Wednesday, July 2, 2008
NYT: CT Angiography May or May Not Be Worth the Cost
The New York Times has an interesting piece out on the overuse of medical technology. To summarize their five pager: There's not enough data out to suggest that CT Angiography actually reduces costs or improves patient outcomes, but doctors tend to request the tests all the time anyway. They go on to do a so-so job of generalizing the phenomenon...
The problem is not that newer treatments never work. It is that once they become available, they are often used indiscriminately, in the absence of studies to determine which patients they will benefit...Once the F.D.A. approves a test or device, Medicare rarely demands evidence that it benefits patients before agreeing to pay for it. But last year, Medicare officials raised questions about the benefits of CT heart scans and said it would demand more studies before paying for them. But after heavy lobbying by cardiologists, Medicare backed down.
One thing The Times fails to highlight is the factors driving the decision on behalf of the doctors. Not only will they be paid as a result of running the test, they're absolved of potential liability of not running the test. It was our experience in the Ortho world that MRIs and CTs were ordered "just to be safe," lest they be questioned on what could have been found in future malpractice proceedings.
Obviously, medical decisions should be based on statistically sound evidence, but there's a fundamental paradox to gathering sufficient evidence before reimbursement: who pays for all of those scans while the data's collected?
More from the New York Times...
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Tuesday, June 17, 2008
Annals of Internal Medicine Article Advocates "Cost Effectiveness Analysis"
Dr Alan Garber, MD PhD's piece in the latest issue of the Annals of Internal Medicine, titled "A Menu Without Prices", highlights the potential benefits of applying more cost effectiveness (efficaciousness?) analysis to medical reimbursement decisions...
For the well-insured, obtaining health care in the United States is like dining in a sumptuous restaurant that has menus without prices. A price-free menu encourages diners to ignore cost when making their selections. Similarly, well-insured patients usually don't know the prices of medical services at the time they receive them. Even for common procedures, few hospitals list their charges, much less the accompanying professional fees and the out-of-pocket costs; these are only revealed weeks or months later, when the explanation of benefits statement arrives.
Not a new concept or argument, but Garber does his best to back up the thesis...
By 2005, per capita expenditures were 92% greater than in Canada, 90% greater than in France, 95% greater than in Germany, and 135% greater than in the United Kingdom. Measures of population health have improved no more in the United States than in these countries, offering little comfort to those who presume that uniquely high expenditure is purchasing better health.
A point of contention with the previous paragraph would be the absence of a citation for that claim. It might be in one of the referenced articles, but a point so central to the argument should be cited right there.
As a non-MD member of the Medgadget staff, this Medgadgeteer is more involved with expanding the costs of healthcare with innovative new devices. While effective management of reimbursement is obviously critical to financial sustainability of any system, it does tend to dampen innovation. Innovative new devices are typically the product of small startup companies who don't have the funding to run years and years of cost-effectiveness studies to prove their product is better than the woeful status quo.
As fans/practitioners/creators of medical technology, we should be wary of (or offer alternatives to) solutions that could dramatically deflate the motivation to innovate.
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Tuesday, June 3, 2008
Medical Device Growth Outpacing Pharma Industry
Michael Rosen of the Wisconsin Technology Network (Wisconsin's got lotsa technology, don'tchaknow?) has a great analysis of how and why the medical device industry is growing faster than the drug industry. In short, it's because biomedical engineers are cooler than biochemists.
...ok, he doesn't say that (even if it is true). The real analysis is as follows...
The medical device market is about 50 percent of the world pharmaceutical market in terms of relative size, but is also growing faster than its drug counterpart. It is dominated by U.S. companies (16 of the 25 companies are U.S.- based) with 72 percent of the revenue. MX estimates that the medical device market will reach sales of $336 billion in 2008. Assuming similar growth to that of 2007, this means that the market last was in excess of $300 billion.According to MX, although the top 25 companies represent the lion's share of sales (almost 60 percent), there are an estimated 20,000 medical devices companies around the world. Only one company showed a decline (however slight) in growth, and two companies had flat sales. The remaining 22 companies all posted positive growth with 15 companies showing double-digit growth. Not mentioned, but with substantial sales and growth, are companies like Toshiba Medical Systems, Hitachi Medical Systems, and Gambro.
The medical device industry faces a number of challenges in addition to the technology convergence factor mentioned earlier. In general, this industry is at lower risk than its pharmaceutical/biotech drug counterpart for a couple of reasons:
• Shorter product development times (about 33 to 50 percent of drug development time).
• Less regulatory (Food and Drug Administration) approval risk.
Additional factors favoring the growth of this industry include the greater physician need for better and more precise diagnostics and imaging to guide them on patient disease status and proper disease management, whether surgical or pharmaceutical (or both).
There's more analysis of the challenges facing medical devices, with the biggest issue being reimbursement.
Snarky commentary aside, we would venture that medical device development does lend itself to more predictable product development cycles than pharma. Engineering project management and "gizmo" development is at least a century old, and medical devices are just a small subset of other devices, meaning there's tons of common knowledge regarding engineering project management. Drugs are a lot more of a biochemical craps-shoot, taking years of effort before you can even begin targeting production.
Full story: Global medical device market outperforms drug market growth...
Image credit: Wellcome images: Surgery by robot...
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Thursday, April 10, 2008
Oh Alfred Mann, You and Your Inhaled Insulin
The LA Times is running a story on billionaire medical device magnate Alfred Mann's dogged persistence of successfully launching an inhaled insulin product.
The latest blow came Wednesday when Valencia-based MannKind Corp.'s stock lost almost 60% of its value after pharmaceutical giant Pfizer Inc. said a study showed that its failed version of inhaled insulin might increase the risk of lung cancer.After dropping much of this year, MannKind shares lost an additional $3.50 on Wednesday, closing at $2.35.
Mann remains undeterred. In an interview, the chief executive was upbeat about his company's drug Technosphere, which combines a concentrated insulin powder with an inhalation device the size of a deck of playing cards. It is superior to rivals' efforts and will be a blockbuster when it arrives on the market as early as 2010, he said...
Mann has invested $566 million in the company and is the controlling shareholder. He has agreed to lend it hundreds of millions more, raising his total stake to $916 million.
When you've got billions to spend (lose?), you can afford to be stubborn if the payoff for being right is tens of billions (as is easily the case with inhaled insulin). Of course, sometimes things just aren't meant to be.
Time will tell if this is one of those cases.
More from the LA Times and from MannKind Corp.
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Tuesday, February 19, 2008
Wal-Mart's Healthcare Struggle
Wal-Mart's foray into healthcare, with their opening of dozens of in-store clinics, is both rough and persistent. A contracting company called CheckUps, hired to run a number of the clinics, has decided to close 23 of its Wal-Mart operations. On the other hand, Wal-Mart is pressing ahead with its partnership with Steve Case's RediClinic. (Mr. Case is also known as the founder of Revolution Health, a health portal) . The plan is for RediClinic to partner with local area hospitals to run the in-store clinics.
From the New York Times:
Wal-Mart has leased space to about 80 clinics in stores across the country, including the CheckUps clinics now closed. They are all operated by independent firms, including 13 by RediClinics, a unit of Steven Case's Revolution Health company, and two by hospital companies in Wisconsin and Florida.While some of the Wal-Mart clinics are headed by doctors, most are run by nurse practitioners who are limited to providing routine medical care like giving flu shots or prescribing drugs for sore throats. Operators say their main clients are mothers with small children, and that about 30 percent do not have a family doctor.
Wal-Mart said it hoped the CheckUps clinics would not stay vacant for long.
From American Medical News:
Among Wal-Mart's first expansions will be in its home state of Arkansas, where St. Vincent Health System will own and operate four clinics in Little Rock scheduled to open in April.At least half of the 400 new clinics will be opened through a deal with RediClinic, a chain owned by AOL co-founder Steve Case's Revolution Health. RediClinic will seek commitments from hospital systems as partners for Wal-Mart clinics, starting in Atlanta and Dallas. Hospitals could be contracted as strategic partners without an ownership stake. Or they might split a stake in the facility, such as RediClinic and Memorial Hermann do in 11 H-E-B grocery clinics in Houston.
More at the New York Times...
Read on at AMNews...
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Friday, December 21, 2007
Roadside Medical Clinics: Bringing Care to Truckers
Hard working members of the trucking community will now find convenient medical services on their way thanks to Roadside Medical Clinics, a company based in Alpharetta, Ga. The company plans to introduce its chain of roadside clinics coast to coast, offering its services "in various subscription packages for an average of $15 to $30 a month," according to Bob Perry, Roadside Medical vice president, who is quoted in eTrucker.com.
Don't wait until you get home to get medical care. With Roadside Medical at Pilot Travel Centers, it's like we're a house call for truckers:
Minor Trauma Care
General Medical Care
Digestive Disorder Treatment
Sleep Disorder Screening
Respiratory Conditions
STD Testing & Treatment
Chest Pain & Heart Conditions
Chronic Care
Vaccinations
Muscular-Skeletal Diagnosis and Treatment
Medication Management
Head, Ear & Eye Conditions
(hat tip: Kevin, M.D.)
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Wednesday, November 7, 2007
For Mann and Mankind
Israel's Globes Online has an article about the legendary medical device inventor Alfred Mann, whom we had a chance to see a couple of years ago at the Frost&Sullivan Medical Devices Awards. The article, which for the most part concentrates on Mr. Mann's interest in further developing Israel's already vibrant medical devices industry, also has information about Mann's biography and his outlook on the future of medicine.
Read: For Mann and mankind ...
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Friday, August 31, 2007
Exubera, Pfizer's Insulin Spray Ordeal
Bad news for the insulin spray gun, as sales are not meeting expectations.
Analysts were forecasting blockbuster annual sales of $2bn (£1.01bn, E1.49bn) for the insulin spray. It delivered just $4m in the second quarter of 2007 - the first time Pfizer disclosed sales of the product.In July, Pfizer launched a massive television and print ad campaign in the US to jump-start sales. Reducing the number of inhalers produced is a clear indication management are unsure their next campaign will have much impact on sales.
The cutbacks are spelt out in a report filed with the US Securities and Exchange Commission by West Pharmaceutical Services, the American drug technology firm that makes about 60% of the device.
It said: "We expect Pfizer's high inventory levels and slower-than-expected demand will affect our fourth-quarter 2007 and full-year 2008 sales levels. In coordination with our customer, Nektar, we have reduced production to one shift per day at our dedicated facility beginning in the third quarter of 2007."
Perhaps the diabetics feel self conscious pulling out what looks like a bong in the middle of a restaurant, and taking a hit.
More from The Business...
(via KevinMD, and PharmaGossip)
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Friday, July 27, 2007
Who Killed U.S. Medicine?
As some of you know, medical doctors on our editorial board have not been big fans of the American Medical Association (AMA). Some of us even quit this organization. (Medgadget does not have a unified editorial opinion on the AMA, but some of us do have a very negative opinion of the organization.) We've been battling the AMA on many fronts: for their obstructive internet practices, for their refusal to serve doctors' interests, for their waste of money, for their populism of the lowest common denominator, and for their current role of lobbying for the sake of lobbying, hoping to make itself more relevant.
Now comes a stinging editorial from Regina E. Herzlinger, at the Washington Post, that everyone should read:
America's physicians are the most trusted and valuable resources in our health-care system. Yet doctors' professionalism and incomes have taken a terrible beating recently. The American Medical Association, which received $286 million in revenue last year to protect the profession, has served physicians poorly.Physician incomes, when adjusted for inflation, declined 7 percent from 1995 to 2003, while those of professional and technical workers rose. But unlike other professionals -- lawyers, architects, authors and economists -- doctors' work is dictated by the policies of insurers and governments. Increasingly, independent physicians, accountable only to their patients and the Hippocratic oath, have been replaced by salaried doctors who are accountable to the hospitals or insurers that employ them...
You might expect that the AMA would fight the insurers, hospitals, government bureaucrats and ivory tower academics who have diminished physicians' incomes, besmirched their ethical reputations and compromised their professionalism -- but you would be wrong. No, instead, at its annual meeting last month, the AMA declared war on retail medical clinics, located in places such as CVS and Wal-Mart.
Read the whole thing, and consider joining some of us in quitting the AMA in protest, for the sake of our profession. Even if you are a medical student, with a free membership, make a statement by rejecting this organization with a great past but a questionable future.
(hat tip: Kevin, M.D.)
Flashbacks: Urgent Action Needed! ; How AMA and Other Societies Abrogate Their Responsibilities; American Medical Association: No Doctors Day Celebrations?
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Tuesday, June 12, 2007
We Knew It All Along: Venture Capitalists Attracted to Medical Devices Over Pharma or Computers
The Grey Lady is running a business article on how medical devices represent an attractive investment opportunity compared to other typical investments...
In the first quarter of this year, seed investors put $1.1 billion into such businesses, a quarterly record for the medical-device industry, and a 60 percent increase over the same period in 2006, according to the National Venture Capital Association, a trade group."The venture-capital-backed boom in medical devices has delivered extraordinary new technologies," said David Cassak, an editor at In Vivo, a monthly publication for the medical-device field. "There's virtually no sector of medical devices that hasn't been given a tremendous boost."
Medical investments are by nature high risk, and devices take time and millions of dollars to develop. They must also be tested for safety and usefulness and then receive regulatory approval. It is a business that generates sales of $15 billion to $20 billion a year, and the venture capitalists are betting on its expanding into new niches.
Part of the lure, analysts and executives said, is that medical devices feel like a smarter gamble than investing in computer technology, which has fallen out of favor with public-market investors. Interest by these investors is critical for venture capitalists who want to profit by selling shares of their start-ups on Nasdaq.
At the same time, venture capitalists and entrepreneurs who are attracted to life sciences are wary of investing in pharmaceuticals, which can typically take 10 years and cost several hundred million dollars to come to market. Devices typically can be developed in half the time and for much less.
For this Medgadgeteer, the cool thing about medical devices is the relatively linear path from recognizing a need to implementing technology to fix it. Consumer electronics have devolved into a melee of convenience features and silly trends. Pharma's development cycles are too expensive and risky...not to mention the work is tremendously boring.
More from Matt Richtel's New York Times Article...
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Tuesday, January 30, 2007
The Power of Quicken, Applied to Health Care
Consumerism in medicine is a hot topic right now, and with the increasing utilization of Health Savings Accounts (HSA) the public will be looking for the software that helps organize the financial mess. Welcome to Quicken Health. Imagine the possibilities if Quicken can do for health care financing what it did for home and business accounting. Don't be surprised if Mr. Gates releases competing software in the near future to grab a piece of that market as well.
Quicken Health: Coming Soon! Explanations of benefits! Doctor bills! FSA reimbursements! HSA Substantiations! The list of paperwork & information people have to manage for their basic healthcare goes on and on and until now, there has been no help.Imagine a solution that will consolidate and organize the flood of healthcare information in one click. Imagine an easy to use tool people will turn to when they need to make better healthcare decisions. Imagine leveraging the lessons learned from connecting Quicken Personal Finance Software to more than 4,000 financial institutions. Now imagine Quicken - for healthcare.
Right now, Quicken is developing products and services that will simplify the way millions of American consumers manage their healthcare.
Product Updates
For the first time, millions of people will have the ability to view and organize the flood of information coming from a variety of healthcare sources, including medical bills, insurance payments and medical records from physicians and hospitals, into one easy-to-use system.The first of the new Quicken-branded healthcare products will help consumers make better healthcare decisions and will help them save time and money.
Our engineers and designers are currently talking to hundreds of people across the United States to make sure that the final product, available in 2007, will truly change the way people think about their healthcare.
Product Page . . .
Product Fact Sheet [PDF] . . .
(hat tip: The Patient's Doctor)
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Tuesday, January 23, 2007
Former FDA Chief To Be Fined for Conflict of Interest
Many people these days associate the pharmaceutical industry with profiteering, misleading advertising, and misplaced development priorities. Just as many place faith in the FDA as the watchdog -- the government organization that will keep the drug companies honest, and keep harmful meds off the market.
These people were undoubtedly disappointed when former head of the FDA, Lester Crawford, was charged with lies and conflict-of-interest:
Crawford pleaded guilty in October to charges of having a conflict of interest and false reporting of information about stocks that he and his wife owned. The stocks were in food, beverage and medical device companies that Crawford regulated while head of the Food and Drug Administration.Crawford and his wife, Cathy, made roughly $39,000 from exercising options and in dividends from the stocks they held in the FDA-regulated companies.
In court, Crawford admitted to falsely reporting that he had sold or did not own stock when he continued holding shares in the firms governed by rules of the FDA, which is illegal. Beginning in 2002, Crawford filed seven incorrect financial reports with a government ethics office and Congress, leading to the misdemeanor charges...
...Though he lied about ownership of the stocks - including under oath before the Senate - government attorneys acknowledged there was no evidence he was "engaged in a concerted scheme to use his high office for personal gain."
When it comes to penalties for hiding damaging information, one wonders if Crawford, and the FDA, would be held to the same standards as Merck and other companies. Today, it will be revealed Crawford would avoid jail time and be fined $50,000.
Crawford's biography on the FDA website has not been updated to reflect this news.
Update: Like so much else concerning the FDA, today's sentencing has been delayed.
More context from The Dissident Voice...
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Friday, January 12, 2007
How AMA and Other Societies Abrogate Their Responsibilities
Your correspondent, a double boarded practicing clinician, just doesn't get it. California governator Arnold Schwarzenegger comes out swinging with a proposal to tax MDs 2% off their income to finance insurance scheme for all. From few, to all: just like in the Soviet Union. In addition, clinicians are assailed from all the other sides: managed care companies and insurance firms, trial lawyers, litigating patients, and populist politicians of both parties. As it becomes increasingly difficult to practice medicine, AMA says nothing about these assaults. And it does nothing. Instead, AMA and nine other "leading physician associations" came out yesterday with a list of "principles" for reforming the U.S. health care system that read like Brezhnev's politburo talking points.
Can anyone explain what does principle #4 mean, in terms of reforming the U.S. health care system?
Improvement of health care quality and safety must be the goal of all health interventions, so that we can assure optimal outcomes for the resources expended.
What about principle #5?
In reforming the health care system, we as a society must respect the ethical imperative of providing health care to individuals, responsible stewardship of community resources, and the importance of personal health responsibility.
I don't know about you, but it seems to me that all these "leading physician associations" are there not to defend MDs but to take politically correct side of populism of the lowest common denominator, and to perpetuate their own bureaucracies.
Any ideas from you on what blogs can do to help MDs to regain some ground?
Talking points at the American Medical Association...
--by DrO
Flashbacks: American Medical Association: No Doctors Day Celebrations?; Urgent Action Needed!; The AMA takes heat from the medical blogosphere.
Update: The title of the post has been changed.
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Thursday, January 11, 2007
Boston Scientific and Guidant: Quagmire?
It was almost a year ago but we remember it so clearly: waking up to learn that Guidant and Boston Scientific had consumated their record-breaking merger, leaving Johnson & Johnson in the cold (they later sued).
With their stock price down, and with promises to expunge the Guidant brand, people are wondering: Any regrets? Boston Scientific says no, but then again, their initials are BS. Redd Herring has the story:
Med-tech maker Boston Scientific had a tough 2006. Despite winning a high stakes-biding war for troubled heart device maker Guidant, glory was short lived. Investors sent Boston Scientific's shares down about 30 percent, saying the company paid too much when it agreed to fork out $27 billion for Guidant.And as if that weren't enough, Fortune magazine called the buyout "the second worst deal ever" (the first honor went to the AOL/Time Warner deal). But Boston Scientific isn't making any apologies. This week at the JPMorgan Healthcare Conference in San Francisco, Boston Scientific CFO Lawrence Best took to the stage to defend the company's decision.
"Best thing we ever did," Mr. Best said about the deal. And to be clear, "it's not about how much we paid. Thank God we paid." he added. In fact, "We sleep much easier today than we would have otherwise," he said.
...As to the greater plan, Mr. Best said he's "developing thoughts" as to what's best for shareholders, rating agencies, and the company. At this point, "anything is on the table," he said.
When pressed for any type of detail, Mr. Best would only comment, "I'm not done thinking about it."
"It sounds like George Bush thinking about Iraq," quipped JPMorgan medical device analyst and conference moderator Michael Weinstein.
Wow. We thought they'd be greeted as liberators.
Flashback: Medgadget's complete Boston Scientific / Guidant / Johnson & Johnson coverage
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Friday, December 8, 2006
Medgadget IPO Watch! Artes Medical Inc.
Artes Medical Inc., a medical technology company, will be going public sometime next week. The stock will be offered at $12-$14. Their main product is the recently approved ArteFill, a permanent dermal filler intended primarily for naso-labial wrinkles. The following is from the company's website:
ArteFill is a unique combination of homogeneous precision-filtered microspheres suspended in a solution of purified collagen gel and 0.3% lidocaine to alleviate discomfort during injection. ArteFill is manufactured in our dedicated 35,000 sq ft current good manufacturing practices (cGMP) compliant manufacturing facility and corporate headquarters in San Diego.In October 2006, ArteFill received final approval from the FDA, making it the first and only non-resorbable aesthetic injectable implant to gain FDA approval.
ArteFill is designed with dual action to correct facial wrinkles, known as nasolabial folds. ArteFill does this as a result of its composition, which is a combination of precision-filtered microspheres (20% of total volume) made from polymethylmethacrylate (PMMA) and purified bovine collagen (80% of total volume). All microspheres have a defined size of 30 to 50 microns in diameter and have a smooth, round surface. Aesthetic results are visible immediately after injection. PMMA is not taken up by scavenger cells (macrophages) and cannot be degraded by enzymes. Thus, the microspheres will remain intact beneath the creases, providing a permanent support structure to support the wrinkle and to prevent further wrinkling. As with all products using bovine collagen, a skin sensitivity test must be performed prior to use.
Pro: There currently aren't any "permanent" fillers approved by the FDA on the market. Use of the product should reduce total costs because only one visit is required.
Con: Bovine-collagen is a dated filler technology, and two potentially pricey allergy tests are required before the filler can be used.
Opinion: The product is promising, but the market is filled with harsh competition. The company also has been plagued by a recent scandal, in which the founder and CEO had to step down over rumors of unapproved testing of the product. Invest at your own risk.
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Tuesday, December 5, 2006
Medtronic Sheds Its External Defibrillator Business
Medtronic has announced the spinning off of its external defibrillator business into a publicly traded company called Physio-Control, Inc. According to Medtronic, Physio-Control is already in many ways an independently functioning entity, with its own manufacturing facilities, headquartered in Redmond, Washington.
From the statement issued by Medtronic:
Physio-Control will be the world's leader in the $1 billion market for external defibrillation products, including automated external defibrillators (AEDs) and manual defibrillators used by hospitals and emergency response personnel. The new company will offer the current portfolio of external defibrillation and emergency response systems, data management solutions and support services, including the popular LIFEPAK® family of external defibrillators. The company will have approximately 1,200 employees and will operate in more than 100 countries around the world. The new company will continue to be headquartered in Redmond, Washington."Medtronic routinely reviews its product and business portfolios and makes adjustments to ensure we meet both our strategic focus and the high expectations we have set for long-term growth," said Art Collins, chairman and CEO of Medtronic. "The creation of this new company will enable Medtronic to more directly focus resources on high-growth therapies aimed at chronic disease management."
"This action also will provide Physio-Control access to a new level of operational, strategic and financial flexibility to invest in and grow its business. We are confident that Physio-Control will be successful as an independent company and that this transition will be seamless to customers and other business partners," said Collins.
The new company will be traded on NYSE.
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Thursday, November 30, 2006
Breaking News: Extraordinary Claims to Require Extraordinary Proof
There's more fallout from last year's blockbuster South Korean stem cell paper that was later shown to contain fabricated data. A panel including the editor-in-chief of Science is developing new guidelines to evaluate the most newsworthy manuscript submissions -- because the classic system of peer review is obviously not catching the frauds. USAToday has more:
"The environment for science has changed," says Science editor-in-chief Don Kennedy. The report noted the rewards of publishing in Science, or its rival journal Nature, such as "enhanced reputation, visibility, position or cash rewards is sufficiently high that some may not adhere to the usual scientific standards." Kennedy said Science will follow the panel's recommendations, including:* Higher scrutiny of studies with surprising, newsworthy or political impacts.
* Reporting the roles of all authors and co-authors.
* Establishing common review standards with other journals.
"Science says that it is committed to change, so one should take them at their word and see what follows," says science misconduct expert Nicholas Steneck of the University of Michigan in Ann Arbor.
E..."current peer review procedures are based on trust," says Brian Martinson of HealthPartners Research Foundation in Minneapolis. "The report makes clear that is an increasingly risky position to take."
The panel estimated that about 10 papers a year will require this extra scrutiny, which suggests to us that the panel itself is still a little deluded about the situation.
More from the Washington Post...
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Tuesday, November 28, 2006
Medical Device IPOs Are Back... For Now
Remember the heady days of the late 90's, when every college prof with a lab and a vision was forming a company, and a few years later, trying to take it public? We admit, we got caught up in those times and are still a bit nostalgic. Which is why we read with interest this Dow Jones newswire report that the recent slew of IPOs in medical device firms may be turning into a bubble. Of course, venture capitalists deny they're throwing too much money around, but we've heard that before...
The blow-ups of the late 1990s ushered in a drought for device IPOs that persisted until the early part of this decade. In the past four years, the cycle has begun anew, with revenue generators such as orthopedics company Kyphon Inc., devicemaker Cutera Inc. and Volcano, which makes products used to diagnose and treat heart disease, clearing the way....Just three companies went public in 2002 and none in 2003. Since 2004, however, 23 have gone public: 12 in 2004, seven in 2005 and four this year, according to VentureOne, a venture capital research firm.
The four companies that have gone public in 2006--Volcano; Northstar; Restore Medical Inc., which sells a snoring treatment; and Cardica Inc., a developer of anastomotic systems used by surgeons during bypass surgery--have raised $227.9 million through their IPOs. That's almost as much as the $275.2 million raised through medical-device IPOs in all of 2005, according to VentureOne.
Will this cycle end with a blow-up similar to the late 1990s? That's a possibility, but many investors contend it won't.
One reason: Many companies today target gigantic opportunities that either didn't exist in the mid-1990s or were smaller.
The article goes on to spell it out: we were all younger and thinner in the 90's, and now that we're older and fatter these new device companies have a chance of making money. Pass the leftovers!
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Friday, November 17, 2006
Hospital Care, Ferrari Style
What do a Ferrari race-car team and your local hospital have in common? More than you might think. Great Ormond Street Hospital for Children in London hired a Formula One Ferrari racing team to improve hospital care. The Wall Street Journal explains:
In one of the more unlikely collaborations of modern medicine, Britain's largest children's hospital has revamped its patient handoff techniques by copying the choreographed pit stops of Italy's Formula One Ferrari racing team. The hospital project has been in place for two years and has already helped reduce the number of mishaps.
The curious should follow this link to the article...
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» WebMD Announces Plan to Acquire Subimo (November 3, 2006)
» The Guidant Acquisition: It Never Ends (September 26, 2006)
» The Educators Corner (August 24, 2006)
» Financial Conflicts of Interest: CSMonitor's View, Medgadget's Commentary (August 10, 2006)
» Boston Scientific: Number One with a Patent (June 29, 2006)
» Silicon Valley Venture Forum to Highlight Medical Device Companies (June 23, 2006)
