July 30, 2015, with details on Justice Dept. probe.

NuVasive Inc. (NSDQ:NUVA) posted 2nd-quarter earnings that topped expectations on Wall Street and closed out its $14 million settlement with the U.S. Justice Dept.

San Diego-based NuVasive reported profits of $10.3 million, or 20¢ per share, on sales of $202.9 million for the 3 months ended June 30, marking a swing to profits from losses of -$4.1 million and 6.4% sales growth, compared with Q2 2014.

Adjusted to exclude 1-time items, earnings per share were 31¢, a full 6¢ ahead of expectations on The Street.

“We are pleased to report another strong quarter that resulted in revenue growth of more than 8% and an impressive 460 basis point increase in profitability, as we continued to take market share and gain momentum in our efforts to improve operational efficiencies,” chairman & CEO Gregory Lucier said in prepared remarks. “We are laser-focused on increasing our market share by rapidly developing disruptive technologies and services for spine surgery, expanding our global footprint in existing and new markets, and positioning NuVasive as a commercial powerhouse with integrated sales, service and specialized customer marketing programs. With these efforts underway, we look to move even faster to drive NuVasive’s next phase of growth and success, while generating enhanced long-term value for our shareholders.”

NuVasive said it still expects full-year sales of $810 million but raised its 2015 earnings outlook to $1.18, up from prior guidance of $1.12 per share. Adjusted EPS are pegged at $1.17, up from prior guidance of $1.10.

The company also said it finalized a previously announced deal with the Justice Dept. NuVasive said in July 2013 that the U.S. Health & Human Services Dept.’s inspector general issued a subpoena “in connection with an investigation into possible false or otherwise improper claims submitted to Medicare and Medicaid” for documents from January 2007 through April 2013. In April the company said it agreed to pay $13.8 million to settle the probe.

NuVasive said July 28 that the final deal calls for it to pay $13.5 million, plus fees and accrued interest, but admit no wrongdoing in the case.

The Justice Dept. said yesterday that it accused the company of a marketing scheme to promote the off-label use of its CoRoent spinal fusion system in treating severe scoliosis and severe spondylolisthesis. The case stems from a qui tam whistleblower lawsuit filed by former NuVasive sales rep Kevin Ryan, who will receive roughly $2.2 million of the settlement, according to the DoJ.

Prosecutors also alleged that NuVasive “knowingly offered and paid illegal remuneration to certain physicians to induce them to use the CoRoent system in spine fusion surgeries” using speaker fees, honoraria and expenses relating to physicians’ attendance at events sponsored by a group known as the Society of Lateral Access Surgery.

“SOLAS was allegedly created, funded and operated solely by NuVasive, despite its outward appearance of independence,” according to the government.

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Toshiba slashes CEO’s pay by 90%

(Reuters) — Toshiba (TYO:6502) said it would slash its interim CEO’s monthly salary for the next 2 months by 90%, including previously announced cuts, following revelations of improper accounting at the Japanese conglomerate.

The company said yesterday that it would reduce Masashi Muromachi‘s monthly salary by 50%, on top of the 40% cut already in place. It said it would also dock the pay of other senior executives, and that an extraordinary shareholders’ meeting in September would consider any additional measures.

Toshiba also said it would hire more independent directors, including lawyers and accountants.

Earlier this month an independent panel found that former CEO Hisao Tanaka was aware the company had inflated its profits by $1.2 billion over a period of several years. Tanaka and a string of other senior officials resigned over their roles in what’s become Japan’s biggest accounting scandal since Olympus (TYO:7733) nearly imploded in 2011 over a similar, $1.7 billion accounting coverup.

Vice chairman Norio Sasaki and adviser Atsutoshi Nishida also stepped down after the 3rd-party report showed they played a part in the overstatement of profits going back to the 2008 financial year. A total of 8 officials resigned. The outside panel of accountants and lawyers said Toshiba had overstated its operating profit by ¥151.8 billion ($1.22 billion), roughly triple the company’s initial estimate.

Tanaka and Sasaki pressured business divisions to meet difficult targets and knew they were overstating profits and delaying the reporting of losses, amid a culture of not going against the wishes of superiors, the report said.

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