Neurostimulation devices that send mild electrical pulses to target nerves are arguably the fastest-growing segment of the medical devices sector. They’re primarily being commercialized in neurology and urology but are apparently showing promise in cardiology too.

A startup called NeuroTronik spun out of medical device incubator Synecor last year says it’s raised a $13.1 million series A led by Hatteras Venture Partners. NeuroTronik CEO Fred McCoy told VentureWire that Lord Baltimore Capital, Mountain Group Capital and Synergy Life Science Partners also participated in the round.

The funding will be used to develop a device to treat patients who go to the hospital for worsening symptoms of acute heart failure syndrome, which occurs when the heart’s ability to pump blood is hindered by coronary artery disease, high blood pressure or a variety of other conditions.

NeuroTronik is creating a device that cardiologists would use to stimulate a patient’s heart so that it could pump blood more effectively. This kind of treatment has the potential to shorten hospital stays and reduce the need for patients to return to the hospital, McCoy told the News & Observer.

The Chapel Hill, North Carolina, company, which also has operations in Ireland, hopes to have its device approved outside of the U.S. within four years and in the U.S. in six years.

Minnesota firm BioControl Medical is already testing a nerve stimulation system for heart failure, but its intended use appears to be in chronic heart failure patients.

NeuroTronik’s McCoy spent the first part of his career working his way up the ladder at Eli Lilly and Company and its subsidiaries. He was president of Guidant’s cardiac rhythm management division when the Lilly spinoff was sold to Boston Scientific in 2006. He’s also currently vice chairman of Synecor.

Research Triangle Park might be North Carolina’s hotbed for biotechnology, but the neighboring Piedmont Triad region has quite a bit going on in the way of healthcare innovation, too.

An economic development group within the 12-county region, which is home to companies like Piedmont Pharmaceuticals, Targacept and regenerative medicine company Tengion Inc., has just launched a new business accelerator.

Triad StartUp Lab is a five-week program that will match startups with mentors and provide them with co-working space at Elon University School of Law’s Center for Professional Development. Run by the Piedmont Triad Partnership and supported by the Lincoln Financial Foundation, it’s an extension of the PTP Next Business Competition program, which awards seed funding grants to area entrepreneurs.

The first class of eight startups includes five mobile or digital technology companies and three in the biotech space, including Blue Atom Technologies.

Blue Atom is using predictive modeling technologies licensed from Targacept to develop a search, modeling and forecasting engine for improving drug discovery. Chairman Mauri Hodges said in a statement that the company would focus its time in the accelerator on formalizing its marketing and sales strategy, plan and systems for its two software products.

 [Photo credit: BigStock Photos]

In its first U.S. clinical trial, Humacyte is testing the safety and effectiveness of the blood vessel, which is intended to be an off-the-shelf product that’s derived from human cells but doesn’t have any of the biological properties that cause organ rejection.

People with kidney disease undergo dialysis, which often requires use of a graft to connect an artery to a vein. Current options carry risks of complications, according to Duke, like clotting and infection.

Humacyte creates its vessels by cultivating donated human cells on a tubular scaffold. The resulting vessel is then cleansed of the qualities that might trigger an immune response, leaving a collagen structure that mechanically matches artery and vein it’s being sewn to.

To read more from Duke, click here.

[Photo credit: Duke University]

NEW YORK (Reuters) - Private equity firms KKR & Co LP, Warburg Pincus LLC and Cinven Ltd are weighing bids for PRA International, a clinical research group, which is for sale and could fetch as much as $1.3 billion, several people familiar with the matter said.

The buyout firms are among the parties preparing to submit second-round bids later in June for Raleigh, North Carolina-based PRA, the sources said this week, asking not to be identified because the auction is not public.

Private equity firm Genstar Capital LLC, which acquired PRA in 2007 for $797 million, put the company on the auction block earlier this year, two years after its earlier effort to sell PRA failed over price, the sources said.

Genstar is also considering an initial public offering for PRA and could pursue that route should private equity bidders fail to meet its price expectations, the people said. PRA could be valued at as much as $1.3 billion based on annual earnings before interest, tax, depreciation and amortization of around $130 million, they added.

Genstar is working with Jefferies Group LLC to find a buyer for PRA, the people said. Genstar declined to comment, while PRA and Jefferies did not respond to requests for comment.

Cinven declined to comment, and KKR and Warburg Pincus did not respond to requests for comment.

PRA, which provides clinical trial services and other research for pharmaceutical companies in over 80 countries to help them win regulatory approval for drugs, was founded in 1976.

Genstar worked with Credit Suisse Group AG in 2011 in an attempt to sell PRA amid a wave of private equity deals in the contract research space, but could not find a buyer that would meet its price expectations, people familiar with the matter said at the time.

The market is now more generous toward such companies. Last month, Bain Capital LLC and TPG Capital LP raised $947 million by taking Quintiles Transnational Holdings, the world's largest provider of contract research services, public.

Other private equity deals in this space include the $3.9 billion acquisition of Pharmaceutical Product Development Inc by Carlyle Group LP and Hellman & Friedman LLC in 2011, and the $1.1 billion takeover of inVentiv Health Inc by an investor group led by Thomas H. Lee Partners LP, also in 2011.

(Reporting by Soyoung Kim and Greg Roumeliotis in New York; additional reporting by Jessica Toonkel; Editing by Leslie Adler)

The offering price values Quintiles at $6.6 billion including debt, according to Bloomberg.

Morningstar Senior Equity Analyst for Biotechnology Lauren Migliore is bullish about how Quintiles will fare in its return to the stock market, according to a report authored by Migliore this week.

“We think the firm’s unparalleled size and exposure outfit it with a narrow economic moat and the strongest competitive advantages in the CRO industry. Drugmakers’ increased use of outsourcing and the emerging strategic partnership model are further bolstering Quintiles’ already-formidable defenses against weaker rivals…”

and

“We think Quintiles will see 8 percent compound annual revenue growth over the next five years, at the top range of management’s 5 percent to 8 percent forecast. This growth will be driven by both increased outsourcing (we project CRO penetration will improve roughly 5 percentage points in the near term) and market share gains as Quintiles continues to take a greater share of the dollars spent on R&D.”

And Quintiles is a giant among CROs. By Morningstar’s calculations, it is 70 percent larger than the next largest CRO by sales — Covance.

The Burrill Report counted 16 life science IPOs among the 37 that were filed last year. Companies in many sectors, including life science companies, have taken a cautious approach to IPOs in the past couple of years, according to Fenwick. because of the volatility and uncertainty that has hung over the stock market in recent years.

But there seem to be some signs that 2013 could turn things around. In 2010, the BIO industry organization predicted that 2013 would mark a resurgence in the number of life science IPOs filed, comparable to 2007 levels thanks in part to the JOBS Act which loosened the pre-IPO marketing requirements for emerging growth stage companies. BIOtech Now noted that 20 life science companies had filed to go public as of the third quarter of 2012 under the looser rules.

The Wall Street Journal underscores the 2007 feeling. Referencing capital markets research firm Ipreo, it said the Durham, NC, company’s debut is the biggest of 11 US-listed IPOs this week — the most for any week since November 2007.

Quintiles initially went public in 1994 but was taken private in 2003.

According to the article, GSK used text analytics software over a two month period, allowing it to gather the themes of thousands of posts it de-identified into topical clusters like “safety,” “timing” and “comfort” and sentiments, like “happiness” and “unhappiness,” to give the company a better view of parents’ sentiments than what they might share in an official survey or focus group. It assembled the information into a study in which it concluded that parents often had a lack of “comfort” with the safety of vaccines, and were unconvinced that they needed to vaccinate their kids against measles and mumps.

I think that’s great and hope they keep it up.

Why? Because measles is one of the leading causes of death for children under 5 years old, according to the World Health Organization. About 158,000 people died from measles in 2011 – mostly children under the age of five. This is a disease that was eliminated in the US in 2000 but it’s making a comeback — in 2011 there were more than 200 reported cases. In the UK, the count has surpassed 1,000 since November 2012, — the majority of cases are in Wales.

It’s hard to come up with a more emotional issue than healthcare, particularly when it comes to our loved ones. I can respect a parent’s concern about the potential side effects of childhood vaccinations. But if I were a physician or a pharmaceutical company, I would want to know the specific sources of those concerns because it would help me better empathize and better educate parents, particularly if the fears are associated with autism. It would also help me better combat the misinformation being spread around the Internet. After all, these are public health issues and if you want to boil it down to cost — it’s much cheaper to get a vaccine than hospitalize a child with measles.

I recall an e-patient conference last year where some of the speakers expressed annoyance that pharmaceutical companies were following them on Twitter. At least one person wished they would ask permission. Please. That’s what private groups and direct messages are for.

Personally, I wish pharmaceutical companies felt less encumbered to be more transparent. I’m sure most people who have questions about issues like the merits of MMR vaccines and the misinformation spread by Andrew Wakefield and his advocates over these vaccines causing autism would welcome the opportunity to communicate with a pharmaceutical company, preferably with a pediatrician.

As one commenter pointed out, Google collects information from searches with little complaint as does Facebook (well, some complaint). There are plenty of people advocating for more pharmaceutical companies to engage the public. A balanced dialogue would be the perfect antidote to ignorance.

G1 Therapeutics’ small molecules transiently arrest the cell cycle of hematopoeitic progenitor and stem cells in the bone marrow. This transient arrest is pharmacological quiescence or Pharmacoquiescence™(PQ™).

After the Boston Marathon bombing, it’s easy to understand why the government is giving G1 Therapeutics millions of dollars to develop a pill that protects against radiation exposure.

If the pressure-cooker bomb had been a dirty bomb instead, Boston would have had a public health crisis to deal with in addition to the manhunt and trauma patients.

G1 Therapeutics is closer than ever to human trials of a radiomitigant that would protect bone marrow and the liver in particular from the effects of radiation.

The team is working on two formulations of the same molecule. The lead formulation is in intravenous form that could be added to existing chemo treatments.

“This allows us to exquisitely tune in the dose and to turn it on or turn it off,” Christy Shaffer, Ph.D., said.

Shaffer is the executive chair of the board at G1 Therapeutics and a venture partner at Hatteras Venture Partners, and managing director of Hatteras Discovery.

The North Carolina company’s drug could help soldiers as well. The other formulation will be a pill form that governments could stockpile or soldiers could store in their backpacks. This treatment would work after exposure. Current protective treatments have to be given before exposure.

Shaffer said the company has a pipeline, not a single compound. “The chemical scaffolding they have created has generated a different number of compounds; the lead is what we can get into the clinic first,” she said.

Hatteras Venture Partners led the initial seed round with a $600,000 investment last September. The firm invested another $400,000 this year.

“By 2014, we expect to be through initial conversations with the FDA and be ready for first human testing,” she said.

G1 got $1 million in a fast-track grant from the National Institutes of Health last year. G1 also won a Phase I SBIR grant in April from the National Institute of Diabetes and Digestive and Kidney Diseases, part of the NIH. The grant was for $159,836.

Shaffer said that G1 Therapeutics is a good example of a company that has taken advatange of nondiluted financing.

“The are taking advantage of grants and coupled with venture money, this shows that 1 + 1 equals well over three,” she said and added  that the company got extremely good scores on their grants.

The company is preparing an application due at the end of May for a grant for several million dollars from the military.

G1 Therapeutics was founded in 2008 by Dr. Norman Sharpless and Dr. Kwok-Kin Wong as G Zero Therapeutics. The company changed its name last year.

[Image from G1 Therapeutics]

Drunk driving is bad. It just is. On a mission to fight this problem, Alcohoot has created ‘the world’s first enforcement grade smartphone breathalyzer’.

Alcohoot is a device that plugs in your smartphone and measures your blood alcohol concentration (BAC). It uses platinum grade fuel cell sensors, the same technology used by police, along with a pressure sensor, mouthpiece, and mobile application to help people monitor their drinking.

Let’s say you are celebrating a friend’s birthday with pitchers of margaritas. Those tasty limey concoctions can pack quite a punch, and you realize after a few rounds that driving to dinner across down may not be the wisest choice. Whip out Alcohoot, check your BAC, and let actual numbers (rather than the illusion of sobriety) dictate your next move.

As we all know, drinking driving doesn’t just affect you and your passengers. It also affects the people on the street around you.

The app has tools to monitor your booze levels throughout the night. You can see as your alcohol level goes up or down and track your boozing over longer periods of time. The quantified self movement has led people to obsessively watch their heart rate, sleep patterns, calorie burn, steps taken, and eating habits. Why not our alcohol consumption? Data can lead to insights which can help people who want to lead a healthier lifestyle.

Beyond data, Alcohoot also provides actionable assistance for when you’ve had one too many. The app connects you nearby restaurants and taxi services so you can grab that anchoring burrito or safely go home to bed when needed. Whenever Alcohoot needs calibration, the company will mail the user a calibrated device with a pre-paid return shipping label and you just swap them out.

The manufacturing and design happens in Tel Aviv, Israel and is built to conform with FDA and Department of Transportation requirements for breath alcohol testers to ensure accurate results.

Alcohoot is conducting its own crowdfunding campaign to raise $75,000 for the first batch, which will ship in September 2013. Founder Ben Biron said that the law enforcement breathalyzers can cost $800, while Alcohoot is just $75. Check out this video below.

Photo Credits: Alcohoot

This article originally appeared on VentureBeat

DURHAM -- Tranzyme Pharma, a Durham-based biopharmaceutical company that discontinued clinical trials for two drug candidates last year, is planning to merge with private drug developer Ocera Therapeutics Inc. in an all-stock deal.

The combined company, which will be headquartered in California, will focus on development of therapeutics for patients with later-stage liver disease. San Diego-based Ocera has a candidate in Phase 2 trials for treatment of orphan liver diseases.

Tranzyme Inc.'s board has been looking into the possible sale, merger or other business combination for the company following the discontinued development of both of its two clinical-stage drug candidates.

The company was developing a candidate called ulimorelin to speed gastro-intestinal recovery in patients after surgery. It planned to focus on another candidate, TZP-102, after it discontinued development of ulimorelin due to clinical trial results.

It later discontinued testing of TZP-102 in diabetic patients for the management of the stomach condition gastroparesis after the candidate didn't meet its primary endpoint in two clinical trials.

The merger with Ocera is expected to close in the third quarter, subject to approval by the majority of Tranzyme shareholders and other closing conditions, according to a news release. The boards of both companies have voted to approve the deal.

When the merger is complete, Tranzyme shareholders will own about 27 percent of the company, and Ocera shareholders will own about 73 percent.

Tranzyme's President and CEO Vipin Garg will leave the company, and Ocera's president and CEO will lead the business.

Tranzyme's chief medical officer, Dr. Franck Rousseau, will lead the company's clinical and regulatory operations from Durham.

"We expect the merger will benefit from the substantial synergies of the combined management team's extensive experience in drug development, specifically in hepatology, which will help accelerate the transition and allow for efficient execution of the development plan," Garg said in a statement in a news release.

With the merger, a group of investors committed $20 million in a private investment in public equity financing. Ocera's largest preferred stock investors committed to participating.

In connection with the merger, Tranzyme plans to complete a reverse stock split that's intended to raise its trading price above Nasdaq's minimum to allow the company to remain listed following the transaction, according to the release. ___

WINSTON-SALEM - North Carolina will receive $359,571 from drug manufacturer Amgen as part of a national $24.9 million settlement for offering kickbacks to pharmacies for prescribing its kidney drug Aranesp.

The N.C. Attorney General's Office said Monday that the settlement resolves allegations that Amgen provided certain institutional pharmacies additional rebates on Aranesp in exchange for the promise that these pharmacies would promote the drug in programs implemented in nursing homes they served.

The alleged purpose of the scheme was to induce medical professionals working at these facilities to dispense Aranesp instead of competing drugs.

The settlement money will go to compensate the federal government and state governments for Medicaid, Medicare and other taxpayer-funded health-care programs from Amgen's illegal conduct. ___

A company developing an off-the-shelf immunotherapy that it thinks can turn tumors into adjuvant-secreting machines has some fresh capital as it heads into phase 2 clinical trials.

Twenty investors have put $5 million behind Heat Biologics, according to a U.S. Securities and Exchange Commission filing. CEO Jeff Wolf was not available to provide more details on the funding for this story.

Heat’s lead product is an engineered version of a naturally occurring heat-shock protein that the company says both stimulates the cancer cell-killing arm of the immune system and acts as an antigen-delivery system. Research has established that heat-shock proteins play a role in tissue and cell protection when the body is under stress, and they’ve been studied as potential targets in treating neurodegeneration, cardiovascular disease and cancer.

Unlike other immunotherapies that use a patient’s own cells or blood, Heat’s technology, ImPACT, is designed to be an off-the-shelf product. Currently, Heat is recruiting patients for a phase 2 study in late-stage, non-small cell lung cancer patients. Clinical trials in bladder cancer are expected to begin this year as well.

Wolf has said that down the road, the technology also has applications in viral diseases.

Heat was spun out of the University of Miami in 2008 and moved to Chapel Hill, North Carolina, in 2011.

RALEIGH, NC -- Gov. Pat McCrory's administration has begun a precipitous climb tackling the reform of one of the state's most complex and expensive programs: Medicaid.

But is that a pinnacle he's headed for, or a cliff?

McCrory's new secretary at the N.C. Department of Health and Human Services, Greensboro's Aldona Wos, is gung-ho about overhauling the government health insurance, which serves more than 1.5 million for about $13 billion a year.

She's pursuing it with an energy familiar to those who know her as a political and charitable fundraiser. The retired physician promises the potential privatization of many Medicaid functions will be good for patients and doctors.

She's meeting with doctors across the state, pitching to a sometimes incredulous crowd. She has routine office hours for providers to visit her in Raleigh.

The plan is to find three or so entities -- likely including private companies -- to function as insurance companies for Medicaid recipients.

Each would operate statewide and patients would choose their company. Each likely would have different plans, but Wos said the state would write minimum care requirements "in cement for everyone."

Nurses and case managers would plan care with patients in a process similar to private managed care plans. The goal would be to keep people on their medication and out of the emergency room, to plan ahead for long-term care needs and keep Medicaid recipients healthier and cheaper to care for.

Each "comprehensive care entity" would get a set amount of money for each patient it signs. But the per-patient payments would be weighted for people who are more expensive to cover -- the very old, or people with chronic illnesses, for example.

If the CCE can keep costs below what the state pays, it would turn a profit.

If not, it's on the hook for extra costs.

Wos and her Medicaid director Carol Steckel hope this will save the state money and make the annual Medicaid budget more predictable. That budget typically requires hundreds of millions of dollars from state coffers near the end of each fiscal year because of the hard-to-predict costs of caring for so many people.

Wos and Steckel hope the changes, combined with new state technology, will simplify Medicaid and strip away administrative costs.

McCrory and Wos have said Medicaid is "broken" in North Carolina, an assessment with which not everyone agrees. Many are concerned a push toward privatization will deny care to patients as for-profit companies look to cut costs.

But even they agree the system needs changes.

"In the present model, who's happy?" Wos asked last week. "Are the people happy? No. Sometimes they're in a very large, confusing system. Are we as taxpayers happy? It's a roller-coaster financially."

Uneven track record

A number of states have made this move with mixed results on savings, according to a 2012 report from the The Kaiser Family Foundation.

Wos' critics point to Kentucky, where millions in medical bills sit unpaid. Kentucky Spirit, one of the managed care groups, is suing, saying the Kentucky government provided faulty information and made costs seem lower than reality.

A first-year review of Kentucky's system, published last November by the Urban Institute and University of Kentucky, detailed a number of problems, including "increased administrative difficulties" for doctors.

Wos hopes the reforms here will simplify the paperwork burden. She's leaning on her experience as a New York physician in the 1980s and '90s, when a managed care boom led to unpaid bills and other problems, to convince doctors she knows the potential pitfalls of reform.

She and Steckel promise to learn from other states' mistakes

"Now, will we avoid every problem? No," Steckel said. "But we will avoid the ones that have happened before."

McCrory and his team want to phase in the new system in July 2015. The General Assembly must approve the changes; the governor said he hopes that happens during this legislation session.

A request for proposals would go out early next year, laying out the requirements for private companies. The federal government would have to sign off on a plan before it's finalized, because it pays for more than 65 percent of Medicaid in the state.

State Rep. Nelson Dollar, R-Wake and a House appropriations chairman who has focused heavily on Medicaid, predicted "significant progress toward reform" this session. But he has also defended a key part of the state's current Medicaid structure, run by Community Care of North Carolina, a nonprofit lauded as a national model.

The Kaiser report indicates that savings may be hard to come by. It notes that roughly half of Medicaid beneficiaries across the country are in a managed care program, but they account for only about 20 percent of the country's total Medicaid spending. That's because the focus has been on enrolling children, pregnant women and parents, who are fairly inexpensive to care for and make up the majority of Medicaid recipients.

States haven't generally moved disabled and elderly patients, who are the most expensive to cover, into managed care programs, the foundation said.

But North Carolina would move all Medicaid enrollees into the new program, said a Department of Health and Human Services spokeswoman, Julie Henry.

A model for the state

The proposed reforms expand on methods used by Community Care of North Carolina.

It has a three-year, $375 million contract to provide managed care through 14 regional entities, including one in Guilford County. It sends nurses and case managers for home and hospital visits, follows up with patients and makes sure they know about local charitable programs.

Community Care typically works with patients through primary care doctors and hospitals, not specialists. It works with 75 to 80 percent of Medicaid enrollees, according to Dr. Allen Dobson, the group's president and CEO.

The proposed reforms would expand on both those fronts, and Community Care may end up as one of the three or so comprehensive care entities managing Medicaid cases statewide.

Earlier this month, Community Care officials received a national award from a coalition of health care CEOs. U.S. Sen. Richard Burr, a Winston-Salem Republican, praised the organization, and Wos echoed that last week.

"They are a model for the United States," she said.

Doctors and others in the Community Care network visited Raleigh last week to meet with Wos and Steckel. Several expressed optimism that long-lingering challenges will be faced through these reforms. One called Wos "a breath of fresh air."

But there are concerns Community Care will be replaced by private managed-care companies.

"I think there are not a lot of folks that I'm talking to that are saying, 'Oh yeah, let's get outside insurance companies to come in and run the Medicaid program,'" Dobson said.

"I think people are saying, 'Yep, I understand that Medicaid has problems. We like the sound of the secretary's vision. But we just don't understand, because there's high risk in what it sounds like they've proposed.'"

Dobson and other Community officials said they look forward to working with Wos to find a strong role in the coming reforms. Steckel said the department's not pushing them aside.

"We're asking them to step up," she said.

Claudette Johnson, Community Care's president for Guilford, Rockingham and Randolph counties, said: "I think we are being listened to."

Community Care was one of 160 entities -- including private companies, advocacy groups and government agencies -- to submit reform suggestions, answering Wos' call for their input this year. But DHHS officials won't release those responses to the public, raising questions about transparency and where McCrory, Wos and Steckel's ideas came from.

Wos defended the decision last week, describing documents as rough drafts and saying transparency can be "pretty dangerous" when requests "prevent people from working."

It's unclear what information would be public and what would be shielded, if the state brings in private companies to oversee Medicaid programs.

"I think a lot of that is yet to be determined," said DHHS spokesman Ricky Diaz.

It's unclear how much money Community Care saves the state. A 2011 analysis by Milliman Inc. said it generated significant savings, with the highest coming from patients younger than 20. That age group makes up a big chunk of the state's 1.5 million Medicaid enrollees, since roughly 700,000 recipients are children or infants, according to DHHS statistics.

The study estimated four-year savings from Community Care as high as $984 million, but said there are "significant sources of uncertainty in this type of analysis." In January, the state auditor's office questioned assumptions behind the results and called for "a scientifically valid study" to see if Community Care saves the state money.

But many doctors and hospitals believe in Community Care's work and fear private insurers would resist paying for care.

The N.C. Medical Society, which says it has 12,000 members, has called for caution. Instead of using private companies, the group suggested expanding Community Care's program. Savings would benefit the state, not "an out-of-state corporate entity," N.C. Medical Society CEO Robert Seligson wrote.

Wos and Steckel bristle at suggestions their reforms will be bad for doctors or patients.

"This is not an exercise in cutting costs at all expenses," Steckel said. "It is a comprehensive care system."

But Steckel said, "there are going to be some hard decisions that have to be made."

"It's in the sense of, what does that person need and, then, what is a Medicaid service and what is not a Medicaid service?" she said.

Wos, a Polish immigrant who grew up under communism, said she has devoted her "entire life to helping people." That will continue, she said.

"I will do everything humanly possible to ensure that people have freedom," she said. "That they are in a situation where there is dignity around them. Where they receive the care and the respect that they need."

Contact Travis Fain at 373-4476 and follow @travisfain on Twitter. ___

Last week CaroMont Health tried to defend the move by saying the tagline was taken out of context:

“We are not saying we can stop death. What we are saying is that if you take an active part in your own health — being more active, making better nutritional choices, stop smoking — you can live a longer, healthier and ultimately happier life.”

A subsequent statement published today seemed to indicate that the hospital system got as much publicity about the chronic care issues facing the community as it was seeking:

“Right now Gaston County is facing the highest levels of type 1 and 2 diabetes, heart disease, drug and alcohol abuse and obesity we’ve ever seen…Whether you liked the tagline or not, for more than 5 days we have received more commentary and discussion than any other campaign in the hospital’s history. We needed all of our participants and members to wake up and pay attention to the challenge that we face – as a hospital and a community. We have successfully accomplished that goal.”

It doesn’t sound like an apology so far, does it? And it’s not until you reach the end that CaroMont Health CEO Randy Kelley said: “Our intent was never to offend or incite.  …We will continue to move forward with the job of realizing our goal to make Gaston County the healthiest in the state.”

While hospitals may want to be known for cutting edge medical procedures, there probably aren’t too many cutting edge marketing campaigns for health systems out there. CaroMont’s plight to address it’s county’s 81 out of 100 national health ranking echoes that of many health systems. How do you convey a sense of urgency and spur a community to action without creating fear and without using fear-inducing words? It’s not an easy balance.

I was struck by how obviously torn the hospital system was about apologizing for a message it felt the community needed to confront but wasn’t ready to hear. It will be interesting to see how its message evolves from here. I’m no marketer, but I’d just drop the tagline and focus on the message behind the hospital system.

Why? “Shared responsibility” penalties are much more likely to kick in for employers in states that don’t expand Medicaid. This tax comes into play if certain employees can’t afford insurance from their employer and turn to exchanges, and the associated tax credits for health insurance.

As with most policy components of the Affordable Care Act, the explanation is complicated. But given the potential price tag for employers — up to $447 million in Texas — it’s worth paying attention to the details.

Brain Haile of Jackson Hewitt Tax Service recently calculated the potential shared responsibility bill for employers in all 50 states.

His study focused on uninsured adults who are under 65, working full time for a company with 50-plus employees, and earning between 100 percent and 150 percent of the federal poverty level.

Haile used the latest census data to estimate the number of who meet these three criteria. The data showed that:

• 46 percent of these uninsured individuals work for companies with 50 or more employees
• 91 percent of the firms at which these employees work would offer some form of health coverage

Based on those assumptions, about 1.01 million people fit this criteria and could enroll in the premium assistance tax credits.

Haile used the example of a custodian who works for a county government. “The county provides insurance, but the person’s wages are so small that 25 percent goes to insurance, which makes it unaffordable,” Haile said.  That person could qualify for coverage through an exchange and the tax credit that goes along with it.

If the employee gets insurance through the exchange, the employer would pay a related tax, the shared responsibility penalty. This penalty applies to employers that offer health coverage and have 50 or more full-time equivalent employees. The fines are up to $3,000 for each employee who gets the premium assistance tax credits. The provision caps an employer’s total liability at approximately $2,000 multiplied by the total number of employees.

If the person is eligible for coverage through Medicaid instead of an exchange, the employer avoids the penalties.

“Businesses will have a lower tax penalty if more people are eligible for Medicaid,” Haile said.

The actual penalties will depend on how many eligible employees use the exchanges and the tax credit programs. The analysis excludes employees who currently have health insurance.

Another group of people who could add to the total bill are people who are currently insured but who might be eligible for exchange insurance if their coverage is deemed unaffordable. For example, spouses of farmers or ranchers working only for health insurance could drop their employer-provided coverage and buy coverage through the exchange.

“The question is how many will drop what they have and move across to the new option,” Haile said.

Haile is Jackson Hewitt’s first senior vice president for health policy. Before joining the tax preparer earlier this year, he was in charge of drafting a plan for Tennessee’s exchange.

Check out the entire study for cost estimates for all 50 states.

DURHAM - Durham drug-development company Chimerix, which could go public as early as next week, is anticipating that Wall Street will value the business at more than $300 million.

Chimerix filed a registration statement early last month with the Securities and Exchange Commission disclosing its plans for an initial public offering. The company followed up with a filing on Monday that filled in some crucial blanks -- notably, the price per share it is targeting and how many total shares outstanding it would have after an IPO.

According to the new filing, Chimerix, which doesn't yet have a prescription drug that's been approved for sale to the public, intends to sell 6.1 million shares of stock at between $13 and $15 per share in its IPO. That would give the company nearly 23.2 million shares outstanding -- putting its market capitalization, or total value of its outstanding shares, at between $301.5 million and $347.9 million if it achieves its price target.

The filing is an expression of confidence that the company will manage to go public, said John Fitzgibbon Jr., who tracks new stock offerings for IPOScoop.com.

"It looks to me like they feel they do have a strong enough demand to bring it public," he said.

IPOScoop.com anticipates, based on information obtained from the underwriters, that Chimerix will price its shares after the market closes on Wednesday, April 10. That would mean that shares would start trading the following day.

It remains to be seen whether Chimerix shares will hit the company's price target or if the company will end up lowering its price in order to stimulate demand.

Chimerix, which was incorporated in 2000 and has 46 employees, has spent $123 million on research and development of innovative medicines. Its most advanced experimental drug is CMX001, a treatment for life-threatening viral infections in patients whose immune systems have been compromised by cancer or drugs. Chimerix expects to enroll patients in a third phase trial, the final phase required before seeking regulatory approval, later this year.

Shares for millions

If Chimerix goes public at $14 a share -- the midpoint of its target price -- it expects to generate net proceeds of $77.6 million after fees and expenses. The company plans to use that money, first and foremost, for research and development related to CMX001.

Chimerix has been sustained up till now by government grants and $101 million raised from private investors, including Durham-based Pappas Ventures. Pappas would own a 5.4 percent take in the company after an IPO, which would be worth $15.6 million if Chimerix goes public at $14 a share.

If Chimerix succeeds in going public next week, its path from publicly disclosing its IPO plans to going public would be less than five weeks. Such a short period would have been unthinkable under the traditional rules, but Chimerix is benefiting from a bill that was signed into law by President Barack Obama last year.

The company qualifies as an "emerging growth company" under the Jumpstart Our Business Startups Act, or JOBS Act. The JOBS Act permits emerging companies -- defined as companies with less than $1 billion in revenue -- to start the IPO ball rolling by filing a "confidential" draft registration statement that the SEC can review.

"You can stay confidential as long as you want," said Don Reynolds, a securities lawyer with Raleigh's Wyrick Robbins Yates & Ponton. "But you can't go on a road show until 21 days after you file publicly."

Privacy before pitch

The road show is a crucial part of the IPO process where top company executives make their sales pitch to institutional investors -- mutual funds, pension funds and other large money managers.

So when Chimerix filed its registration statement on March 8, it already was well into the IPO process, having filed a confidential draft statement on January 30. That confidential statement was publicly disclosed on March 8 as well.

Filing a confidential draft document enables companies to "get a better sense if the market is going to be welcoming" to their IPO aspirations without disclosing their intentions publicly, Reynolds said. That would permit a company to pull the plug on an IPO if the market isn't favorable or if a buyer emerges for the business without ever having to release the detailed financial information a registration statement entails.

"Your competitor never sees your information, and the next-door neighbor of the CEO never know how much he or she makes," Reynolds said.

Ranii: 919-829-4877 ___

A catheter and surgical ablation device maker working toward enabling less-invasive treatment of atrial fibrillation is looking for a big round of fresh capital for its next move.

Morrisville, North Carolina, company nContact Inc. has already secured $6.7 million from a handful of investors and could continue raising up to $13 million, according a U.S. Securities and Exchange Commission filing.

nContact makes an endoscopic cardiac ablation system that combines suction capabilities, radio-frequency energy and perfusion to create lesions on the heart to disrupt the erratic electrical signals that cause atrial fibrillation. A-fib is the most common heart arrhythmia that starts in the two upper chambers of the heart.

nContact’s system is being studied in an ongoing safety and efficacy trial in patients with long-standing persistent atrial fibrillation, according to ClinicalTrials.gov. The company’s media representative could not be reached for an update on its progress.

Formed in June 2005, nContact is one of several companies, including medical device giant Medtronic and Ohio-based AtriCure, trying to improve the treatment of A-fib. Its proposed advantage is that it’s developed a way to treat arrhythmia through a small hole in the abdomen.

nContact’s last big fundraise came in 2010 when investors including Harbert Venture Partners and ZMV Associates pumped $16 million into the company to support clinical trials and product development.

It is continuing to recruit three more patients for the trial to assess the safety and preliminary efficacy of the neo-urinary conduit. It has demonstrated that urinary tissue can be regenerated in a limited number of patientsand expects to follow it up with a Phase 2/3 trial later this year. Because more sites will be set up, the company believes it will better positioned to recruit a broader patient population than before, according to a conference call it held yesterday.

The current level of care for bladder cancer patients who need their bladder removed involves using bowel tissue to create a which critics argue puts patients at risk for complication from the use of this tissue. because it involves a longer surgery and post-op recovery time. There are more than 20,000 urinary diversions performed annually in the United States and Europe, according to its website.

A program to regenerate kidney tissue for patients suffering from advanced chronic kidney disease is also progressing. The procedure is intended to prevent or delay the need for dialysis or a kidney transplant by regenerating functional kidney tissue, according to the website. If the Medical Products Agency in Europe accepts its clinical trial application, it expects to start a Phase 1 clinical trial in Sweden next quarter. It is also submitting an IND to the FDA for its neo-kidney augment procedure next quarter. It expects to start a Phase 1 clinical trial in the U.S. in the fourth quarter of the year with initial proof-of-concept data expected next year.

More than $27 billion in Medicare costs each year are from to patients with end stage renal disease, associated with a 20 percent annual mortality rate, according to the United States Renal Data System.

The regenerative medicine technology that’s the basis for Tengion’s work was originally developed at Wake Forest University‘s Institute for Regenerative Medicine. Tengion was spun out of the university in 2004.

In its fourth quarter financial results yesterday, the company stated that, based on its currently expected level of operating expenses and debt repayments, it only expects to be able to fund its operations to May 2013. But under the terms of the financing agreement from last October, the company may seek an additional $10 million in financing without the need to obtain any additional consent.

The concept of regenerating tissue and organs is an exciting one, particularly for people with chronic kidney disease. Adam Feinberg of Carnegie-Mellon University is developing a heart-tissue regeneration process using artificially produced protein framework and genetically engineered cells to help patients with heart failure. Researchers at the Royal College of Surgeons in Ireland have developed a way to regenerate bone using gene therapy.

Chemotherapy drugs used today are potent and nonselective, meaning they kill both cancerous and non-cancerous cells. That’s why many cancer patients experience so many troublesome side effects. It’s also why a pair of University of North Carolina researchers want the healthcare industry to remember to ask another question: Are these drugs handled as safely as they should be?

Stephen Eckel, the assistant director of pharmacy at UNC Hospital, and Bill Zamboni, an assistant professor at UNC’s Eshelman School of Pharmacy, started work on what would eventually become ChemoGLO LLC  about five years ago. They combined their expertise in hazardous drug  contamination and anticancer drugs, respectively, to create a wipe kit and reference lab where they could help institutions, clinics and pharmacies measure the level of contamination on the surfaces of their facilities.

Based on the levels of contamination they saw, they’re launching a new product that these facilities can use to clean up spills of five commonly used hazardous drugs.

Despite safe handling guidelines recommended by organizations including the American Society of Health System Pharmacists and the National Institute for Occupational Safety and Health, chemotherapy and other hazardous drugs are still being splattered and spilled more often than we might think. In the more than 2,000 tests ChemoGLO has run so far, Zamboni and Eckel said 80 to 90 percent of the sites have shown detectable levels of contamination — many of them levels that were ten to a hundred times higher than those needed to kill cells if it’s absorbed (PDF).

“It has been well-documented that, through the preparation of doses by pharmacists to the administration of doses by nurses, there’s low-level of exposure to chemo throughout that whole process,” Eckel said. In fact, the CDC estimates that about 8 million U.S. healthcare workers are potentially exposed to hazardous drugs.

The question that’s still relatively unanswered is how exactly how spills of these drugs affect the people handling them. “(Healthcare workers) have documented skin rashes, spontaneous abortions, acute toxicity,” Eckel said. “There’s other suggestions that there could be secondary cancers, but that’s not as well studied or documented.”

But it’s certainly caused some alarm. The state of Washington, for example, last year passed a law that will require healthcare employers to follow certain requirements for handling hazardous drugs. BD and Equashield have also also designed a closed-system transfer devices to prevent leaks and spills during the reconstitution and administration of hazardous drugs.

Hospitals, pharmacies and labs can use ChemoGLO’s kit to quantify amounts of contaminants on surfaces in their facilities. The test measures five types of anticancer agents (docetaxel, paclitaxel, 5-FU, cyclophosphamide, and ifosfamide) and delivers results within two to three weeks.

What the ChemoGLO team learned from processing these tests for repeat clients was that just implementing best practices after the initial test wasn’t completely eliminating contamination.

That was a problem they were confident they had a solution for. Eckel and Zamboni developed a two-towelette system called HDClean, short for Hazardous Drug Clean, that they say can be used in conjunction with established best practices to clean up surface residue from the drugs detected by the wipe kit. They licensed the technology from UNC in 2012, and sales of the product have already begun, Zamboni said.

The company’s near-term goals are focused around getting the reference lab test and HDClean used in more clinical and pharmacy practices. “Even though we’re testing these exposures, that’s probably less than 2 percent of hospitals that mix chemotherapy in the world,” he said. “The biggest thing we need to do as a company and as a profession is educating about the importance of monitoring. We know these spills are out there.”

[Photo from flickr user Tips Times]

He also signed three other pieces of legislation, including an expansion of a 2006 law to limit protests near funerals and a bill to ensure that group homes continue to receive state funding through June 30.

The health care bill has been subject of heated debate between Democrats and Republicans. It would do two things to limit North Carolina's participation in the federal Affordable Care Act, also known as Obamacare.

First, the law stops the state from running a program to help the public compare prices and benefits when they shop for health insurance. Instead, the federal government will create this program, called a health care exchange, on behalf of the state.

Second, it has North Carolina rejecting the federal government's plan to offer its Medicaid health insurance program to a larger number of low-income North Carolinians.

Estimates have projected that 500,000 people could have been added to Medicaid rolls if the state had agreed to it, at a cost of $2 billion per year.

Initially the federal government would have paid the full cost. Eventually, its share would have dropped to 90 percent, and North Carolina taxpayers would pay the remaining 10 percent.

Republican lawmakers have complained about the Medicaid cost, speculating that Congress will have North Carolina pay more than 10percent and fretting that participation would add to the national debt.

They also cited an audit that found steep overruns and flaws in North Carolina's administration of Medicaid money.

"My team conducted a thorough review of the Affordable Care Act and its impact on North Carolina," McCrory, a Republican, said in a written statement after he signed the bill. "Before considering Medicaid expansion, we must reform the current system to make sure people currently enrolled receive the services they need and more taxpayer dollars are not put at risk."

Democrats accused Republicans of turning their backs on the poor.

North Carolina's hospitals have been caught in the middle of the battle: They were counting on the Medicaid expansion to allow them to collect money from patients who otherwise couldn't afford to pay their bills. Also, the Medicaid money was expected to offset cuts in other federal reimbursements that are scheduled to take effect in the next several years.

Funeral protests

McCrory also signed the Respect Our Fallen Heroes bill, whose sponsors include Rep. John Szoka of Cumberland County.

The bill expands the scope of the 2006 law that limits the public's ability to hold a protest at a funeral. It's aimed at members of the Westboro Baptist Church of Kansas, which uses the funerals of soldiers and others as platforms to protest against homosexuality and abortion.

"Loud, anger-inducing protests violate the rights of families seeking to bury their loved ones in peace and respect," Szoka said in a statement following the bill signing.

When it takes effect Dec. 1, the law will require protesters to leave the sites of a funeral and its related activities two hours prior -- up from the current one hour -- unless the protest is non-disruptive.

For the duration, they will have to stay 500 feet away, up from the current 300 feet, and they can't return to the site until two hours afterward.

The law also stiffens the punishment for violators.

Group homes

In the group home legislation, lawmakers said they made a mistake last year when they excluded several thousand group home residents from state Medicaid funding for their care. These residents are people with dementia or other mental problems.

Last year the legislature set aside $39.7million for these patients, but some were inadvertently blocked by law from using it.

Opossum drop

Brasstown, in the North Carolina mountains, had a tradition of holding a opossum drop to celebrate the New Year. Animal rights protesters intervened, and it was found that existing North Carolina law prohibited the practice of capturing a wild animal for the event.

McCrory signed a law to allow wild animals to be captured and used in such events and released afterward.

Staff writer Paul Woolverton can be reached at woolvertonp@fayobserver.com or 486-3512. ___

About 15 percent of the 26 million Americans with diabetes will develop foot ulcers, according to a 2005 study published in the Journal of the American Medical Association, and as many as 7 percent of those cases lead to amputation.

That’s the problem MxBiodevices is trying to address with its E-Matrix bioscaffold that’s designed to encourage wound healing in patients with diabetic ulcers without exposed tendon or bone.

Injected under the wound bed in a 10-minute in-office procedure, the nanoscaffold forms an extracellular-like matrix that provides a favorable environment for the patient’s cells to initiate wound healing.

The nice thing about commercializing this product is that the technology has already been approved in the U.S. and Europe for other indications, co-founder Ron Hill said. Pioneer Surgical Technology received 510(k) clearance for its use in orthopedic and spine applications in 2009. Hill and co-founder Marilyn Thompson were previously vice president of research and development and director of and finance and administration at Pioneer Surgical, respectively.

Hill said feasibility and pilot studies have already been performed in humans for the treatment of diabetic foot ulcers, so a single, 300-patient pivotal study is the remaining step for PMA approval.

“The nice thing about the DFU clinical outcomes that the FDA is looking for is that the endpoint for efficacy is the number of wounds that close by 12 weeks,” Hill said. That will make the study relatively short, even though the company will also do a six-month follow-up to show the resilience of response.

To fund that study and its PMA application, the company is looking for $8 million in funding.

Among its direct competitors in treating ulcers, MxBiodevices counts artificial skin products by Shire and Organogenesis and a growth factor gel by Healthpoint. Other treatments currently available for advanced diabetic foot ulcers include negative pressure wound therapy and moist wound dressings. These technologies work alongside a growing number of technologies designed to detect foot ulcers early.

Hill said there are other wound closure applications that a future strategic partner might be interested in licensing the technology to address, but for now the startup is staying focused on the diabetic foot ulcer market. MxBiodevices was founded in 2009 in Greenville, North Carolina.

[Doctor examining foot photo from BigStock]

RALEIGH, N.C.­ – The ranks of Republican governors refusing to expand Medicaid has shrunk in recent weeks. Nationwide, 14 of the nation’s 28 Republican governors have rejected the federally funded expansion. Eight of the holdouts are in the South.

Carol Steckel sides with the governors who have decided not to expand Medicaid. Newly appointed head of North Carolina’s Medicaid program, she will oversee a top-to-bottom internal overhaul. Shortly after Steckel took the job, the state’s new Republican governor, Pat McCrory, declared the Medicaid program “broken and not ready to expand.”

A recent state audit showed the state’s $13 billion Medicaid program spent more on administrative costs than nine other states with similarly sized programs. Expected next is an internal review of North Carolina’s vaunted medical homes program, which reportedly saved the state $1 billion in Medicaid costs over the last decade.

North Carolina is Steckel’s third state post overseeing federal health programs. She was chief of federal health law implementation for Louisiana, where GOP Governor Bobby Jindal is among the nation’s most vocal critics of the law.

Before Louisiana, Steckel, an Alabama native, led that state’s Medicaid program from 1988-1992 and again from 2003-2010. At the national level, she was instrumental in creating the first independent organization of Medicaid directors in 2009. She was a major contributor to a seminal report by the Republican Governors Association in 2011 that outlined the party’s guiding principles for revamping Medicaid.

Stateline interviewed her at her office in Raleigh.

What was your greatest challenge in your first job in Alabama?

I was in D.C. when the governor called and asked if I wanted to come home and be Medicaid director. I will never forget this because I was 29 years old. I was the deputy director of the office of pre-paid health care, and I was thinking about keeping that position and maybe going to law school. I had my life all planned out.

I’ll have to admit that going back home was always intriguing but what really got me was the $75,000 salary and the fact that it would be a cabinet position. I would be one of two women cabinet officers. And then I thought how hard could it possibly be to run Medicaid. A week later, I’m in Alabama trying to run Medicaid, and I don’t have a clue what I’m doing.

One of the first decisions I had to make was a liver transplant for a child who would have had a 20 percent chance of living even if everything went perfectly – $500,000. Do we do it or not? I went home and pulled the covers over my head. What did I do?  I approved it. How do you tell a mother, “No”?

What that taught me from that day to this day is that Medicaid is about trying to allocate resources in the most appropriate way. The bottom line is that you have somebody’s life in your decision tree and you cannot ever forget that. Still, you get into positions where you have to say “No,” and that is part of the process. There is not an endless amount of money.

The other thing is: How exciting is it to have a job that you know every single day you are making a difference in somebody’s life?

Did the child live?

I don’t know. I was too chicken to ask.

What were you able to accomplish in Louisiana?

I started my job there (in 2011) working with Governor Jindal and (Secretary of Health) Bruce Greenstein as the director of health care reform. And it became pretty clear very quickly that we weren’t going to do the (health insurance) exchanges, and we weren’t going to do the Medicaid expansion.  But I still oversaw the group that looked at health care reform mandated outside of those areas.

We decided we would do a little pivot. One of the things I took on was the IT department. I started working on ways to better gather and use data to calculate the return on investment of the state’s health programs. When you decide whether to continue a program, we needed to ask: “Is it making a difference? Is it effective?”  If not, let’s move on to something else.  I also supervised the innovation side. If someone in public health wanted to try a new idea, we tested it.

Do you see the Medicaid director’s job changing under the Affordable Care Act?

I’ll speak from the southern perspective. The job is changing, but it started before health care reform.  Up until the late 1990s, Medicaid was a claims processor. We paid claims, and we did it very, very well. But that is all we did.

Now Medicaid is so much more than a claims processor. The skill sets that are needed now are very different than what you needed 20 years ago. Who knew that Medicaid would become a power in designing a system of care instead of just paying claims? The whole move away from fee-for-service has changed everything.

We’ve got an actuarial team here. In Alabama, I didn’t have a single actuary. Not one. So, over the evolution, you’ll see that happening more. The whole idea of calculating a return on investment on what you’re spending your money on. That was unheard of 20 years ago. Now we can routinely do it and say okay, what we’re doing isn’t giving us what we want for our money so let’s fix it quickly. 

The idea of managing care, whether its commercial managed care or community-based managed care, didn’t exist in the past. Now, instead of throwing someone out and saying you find your health care providers and we’ll pay them, we’re asking how can we get beneficiaries into the system early. How do we take care of them early? And how do we avoid the catastrophic chronic illnesses that we’re all having to deal with or mitigate the diseases if they are already there.

That is a whole different mindset.

Is the door open in North Carolina for a Medicaid expansion later on?

Someone said our message should be not that we’re not expanding but that we need to take time to improve the quality of services to the 1.5 million people we currently serve. I stole her idea.

We’ve got to clean up internally. We’ve got to design a program that’s as efficient and tight as it can be while providing high quality services at the right place, at the right time and for the right people. Then, maybe. First the federal government needs to get their act together. They have to better understand what they’re doing.  Who is a newly eligible? Who’s not a newly eligible? What are the essential benefits? All that is too uncertain right now.

If North Carolina fails to expand Medicaid, the state will miss out on federal money that could be used to help hundreds of thousands of uninsured residents get health care and presumably get healthier.

If I gave 700,000 people who don’t have health care coverage a Medicaid card in North Carolina, do you really think they would get healthier?  There simply are not enough providers. Again, that goes back to shoring up the program we have. I would be surprised if any Medicaid director in this country told you that if they gave a Medicaid card to the people that are in that expansion that, in fact, they would get good quality health care and access to the primary care doctors they need.

Do you think you can cure what ails your Medicaid program in one year or two?

Probably not. But there are other alternatives besides the emergency room that low income people can go to without a Medicaid card. They’re called federally qualified health centers.  They’re called rural health centers and they have billions of dollars that are put into their systems to do a sliding-scale fee schedule, and they are primary care focused.

More outreach is needed. People need to be talking about it. Right now, all they’re talking about is Medicaid or emergency rooms like there’s nothing in between.  Well there is this whole system in between. That doesn’t even include free clinics that are out there and state health departments.

That gets back to the frustration over the one-size-fits-all approach of (federal) health care reform. They (Congress) didn’t seem to recognize or build on the systems that were there. It was a matter of  “we’re going to have Medicaid be the largest part of health care reform.” Remember, it was only the Supreme Court that said, “Gosh, it’s got to be optional.”

What’s the next step for North Carolina?

To be responsible we’ve got to include everybody and look at everything in a new light. We want bold proposals. It’s not a matter of playing around the edges anymore. Let’s come up with what we think is right, what is cost-effective and will provide good quality care for our citizens. And then we’ll go to (the federal government) and worry about the rest of the stuff.

It’s not something that’s going to happen overnight. But we will pursue it quickly and aggressively. It’s not that (North Carolina’s medical homes organization, Community Care of North Carolina) isn’t doing a good job, but that we need it to do a better job. They would be the first to agree. They did what they did through physicians. Now we need to add the hospitals. We need to add the pharmacies. We need to add mental health. Once you blend all of that, then it’s an even better program than we have now. We’re calling it “the neighborhood.”

A startup called Oncotide Pharmaceuticals is hoping to outsmart some cancer cells by modulating  a certain kind of protein phosphatase that impedes the ability of cancer cells to grow and replicate.

That phosphatase is PP2A, and researchers have acknowledged it as a tumor suppressor because of the role it plays in deactivating oncogenetic kinases that control the proliferation of cells in several kinds of cancers.

But cancer cells have developed ways to stop PP2A so that they can continue to grow. One of those ways is by producing in excess a protein known as SET, which Oncotide says it does in as many as half of primary tumors in a variety of cancers including leukemia, breast cancer and lung cancer. In cells where SET is over-expressed, PP2A is unable to deactivate those oncogenetic kinases, so cancer cells can continue forming and surviving.

Oncotide’s lead candidate, OP449, is designed to deactivate the SET protein and restore the tumor-suppressing functions of PP2A. It says the compound is not toxic to normal cells because PP2A activity is not suppressed in normal cells. In preclinical studies, Oncotide says its compounds have demonstrated the ability to inhibit growth of primary human breast and pancreatic cancer cells and to kill primary human leukemia cells. CEO Mike Vitek said it’s also demonstrated synergistic activity with compounds designed to inhibit the oncogenetic kinases like Genentech/Roche’s Herceptin.

Initially, Oncotide will focus its development on killing cancer cells in hematological cancers like leukemia. This has been one of the fastest-growing markets in cancer drugs in recent years. Gilead has done a series of deals to acquire potential therapeutics for blood cancers, and Ariad Pharmaceuticals and Pfizer saw U.S. Food and Drug Administration approvals in this space last year. Numerous other Big Pharmas have leukemia drugs in their pipelines as well.

Oncotide, which has to this point been funded with SBIR, STTR and DOD grants, is pursuing a $15 million series A to fund IND-enabling studies, which Vitek expects will take nine to 12 months, and a phase IB/IIA proof-of-concept study in humans.

Vitek, an associate professor of neurology at Duke University Medical Center, founded Oncotide in February 2011 with technology licensed from his previous company, Cognosci Inc. It’s based in Research Triangle Park, North Carolina.

[Diagram from Oncotide Pharmaceuticals]

Coleman Greene is part of the group that would argue that it doesn’t have to be that way. That is, technology doesn’t have to be the problem; it can actually be part of the solution. Green is the co-founder of Sqord, a digital health startup trying to squash kids’ sedentary habits by turning exercise into a game.

“I came across the FitBit and fell in love with the concept,” he said. Since that market was already becoming saturated, Greene, then an MBA candidate at the University of North Carolina at Chapel Hill, began thinking of ways that kind of technology could be simplified and transformed into something that would encourage activity in a younger demographic.

With some bootstrapped and friends and family money and a spot in Carolina Launch Pad’s incubator, Sqord was born, and by the summer of 2011 it was ready for its first pilot.

The startup is going after a market of 8 to 13-year-olds, although Greene said the device has been especially popular among the 8 to 11 crowd.

In designing a health-focused product that kids would actually want to use, Greene said a few things quickly became clear: It had to be customizable, it had to be fun and it had to be social.

Let’s start with customizable. The tracker itself is a three-axis accelerator housed along with a battery in a sealed, waterproof device about the size of a watch face. It fits into a rubber band that’s worn around the wrist like a watch, or can be popped out and carried in a pocket (the preferred way for pre-teen guys, Greene noted). The $20 device captures the intensity and duration of kids’ movements, and when it’s swiped over a companion sync station that connects to a computer, that information is transferred to the child’s account on the Sqord website.

This is where the fun and social parts come in. Kids create the digital version of themselves in the form of a PowerMe, similar to a Mii on the Nintendo Wii system.  When their information is loaded online, their steps, jumps and strokes convert into points that they can track. With those points, they can compete against their friends and earn medals for reaching their goals. They can also see what their friends have been doing and give them kudos with virtual “high-fives.”

For kids to adopt and integrate this kind of technology in their daily lives, it was important that the social element be built on real-life relationships, Greene said. That way, it becomes something they talk about with their friends or in their classrooms.

And that seems to be what’s actually happening, based on early tests of Sqord. Greene said the company has found that the best way to build its initial user base has been by deploying the device through schools and youth organizations. Last summer, the company began testing the band with kids through the YMCA in Chapel Hill. Within a few months, the company landed its first paid pilot.

The next step of the business model calls for Sqord to target insurers, who would “sponsor” use of the device through their plans. Eventually, though, Greene thinks the market will be receptive to a direct-to-consumer model.

Although it’s continuing to build a customer base, Sqord faces plenty of competition. Kid-friendly activity trackers are also being made by GeoPalz and MOVABLE (whose model is focused on schools). A company called Zamzee has also gotten some traction with its clip-on activity meter, winning support from the nonprofit HopeLab, which has partners in Cigna, the Robert Wood Johnson Foundation and Kaiser Permanente to name a few.

But Sqord is marching on, armed with $70,000 it won last year from ChildObesity180’s Active School Acceleration Project Technology Innovation award  and North Carolina’s Health Innovation Challenge.

For the near future, Greene said the focus is on building the customer base, collecting more data and making improvements to the device, like extending the battery life from nine months to a year (it’s not rechargeable, so the device will only last as long as the battery). He also wants to add some more functionalities to the online component, particularly enabling it to tag periods of high activity, so that kids can see where the majority of their points and their friends’ points are coming from. He said he’d also like to expand the social capabilities to allow organizations push out information on group events.

It’s all in the name of getting kids moving, keeping it fun and avoiding inactive lifestyles that have been linked to obesity. “We think any activity is good activity,” Greene said.

[MedCity News photo]

In a phone interview with MedCity News, Ross Tonkens, the director of the Science & Technology Accelerator, and Major Gifts Officer Mark Germano said they’re  forming a group of donors who can provide expertise to screen applications. These donors have investment backgrounds steeped in biotechnology, drug development and medical devices. They also have expertise in legal issues, commercialization, IP, regulatory, clinical trial design and conduct issues. In a lot of cases, these are people who have had personal or close contact with people who have had cardiovascular disease or a stroke and want to see things move from the [lab] bench to bedside.

In the past year, says Tonkens, it has created a network of collaborative investors from other nonprofit foundations where there’s a strong likelihood that their interests would align. Tonkens said it’s working with 16 sister foundations such as the American Cancer Society and Diabetes Foundation to identify areas of common interest for collaborative investment. For example, a company developing a diagnostic for cardiovascular disease may also have applications for cancer. In addition to sister foundations, it is also looking at mission related investment organizations like BioMotiv — a for-profit division of the Herrington Project for Discovery and Development in Cleveland, Ohio. BioMotiv is aggressively looking for profit.

It is devising a strategy to increase donor engagement to smooth out the peaks and valleys and predict with some accuracy when it should do new rounds of investment because collaborating multiplies the value of each donor dollar. It shouldn’t be surprising that they’ve been re-evaluating their strategy, Tonkens explains, as foundations advised them before they started that it’s good to have the flexibility to consult others for best practices and apply what you have learned.

In the initial application process it received submissions from 100 companies and chose CytoVas for its first investment. CytoVas has begun enrollment for a proof-of-concept trial for its lead diagnostic — a blood test to identify people at risk for cardiovascular events even though they may not have any symptoms. The company is part of the UpStart program – the University of Pennsylvania’s Center for Technology Transfer.

It is devising a strategy to increase donor engagement to smooth out the peaks and valleys and predict with some accuracy when it should do new rounds of investment to multiply the value of each donor dollar. It shouldn’t be surprising that they’ve been re-evaluating their strategy, Tonkens explains. Sister foundations advised them before they started that it’s good to have the flexibility to consult with others for best practices and apply what you learn. The Cystic Fibrosis Foundation has really pioneered venture philanthropy, led by Robert Beall as the driving force behind it.

Tonkens said it is looking for donations ranging from $100,000 to $1 million. This time there will be a narrower focus for accelerator companies in which it will invest donor funds. A longterm investing goal is to reinvest returns the accelerator gets from these companies to invest in more companies.

Of all the medical advancements to improve outcomes for various cardiac conditions, heart failure remains the depressing exception. In the 40 some years since he trained as a cardiologist, Tonkens notes that defibrillators are almost as pervasive in public places as fire extinguishers, but the death rate for heart failure has barely budged.

Among the areas the accelerator is considering for investments are treatments for reperfusion injuries, using big data to not only for personal medicine to determine the best treatment for each individual but also for taking environmental factors into consideration.

“In the long run we’re vetting companies to find the true game changers.”

This is Quintiles’ second IPO. Its first was in 1994 but it went private again in 2008 with private equity owners TPG Capital and Bain Capital.

The move comes less than a year after Dennis Gillings, the founder, stepped down as CEO and became executive chairman.

When the rumors of an IPO were just beginning to rev up, Jessica Gladstone, a senior analyst at Moody’s told Bloomberg: “I view the fact that they have a new CEO now as potentially a sign that they’re preparing their next leg of growth or next strategy, which could include an IPO…An IPO could also be a way to reduce leverage and an exit strategy for the owners.”

S1 filings often yield some interesting facts about the company and its place in in the market it would usually shield from view. Here are 5 interesting things gleaned from its S1 filing.

1. A company that got its start 31 years ago to make drug testing for pharmaceutical  companies more efficient has grown from a modest five employees to a behemoth employing more than 27,000 in 100 offices in 60 countries and generated $4.8 billion in revenues last year. It also made $177.5 million in net income.  Although its CRO division generated 74 percent of its revenues, its integrated healthcare services was responsible for the rest. That division provides the sales workforce for its contract pharmaceutical sales and also provides healthcare services such as outcome-based and payer and provider services.

2. Of all the new molecular entities and new biologic applications approved between 2004 and 2011, it helped develop or commercialize 85 percent of central nervous system drugs, 76 percent of the oncology drugs and 72 percent of the cardiovascular drugs.

3. Total biopharmaceutical spending on drug development was $91 billion in 2011. Spending on clinical development, apart from preclinical development, was $48 billion. Clinical development spending outsourced to CROs in Phases I-IV trials in 2011 amounted to $16 billion. It projects that amount will grow to $22 billion by 2015. It expects outsourced clinical development to CROs to grow 5 percent to  8 percent annually over the next few years. In 2012, there were approximately 4,028 drugs in the Phase I-III pipeline, an increase of 18% since 2008.

4.  It currently has access to de-identified electronic health record data representing more than 40 million patients.

5. Quintiles sold its minority investment in Invida Pharmaceutical Holdings in 2011 for $103.6 million of net proceeds, resulting in a gain of $74.9 million. Quintiles had started Invida in 2005 with Asian pharmaceutical distribution firm The Zuellig Group and Asia investment company TLS Beta.

[Photo Credit: Pile of Money from Big Stock Photo]