Radisphere has landed a $10 million equity investment as the radiology company looks to expand its community hospital customer base.

Radiology outsourcing groups like Cleveland-area Radisphere have become increasingly popular with investors in recent years. The trend is being driven largely by technology advances and healthcare cost pressures, which have combined to create a lucrative market for the companies stepping up to provide radiology services as hospitals look to save cash any way they can.

Radisphere’s latest funding was sourced from three investors, with Jan. 26 listed as the date of the first sale, according to a regulatory document. The company is aiming to raise an additional $5 million, the document states.

This isn’t Radisphere’s first rodeo. The company announced a $27.5 million series C round led by Maverick Capital in 2010. CEO Scott Seidelmann told MedCity News in November that the company had raised a total of $75 million over 10 years up to that point.

Radisphere said it used its series C round to invest in its “radii” technology platform.

Among other things, the software collects orders and information from hospitals, routes the orders to the right radiologists, then delivers a report back to the referring physician and enables real-time consultation among the physicians.

“We’re dealing with thousands of studies every day across hundreds of facilities,” Seidelmann said last year. “That’s a massive undertaking.”

A Radisphere spokesman confirmed the funding, but declined to provide further details.

You can’t read much about the venture capital industry before you start hearing about the so-called “valley of death” for early stage companies.

Conventional wisdom holds that young companies enter that valley, in which attracting investment capital becomes extremely difficult, at an early stage, typically between an initial round of angel funding and the company’s first institutional series A round.

But is the whole valley of death concept just media-fueled hype? Maybe so.

“From my perspective, there is no valley of death,” said Tim Moran, CEO of PediaWorks, speaking on an Ohio Venture Association panel on the topic.

As Moran pointed out, if you subscribe to the theory of efficient markets, then it’s tough to say there are tons of investment-worthy deals floating around that aren’t drawing cash.

When it comes to capital funding, the continuum typically looks like a funnel: In the early stages, lots of companies can get an investment, but as time goes on, more and more companies encounter problems and drop off. (Think of companies failing as the narrowing of the funnel.)

That’s essentially nothing more than a culling of the herd, a Darwinian means of separating the companies that can prosper from those that can’t.

Plus, angel investors, to some extent, and the government, to a lesser extent, have stepped up to fill the void created by a thinning of the ranks of venture capital firms in funding young companies.

Unfortunately, the hard truth for many hungry and hardworking entrepreneurs is that if you fail at fundraising, there’s probably a good reason for it.

“Maybe your idea just isn’t good enough, or you’re not a good enough entrepreneur,” Moran said.

[Photo from flickr user Cool Guyz]

When we last heard from Foundation Radiology Group, the radiology outsourcing company had raised $1 million last November, funding that was revealed in a regulatory document.

Now the company has filed an amended regulatory document with the U.S. Securities and Exchange Commission that indicates it’s raised another $1 million.

That’s consistent with Pittsburgh-based Foundation’s practices of not following the traditional fundraising route of discrete A, B and C rounds. Instead, the company simply raises funding as it’s needed and seems to have little trouble doing so.

Foundation’s major investors are Chrysalis Ventures and Health Evolution Partners. Foundation has raised approximately $23 million.

Although the market for advanced imaging services such as CT and PET scans is expected to experience a significant slowdown in the coming years, companies in the market say they’re not concerned. Radiology is a huge market valued at more than $100 billion annually, and market share is always ripe for the taking, so companies like Foundation figure to have no shortage of dollars to chase in the future.

In December, Foundation announced that it had added a new customer, a 117-bed hospital in Somerset, Pennsylvania.

A drug that’s already approved by the FDA has shown promise in clearing away a plaque in the brain that’s associated with Alzheimer’s disease, Case Western Reserve University researchers have found.

The drug, bexarotene (brand name Targretin), in mice was able to reduce levels of Beta-amyloid plaque, a protein fragment that builds up in the brains of people with Alzheimer’s, according to a statement from the university.

Case touted the research as “a dramatic breakthrough in [the] effort to find a cure for Alzheimer’s disease,” but it’s important to note that research won’t mean anything for people suffering from Alzheimer’s until the results are replicated in humans, and that’ll likely take several years. Nonetheless, the findings certainly represent a ray of hope in someday treating Alzheimer’s patients.

“We were shocked and amazed,” Gary Landreth, the study’s senior author, told AFP. “Things like this had never, ever been seen before.”

The researchers said bexarotene works by elevating levels of a substance that clears away beta amyloid from the brain.”Think of this as a garbage disposal,” Landreth told AFP.

Bexarotene is generally used to treat a type of skin cancer.

CWRU researchers were struck by the speed with which bexarotene improved memory deficits and behavior as it also acted to reverse the pathology of Alzheimer’s. Within six hours of administering the drug, some amyloid levels dropped as much as 25 percent, according to the statement.

“This is an unprecedented finding,” said another of the study’s authors. “Previously, the best existing treatment for Alzheimer’s disease in mice required several months to reduce plaque in the brain.”

Landreth said he hoped to begin human testing “within the next few months.”

The brand-name version of bexarotene, Targretin, was developed by San Diego biotech company Ligand Pharmaceuticals (NASDAQ:LGND), which received U.S. Food and Drug Administration approval on the drug in 1999. Eisai acquired Targretin and three other cancer products from Ligand in 2006 for $205 million. Targretin’s patents expire in 2016.

A startup that’s developed a device to better secure intravenous lines has landed its first major customer.

Linebacker said winning its first big client would help the startup build credibility for its eponymous product and expand to other healthcare systems, according to a statement from the Columbus-area company.

The company didn’t have to look far for the client, Columbus-area hospital system OhioHealth. Linebacker, which was formerly known as Sybermed, was founded by Dr. David Sybert, chairman of the department of anesthesia at OhioHealth’s Riverside Methodist Hospital in Columbus.

Linebacker is also the name of the company’s product, a disposable, low-cost device designed to lock in a catheter and IV line with a hook-and-loop closure. The company says the device is stronger, more comfortable and more secure than medical tape. The device comes with a strap that allows for customization for patients.

Linebacker has three versions of its device aimed at adults, children and infants.

The company has had customers before, primarily emergency medical crews, but its sales in each of the last two years were under a paltry $12,000, CEO Jack Kromar told Columbus Business First.

“This gives us a reference account — a highly visible, nationally recognized account,” Kromar said to the media outlet. “It adds a significant amount of credibility for us.”

About 11 percent of doctors have knowingly lied to a patient in the last year, according to a new survey published in Health Affairs.

Reasons why doctors lie to patients vary. Nearly 20 percent of physicians said they had not fully disclosed an error to a patient  due to fear of malpractice litigation. More than 55 percent of doctors said they’ve described a patient’s prognosis in a more positive manner than the facts might support.

Many doctors apparently aren’t big fans of disclosure. About one-third didn’t agree that they should disclose serious medical errors to patients, while nearly two-fifths said they did not completely agree that they should disclose their financial relationships with drug and device companies to patients, according to Health Affairs.

Dr. Mike Sevilla, a Youngstown, Ohio-area family physician and social media enthusiast, said that doctors generally strive for open communication with patients, but often there are gray areas.

“When it comes to describing a patient’s condition and prognosis, especially with complicated cases, sometimes it’s difficult for the physician to make an exact assessment,” Sevilla said. “What many physicians do is give a best-case scenario, a worst-case scenario and then their medical opinion. Is this describing a ‘patient’s prognosis in a more positive manner than warranted?’ I guess people will have to decide on that.”

What types of doctors are most likely to lie? Male doctors who graduated from medical schools outside the U.S. or Canada. The survey also found that cardiologists and psychiatrists were the least likely to completely agree about needing to disclose all serious medical errors to patients.

The findings come from a 2009 survey of more than 1,800 physicians nationwide to see whether they follow standards of professionalism issued in 2002.

Writing at the Incidental Economist, Aaron Carroll was not pleased with the results of the survey:

I applaud the honesty of those answering the survey, but we’ve got to do better. We cannot, as a profession continue to think that we are immune to conflicts of interest (and yet want to hide them). We cannot, as a profession, not be truthful with those who entrust us with their care. And we cannot, as a profession, fear potential accountability so much that we hide mistakes from our patients, especially when honesty has been shown to make lawsuits less likely.

An executive hired last year by Cleveland Clinic Innovations was faulted for destroying documents, misusing public funds for personal expenses and creating an uncomfortable work environment by having an office romance in his previous job at a Kansas economic development group, according to a recently released audit by the state of Kansas.

However, the $960,000, 900-page audit found that the Kansas Bioscience Authority made sound investments with taxpayer dollars during the tenure of former CEO Tom Thornton, who holds the title of general manager of strategic alliances with Cleveland Clinic Innovations, several Kansas media outlets reported.

Thornton resigned from the Kansas Bioscience Authority (KBA) last April and started with the Clinic almost immediately thereafter. In the wake of his departure, Kansas legislators questioned everything from Thornton’s exit and the way he managed the Kansas organization to the relationship between Thornton and business partners in Ohio — so this controversy is nothing new.

The audit found that Thornton misled the KBA board about a trip he took to Cleveland to interview for the job with the Clinic, but he eventually reimbursed the agency for the cost of the plane ticket. One Kansas government official said the audit suggests that intellectual property belonging to the KBA was taken by Thornton to his new job in Cleveland, the Associated Press reported.

The media outlets reported that Thornton hasn’t returned calls.

The audit of the KBA came about after Kansas lawmakers and Gov. Sam Brownback’s office made accusations of potential fiscal mismanagement and conflicts of interest at the agency. The KBA was created in 2004 to oversee $581 million in tax dollars to build the state’s bioscience industry, according to the Kansas City Business Journal.

The good news for Thornton is that several Kansas lawmakers criticized the cost of the audit and said it was time to move on, a sentiment that Cleveland Clinic and Thornton would surely agree with.

“It was a $960,000 witch hunt, essentially, to uncover, what, was it 4,800 bucks total?” said one legislator, who was referencing the amount ($4,800) that Thornton spent on a plane ticket and artwork for his office, for which he later reimbursed the state.

Neurostimulation company Checkpoint Surgical has raised a $1.7 million series B round of investment and expects to win European regulatory approval of its intraoperative device shortly.

The Cleveland-area company will use the new funding to boost its U.S. sales and marketing staff, CEO Len Cosentino said.

Checkpoint received U.S. Food and Drug Administration clearance to sell its device in late 2009. The company expects to receive the European equivalent, the CE Mark, within a few months.

The company’s handheld, disposable device, called the Checkpoint Stimulator/Locator, stimulates motor nerves so surgeons can avoid damaging them during surgery. The device also helps physicians gauge nerve and muscle health. It’s used primarily by orthopedic; plastic; and ear, nose and throat surgeons.

Checkpoint’s series B round was led by its primary investor, the NDI Healthcare Fund. NDI also runs a neurotechnology incubator that helped start Checkpoint and is best known for the $42 million sale of a urinary incontinence-treating product to Medtronic in 2008.

As a result of the new funding, Checkpoint now has six sales representatives in the field. The company has more than 50 hospital customers and posted strong revenue growth of about 250 percent last year, Cosentino said.

Also on Checkpoint’s priority list: a second version of the Stimulator/Locator that could be used arthroscopically. The second device would essentially do the same thing as the first, but would be designed for use in less-invasive surgeries.

The arthroscopic device is still in development, but Cosentino hopes to begin clinical testing of it sometime this year. A 510(k) submission could follow in 2013.

The chief executive of what was touted as a $100 million investment fund aimed in part at Ohio medical device companies has been indicted for his alleged role in the failure of a suburban Cleveland credit union.

The indictment of 43-year-old businessman Eddy Zai, who was charged with 34 counts related to more than $16 million in unpaid loans, raises questions about the future of the Cleveland Bio Fund, which was planning to invest in small- to medium-sized medical device companies that were looking to expand in China.

Zai surrendered to the FBI this morning, The Plain Dealer reported.

A spokeswoman for the Cleveland Bio Fund said the group would continue.

“The Cleveland Bio Fund is an independent private equity fund that will continue to operate and search for cross-directional business opportunities with China,” she said. “Eddy will no longer be involved. Kristen Laughlin will continue to work on the initiative for the near term until permanent staffing is determined.”

Cleveland Bio Fund was planned to source deals on behalf of Newsummit Pharmaceutical Group, a Chinese company that is backed by renowned U.S. venture capitalists Sequoia Capital and other venture firms. Zai told MedCity News in September that the fund would begin by scouting deals in the Cleveland area and then branch out to the rest of the country.

“We’re as surprised as everyone else” to hear of Zai’s indictment, said a spokeswoman for Cleveland nonprofit biomedical development group BioEnterprise, which is listed as an adviser and “key partner” on the fund’s website.

In a press release announcing the formation of the Cleveland Bio Fund, Newsummit said $30 million of the fund’s anticipated $100 million had already been secured. The fund has not announced any investments. Zai said in September that the fund planned 15 to 20 investments over the next year, but he also said he expected the fund would make an investment by the end of 2011.

Newsummit executives visited Cleveland last year to evaluate medical device investment opportunities.

Zai was also involved in another project, the Cleveland International Fund, which invests in real estate. The idea behind the fund was to source capital from foreign investors looking to take advantage of a federal program that offers green cards to foreign investors who help create jobs. In Cuyahoga County, which includes Cleveland, each investor must put up $500,000 and create at least 10 jobs to gain American residency, The Plain Dealer reported last year. (A similar Columbus-based fund associated with Zai has decided to disband, but the Cleveland International Fund will continue.)

Zai was one of 19 people indicted for roles in the collapse of St. Paul Croatian Federal Credit Union. He is charged with two counts of conspiracy, two counts of bank fraud, one count of bank bribery, 11 counts of money laundering, 17 counts of making false statements to a bank and one count of making false statements to law enforcement, according to The Plain Dealer.

[Photo from flickr user futureatlas.com]

Radiopharmaceuticals company Navidea Biopharmaceuticals (NYSE Amex:NAVB) has opened a Boston-area commercialization office.

Employees at Navidea’s new Andover, Massachusetts office will focus much of their attention on the expected launch later this year of drug candidate Lymphoseek, a targeting agent used by surgeons to identify lymph nodes in patients with breast cancer or melanoma and to indicate whether cancer has spread to a particular lymph node.

Lymphoseek is in the midst of a review by the U.S. Food and Drug Administration and could be approved for sales and marketing as soon as this summer.

Navidea’s corporate headquarters, with clinical, manufacturing, regulatory and administration functions, will remain in Dublin, Ohio, according to a statement from the company.

Navidea, which until earlier this year was known as Neoprobe, is also working toward European commercialization of Lymphoseek and last week reported obtaining “positive guidance” from regulators about a path forward for the drug.

The company plans by the end of the year to submit regulatory documents aimed at securing European marketing approval of Lymphoseek.

[Photo from flickr user Manu_H]

Steris' System 1E

Sterilization products maker STERIS (NYSE:STE) reported that shipments of its System 1E sterilizer continue to fall below the company’s earlier projections.

The Mentor, Ohio-based company now projects that it’ll ship 4,000 System 1E units in its fiscal 2012, which is scheduled to end on March 31, company executives said Tuesday in a conference call to discuss STERIS’ third-quarter earnings. In November, STERIS projected that it would ship 5,000 units, and as recently as August, said the number could be as high as 8,000.

The System 1E is a liquid chemical sterilizing system used by hospitals, surgical centers and other healthcare facilities to sterilize heat-sensitive medical instruments. It’s a replacement device for the System 1.

The U.S. Food and Drug Administration is requiring customers transition away from the System 1 because it found in December 2009 that STERIS had made so many changes to the device over the years that the agency hadn’t cleared the modified version of the device. STERIS began shipping the System 1E in December 2010.

In December 2011, the FDA extended by six months until August 2012 a deadline for STERIS to support customers transitioning from the System 1. STERIS said at the time that the extension could result in shipments of as many as 1,000 System 1E units shifting from fiscal 2012 to fiscal 2013, as the latest shipment projections show.

Hurting sales of the System 1E is the lengthy regulatory approval process for one of the device’s accessory parts, called a biological indicator. That part isn’t necessary to operate the System 1E, though many customers prefer to use it. The part indicates the presence of biological materials on equipment.

CEO Walt Rosebrough said Tuesday that STERIS is still awaiting FDA clearance of the accessory part.

STERIS also faced another issue with the System 1E during the quarter, related to water quality and temperature at customers’ facilities. That’s resulted in maintenance “field corrections” the company has had to make on the device. STERIS is seeking regulatory approval for a software modification that could ease the water-related problems, Rosebrough said.

Considering the ongoing System 1E transition issues, plus a restructuring of the company’s operations in the U.S. and Europe, STERIS turned in a solid quarter financially. Revenue grew 8 percent to $355 million, with growth across its three lines of business, compared with the year-ago quarter. Earnings grew 54 percent to 58 cents per diluted share, though that came in below Wall Street’s expectation of 61 cents per share.

As it finishes up its fiscal year, things don’t appear to be getting any easier for STERIS. It downwardly revised its full-year outlook for 2012, and now expects revenue growth at 6 percent and earnings per diluted share between $2.13 and $2.20.

In November, the company projected full-year earnings per diluted share between $2.25 and $2.45.

The Twitter experience isn’t complete without hashtags.

Hashtags help facilitate conversations on the popular social media platform, help other users discover what discussion topics are trending and are an extremely useful tool in focusing on information that’s important while excluding what isn’t.

But some complain that the hashtag is misused and misunderstood.

“The hashtag is incredibly important as it is the sole way of providing context to the content you are posting,” said Quora user Mike Vosters. “However, it is subject to criticism as a large portion of Twitter users are not educated on its true purpose, and use it as a sort of punchline at the end of their tweet.”

With that in mind, we offer the following list of 15 useful hashtags for those interested in keeping up with the latest buzz in the healthcare industry.

For marketers: With the possible exception of teenage girls, nobody loves social media like marketers. That’s why it’s appropriate to start the list with the popular #hcsm (healthcare social media) hashtag. True believers should participate in the weekly #hcsm chats, which start at 9 p.m. Eastern on Sundays.

For mobile enthusiasts: Mobile is one of the hottest areas in healthcare and figures to be for the foreseeable future. Stay up on the latest by following #digitalhealth, #mhealth and #healthapps. If only the nation’s most prominent digital health lover/physician, Dr. Eric Topol (a frequent Tweeter), would use these hashtags more often …

For IT lovers: Broadening things out a bit from mobile — but without getting too broad — the subject of health information technology has its own distinct hashtags, including #healthit, #hit and #ehr (electronic health records.) Tweets using these hashtags involve topics like cloud computing, telemedicine and clinical informatics. (Note that the #hit tag doesn’t have the greatest signal-to-noise ratio, featuring, for example, a reference to the 2Pac classic “Hit ‘Em Up.”)

For more traditional industry players: Despite the rise of health IT in recent years, a huge part of the healthcare industry is still concentrated in drugs and devices, and that’s not changing anytime soon. To stay up on the latest in the medical device and pharmaceuticals industries, follow hashtags such as: #meddevice, #medtech, #pharma and #biotech.

For anybody we’ve missed: For those with slightly less categorize-able interests in healthcare, the following hashtags are the best of the rest: #hcr (healthcare reform), #ptsafety (patient safety), #meded (medical education) and #healthinnovations.

[Photo from flickr user jeffisageek]

Dr. Jay Ciezki

Among the three most common types of prostate cancer treatment, external beam radiation therapy is the most toxic and costly, according to a Cleveland Clinic researcher.

Dr. Jay Ciezki and colleagues analyzed the Medicare records of more than 137,000 men who received one of three prostate cancer treatments — external beam radiation therapy; prostatectomy, or removal of the prostate; and brachytherapy, a procedure that involves implanting radioactive seeds in the body.

The three treatments are equally effective in treating patients diagnosed with low- and intermediate-risk disease, “so it comes down to quality of life and cost,” Ciezki told WebMD. According to the researchers’ analysis, that means that brachytherapy is the best option, Ciezki said.

Toxicity rates were nearly 8.8 percent for patients receiving external beam therapy treatment, 6.9 percent for prostatectomy and 3.7 percent for brachytherapy.

In terms of cost, external beam therapy was the most expensive of the three treatment options, at $6,412 annually. Average cost per patient per year was $3,205 for prostatectomy and $2,557 for brachytherapy, according to the study.

Ciezki told The Plain Dealer that some high-risk patients can benefit from external beam therapy. But for the 80 percent of patients diagnosed with low- and intermediate-risk prostate cancer, the other two methods may be more preferable options than previously thought by doctors.

One type of radiation therapy called proton therapy has come under increasing scrutiny as critics question whether it’s worth the expense. Former White House adviser and oncologist Ezekial Emanuel coauthored a New York Times editorial last month that decried the rush to build proton centers as a quintessential example of what’s wrong with American healthcare.

Like more conventional cancer treatment methods, proton therapy uses radiation. The difference is that protons do the bulk of their work beneath the skin where a tumor is located, unlike X-rays, which tend to lose power and cause collateral damage as they penetrate the body’s tissues. In theory, that means proton therapy allows for the more precise targeting of tumors and a reduction in collateral damage.

It’s worth noting that Cleveland Clinic’s top local rival, University Hospitals Case Medical Center, last year announced plans to construct a $30 million proton beam center.

Don’t let it be said that a telemedicine startup that bills itself as an ATM for healthcare is lacking in optimism.

The top executive with Columbus, Ohio-based HealthSpot told Columbus Business First that the startup projects that it’ll hit $1 billion in annual revenue within five years. Even with the telemedicine market expected to boom in the coming years, that seems like a tall order for what it is now a relatively obscure, unknown and early stage company.

Regardless, HealthSpot has some prominent (and deep-pocketed) backers and believers to help it reach that goal.

Cardinal Health (NYSE:CAH) — a $100 billion company in its own right — confirmed to Columbus Business First that it has taken a minority stake in HealthSpot and is marketing the startup’s medical-care kiosks to independent and regional pharmacy customers. A Cardinal spokesman told the media outlet that HealthSpot’s kiosks “allow retail pharmacies to offer their patients all the benefits of an in-store clinic, at a fraction of the cost.”

HealthSpot’s investors and advisers also include former Gartner CEO Manny Fernandez, MemberHealth founder Chuck Hallberg and  former Cleveland Clinic CEO Floyd Loop. The company has raised about $6 million in investment funding over 18 months.

HealthSpot will make its money by taking a cut of the $60 per-visit fee from its 9- by 5-foot telemedicine kiosks, as well as charging a leasing fee to customers that host the sites, such as pharmacies, nursing homes or large employers.

HealthSpot envisions patients using its kiosks for a variety of primary care needs — minor illnesses, skin conditions, allergies and the like. Each kiosk comes equipped with high-definition videoconferencing capabilities, plus integrated digital medical equipment that can sends doctors diagnostic information like temperature and blood pressure.

Mayo Clinic beat Cleveland Clinic in the much-hyped and highly questionable U.S. News and World Report‘s list of America’s best hospitals.

But at least Cleveland Clinic can take solace in the fact that it’s the clear victor in a comparison of the two heavyweight hospital systems’ websites, according to a recent edition of Website Smackdown at Inc.com.

The author of the post, Jon Gelberg of New York-based web design firm Blue Fountain Media, said Cleveland Clinic’s site does a much better job of serving its users’ needs.

“The Cleveland Clinic website is clearly superior to the Mayo Clinic site,” Gelberg said in an email. “It is far more user-friendly than Mayo’s. Most importantly, it does a better job of providing visitors with information and steering visitors to the care they are seeking.”

Apparently Mayo’s status as King of Hospital Social Media doesn’t extend to such old-fashioned matters as its homepage. In the piece at Inc., Gelberg blasted Mayo’s homepage as offering “virtually nothing … that is designed to help patients, families of patients, or people looking for assistance from the hospital.”

Cleveland Clinic’s homepage, with its more straightforward navigation, makes finding directions or scheduling an appointment much easier, Gelberg said.

When it comes to finding a doctor, it’s a similar story. Mayo’s site, which allows users to search by doctors and department, and nothing else, is “clinical and unfriendly,” Gelberg said. It also features videos that in which Mayo doctors talk about what a wonderful place Mayo is.

Cleveland Clinic, in contrast, offers users five different searches and includes a video that walks users through the search process.”Rather than extol the virtues of the Cleveland Clinic, it provides a real service to site visitors,” according to Gelberg.

So, while there’s room for debate about whether a patient is better off seeking medical treatment at Cleveland Clinic or Mayo, it would appear that there’s little question about which hospital’s website provides the superior user experience.

“If the purpose of a hospital is to care for patients, then that should be the purpose of the hospital’s website,” Gelberg said. “That’s exactly what the Cleveland Clinic’s site does.”

Home health products supplier Invacare (NYSE:IVC) is still enmeshed in negotiations with the U.S. Food and Drug Administration over a possible shutdown of some wheelchair production at an Elyria, Ohio plant.

In December, Invacare announced that the FDA had asked it to enter into a legal agreement that would require the company to suspend “certain” wheelchair manufacturing operations at the Elyria plant. Negotiations over final details of the agreement have now stretched on for about two months, and potentially longer, depending on when the negotiations began.

CEO Gerry Blouch said Thursday,  in announcing Invacare’s fourth-quarter earnings, that the company is unable to provide investors with any financial guidance for 2012 due to the ongoing negotiations.

“The company is working expeditiously to resolve its negotiations with the FDA and in the meantime continues to add resources in order to make systemic improvements to ensure full compliance with the FDA’s [Quality System Regulation],” Blouch said.

At the time of the December announcement,  Blouch wouldn’t go into detail about any of the issues the FDA cited at the Elyria factory, and said only that the alleged violations “relate generally to processes” involved in the manufacture of wheelchairs.

Last week, Invacare announced plans to move production of a line of manual wheelchairs to Mexico from Elyria. The company didn’t say whether the move was made in part to appease the FDA, but it certainly appears likely. Whether that move was enough to satisfy the FDA’s proposal to suspend “certain” wheelchair manufacturing at the plant remains to be seen.

For the fourth quarter, Invacare reported a loss of $35 million, or $1.10 per share. The loss reflected asset write-downs that totaled $49.5 million related to goodwill and intangibles, and a charge of $8.9 million connected with restructuring activities.

Revenue was essentially flat at $450 million for the quarter.

OnShift CEO Mark Woodka

Web-based staff scheduling company OnShift has closed a $3 million series B round of investment.

MedCity News yesterday reported that OnShift had closed a round, but company officials declined to disclose the dollar amount at the time.

The latest round was led by an unspecified client of West Capital Advisors, which comanages strategic venture funds on an outsourced basis for corporations. The round featured participation by existing investors Draper Triangle Ventures, Early Stage Partners and Glengary, according to a statement from Cleveland-based OnShift.

The company will use the investment to add sales and marketing workers.

OnShift’s software is targeted at hospitals, nursing homes and other long-term care facilities.

The amount of investment capital the company has raised over its lifetime is unclear. An OnShift spokeswoman didn’t immediately return messages.

Pharmaceuticals distributor and medical products supplier Cardinal Health (NYSE:CAH) plans to make $90 million in acquisitions this year to boost its business in China.

Dublin, Ohio-based Cardinal entered the Chinese market with the $470 million acquisition in 2010 of Chinese drug distributor Yong Yu.

Now, Cardinal is looking to make further acquisitions in the country to expand its geographic reach and further its direct distribution business, chief financial officer Jeff Henderson said in a conference call to discuss the company’s second-quarter earnings.

By the end of Cardinal’s third quarter, the company expects to have grown its Chinese business to 10 distribution centers, with a coverage area that includes 250 million people.

Cardinal also hopes to expand its reach in China as a “platform” for medical equipment companies that are looking to break into the market, Henderson said.

Cardinal’s Chinese business enjoyed strong growth in the second quarter, as it expanded at a rate in the “low 20s,” he said.

“Cardinal Health China continues to perform well, and we’re very optimistic about its future,” Henderson said.

Turning to finances, Cardinal reported diluted earnings per share from continuing operations of 81 cents. That beat analysts’ expectations by 5 cents.

Overall, net earnings rose 22 percent to $262 million on a 7 percent increase in revenue to $27 billion.

Much of Cardinal’s growth was again driven by strong sales of generic pharmaceuticals. The quarter featured the generic launches of blockbuster drugs Lipitor and Zyprexa, both of which “contributed strongly” to 30 percent profit growth in Cardinal’s key pharmaceuticals business, Henderson said.

That was enough to offset an 18 percent decline in profit in Cardinal’s smaller medical equipment segment, which suffered from higher oil costs.

It was a glimpse back into the halcyon days of the tech boom over a decade ago: a promising IT startup hosts a party at a large venue, the CEO’s band performs and the drinks and conversation flow freely.

Except it was 2012 and Cleveland Clinic spinoff Explorys, the party’s host, is one of the leaders of the growing Big Data movement in healthcare. Such gatherings may be run-of-the-mill fare in Silicon Valley, but they’re pretty rare in Cleveland. (That’s despite Cleveland recently being cited as No. 1 in a list of cities with the biggest growth in tech jobs by Businessweek.)

Explorys rented out  Cleveland’s House of Blues for a night to host its recruiting and networking event. The company now employs about 50, but expects that number to double in 2012. Explorys is looking to hire software engineers and clinical informatics employees.

“We’re looking for people who understand technology and have a thirst and knowledge for new things, and have a passion for healthcare and medicine,” President and chief technology officer Charlie Lougheed said.

Explorys has developed what it calls a Google-like network that contains troves of clinical and financial data from hospitals, and allows health providers to analyze that data in real time. The idea is that doctors and medical researchers can mine the vast amounts of data to learn how variations in treatment can affect outcomes and uncover best practices to enhance patient care and lower costs.

Below is a brief interview with Lougheed from the event.

[Photo from flickr user Dinner Series]

Healthcare scheduling software developer OnShift will double down on a new state loan and expansion plans with a new round of private fund-raising.

A regulatory document said the company has raised $4.5 million in equity, though the company says that number is inaccurate for the current round. OnShift is expected to formally announce its fund-raise on Thursday.

OnShift CEO Mark Woodka told MedCity News earlier this week that the company was seeking to hire 20 to 25 workers this year, up from its current 36 employees. Most new hires will be programmers, as well as sales and marketing workers. Earlier in the week, OnShift was awarded a $512,000 loan from the state of Ohio.

The company is also looking to make several enhancements to its scheduling software, Woodka said.

It’s likely the latest round of investment will fund the company’s hiring and product development.

In late 2010, OnShift raised $2.3 million that was an extension of its 2009 Series A round. OnShift’s previous investors include Early Stage Partners, Draper Triangle Ventures, North Coast Venture Fund and Glengary. Early Stage Partners also participated in this upcoming Series B investment (it is the company’s largest shareholder).

The regulatory document lists a 2008 date as “date of first sale.” That may suggest that the $4.5 million amount on the document is inclusive of the series A, meaning the series B round would be smaller than that amount.

Regardless, the picture will become clearer when OnShift makes its announcement.

OnShift’s software is targeted at hospitals, nursing homes and other long-term care facilities. Open shift messages can be sent to available staff via text, email and automated phone call.

[Photo by flickr user Peter Kaminski]

Stem cell therapy developer Athersys (NASDAQ:ATHX) reported positive results from a phase 1 clinical trial in patients with leukemia and similar blood diseases.

The trial showed that the company’s MultiStem technology may reduce the incidence and severity of graft-versus-host disease, according to a statement from Cleveland-based Athersys. Graft-versus-host disease (GvHD) often occurs after a stem cell or bone marrow transplant in which the newly transplanted material attacks the transplant recipient’s body.

Athersys made a similar announcement last May about the interim results of the trial.

The company’s next step in the GvHD application is to meet with regulators to discuss future plans for development, which could include a phase 2/3 trial, according to the statement.

In September 2010, Athersys was granted orphan drug designation by the U.S. Food and Drug Administration for GvHD. The orphan drug designation is important to Athersys because its benefits to the company include funding for certain clinical studies, study-design assistance, tax incentives and seven years of market exclusivity for the product upon regulatory approval, the company said at the time.

Athersys’ MultiStem technology is an off-the-shelf stem cell treatment derived from the bone marrow of adults or other nonembryonic sources. The technology has shown promise in reducing inflammation, protecting damaged tissue and forming new blood vessels.

A recent discussion on the popular MyBio community on LinkedIn focused on a simple question: What books would you recommend an entrepreneur read before starting a biotechnology or pharmaceuticals business?

About a dozen members of the community offered their thoughts. The list below provides a brief look at five books suggested in the conversation.

The Billion Dollar Molecule: One Company’s Quest for the Perfect Drug: This 1995 book by Barry Werth received the most votes from MyBio. It focuses on the story of startup Vertex Pharmaceuticals and its push to develop an AIDS drug. The story traces the company’s rise from the labs to its dealings with Wall Street. “This nonfiction tale has enough twists and turns and drama to match any thriller on the market,” said one Amazon reviewer.

Science Lessons: What the Business of Biotech Taught Me About Management: Published in 2008 and written by former Amgen CEO Gordon Binder, this book details that company’s rise to prominence. It details the company’s turning point — the 1989 release of anemia drug Epogen — and discusses the development of other drugs. “Using the principals of the scientific method, [Binder] shares his recommendations for tackling pressing business challenges — such as managing creative employees, navigating the IPO process and protecting intellectual property,” according to Amazon.

The Cell Game: Sam Waksal’s Fast Money and False Promises–and the Fate of ImClone’s Cancer Drug: The general public apparently didn’t take to this 2003 book the way the biotech community has; it’s in Amazon’s bargain bin, priced at $13 for a new hard cover. It tells the story of Sam Waksal and ImClone, both of which are best known for being embroiled in the Martha Stewart stock-trading scandal. Waksal seems like a fascinating character in his own right — “a brilliant, mercurial and desperate-to-be-liked entrepreneur” who “hosted parties at his fabulous art-filled loft and was a fixture in the gossip columns.” ImClone’s cancer drug Erbitux failed and brought Waksal down in his own insider-trading controversy.

Building Global Biobrands: Taking Biotechnology to Market: This 2009 book from two professors and marketing strategists has won praise for its use of case studies and its international emphasis, but has drawn criticism for being a bit dense and written in a “plodding” tone. As the title would imply, it’s aimed at marketing executives with biotech firms. “The authors set out to show managers how companies can innovate with bionetworks, win customers with biobrands and create sustainable advantage worldwide,” according to Booklist.

A Commotion in the Blood: Life, Death and the Immune System: Released in 1999, this apparently out-of-print book aims to be an accessible guide to immunology for nonscientists. It provides a behind-the-scenes look into the world of scientific research, in which ego often rules the day and scientific credit isn’t always given where it’s due. Here’s how an enthusiast on LinkedIn described the book: “A study of 100 years of attempts to discover and develop immune modulators to cure cancer … a great example of the ups and downs of biotech ideas.”

[Photo from flickr user cote]

Stem cell developer Athersys (NASDAQ:ATHX) has received $3.6 million in new grant funding, with one of the grants going toward studying its MultiStem technology for the treatment of traumatic brain injury.

A $1.9 million grant to study traumatic brain injury (TBI) comes from the National Institute of Neurological Disorders and Stroke, according to a statement from Cleveland-based Athersys.

The grant will fund research that will include preclinical safety and efficacy studies required to support an Investigational New Drug (IND) application, as well as the clinical investigation of MultiStem to treat TBI.

Athersys’ MultiStem technology is an off-the-shelf stem cell treatment derived from the bone marrow of adults or other nonembryonic sources. The technology has shown promise in reducing inflammation, protecting damaged tissue and forming new blood vessels.

Athersys is investigating MultiStem for several applications, including heart attack, inflammatory bowel disease, stroke and blood diseases.

Another grant for $1.2 million comes from the government of Belgium and was awarded to Athersys’ subsidiary in Belgium, called ReGenesys BVBA. Athersys will use the funding to further develop cell therapy formulations and manufacturing capabilities, according to the statement.

Athersys apparently received another grant for $500,000, which would be necessary to arrive at the $3.6 million figure. But the company didn’t provide any details on the grant and a company official didn’t immediately respond to an email.

Late last year, Athersys closed a stock purchase deal with Aspire Capital Fund that could be worth up to $20 million.

Healthcare scheduling software developer OnShift has obtained a $512,000 loan from the state of Ohio that it’ll use to further develop its technology.

Cleveland-based OnShift is planning various product enhancements, including boosting the software’s analytics and adding new capabilities for long-term care providers, CEO Mark Woodka said.

“We’re still at an early stage of development, and having access to this capital is critical to us,” Woodka said.

OnShift’s software is targeted at hospitals, nursing homes and other long-term care facilities. Open shift messages can be sent to available staff via text, email and automated phone call.

Along with the product enhancements, OnShift plans to boost its staff this year from a current 36 to between 55 and 60. Most new hires will be programmers, as well as sales and marketing workers.

The young company enjoyed solid growth last year, with revenue rising 400 percent over 2010. OnShift is aiming for a similar rate of growth this year, Woodka said.

OnShift has about 500 customers, Woodka said.

In late 2010, OnShift raised a $2.3 million investment round led by Pittsburgh-based Draper Triangle Ventures. Last year, the company released an iPad version of its scheduling software.

The company says its scheduling software can help clients reduce labor costs by preventing overtime, mitigating regulatory risk and improving efficiencies through automated scheduling. Replacement workers can be found in minutes rather than hours, according to the company.

[Photo by flickr user Peter Kaminski]

Behavioral health personalized medicine company AssureRx Health has secured an $8 million line of credit as it looks to boost adoption of its genetic screening test for psychiatric drugs.

Along with an $11 million series B round of funding that the company obtained last year, the line of credit will help fund the development of several new products to be launched in 2012, according to a statement from Cincinnati-area AssureRx.

An AssureRx spokesman declined to provide further detail on the company’s new products.

However, in the past, AssureRx has said that future products could include tests that help doctors choose medications for patients who have neurodegenerative diseases like Alzheimer’s or Parkinson’s, as well as disorders such as attention-deficit/hyperactivity disorder and post-traumatic stress.

The company’s GeneSightRx test, which helps doctors pick the right psychiatric drugs, was launched in 2009. The test uses a cheek swab, mathematical algorithms and bioinformatics to narrow drug choices to those that work with a patient’s genes.

AssureRx’s series B round was led by California-based Claremont Creek Ventures and Sequoia Capital. Other investors include North Coast Angel Fund, Cincinnati Children’s Hospital Medical Center, Mayo Clinic, CincyTech and Allos Ventures.

The company obtained the $8 million line of credit from Silicon Valley Bank.