When regenerative medicine firm Cytomedix (OTC:CMXI) acquired biotechnology company Aldagen, the stem cell-based stroke treatment in clinical trials was the centerpiece of the all stock deal.

Cytomedix is now making making moves to develop other stem cell treatments from its Aldagen acquisition. Two more clinical trials will start later this year, CEO Martin Rosendale told analysts on a conference call to discuss first quarter financial results. Rosendale wouldn’t identify the indications that will be studied, saying only that they will be announced this summer: one for an arterial disease and the other a neurological condition.

Cytomedix’s goal is to ultimately find large pharmaceutical partners commercialize these treatments. These additional clinical studies don’t represent those kinds of partnerships. Rosendale said that there are two facilities that will conduct investigator-led clinical trials. But those trials will be funded by outside sources, not by Cytomedix.

The pipeline progress comes as Gaithersburg, Maryland-based Cytomedix gets the green light to proceed in phase 2 clinical trials for experimental ischemic stroke treatment ALD-401 following a positive recommendation from an independent data safety monitoring board. ALD-401 is an cell experimental stem cell treatment derived from a patient’s own bone marrow. Aldagen’s “bright cell” technology isolates stem cells that express high levels of the ALDH enzyme, which have the potential to promote healing and cell and tissue regeneration.

Cytomedix already has a portfolio of commercialized wound-healing and regenerative therapies. The Aldagen acquisition was intended to build up the company’s pipeline. But even as part of Cytomedix, Aldagen is shouldering most of ALD-401′s development risk. While the deal is valued at up to $40 million, Aldagen and its shareholders will see that full amount only if the experimental stroke treatment hits development milestones. Aldagen, which continues to operate in Durham, North Carolina as a Cytomedix subsidiary, received just $16 million up front in Cytomedix preferred stock.

The ALD-401 trial is designed to study 100 patients. Rosendale said the study is now up and running in five sites and will reach eight sites by the end of May. The study will cover 12 to 15 sites in the United States.

Cytomedix also reported positive data for another Aldagen stem cell therapy candidate. ALD-201 has completed a phase 1 study as a treatment for end-stage heart failure. Rosendale said that the study showed ALD-201 was well tolerated and showed evidence of improving blood flow and improved clinical status. Findings were published in the American Heart Journal.

[Photo from stock.xchng user caramdesig]

Ten years ago if anyone said that a multi-functional device would one day allow people to play a word game with anyone in the world as well as enable a doctor to get ECG data – many would simply say baloney.

Of course,the  iPhone and iPad are no longer a figment of anyone’s imagination.

With the same idea in mind, MedCity News asked doctors, digital health experts and healthcare futurists, what is in our collective health future?  Here are some ideas they had:

GPS Pacemakers and Defibrillators
Self-described healthcare futurist Joe Flower said that back in 1993 he imagined a world where a person with an implanted heart device suffering from a heart attack could be located within minutes by an ambulance.

With the widespread use of GPS technology and electronic health records, (and the appropriate patient consent of course) this is soon going to be a reality, Flower said.

So what are we going to see? Let’s imagine a patient traveling on business who suddenly keels over and falls on the street, clutching his heart. Within a few minutes an ambulance pulls up and an emergency medical technician jumps out. The EMT has already accessed the person’s medical records because the pacemaker contains that data  and has contacted the patient’s care team in his hometown. The pacemaker is also connected to the person’s smartphone which makes the initial 911 call for emergency help.

All the technology to do this is currently available, so it’s a matter of time before this becomes a reality, Flower said.

Targeted medicine using nanorobots 

Nanorobots are essentially injectible machines the size of a red blood cell than can be controlled from outside the body.

These minute devices can be controlled so that it can be steered to the area of interest – a diseased part of the body. These devices can recognize a tumor, an aneurysm or any other malady, and inject medicine to kill the diseased cell.

“This is targeted medicine at its best,” said Dr. Michael Smith,staff doctor, clinician and community liaison with Life Extension.

Smith added that these devices fitted with a camera can be driven to the area requiring medication or can be programmed based on the person’s body shape to self propel to the diseased area.

He imagines that nanorobots would become most ubiquitous in the treatment of cancer.

Embedded Tracking Chips

Health and wellness afficionados are already using the Nike Fuel Band and FitBit. But Sarita Bhatt, Managing Director, Integrated Strategy & Planning at Euro RSCG Tonic, believes that the future will see a move from external tracking to internal tracking.

In other words, embedded chips in our bodies will not only track calories burned and consumed, activity and sleep level, but they will also gather a variety of physiological data such as blood pressure and heart rate. And of course transmit that data to a device of our choice.

This is #quantifiedself on steroids.

Down the road, you can also imagine something implanted in your teeth that can track what you are eating, said Matthew Holt, co-chairman of Health 2.0 and founder of the Health Care Blog.

Artificial Intelligence to boost lost human function
Multiple sceloris, Alzheimer’s and Parkinson’s are diseases that can destroy a human being – movement and thought are both restricted. Bhatt imagines a future where AI can help regain some of this lost function.

She is not entirely sure how this will occur, but she speculates that certain devices would increase the understanding of our brain such that it would prompt people to see a cup in front of them and not only know that it needs to be picked up but enable them to do so as well.

Extremely advanced high-tech prosthetic limbs developed for wounded veterans are already bringing lost functionality back. An AI element would be further advancement in this regard.

You will see the doctor rarely
We are just now scratching the surface of remote monitoring, believes Matthew Holt, but this will become a big part of how healthcare delivery will change in the future.

“There will be much much better connection between the patient and their healthcare organization,”  Holt said using cheap yet, HD quality group video chat capabilities.

Bhatt of EuroRSCG agrees noting that in the future you will see the doctor mainly for severe cases of illness or injury.

[Photo Credit: freedigitalphotos user chanpipat]

This post is sponsored by Plastics in Medical Devices.

Plastics News’ Plastics in Medical Devices 2012 conference returns to Northeast Ohio next month, and offers plenty for all members of the medical device supply chain  – from the latest in material, tooling and process developments to tips for collaborative innovation and for navigating the FDA approval process.

The June 11-13 event at the LaCentre conference facility in Westlake will feature 25 expert presenters who will touch on such topics as biomaterials, sustainability, part validation and additive manufacturing. Nick Fotis, an R&D director for Cardinal Health Inc., will deliver the keynote address, offering advice on how to enter and supply the medical device market.

The speaker lineup also includes officials from Aastrom Biosciences Inc., Cannuflow Inc., Future Path Medical Holding Co., PolyOne Corp., Materialise NV and U.S. Endoscopy,  plus sessions on the latest in liquid silicone rubber and fluoropolymer molding.

Go to www.plasticsnews.com/pmd2012 to register or for more details on this third annual conference  – which also will feature a number of exhibitors and a Monday afternoon workshop by RJG Inc. Register by May 21 to save $100.

TearScience's LipiFlow device treats evaporative dry eye.

Dry eye treatment company TearScience, which is considering plans for an initial public stock offering, now has a new chief financial officer.

The medical device company has promoted Nicole Wicker from vice president of finance to CFO. Wicker joined TearScience in 2008 and guided the Morrisville, North Carolina company through its $44.5 million series C round of fundraising in 2010 which brought on new investors Essex Woodlands Health Ventures, Investor Growth Capital and General Catalyst.

TearScience has developed technologies to both diagnose and treat evaporative dry eye. Dry eyes affect an estimated 100 million people globally. The vast majority of those patients experience evaporative dry eye, a condition in which the eye has an insufficient amount of the oils that prevent the tear film from evaporating. TearScience’s LipiFlow device uses a combination of heat and pressure to clear the obstructions blocking the oil-producing glands.

The LipiFlow technology initially received U.S. Food and Drug Administration 510(k) clearance last year. Software and a handheld unit that doctors for doctors to use with the device received 510(k) clearance in February. The complete system unit is now being marketed to doctors in the United States and select global markets.

TearScience CEO Tim Willis said earlier this year that the company is considering an IPO and that the stock offering could be made overseas. He said an overseas public offering would offer the venture capital-backed company a better opportunity for liquidity. Wicker is a veteran of Ernst & Young. Before joining TearScience, her experience included financial work at companies such as marketing resource management software firm SmartPath and mobile commerce company Motricity (NASDAQ:MOTR). She helped guide both North Carolina technology companies to major financial milestones; an acquisition in the case of SmartPath and an IPO for Motricity. It’s a safe bet that Wicker is expected to lead TearScience toward those same goals as well.

In the world of startups, few separate topics of discussion have recently been hotter than angel investing and crowdfunding.

But what about considering where crowdfunding and angel investing intersect? Can these two forms of startup fundraising co-exist peacefully or might crowdfunding pose a threat to angel investors?

In short, it’s too early to say, but angels shouldn’t be too quick to regard crowdfunding as entirely benign. It’s not hard to imagine crowdfunding increasing competition for good deals and reducing angel investors’ access to quality dealflow.

Crowdfunding has been enjoying its moment in the sun thanks to the recently passed federal JOBS Act, which, in part, opens up the market for crowdfunding and makes it more attractive to both entrepreneurs and investors.

Many specific details of the JOBS Act are still to be determined, and much of the legislation won’t take effect until next year. But we do know that the JOBS Act permits companies to raise up to $1 million through crowdfunding over a 12-month period in exchange for issuing equity or debt to investors.

There are plenty of other details to the law, including that companies must source crowdfunded investments through brokers or funding portals like Kickstarter, RocketHub or WeFunder. But for angel investors, the big question about crowdfunding revolves around whether it’ll essentially allow a select group of entrepreneurs to go directly to the public and bypass formal angel funds and networks.

Todd Federman, executive director with the North Coast Angel Fund in Cleveland, said that he views crowdfunding as a positive for angels in that it figures to increase the universe of startups that could represent investment targets for angels. (North Coast recently invested in SoMoLend, a debt-based crowdfunding platform.)

“I see crowdfunding as complementary to angel investing, with the caveat that I have no idea how this will play out,” Federman recently said at a panel discussion on crowdfunding.

Angel groups like Federman’s typically invest between $500,000 and a few million in companies, he said. And even though startups are permitted to raise up to $1 million through crowdfunding, it’s anyone’s guess how many companies will actually be able to max out their crowdfunding amounts.

So by that logic, angel investing and crowdfunding are, in fact, complementary: Angels will largely focus on companies that need more than about $500,000, while startups that require or are only able to obtain smaller amounts of cash will go the crowdfunding route.

But it may not be that simple, according to Sean Peppard, a business attorney with Ulmer & Berne in Cleveland. Peppard said he largely shares Federman’s view, but ran through a couple scenarios in which crowdfunding could represent a threat to angel investors.

“It depends on how robust the crowdfunding industry becomes,” Peppard said. “If mechanisms are developed to make it easy and workable, then potentially people wouldn’t turn to angels. They’d turn to crowdfunding sites instead.”

For one thing, crowdfunding holds the potential to be much quicker and easier (and also less painful) to startup entrepreneurs. When fundraising, entrepreneurs typically must do endless amounts of shaking hands, knocking on doors and presenting to investors. Certainly there’s a value to entrepreneurs in doing that to build up their networks, but what if they could simply post company information on a crowdfunding website and have investors come to them?

Then there’s the potential problem of “cherry-picking,” according to Peppard. Startups in particularly hot areas that capture the public’s imagination – think social networking – could have such an easier time raising cash through crowdfunding that they’d eschew angels altogether. In this scenario, angel investors would essentially be frozen out of potential dealflow in the hottest sectors.

Of course, how things play out in the real world is rarely neat and tidy, so while it’s easy to conjecture on crowdfunding, we’re still likely years away from knowing exactly how it’ll change the investment landscape.

But angels would be wise to at least view crowdfunding with a critical eye before embracing it wholeheartedly.

“The risk to the angel business model is that the way they traditionally find companies will go away because crowdfunding will replace it,” Peppard said. “But if crowdfunding is more limited, it won’t pose a real risk to angels.”

When a payload of data (a clinical summary, a public health transaction, a lab result) is sent from provider to provider, what data should be included in the electronic envelope used in the sending process?

Massachusetts uses the Direct protocol so the payload is encrypted during transport.  The Healthcare Information Services Provider (HISP) cannot read the contents of the message. All routing information i.e. who is the sender, who is the receiver, when was it sent, are there special privacy restrictions etc. must be placed as metadata in an electronic envelope around the payload.

Most metadata is not very controversial.   Beth Israel Deaconess sent a payload to Dr. Smith on May 9th at 8:00am with patient consent.

However, for auditing purposes, it could be important to send patient identifiers in the envelope. If the HIE is asked a question like “we sent 10 payloads about John Halamka, can you tell us the time/date and location of delivery?” For medical/legal, data integrity, and service level guarantees, patient identifiers in the audit trail make HIE operations easier.

However, there are downsides. The audit trail becomes protected healthcare information. Operators of the HIE now have access to person identified information.

How could this be a problematic?

What if the audit trail is itself is breached? The HIE must follow HITECH reporting requirements. The Direct Protocol was designed so that transport intermediaries minimize risk of breach by sending unidentified payloads.

What if someone asks the HIE to provide the date/delivery times of a patient’s payloads sent from a substance abuse or psychiatric treatment facility? The public is likely to have concerns that HIE staff (especially state government operators) have access to audit trails which contains such sensitive details.

Furthermore, applications that will perform novel routing and linking may need more than just limited amounts of person identified metadata in the envelope to add functionality. Clinicians on the Tech Workgroup noted that data elements such as visit type (inpatient or outpatient),  message purpose (discharge summary, medication summary, admission notification), author of the message etc. are needed to automate advanced routing functions. Thus, the recipient organization will likely open the payload after it is securely received to access additional information for processing.

What did we decide?

We elected to remove all human readable patient identifiers from the audit trail, instead using hashes of such data elements as name and date of birth for auditing purposes.

How will that work?

Suppose my PCP wants to send a clinical summary to a specialist as part of a referral.

We agreed to use a secure hashing algorithm (such as salted SHA-2) to anonymize identifiers.

The hash of John becomes AY#!

The hash of Halamka becomes *iUOP

The hash of my birthday becomes G5^*

If the audit trail is breached or mined by HIE staff, there is no way to know that AY#! *iUOP refers to me

However, I can ask the HIE to run an audit on AY#! *iUOP G5^* messages to ensure the payloads were delivered.   We get a perfect audit trail that’s non-disclosing.

Such hashing approaches for anonymous linkage of patient records are very powerful and I recommend you study the work of Jeff Jonas, described in this post and this powerpoint.  Linking identity among heterogenous databases will be required for healthcare reform and emerging ACO business intelligence applications. Doing it without having to disclose identity of the patient gives us the functionality we need without the risk.

Thus, Massachusetts has decided to use Direct without human readable personally identified metadata, instead adopting hashes of personal identifiers in the envelope and audit trail. The HIE cannot be asked to mine audit trails by anyone but the sender of the messages, and the audits themselves are non-disclosing.

We have broad support for this approach and we’ll let you know how it works in production.

A background report issued last month by a working group of the World Health Assembly called for establishing a global research and development treaty that would beef up research into cures for so-called neglected tropical diseases. It also called for the treaty to create mechanisms for ensuring the next generation of drugs for fighting those diseases could be produced by generic firms at prices barely above the cost of manufacturing.

In calling for governments to double their investment in research and development, the report identified not just the “big three” of AIDS, tuberculosis and malaria, which have received significant research attention over the past decade, but also the so-called “neglected diseases” like Chagas or leishmaniasis, which kill or debilitate millions of Africans, Latin Americans and Asians annually. The intellectual property created by the new global research fund would be made available through a patent pool to any company or state-run firm willing to produce the drugs on a cost-plus basis.

The idea is already gaining traction at some hard-pressed international institutions, which are seeing their funding cut by U.S. and European nations because of their long-term budget crises. In 2010, UNITAID, an arm of the United Nations, created a patent pool that received support from at least one leading AIDS drug manufacturer, Gilead Sciences, Inc. The Pool for Open Innovation against Neglected Tropical Diseases, created by GlaxoSmithKline and transferred last year to the World Intellectual Property Organization, is just getting off the ground.

The pooling idea was pushed to the forefront by global health activists at groups like Doctors Without Borders, who worry about access to the next generation drugs to fight HIV/AIDS. Many patients on long-term therapy develop resistance to their initial generic regimens and need to be switched to the latest on-patent drugs.

In addition, companies like Gilead are introducing new combination pills that make it easier for patients to stay compliant with the complicated daily pill schedules. Lack of adherence is a major cause of treatment failure and the rise of resistant strains of HIV/AIDS.

“The patent pool can bring together the intellectual property for large numbers of individual drugs which need to be packaged in fixed-dose combinations,” said Robert Hecht, managing director for global health at Results for Development Institute in Washington, D.C. “It makes it faster, easier and more efficient for the generic companies.”

His group last month issued a report funded by the Bill and Melinda Gates Foundation that praised the patent pool concept. However, it expressed concern that it wouldn’t have much impact on diseases where major drug and biotechnology companies are making few if any investments, such as Chagas or leishmaniasis. Companies that sell AIDS drugs have a large, lucrative market in the U.S. and Europe, so there is no shortage of R&D in the field.

The World Health Assembly will debate setting a goal of doubling the estimated $3.2 billion that is currently spent on research into cures, vaccines and diagnostics for neglected diseases. About 70 percent of that is provided by the U.S. with most from the government, which has lavished attention on HIV/AIDS research.

The U.S. has also invested heavily over the last decade in treating AIDS, tuberculosis and malaria. It sent $6.1 billion through 2011 to the multi-lateral Global Fund and $31.9 billion to the President’s Emergency Plan for AIDS Relief (PEPFAR), which was launched in 2003 by President George W. Bush.

The Global Fund, largely because of cuts by European governments, earlier this year announced it would no longer take applications for new grants until at least 2014. President Obama’s proposed budget included an increase for the Global Fund, but it was funded by cutting its request for PEPFAR, according to Judit Ruis, who works for Doctors Without Borders’ Access Campaign.

Those cuts threaten to defeat the Fund’s goal of having 15 million under treatment by 2015, which is about twice the current level. It prompted Bill Gates to announce at Davos in February that his foundation would donate $750 million to the cause.

But foundations cannot make up for lost investment in R&D, which has traditionally been the province of governments. The U.S. over the last decade has poured $13 billion into research on cures for neglected tropical diseases, mostly through the National Institutes of Health. “The U.S. is involved in half of the 200 drugs and vaccines in the pipeline for these diseases,” said Nils Daulaire, director of the Office for Global Health Affairs at the Health and Human Services Department.

At a forum at the Results for Development Institute Monday, Daulaire expressed concern that a World Health Organization-run patent pool could manage the R&D process, which, he said, needed to be nimble and researcher-friendly.  “These traits are not always associated with government or WHO-run institutions,” he said.

Mayo Clinic has 14 apps for the iPad and 15 on the iPhone.

Until Monday, none of the free mobile medical apps were specifically meant for patients. The three free ones were mainly for doctors, alumni and people interested in medical research).

In a phone interview, Dr. Sidna Tulledge-Scheitel, associate dean of e-health and medical director of Institutional Business Solutions, said that the new Mayo Clinic Patient app is “unique” compared to what Mayo has in the App Store in that it is free and centered around the patient.

The app aims to connect with patients from the time they are simply seeking for information about Mayo, to their first visit to any of the three campuses and finally when they become an established patient at Mayo.

It is divided into several sections entitled Mayo Clinic Information, Our Locations, My Visit, My Health and My Care Team And then each section has various sub sections.  For instance, clicking on the My Health section opens up the section through which established patients with registered accounts can check their medical record, refill prescriptions and get health recommendations.

Under the My Care Team section, patients can connect with their primary care provider, send secure messages to the care team and view notifications sent to them. The My Visit section is specifically for patients who have set up appointments and can only be accessed with a log in.

There are also maps for each Mayo location in Arizona, Florida and Minnesota as well as information about the local community including activities and restaurants

Scheitel of Mayo said that the app is meant to empower patients and “aligns with Mayo’s mission of trying to make our services accessible and affordable.”

She noted that patients can view lab results in real time as they become available and can check blood work results, for instance, before they meet with the doctor.

“That can help patients to fully engage in the conversation,” she said.

Even after patients go home, they can use their iPad or iPhone to log in and view clinic notes if they want to review what the doctor said during an appointment. They can also send secure messages to their care team, although Currently that service  only available for certain areas within Mayo – transplant, obstetrics and primary care.

But Scheitel said that the goal is for that funcitonality to be expanded to other service areas in future updates of the app. She also added that the app is also being developed to work on the Android operating system.

Since the official release of the app on Monday, there have been six reviews of the app with five of them giving the highly-coveted five-star rating.

One glowing review possibly captures all that the developers at Mayo intended to achieve with the app.

“Not only do we get access to my medical information, but I can use this when I am looking for things to do, places to eat etc. This is such a wonderful tool and is really putting me first. Good work team Mayo!!!” – Amy Petro Kennelly

 [Photo Credit: Mayo Clinic]

Wound and surgical sealant developer HyperBranch Medical Technology has received the CE Mark for an applicator that delivers its sealant used in cranial and spinal surgeries.

The Adherus AutoSpray Dural Sealant delivers HyperBranch’s dural sealant to prevent leaks of cerebrospinal fluid after the surgical repair. The company’s spinal sealant had previously secured a CE Mark. With the latest CE Mark, the medical device developer can now start selling its surgical sealant system in Europe and other markets outside of the United States. The company is still seeking U.S. Food and Drug Administration approval of the system.

Durham, North Carolina-based HyperBranch has developed surgical sealants based on synthetic hydrogels. The biodegradable sealants break down slowly as the tissue heals. HyperBranch’s technology of adhering tissues to prevent leakage is based on chemistry research originally developed at Duke University by company co-founder Mark Grinstaff, who was a professor of chemistry, ophthalmology and biomedical engineering at the university. CEO John Conn said in a statement that the technology provides a watertight seal and acts as an adhesion barrier that limits scarring, an advantage if subsequent surgery is required.

Privately held HyperBranch now holds the CE Mark on five of its products so far. Besides the sealants for spine and cranial surgeries, the company also holds a CE Mark for an ocular sealant as well as a hernia mesh fixation product.

HyperBranch’s liquid eye bandage OcuSeal was licensed to medical device giant BD (NYSE:BDX), which is marketing the product outside the United States.

NuMe Health LLC just announced that it will begin a phase 1 proof-of-concept study for its cobiotic — a proprietary blend of prebiotics and other natural, plant-derived ingredients — that’s designed to alter the composition of the bacteria living in the gastrointestinal tract in order to help people with prediabetes maintain healthy blood glucose levels and body weight.

Unlike probiotics, which add relatively small amounts of bacteria to the gut, prebiotics provide nutrition that supports the growth of beneficial bacterial strains. According the company, NM504 facilitates the growth of bacteria that inhibit appetite signals and prevent the conversion of undigested nutrients into extra calories. It also supports bacteria that stimulate satiety signals and shifts the overall bacterial environment of the microbiome in the gut to decrease absorption of sugar and cholesterol.

The company just closed a $1.5 million series A led by existing investor BVM Capital with the addition of company insiders and several new private investors. It will use the funds to move forward with the trial and commercialization of its first product, a dietary supplement. According to a company rep, follow-on products will likely move into the medical foods space.

An estimated 79 million U.S. adults have prediabetes, which increases the risk of developing type 2 diabetes, heart disease and stroke. Currently, dietary changes and increased physical activity are encouraged to prevent the development of type 2 diabetes, and many prediabetics also take metformin. But a few other companies are also taking NuMe Health’s approach by developing supplements and medical foods to prevent metabolic disorders, including Metagenics and ATM Metabolics.

NuMe Health was co-founded in 2009 by John Elstrott, the chairman of Whole Foods Market, and biotech entrepreneur Dale Pfost. It’s headquartered in New Orleans.

From loud conversations to carts moving through the halls to pages and nurse calls, the peace and quiet patients need to promote healing is often in short supply in hospitals.

Aside from the obvious benefits to patient care that a quiet environment provides, hospitals have another reason to begin caring about quiet: their finances.

Beginning in October, hospitals’ Medicare reimbursement rates will be affected by how they score on a patient experience survey called the Hospital Consumer Assessment of Healthcare Providers and Systems (HCAHPS). The 27-question survey asks patients to share their perspectives on items like communication with doctors and nurses, responsiveness of hospital staff,  cleanliness and quietness of the hospital environment.

And nowhere did hospitals perform worse than quietness in a summary of the 2010 HCAHPS survey.

“It’s the lowest-scoring quality metric and people have been working on it for years, but collectively they’re not achieving their desired results,” said Gary Madaras, director of the Making Hospitals Quiet program, a group that helps hospitals find ways to reduce noise.

Fixing the problem requires a “paradigm shift” in hospitals’ thinking, Madaras said.

“Everybody thinks they know the right process, but our studies and experiences in hospitals show that what they think they know and what they’re trying is not resulting in the desired outcome,” Madaras said.

Here are five guidelines Madaras shared on how hospitals should shift their thinking about noise reduction.

Commit forever: Hospital executives must realize that, like infection prevention, noise prevention must have dedicated staff, time, resources and budget. One person must have noise prevention and sound quality as one of his or her primary responsibilities, be held accountable for them, and have them as part of their job description, performance reviews and compensation package. This isn’t something that a group of volunteers come together temporarily to fix.

Conduct a culture assessment of your hospital:  A hospital must know who it is and the barriers to closing the gap to who it wants to be as an organization. Assess successful and unsuccessful changes in the recent past. Which types of approaches worked with your organization?

Anchor a noise reduction project in patient recovery: For executives and upper level managers, the desire to cut noise is often financially based, while mid-level managers are focused on boosting HCAHPS scores. Both of those are certainly valid, but for broad-based buy-in, focus on helping staff understand the negative relationship between noise and patient recovery. “Create awareness of this on a system-wide basis and watch mass buy-in and self-generated movement begin,” Madaras said.

Stop chasing silence: Silence is not the goal, nor is it achievable, nor should it be the focus of a hospital’s efforts. The patient’s perception of quiet is achieved when good sounds are louder than bad noises most of the time. Focus on improving the ratio of good sounds to bad noises.

Systematize: Hospitals need a real-time reporting and remediation system. Consider this a “noise hotline” system that documents each occurrence and feeds information back into a sound quality improvement action plan. For example, you might find that last month, there were X number of complaints related to night admissions.  Such a system would prompt a review of the night admission process from a noise-prevention perspective.

[Photo from flickr user TechMaverick]

An FDA advisory committee has approved an in-home test for AIDS that works like OTC pregnancy tests: two colored lines on the test strip after 20 minutes means the person is positive for HIV. The vote was 17-0 in favor of the OraQuick In-Home HIV Test.

A FitBit for kids is using avatars and points to motivate 11 to 14-year-olds to get off the couch. The data is tracked and uploaded to an online account. Parents can put money in the account so that children can redeem their Zamz point to buy virtual clothing and accessories or save up for an iPod or a Wii.

Medical expense tracker Simplee has great market coverage, high user engagement and now $6 million in Series A funding. After only a year, the company has managed nearly half a billion dollars in doctor bills for members across thousands of medical providers and is planning to launch a new feature that will spot billing errors.

This fall Colorado will launch a payer claims database that compares prices for all medical procedures. The Center for Improving Value in Health Care expects to have data from most of the claims in the state in 2013 and will identify providers by name at that point. Thirteen other states either have similar databases or are working to build them.

Before he became President, Senator Barack Obama addressed members of the AFL-CIO. He stated:

“I happen to be a proponent of a single-payer universal health care program. I see no reason why the United States of America, the wealthiest country in the history of the world, spending 14 percent of its gross national product on health care, cannot provide basic health insurance to everybody. Everybody in, nobody out– a single-payer health care plan, a universal health care plan. That’s what I’d like to see. But as all of you know, we may not get there immediately. Because first we’ve got to take back the White House, we’ve got to take back the Senate, and we’ve got to take back the House.”

The messy business of passing health care reform began in earnest as soon as President Obama took office.  His party did have control of the House and Senate, but loud opposition began and the Patient Protection and Affordable Care Act (PPACA) was passed by the slimmest of margins in early 2010. In order to keep the semblance of continuity, the new law was built on the current system of employer-based health insurance. Americans have an independent streak and would not accept a government single-payer system in one fell swoop.

Employer-based health insurance has proven inadequate.  It developed in a time when people were less mobile and the norm was to find a job and stay with it until it was time for the retirement dinner and gold watch. Now that people tend to regularly change jobs, getting into and out of health insurance policies leads to disruption of care as different doctors are in different plans.

Despite its drawbacks, 170 million Americans depend on employer-based coverage. What will happen if they lose it in the next two years, thanks to PPACA? The law was actually designed to discourage employers from covering their workers, as the penalty for not meeting the employer mandate is quite small, while the “minimum essential coverage” will be very expensive. The House Ways and Means Committee found that 71 of the Fortune 100 companies could save $422 billion from 2014-2023 by dropping insurance and paying the fine.

In addition, price limits on premiums with increasing mandated benefits will serve to drive the insurance companies out of business.

If PPACA is not overturned or repealed, President Obama will probably get his wish.

And would Americans get “fair” and “equal” care? On George Orwell’s Animal Farm “all animals are equal, but some are more equal than others.” Under socialism, the ruling elite never seem to have to abide by the rules that they so methodically craft for the rest of us.  President Obama knows that his wife and daughters will be immune to the downside of single payer, while the rank and file will suffer greatly. The people will beg for relief from excessive taxation and access to better medical care, but will they be able to find it?

Rather than moving toward single payer, it would be better to eliminate any middleman in most encounters between patient and physician. Allow the patients to pay for routine care and purchase their own health insurance plans with the least government meddling. Big government stifles initiative and punishes achievement.

Our Constitution envisioned citizen legislators who would create laws that are so fair they are happy to live by them. It is what Americans really need.  Let’s hope the Supreme Court completely voids PPACA and we can have a system based on liberty, personal initiative, and freedom to access the best care at the lowest cost. Only when the government gets out of medicine will we ever achieve that goal.

Scott Guelich, a software developer who also has a medical degree, co-founded Care Thread 12 months ago to address problems where they happen most — when a patient is handed off to another healthcare professional. He spoke to MedCity News at the Health 2.0 Spring Fling conference in Boston this week.

Users can click on a patient’s name to reveal a list of people involved with that patient’s care, showing their picture by their name. Users can send messages to each other and one thread displays them so everyone on that team can see them.

For example, if a patient develops a fever or is in pain, a doctor can request a medication order be changed.

Another component provides updates when medication and room changes are made, and delivers lab and radiology results to mobile devices when they are ready. The powerful activity alert feature allows providers to set audio alerts that sound the moment an awaited lab value returns.

The tool is currently available for iPhones, iPads and iPod Touch. It  is also developing support for Android models 2.2 or later and Blackberry 5.0 or later models that are expected to be ready sometime this summer.  The tool also works with  a web browser. The company does enterprise licensing and sells the product to hospitals, integrating it with their systems.

The company is part of startup accelerator Betaspring‘s spring class in Providence, Rhode Island.

A precursor to Care Thread was Guelich’s TextPage, launched in 2010 through the iTunes store, which allowed users to send text messages to alphanumeric pagers from an iPhones, iPad, or iPod Touch.

The tool is the focus of a study by a Harvard-affiliated clinician that will look at how to improve communication among care providers in an in-patient medicine setting.

“There’s a need for a collaborative platform to get information to doctors and nurses who are on their feet all the time — they need something that’s mobile,” Guelich said.

Improving handoffs was one of the goals of a 2010 initiative by the Joint Commission Center for Transforming Healthcares. It singled out hand-off communications as a critical area in need of improvement. About 70 percent of adverse events are caused by poor communication. Every transition of care can be risky because it often depends on  important information needing to be communicated from one caregiver to another and from one institution to another.

Healthcare chief information officer Tom Wittman, a veteran of the Army as well as several hospital mergers, says it’s very easy to underestimate the impact of bringing two groups of people together.

“With a merger, you’re creating a new culture and it’s difficult to do that without building trust and building a common vision,” he said. ” It’s a lot of work to build a new culture and it can’t be rushed.”

Wittman is a regional CIO for Catholic Health Initiatives, which is investing $320 million to merge two healthcare groups into one. KentuckyOne Health was created in January by the merger of Jewish Hospital & St. Mary’s HealthCare Inc. in Louisville and Saint Joseph Health System in Lexington. The new nonprofit has nearly 200 locations, more than 2,325 beds, 13,600 employees and $1.8 billion in annual revenue.

Wittman is managing the IT aspects of the merger. He talked to MedCity News about the challenges of balancing centralization with a respect for existing best practices.

What was your strategy for consolidating historical medical records?

It’s an issue of cost and time. There has to be a decision about how much data you’re going to maintain in the new system.  Both of the Kentucky legacy organizations were just starting implementation of an ambulatory electronic health record system and they had both chosen Allscripts. We are starting the transition to Cerner for our hospital system. We will copopulate from one system to another and the information will go to the Kentucky Health Information Exchange as well. CHI is starting on a patient portal project that is about two years out. So, if you’re a patient and come into the KentuckyOne facility, you’ll be able to log in and see what the physician sees.

KentuckyOne has an employee blog to answer questions about the new organization. What else have you done to make sure people are buying into the new company?

We are beginning to implement Cerner for our common clinical information system and we are creating order sets for that system. CHI as a whole had comments from hundreds of physicians across the country on what these order sets should look like and we got over 100 just from doctors in Kentucky. So, when we build an order set for the system, we have an idea of what the common practices are. At the end of the process we can say here’s what you guys told us you wanted. There is a governance body throughout CHI that reviews best practices as new things come up. They go through recommendations for best practices that maybe KentuckyOne brought to the table that affect other CHI groups in Seattle, Tacoma or Little Rock.

How does the accountable care model fit into KentuckyOne’s plans?

ACO models are being started at other locations; it’s very much top of mind with CHI. Because of the merger, CHI decided it was not a good time to do that here. It’s a big part of our IT work anyway. In order to have a managed health environment, you have to have data on patients. Our Onecare program will allow us to create the ACO when we’re ready.

Any thoughts on the fate of the healthcare reform law?

I think regardless of what happens with the law, what we’re doing here for healthcare is the right thing. We’ve got to do this anyway from a quality and information sharing perspective.

Has anything surprised you during your work so far with KentuckyOne?

I’ve been pleasantly surprised that there is so much enthusiasm for doing this; everyone is really anxious to get these IT systems and platforms in place. They can see better patient care and increased efficiencies when this is done.

Noah Lewis, managing director, GE Healthymagination Fund

Startups, listen up.

GE’s nearly two-and-a-half-year-old, $250 million Healthymagination Fund still has a “lot of dry powder” and executives are looking for promising startups to invest in.

Noah Lewis, managing director of the Healthymagination Fund, and a colleague were out broadcasting the fund’s capabilities while meeting new companies at the IBF MedTech Investing Conference in Minneapolis last week. In the midst of that, Lewis took some time to talk about the fund, the investment criteria and what GE brings to the table. Below is an edited version of the interview.

How much of the $250 million have you invested?

For competitive reasons, we don’t disclose that, but we have a lot of dry powder. We’re more opportunity short than capital short, which is a great place to be in in this environment given some of the fundraising challenges that promising medtech companies are experiencing.

What kind of medical technology companies are you looking at?

The GE Healthyimagination Fund looks for investments that correspond with sectors that we know well. For us really that falls into a few categories — life science instruments, consumables, in vitro blood-based diagnostic systems and classic medtech, which includes medical imaging, clinical systems, devices and patient monitoring.

So, if you took the entire healthcare startup landscape and took out pharmaceuticals and permanent implantables, we pretty much operate in everything else. Health IT, too.

What kind of investment criteria do you have?

Our sweet spot is typically series B and later. Most often we like to work with a syndicate of investors. We have a few partners that we have publicly announced — for example, Kleiner Perkins Caufield Byers, Mohr Davidow and MPM Capital.

Our criteria are about strong IP, solid path to commercialization; a lot of clinical evidence to show that it can fundamentally change the quality of care. We are not about incrementals. We are about significant disruption.

You said you invest in consumables. Can you give an example?

You are seeing convergence across the healthcare landscape. And so an interesting company that we just invested in, which was our first investment, is in Israel called Check-Cap. Check-Cap is changing the standard of care in colon cancer screening. Rather than the current standard for colon cancer screening, where you prep, you clean out your GI tract, you have an endoscope inserted, they have actually invented an ingestable, miniature, X-ray pill that you swallow and it goes through and transmits diagnostic imaging digitally to a wristwatch-type device, which is then seen and reviewed by a clinician.

It’s a consumable. So, you’ve taken what was a large footprint X-ray or CAT scan and made it a consumable. It stays in pill format, gets excreted in the toilet and is environmentally safe.

This is an example of a strategic collaboration where we actually have a formal supply agreement to help them manufacture the product.

Are you able to help companies in prototyping?

We are able to bring the power of GE resources globally. So, that’s our global supply chain of GE Healthcare; our global research center where there are 3,000 Ph.Ds. — New York, Bangalore, Ireland — or our engineering staff of over 10,000 engineers in GE Healthcare that help with product development. So, from early proof of concept to prototyping to taking cost out of a product to drive more attractive margins, we can help across the entire spectrum.

Do you share the general gloom of other investors that regulatory challenges will kill U.S innovation?

First of all, GE is bullish about the healthcare market in general. Different from other financial investors, I think we’ve always been a global company and we continue to be a global company. We bring about 500 products to market every few years across the globe and so we are very accustomed to working with the FDA of course, but also every European regulatory body in addition to the SFDA in China and [regulatory bodies in] Latin America.

So, we are not really fazed by the challenge of commercialization. There have been slowdowns to which our organic business has had to work through, just like startups in the U.S.

But in general, we see healthcare as a very good business. We are able to advise portfolio companies on the quickest, most efficient way to market.

Can you talk about some investments you have made in the U.S.?

In the U.S., we’ve invested in NanoString Technologies in Seattle. They have a breast cancer diagnostic assay called the Pam50, which is really showing positive results that are equal if not superior to the leading standard of care — Oncotype DX.

In addition, we are invested in a really neat St. Louis company called Veran Medical Technologies, which is an in-organ guidance system that is really changing the care for therapy guidance.

In addition, we have invested in a company called CardioDX, which has the leading in vitro diagnostic test for cardiovascular disease.

You said a third of your investments are made overseas. Are those companies developing product for the local market?

This is one of the things that differentiates us. Given that we create products every day, it’s old thinking to say that you can strip down a product and then export it to different geographies. So, we look at it from an in country for country perspective both organically and inorganically.

The healthcare models patients need and providers need differ based on geographies, and we are attuned to those local needs. Although there are some products that can be globalized as is, typically it really benefits the business case, the investors and the company to think locally.

NovaDigm Therapeutics’ lead product, the NDV-3 vaccine, targets the fungal infection candida and the bacterial infection staphylococcus aureus (including MRSA). It contains a protein called Als3, which is found on the surface of candida cells and allows them to attach to and invade human host cells. Structurally, the protein is similar to proteins on the surface of staph or MRSA, and in preclinical studies, the vaccine reduced mortality in otherwise lethal doses of both pathogens.

The synthetic version of the protein used in the vaccine is produced by the fermentation of yeast cells, according to CEO Timothy Cooke.

NovaDigm just released positive data for a phase 1 trial of the vaccine, which demonstrated that a single dose was safe, well tolerated and induced strong antibody and T-cell immune response in healthy humans.

The company’s next study, slated to begin next year, will test the vaccine when used to prevent chronic vaginal yeast infections in women with recurrent vulvovaginal candidiasis. There is an apparent market need for prevention and treatment of this condition, which affects 5 million women, Cooke said. And because of the large patient pool and frequency of recurrence in this condition, the trials will be much cheaper and smaller than trials for use of the vaccine in a hospital setting.

Although the company plans to continue working in parallel with both applications of the vaccine, a vaccine for prevention of vulvovaginal candidiasis will likely be the company’s first product to market. Cook said NovaDigm has enough money to get through a phase 2 trial for the vulvovaginal candidiasis application but is currently looking for a series B round to fund the staph studies.

Domain Associates provided the company’s initial $18 million series A investment June 2008 and since then, NovaDigm has secured more than $17 million in government grants.

An estimated 1.7 million nonsocomial infections are diagnosed each year in the U.S. and about one-third of them are preventable, according to the Centers for Disease Control and Prevention. Although the market for antibiotics has suffered from the introduction of generics, a market report from the Freedonia Group forecasts that the demand for infection prevention products will rise through 2015.

Cooke said NovaDigm’s vaccine looks so promising because it appears to increase antibody levels and T-cell activation in humans, and to do so fairly quickly.  “A lot of what we think is important is getting not just the antibody side of the immune response, but getting the T-cell immune response for staph,” he said. “We have both in our vaccine.”

Staph infections have been a target among Big Pharma companies — Pfizer, GSK and Novartis all have phase 1 vaccine projects, and up until they pulled the plug on a clinical trial last year, Merck and Intercell were leading the pack. The market for candida vaccines is less competitive, with Novartis and two other smaller biotechs in the mix.

Stephen Patrick et al, in the linked report, find that the incidence of NAS increased from 1.2/1,000 births in 2000 to to 3.39/1,000, in other words almost triple. Investigators have yet to sort out the direct long-term consequences for these babies — they often have problems later but their mothers, not surprisingly, are also disproportionately likely to smoke, drink alcohol, have poor nutrition and so on, and the babies go on to have a disadvantaged social environment. They have an increased risk of low weight birth, but whether that is a direct consequence of opioids is unknown. In any case, it’s a humanitarian catastrophe and oh yeah, it costs a lot of money at a time when Medicaid programs everywhere are under strain.

I’ve discussed this opioid epidemic here before, but just a reminder, the driving force is misuse of prescription opioids. Some people who start with prescription drugs do end up using heroin because it’s cheaper; but women tend not to like needles and so the epidemic prescription opioid abuse has meant a higher proportion of women get into trouble.

The difficulty is that there are completely legitimate uses for opioid analgesics, in fact they are a great boon to humanity and some people would suffer horribly, and unnecessarily, without them. But it’s difficult for doctors to tell when somebody really needs them or just wants them because she or he is addicted, or intends to sell them. But here are some ways to improve the situation:

1. Shut down pill mills. Florida had a big problem with this, clinics that exist only to write scrips for dope. The governor refused to take action for a long time (maybe he had friends in the business), so Florida also has a disproportionate problem with NAS. These operations can be identified pretty readily, and there’s no reason to tolerate them except that law enforcement doesn’t make it a priority. We’d do a lot more good concentrating on them than on marijuana growing and trafficking.

2. Many states have registries for opioid prescriptions. They all should have them, and doctors should be trained (and perhaps required) to check them before writing a new scrip. That way they can find outif the person has recently filled opioid prescriptions elsewhere.

3. Offer treatment on demand. Stop locking up addicts in jail, which is very expensive and doesn’t do any good. Have drug courts that divert them to treatment, and actually have the treatment available (which it often is not).

4. Create more comprehensive pain programs. There are alternatives to opioid treatment that will work well for many people, but there aren’t enough physicians trained in comprehensive pain management.

5. Have universal health care, including dental care. Lots of people develop chronic pain because they have untreated conditions. They show up in Emergency Rooms and they need pain relief. ER docs can’t tell the people with real dental pain (or whatever) from the fakers, so they write scrips indiscriminately. If they could just have the people seen right away by a dentist, that particular tactic would instantly become obsolete.

I can think of a few more but you get the idea. This is a problem that can be solved, or at least greatly ameliorated, if we take off the ideological blinders and approach it pragmatically. And that requires a government that responds compassionately to human needs.

But St. Jude Medical is hoping that slow and steady may still win the race in the quest to use this novel treatment in patients whose high blood pressure is not controlled by medication. The device maker announced Tuesday that its  EnligHTN renal denervation system has been approved and launched in Europe. And the principal investigator of a study evaluating the safety and efficacy of the device said that it is a second-generation product and has several “improvements” on Medtronic’s Symplicity renal denervation system.

Renal denervation is used to control high blood pressure by ablating the nerves that line the renal arteries using a catheter. Medtronic acquired this therapy after buying Ardian for an up-front $800 million in 2010.

Professor Stephen Worthley, a cardiologist at the Royal Adelaide Hospital and a principal investigator in the trial to test St. Jude’s EnligHTN, said that renal denervation therapy holds much promise for those patients for whom drug therapy has failed. They are eight times more at risk of experiencing a heart attack or stroke than those with normal blood pressure, Worthley said.

“It’s a huge risk factor and an important unmet clinical need,” he noted.

He said that Medtronic’s Symplicity system was an “early catheter design” with a single electrode, while the EnligHTN has “multiple electrodes rather than just the one.”

St. Jude Medical’s first-in-man study was done in 46 patients in Australia and Greece, similar to Medtronic’s study, which looked at 45 patients, he said. The early data on EnligHTN after the first 30 days, which will be presented Wednesday at the EuroPCR conference in Paris, shows that there was a 28-on-10 millimeter of mercury reduction in blood pressure.

“When you think about what that means … that’s more than a halving of their cardiovascular risk, more than halving the risk that they will have a heart attack or stroke in the future,” Worthley said.

He added that the comparable Medtronic study — Symplicity HTN 1 — showed a 14-on-10 millimeter of mercury reduction in the first 30 days. (Worthley said he did preclinical work using Medtronic’s Symplicity system and was not involved in human clinical trials, but is familiar with data sets.)

“That’s a two-fold greater reduction of the systolic blood pressure,” than Symplicity, Worthley said. “That goes to the improved efficacy of this novel catheter.”

Under St. Jude Medical’s clinical trial design, patients had to stay overnight at the hospital, but fully expects renal denervation to be an outpatient procedure in the future.

While St. Jude is gearing up in Europe, Medtronic is far ahead in the U.S., where it is expecting to complete enrolling patients in a clinical trial in the third quarter of fiscal year 2013. Some believe that Medtronic’s Symplicity works but is rather hard to manipulate.

Meanwhile, another device maker — Covidien — has joined the fray in the hopes of breaking into this potentially lucrative market by buying California startup Maya Medical for $60 million up front with another $170 million in milestone payments.

[Photo Credit: Freedigitalphotos user digitalart]

AxioMed's Freedom Lumbar Disc

Medical device developer AxioMed Spine has received European regulatory approval to market its cervical spinal disc replacement device.

The CE Mark for AxioMed’s Freedom cervical disc complements the earlier European regulatory approval for the company’s Freedom lumbar spinal disc replacement, according to a statement from the Cleveland-area company.

AxioMed is currently selling the lumbar disc in three countries: Germany, Switzerland and the United Kingdom, chief financial officer Jerry Baty said. The company is still evaluating its options on where to kick off European commercialization of the cervical disc.

As for U.S. commercialization, AxioMed is conducting a pivotal clinical study of the lumbar disc and hopes to obtain regulatory approval in 2014, Baty said.

AxioMed describes its spinal discs as being viscoelastic (possessing both viscous and elastic properties) and featuring a core made of polymer.

In 2010, AxioMed, a Cleveland Clinic spinoff, raised a $14.5 million series D round of investment to support European commercialization.

Medical device executives with designs on leveraging big data. Innovators pushing insurance companies to think differently. Leaders of startup accelerators ready to reveal what’s next.

Our speaker list continues to grow for MedCity CONVERGE, MedCityNews.com’s one-day event on healthcare innovation and convergence on July 10 in Philadelphia. Pfizer’s head of clinical innovation will talk about Big Pharma’s transition in a new era for medicine, the chief innovation officer of Children’s Hospital Boston will outline a vision of telemedicine, and a vice president from Medtronic will discuss how the digital health movement can best serve the medical device industry.

We’re two months away from the conference, but our early-bird ticket rate is ending this Friday. So if you want to see all the speakers below (and many more) for the best price possible you should buy your tickets now.

CONVERGE will put innovators of all stripes shoulder-to-shoulder with one another to talk about the next opportunities and the latest in cutting-edge solutions. In the coming weeks we’ll outline many of the startups contributing in the agenda, as well as those selected for our startup showcase – a largely hand-picked collection of early-stage companies showing how convergence is done.

There’s more to come. But here’s who is coming to participate in the CONVERGE agenda so far.

• Steve Auvil, partner, Benesch
• Andre Blackman, managing editor, Pulse & Signal
• Jessica Boden, president, Stone Arch Creative
• Jim Burns, CEO, AssureRx
• David Delaney, chief medical officer, SAP
• Ted Driscoll, technology partner, Claremont Creek Ventures
• Dr. Arlene A. Forastiere, senior vice president for medical affairs, eviti, and professor of oncology at the Johns Hopkins Sidney Kimmel Comprehensive Cancer Center
• Naomi Fried, chief innovation officer, Children’s Hospital Boston
• Kem Hawkins, CEO, Cook Medical
• Dr. Anil Jain, staff physician at Cleveland Clinic and senior vice president  and chief medical information officer, Explorys
• Dr. Gary Kurtzman, vice president and managing director in life science group, Safeguard Scientifics
• Craig Lipset, head of clinical innovation, Pfizer
• Dr. Jennifer Lowry, Center for Personalized Medicine and Therapeutic Innovation, Children’s Mercy Hospital & Clinics
• Dr. Ken Riff, vice president of strategy and patient data management CRDM, Medtronic
• Don Rose, director of University of North Carolina’s Carolina KickStart Program
• Brandon Rowberry, vice president of innovation development, UnitedHealth Group
• Richard Russo, CEO, Endomedix
• Mike Scott, chairman, board of directors, National Organization for Rare Disorders
• Albert Shar, vice president, Robert Wood Johnson Foundation
• Steve Tang, president and CEO, University City Science Center of Philadelphia
• Brian Wells, associate chief information officer, Penn Medicine
• Dr. Brad Weinberg, founding partner, Blueprint Health
• David Williams, Health Business Blog
• Alan Ying, venture partner, Chrysalis Ventures
• Wil Yu, special assistant of innovations and research, Office of the National Coordinator for Health IT

Remember, early-bird registration ends Friday, May 18. This is your last chance to save 40 percent off the ticket price. Don’t miss out on this opportunity to network, make deals, learn about where the industry is heading, see the coolest startups and connect with thought leaders and decision makers from across the healthcare ecosystem.

[Photo courtesy of Flickr user Caitlinator]

The Cleveland-based company, which recently secured an important investment from Takeda Pharmaceuticals, is planning to enroll 48 patients and complete enrollment early next year, CEO Rahul Aras said.

Juventas’ technology, called JVS-100, works by recruiting stem cells from the bone marrow to create new blood vessels. It’s based on Stromal Cell-Derived Factor-1 (SDF-1), a naturally produced molecule that attempts to repair the heart immediately following a heart attack.

Critical limb ischemia (CLI) patients are enrolling at several U.S. hospitals, as well as three in India. CLI is a severe obstruction of the arteries that greatly decreases blood flow to the extremities.

About 3 million Americans suffer from the condition and the prognosis for many patients isn’t good: 25 percent mortality and 35 percent major amputation rates within a year of diagnosis, according to a statement from Juventas.

“CLI has become a very exciting clinical opportunity,” Aras said. “It’s becoming a growing area of interest for a number of biotech and pharma companies.”

Other companies pursuing CLI treatment include Aastrom Biosciences, Arteriocyte and Biomet.

Among the top advantages of Juventas’ CLI therapy is its simplicity and cost-effectiveness, Aras said. Patients can be injected with the company’s therapeutic in an easy procedure at a physician office, and the approach doesn’t require bone marrow aspiration to obtain patients’ own stem cells or complex cell processing as some competing therapeutics do.

Juventas also has a phase 2 trial underway to investigate its therapy with heart failure patients.

The company is expected to shortly announce a series B round of investment, which includes the funding from Takeda, that totals around $20 million or $25 million.

 [Photo from flickr user Horia Varlan]

It tied that number in 2011 and inked a total of 99 commercialization deals.

With a gross royalty income of $3.9 million, the university isn’t one of the most lucrative technology transfer programs in the country, but it has spun off a few notably successful Indiana life science companies that include Endocyte and Cook Biotech.

The university is facilitating and encouraging startup creation through several investment funds, engagement with surrounding communities and investors, and one of the largest university-affiliated incubation parks in the country, which comprises more than 200 companies across Indiana and has provided about $22 million for sponsored research at the university since 1999.

Elizabeth Hart-Wells, the assistant vice president and director of the Purdue Office of Technology Commercialization, talked to MedCity News about the climate for university technology transfer and the university’s efforts to excel at it.

What kinds of things have made Purdue successful in bridging the gap between research and entrepreneurs?

We have several initiatives designed to encourage and expedite the transfer of new technologies to the public. First, there is the Trask Innovation Fund (TIF), to support short-term projects that will enhance commercial value of Purdue University intellectual property assets, and the Emerging Innovations Fund. More recently, OTC works with the Burton D. Morgan Center for Entrepreneurship to put together student teams that perform due diligence on one or more of the potential investment opportunities. The student teams and eligible applicants pitch before the EIF Advisory Board, which consists of active investors and venture capitalists, for up to a $150,000.

OTC and our colleagues at other Indiana research institutes also take technologies on the road, aiming to bring innovations to communities’ backyards rather than wait on them to come to us.  We pitch from four to eight technologies in a showcase format, and often these technologies are selected to target the communities’ economic engines.

Purdue’s P3 Alliance, the Purdue Angel Investment Network, aims to coalesce private sector resources around Purdue innovations and Research Park tenants by enabling accredited investors with an interest in furthering the university and foundation’s mission to obtain the First Look advantage for investing in the companies that are commercializing technologies. Companies seeking equity investment are featured through an online subscription as well as through live presentations scheduled throughout the year.

How big of a role does Research Park have in the university’s tech transfer success?

More recently, a little less than half of the licensing income is from companies in the Purdue Research Park.

Are there certain qualities that make a product or technology more likely to be successful as a startup vs. licensed out to an existing establishment?

While always a case-by-case analysis, the startups tend to lean toward disruptive technologies.  However, with the ease of starting online companies and e-commerce, this may change. Incremental improvements often are better suited for existing establishments but again, there are exceptions. The key is to keep breathing innovative thinking into your OTC.

From the university’s perspective, will patent reform make it harder or easier for university tech transfer?

Both. This is a very complex space. We are planning for the worst and cautiously expecting the best.

What have been your biggest goals in the OTC over the last two years?

One goal was to reach beyond the existing portfolio focus and diversify to reflect Purdue’s breadth of core competencies. To do that well, as a group we have had to increase bandwidth on many fronts, legal tools, personnel proficiencies, articulating a broader vision. Another goal has been and continues to be reward good work, of both the innovators as well as the OTC team.

Editor’s note: This interview has been edited and condensed for clarity.

Shane, a Case Western Reserve University economics professor who authors a regular column for Business Week, castigates a culture that promotes a “naive view of entrepreneurship and starting businesses” in his 2008 book “The Illusions of Entrepreneurship: The Costly Myths That Entrepreneurs, Investors, and Policy Makers Live By.”

The reality is very, very few entrepreneurs are successful. “We overinflate the positives and talk only about a small group of extremely successful start-ups like Apple, Google and Federal Express, but ignore the much larger number that fail,” he said in an interview with Case’s news center to promote the book.

The reality is older companies create more jobs than young ones. “Putting money into the typical new company is a worse use of resources than putting it into the typical older company,” he said. “Only 45 percent of new firms last five years.”

Those aren’t exactly the types of messages that startups seeking government handouts or politicians chasing easy votes like to hear.

In the Q&A below, Shane, whose title is the A. Malachi Mixon III professor of entrepreneurial studies, expands on his ideas on economic development and entrepreneurship.

Q: What policies do you advocate governments implement to best support entrepreneurs?
A: Most economists believe that the government should intervene in markets only when markets do not work properly. For instance, we need government funding of basic research because businesses cannot capture the full value of the returns to their investment in basic science. Therefore, they underinvest in basic research. If the government didn’t intervene, we wouldn’t have the basic research on which many new technologies are built. Without government-funded research, there would have been no Internet and no subsequent Internet-based businesses.

Q: What do you see as the major problem with government entrepreneurial support programs, such as Ohio’s Third Frontier?
A: The state government doesn’t limit its intervention to market failures. It responds politically to demands for help. Everyone likes a subsidy when it’s given to them. So policy makers hand out a lot of unnecessary subsidies to all kinds of entities when the private  market is functioning just fine.

There are two problems with this strategy. First, every time the government intervenes, it distorts the market place. People may not notice but the angel capital market in Ohio doesn’t function normally because the state intervenes heavily in the market. The incubator market doesn’t function normally because the state intervenes. If you intervene to change a market transaction, there will be some cost, even if it is not obvious to those in the market.

Second, everything has an opportunity cost. If you subsidize something, the money had to come from somewhere. So if you spend money on organizations to promote startups, either you have to raise taxes and hinder entrepreneurial activity that way or you have to take money from some other program.  No one ever says, “‘Let’s take money from early childhood education to create early stage investment companies.”  But that’s what you do.  And no one says, “If we educate X-number more kids how much more benefit would we get than by stimulating one additional start-up.” But that’s what’s actually happening.

Do we get more jobs created from spending money on the program or by eliminating the program and cutting taxes on startups by an equal amount? We don’t know because the state and the recipients of the money don’t measure the effect of programs. Instead of doing a proper analysis of the effect that funding a startup has on job creation, everyone relies on multipliers.  The problem is that everything has an economic multiplier. (The fact that the state of Ohio is a presidential battle ground state has a high economic multiplier. Think of the economic impact that occurs when the president flies into town and goes to an ice cream shop as part of the campaign. The secret service has to come in and secure everything. Air Force One has to refuel. The reporters have to eat.  The camera crews need to ship equipment here, and so on.)

What you really want to know is what the marginal effect of a dollar of government funding is on job creation.  You will only get that if you carefully compare a matched sample of recipients of funding and non-recipients of funding and see how many more jobs the recipients create.

One reason that policy makers and the support organizations that receive funding resist these studies is that there is a good chance they will show that the programs have little effect. It’s politically more effective to use studies with poor research designs to justify government programs than to take a chance that a proper investigation will reveal the true value of the programs. Few people understand the difference, so there is little upside and a lot of downside to the champions of the programs. The big loser, of course, is the taxpayer.

Q: You argue it’s a myth that creating more startups will transform struggling economic regions, create innovation and job growth. Why is that, and how does it harm a region like Northeast Ohio when people buy into this myth?
A: It’s opportunity cost again. If we fund a bunch of programs that do nothing, and that comes at the expense of programs that do something, we’ve lost the opportunity to fund something valuable.

The evidence on startups indicates that greater volume of new companies does little to create economic growth or innovation.  If you think about it for a minute, you can see why. Suppose everyone who worked for Eaton quit and started a business. We would have a lot more startups in the region because a lot of people work at Eaton. But that would reduce the value of Eaton.

For this trade-off to make sense, the people who work at Eaton would have to be more productive if they did not work for Eaton than if they did. But we know that there are benefits of economies of scale and scope, learning curve effects, and a host of other things that come from organizing big businesses as big businesses.  After all, if replacing Eaton’s workforce with thousands of start-ups was more productive than keeping Eaton the way it is, then why aren’t Eaton’s shareholders, senior management, and board breaking the company into thousands of self-employed independent contractors?