St. Jude Medical shareholders grudgingly approve executive tax breaks ahead of Abbott merger

Shareholders in St. Jude Medical (NYSE:STJ), who this week voted to approve its pending, $25 billion merger with Abbott (NYSE:ABT), grudgingly approved a measure to give tax breaks to its senior executives if the deal goes through.

Little Canada, Minn.-based St. Jude’s board last year voted to do away with a “gross-up” provision that would have covered the 15% excise tax imposed by U.S. tax laws on stock owned by executives and directors for the 6 months before and after a merger transaction.

But after inking an $85-per-share deal in April to be acquired by Abbott, St. Jude moved to reinstate the gross-up provision, which could relieve CEO Michael Rousseau and other executives of $18 million in tax payments if they leave Abbott after the deal closes, expected by year-end.

The provision would save $5 million for Rousseau, a $3.3 million hit for president Dr. Eric Fain and $2.5 million for CFO Donald Zurbay. The benefit only applies if the executives are terminated without cause or leave for good reason after the deal closes, the newspaper reported; Abbott hasn’t publicly outlined its post-merger leadership plans. Former CEO Dan Starks, who is still chairman and the company’s largest individual shareholder, is not eligible for the gross-up provision as the $18 million he set to pull down from the deal is not subject to the excise tax.

In a regulatory filing yesterday, the company detailed the shareholder votes for the merger, the gross-ups and for its executives’ compensation plans. Although the stockowners overwhelmingly approved the Abbot merger (casting nearly 212.2 million of 239.6 million votes, or 88.5%, in favor), only 52.3% approved the gross-up plan (125.3 million votes for). Only 53.5% of shareholders voted for the executive compensation plan, casting 128.3 million “aye” votes, according to the filing.

St. Jude and Abbott still plan to close the deal, which must still pass reviews by anti-trust regulators in the U.S. and Europe, by the end of the year. In July, the Federal Trade Commission asked for more information about the merger; the European Commission is slated to decide by Nov. 9 whether to bless the union.

Earlier this month, the duo agreed to divest some of their vascular access products, likely aiming to appease the anti-monopoly agencies. Japan’s Terumo Corp. (TYO:4543) paid $1.12 billion for St. Jude’s Angio-Seal and Femoseal vascular closure devices and Abbott’s Vado steerable sheath, but Abbott said it would retain its overall vascular closure business.

Abbott CEO Miles White last week praised St. Jude’s handling of claims by short-seller Muddy Waters that its implantable heart devices pose cybersecurity risks and said he’s still planning to close the sale by the end of year.

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Litmus Health looks to bring wearables to drug development

Litmus Health said yesterday that it launched its clinical data science platform into public beta. The company hopes to use big data from wearables and connected devices to help inform endpoints for Phase I & II clinical trials.

The goal of its platform, according to Litmus, is to get pharmaceuticals to market faster by putting health-related quality of life as the primary motivation for clinical development. Massive sets of data collected from wearables will help to inform researchers about their patients quality of life outside the clinic.

Get the full story at our sister site, Drug Delivery Business News.

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Monaghan Medical touts Aerobika study

Monaghan Medical yesterday touted data from a 6-month retrospective study showing that its Aerobika device reduced drug use for treatment of chronic obstructive pulmonary device.

The Syracuse, N.Y.-based company says its oscillating positive expiratory pressure therapy device is designed to expand the airways, help expel mucus to the upper airways and aid in drug deposition.

Get the full story at our sister site, Drug Delivery Business News.

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Corindus wins FDA nod for 2nd-gen CorPath GRX vascular robot-assisted surgery system

Corindus Vascular Robotics (OTC:CVRS) said yesterday that it won 510(k) clearance from the FDA for the CorPath GRX, it’s 2nd-generation vascular robot-assisted surgery platform, and plans to have it on the market during the 1st quarter of 2017.

Waltham, Mass.-based Corindus said it added several features to the latest CorPath iteration, including the ability to control the guide catheter in 1mm increments to precisely position balloon or stent catheters during percutaneous coronary interventions.

“CorPath GRX is a critical advance in our core technology and a meaningful step toward realizing our vision of fundamentally changing how PCI procedures are performed,” president & CEO Mark Toland said in prepared remarks. “GRX will enable us to build more robust and sustainable cardiovascular robotic programs with our hospital partners as we remain focused on providing the highest level of care to patients while protecting the health and wellness of the cath lab staff. We are excited to debut the GRX at the upcoming Transcatheter Cardiovascular Therapeutics (TCT) 2016 conference later this week where we will be holding clinician demonstrations.”

“The new features of the next generation CorPath System, particularly the addition of active guide catheter management, will allow physicians to increase the complexity of procedures performed robotically,” added chief medical officer Dr. Aaron Grantham. “This is a tremendous advancement in the technology platform that will greatly extend the clinical capability of the system.”

In March, Corindus won 510(k) clearance from the FDA for the original CorPath system for a peripheral intervention indication, a year after launching a clinical trial.

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Comparing drug and medical device clinical trials

Understanding the similarities and appreciating the differences of drug and medical device clinical trials is important. A well-organized, controlled clinical trial can save time and money. Additionally, the faster and more accurately a trial is performed, the faster the test article can be introduced to the market and begin helping the community.

Read on to learn the similarities and differences between drug and medical device clinical trials.

The Differences between Drug and Medical Device Clinical Trials

	Drug	Device
Primary Administrator	Patient or Patient’s Caregiver	Investigator
Principal Investigator Supervision Required?	No	Yes
Patient Responsibility	High	Low
Physician Involvement	Low	High
Training Process	Observational Staff and patients are informed of administration regimen, possible side effects and potential adverse reactions.	Practical Complex devices may require extensive investigator training, including cadaver labs, animal models, or proctoring during live cases.
Cost of Product	Often provided free of charge	Up-front cost with subsequent reimbursement

The Similarities between Drug and Medical Device Clinical Trials

Both drug and device clinical trials require adherence to the following regulations:

• 21 CFR 11 – Electronic medical records
• 21 CFR 50 – Human subject protection
• 21 CFR 54 – Financial disclosure
• 21 CFR 56 – Institutional Review Board (IRB) requirements

On the other hand, drug trials must abide by 21 CFR 312 (investigational new drug application) but device trials do not. Additionally, device clinical trials must abide by 21 CFR 812 (investigational device exemptions) whereas drug trials do not.

However, these two regulations have a number of similarities, some of which are outlined below:

1. The appropriate submission must be made to the FDA before beginning an investigation
2. Amendments are required when changes are made
3. Annual updates on study progress are mandatory
4. Both sponsor and investigator responsibilities are described
5. Investigation must be conducted in compliance with the investigational plan, signed agreement, federal regulations and conditions of approval imposed by the IRB
6. Investigation must be properly monitored
7. IRB approval must be obtained prior to beginning the investigation
8. Labeling requirements are specified
9. Significant new information must be provided to subjects
10. Sponsors must provide information to investigators

Drug and device clinical trials have several similarities and differences, but the end goal is the same: introduce safe and effective products to the public as quickly as possible. To help you further understand how to conduct global clinical research trials and understand the differences between drug and device trials, take a look at this helpful resource.

John Lehmann is the director of marketing of IMARC Research, a clinical research organization (CRO) that specializes in medical device trials. IMARC Research assists study sponsors with clinical monitoring, auditing, training, consulting, project management and more. To learn more, visit imarcresearch.com.

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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Integer Holdings Q3 EPS beats the street

Shares in Integer Holdings (NYSE:INTGR) fell slightly today after the medical device maker topped earnings per share expectations and missed slightly on revenue for its 3rd quarter.

The Frisco, Texas-based company posted profits of $11.5 million, or 37¢ per share, on sales of $346.6 million for the 3 months ended September 30.

The company saw a huge swing from a minimal $22,000 in profits reported last year during the quarter, with sales increasing 136.3% compared with the same period last year.

After adjusting to exclude 1 time items, profits were at $25.8 million, 67.5% up from the same period last year. Adjusted earnings per share were 83¢, 4¢ above the consensus of The Street, though revenue missed the mark, with consensus putting the company at $347.9 million.

“Our 3rd quarter results demonstrate that the steps we have taken to stabilize our business are working. Our internal focus on reducing costs, improving working capital, and business process optimization is progressing well and has allowed us to stem the revenue and adjusted EBITDA declines we saw during the 1st half of the year. Our outlook for the remainder of the year further demonstrates this business stabilization. Integer’s value proposition remains intact and we are well-positioned within the medical technology market, with a broad suite of technologies, capabilities and product offerings to deliver innovative, cost-effective solutions to our customers in order to enrich the lives of patients worldwide,” prez & CEO Thomas Hook said in prepared remarks.

Shares dropped 2.2%, closing down 41¢ at $18.15 for the day.

Integer said it is maintaining its revenue, net income and diluted EPS guidance. The company said it expects to post adjusted EPS between $2.60 and $2.75, on sales of $1.38 and $1.4 billion for the full year.

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Study uses nasal tissue to repair damaged knees

(Reuters) – Doctors might one day be able to harvest cells from patients’ noses to produce cartilage that can be transplanted into damaged knee joints, a small experiment suggests.

Researchers tested a new technique for repairing what’s known as articular cartilage, the tissue that covers the ends of bones where they come together to form joints. When articular cartilage is damaged by injury or normal wear and tear, it can result in joint pain and limited mobility.

Because the experiment only included 10 adults who were followed for just two years, it’s impossible to say for sure whether this procedure would be safe or effective with widespread use. But the results are promising enough to merit more testing, said study co-author Ivan Martin of the University of Basel in Switzerland.

“We have developed a new promising approach to the treatment of articular cartilage injuries,” said Martin said by email. “Before this can be offered to patients as a standard treatment, obviously it needs to be tested in larger patient cohorts and in randomized and controlled trials with long-term assessment of clinical outcome.”

Previous research has found cells extracted from the septum, cartilage tissue in the nose, can be used to grow new cartilage in a lab, Martin said. With the current experiment, researchers successfully implanted this lab-grown tissue into knee joints for the first time, he said.

To do this, researchers first performed a minimally invasive procedure using local anesthesia to harvest a small specimen, about 6 millimeters or a quarter of an inch, of tissue from the nasal septum.

Next, they grew the harvested cells in a lab for two weeks, then cultured them for another two weeks on a scaffold made of what’s known as collagen membrane to grow thin sheets of cartilage measuring 30 mm by 40 mm, or about 1.2 inches by 1.5 inches.

Researchers trimmed these grafts to the right shape to replace the damaged cartilage removed from each patient’s knee joint, then implanted the replacement tissue.

Two years after reconstructive surgery, most recipients reported improvements in pain, knee function and quality of life, researchers report in The Lancet.

MRI scans at two years also showed the growth of new tissue similar to native knee cartilage around where the replacement tissue was implanted, the study found.

Researchers didn’t see any adverse reactions or dangerous side effects.

Every year, around 2 million people in the U.S. and Europe alone are diagnosed with damage to articular cartilage because of injuries or accidents, the researchers note.

Because the tissue doesn’t have its own blood supply, it has limited capacity to repair itself once damaged, leading to degenerative joint conditions like osteoarthritis.

Traditional methods to prevent or delay onset of cartilage degeneration don’t create the healthy cartilage needed to endure the forces of everyday movement, the authors contend.

Efforts to use patients’ own healthy articular cartilage cells from a healthy joint to repair damaged knee tissue haven’t been able to reliably restore function over the long term, the researchers argue.

“In my eyes, the major advantage (of the experimental procedure using nasal tissue) is that there is no need to obtain cartilage from within a healthy joint,” said Dr. Nicole Rotter of Ulm University Medical Center in Germany, author of an accompanying editorial.

“Potential harms include side effects to the new donor site, the nose, such as deformities of the nose and functional problems such as nasal obstruction,” Rotter added by email. “These negative side effects can be avoided with an appropriate surgical technique to obtain the biopsy, meaning this is a surgery that should be done by a person with expertise in nasal surgery such as an otorhinolaryngologist.”

Beyond that, more research is needed to see how this procedure works in the knee joint over a longer period of time, Rotter added by email.

“Long term stability and integrity need to be investigated, as a potential risk could be that these transplants are not stable in the long run,” Rotter said.

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