Mardil is near the starting line of companies creating new innovative medical devices for the structure heart valve market. The field is dominated by companies like St. Jude Medical (NYSE:STJ), which last month bought another giant in the industry, AGA Medical, for $1.3 billion.

Mardil, which has seven full-time employees, will use $2.8 million recently raised in an ongoing Series B investment round to “fund the next generation clinical studies on the BACE (Basal Annuloplasty of the Cardia Externally) device … and to fund product development of the next generation of the device and the minimally invasive deployment of the device,” said Jim Buck, who joined the company as CEO in September, moving it to Orono, Minnesota.

Buck hopes to raise between $10 million and $12 million for his company during its B Round. Over its seven-year life, Mardil has raised about $10 million, he said. Its investors include Kardia Capital Partners, an investment company in Raleigh, North Carolina.

Mardil was launched seven years ago in Morrisville, North Carolina, by pharmaceutical and healthcare industry veteran Gopal Muppirala, and cardiothoracic surgeon and inventor Dr. Jai Raman.

Raman, who is professor of surgery and director of Adult Cardiac Surgery & Cardiothoracic Surgical Research at University of Chicago Medical Center, as well as Mardil’s chief scientific officer, got his first patent for Mardil’s BACE device in December 2004. The device acts like a tension band around the heart, supporting the mitral valve leaflets so they close properly and treating the back flow of blood known as “regurgitation.”

Many of us have some level of mitral valve regurgitation. However, if the regurgitation is prolonged and severe enough, it can contribute to heart failure — a condition that cost the U.S. healthcare system $35 billion to treat in 2005, according to Mardil’s Web site.

“This is a fantastic technology,” Buck said. “Mitral valve surgical repair is a very effective surgery, but it has big risks associated with it.”  Some of those risks are thrombosis, stroke and infection that can occur when devices are implanted inside the heart.

By implanting and then tightening a band around the outside of the heart, Mardil can provide a solution that has a far lower risk profile and could have similar effectiveness, Buck said.

Mardil is aiming its BACE device at the structural heart defect market, which is estimated to be a $2 billion market in the early stages of development, according to Medical Device and Diagnostic Industry.

Muppirala, the former Mardil CEO who remains on the company’s directors’ board, said in a 2005 interview that 2 million people in the United States alone have mitral valves that don’t work well enough. “Capturing just a small share (about 4 percent to 5 percent) of these 2 million patients will generate strong revenues of over $250 million,” Muppirala said.

Though Mardil has a few competitors, none have taken its device approach. “A couple other companies have tried extracardiac approaches for heart failure, but we’re the only one that has a belt-like approach around the heart,” Buck said.

Highlights of the important and interesting in the world of healthcare:

Medical images in the cloud. Dell said it will acquire Insite One, a developer of applications that enables doctors to share medical images in the cloud, for an undisclosed price, reports VentureBeat.

Not growth-centered care. If patient-centered care is to get off the ground, health plans and CMS need to make it easier for healthcare leaders to break their addiction to growth, says FierceHealthcare Editor Sandra Yin.

Novartis invests in Russia. Swiss drug maker Novartis is investing $500 million in Russian pharmaceutical infrastructure, R&D partnerships, and public health development over the next five years as it aims to strengthen its position there, according to the Burrill Report.

Gardasil OK to prevent anal cancer. The Food and Drug Administration has approved Merck’s human papillomavirus vaccine Gardasil for the prevention of anal cancer caused by the virus.

Abbott recalls diabetes test strips. Abbott Diabetes Care is recalling up to 359 million of its glucose test strips because they may provide falsely low readings, according to The Heart.

Health ads helpful to patients. Earlier this year, About.com conducted a research study on health, revealing that significantly more people find online health advertisements helpful in coping with diseases and learning about the side effects and safety of medication.

Highlights of the important and interesting in the world of healthcare:

We [heart] Detroit. New venture firm Detroit Venture Partners wants its portfolio companies to move their operations to the heart of Detroit in the hopes of transforming the Motor City into a vibrant startup community like Boston and San Francisco, according to Xconomy Detroit.

Senate defunds healthcare reform. The Senate voted 79-16 Tuesday afternoon to defund the implementation of both healthcare reform and financial-regulation reform, reports the Washington Post.

Med tech, not so hot. Slightly more than half of venture capitalists expect VC investing to make somewhat of a comeback in 2011, according to the  Minneapolis-St. Paul Business Journal. But the news is much better for Internet startups than for medical-device and biotech companies.

Community Health nurses’ strike likely. Tennessee-based Community Health Systems, the new for-profit owner of Forum Health in Youngstown, Ohio, likely faces a strike this week from nurses at its Wilkes-Barre (Pennsylvania) General Hospital for “ongoing illegal behavior and bad-faith bargaining,” reports the Youngstown Vindicator.

Mayo subject of civil lawsuit. The U.S. Attorney’s Office for the District of Minnesota said that a civil complaint has been filed in an existing federal suit against the Mayo Clinic and three related entities. The complaint alleges Mayo billed the federal government, including the Medicare and Medicaid programs, for surgical pathology services not rendered, according to KARE 11.

Old drugs find new uses. Finding new uses for old drugs is a tempting strategy for pharmaceutical companies, but the longer a medicine exists, the greater the challenge in recouping its costs, according to the Financial Times. One of the most famous examples of drug repurposing is Viagra, initially developed as a high blood pressure treatment.

Photo credit: Flickr user s o u t h e n’s

Highlights of the important and interesting in the world of healthcare:

Sanofi to buy Avila Therapeutics for $800M. The dealmaking machine that is Sanofi-Aventis is at it again, signing an oncology drug pact with Avila Therapeutics in Waltham, Massachusetts, worth $40 million up front and up to $154 million in milestone payments per program. Overall, the deal is valued at $800 million, according to FierceBiotech.

Budget could starve health reform. Here’s the problem with funding 2011′s government using 2010′s budget: Funding the government at 2010 levels means starving some signature accomplishments — like healthcare reform — of implementation funds, according to the Washington Post’s Ezra Klein.

More biotech M&A for Gilead. Gilead Sciences (NASDAQ: GILD), the Foster City, California-based biotech company, has agreed to acquire Arresto Biosciences, the Palo Alto, California, company whose lead drug candidate is an antibody for idiopathic pulmonary fibrosis, for $225 million plus future milestone payments based on product sale levels, according to Xconomy San Francisco.

Nurses plan HCA strike in California. Hundreds of nurses plan to strike five hospitals in Southern California owned by for-profit hospital giant HCA Inc. over the Christmas holiday to protest stalled contract talks, reports the San Francisco Chronicle.

Neuronetrix goes to trials with Alzheimer’s detector. Neuronetrix in Louisville, Kentucky, has begun a multi-center clinical trial of its COGNISION system, a headset that measures electrical field potentials of the brain while a sound pattern is played to the subject, for early detection of Alzheimer’s, according to the medGadget blog.

Silence… for $20.7M. Former Pfizer CEO Jeff Kindler had to sign a vow of silence that prevents him from saying certain “truthful statements” about the company in order to receive his $20.7 million severance package, according to an SEC disclosure, BNET reports.

Highlights of the important and interesting in the world of healthcare:

Stanford docs too cozy with drug companies? As medical schools wrestle with how to keep drug companies from corrupting their faculties, Stanford University often is lauded for its tough stance. But a ProPublica investigation found that more than a dozen of the school’s doctors were paid speakers in apparent violation of its policy — two of them earning six figures since last year.

Spinal fusion (and Medtronic payments) put Kentucky hospital on map. Five senior spine surgeons have helped put Norton Hospital in Louisville, Kentucky, on the map in at least one category: From 2004 to 2008, Norton performed the third-most spinal fusions on Medicare patients in the country, reports the Wall Street Journal. The five surgeons are also among the largest recipients nationwide of payments from medical-device giant Medtronic Inc.

Aastrom raises $22.5M for stem cell therapy. Aastrom Biosciences Inc. (NASDAQ:ASTM) in Ann Arbor, Michigan, has raised $22.5 million for general corporate purposes, including research and development expenses for its Phase 3 program for critical limb ischemia, a severe, chronic cardiovascular disease in the legs.

Supreme Court’s vote on health reform tough to peg. As the “individual mandate” provision in President Obama’s healthcare reform heads to the Supreme Court, the votes of the nine court justices may be tough to divine, according to a New York Times analysis.

Abbott, EpiTherapeutics work toward cancer drugs. Illinois drug maker Abbott Laboratories has agreed to work with Danish biotech company EpiTherapeutics to develop anti-cancer drugs by making small-molecule inhibitors against selected epigenetic oncology targets. Terms of the three-year research and development program were not disclosed.

Healthcare adds jobs; doctor offices shed jobs. Healthcare continued to add jobs even as the unemployment rate went up in November, according to a report in American Medical News. However, doctor offices shed employees during the month. There were 500 fewer jobs in that setting in November.

Here are some of the top stories at MedCity News this week:

– The artificial pancreas just got a brain. Medtronic Inc. (NYSE:MDT) said Monday the Food and Drug Administration has approved software that helps manage a patient’s diabetes therapy. Medtronic’s CareLink 3.0 software analyzes data from a patient’s insulin pump, continuous glucose monitoring device, and blood glucose meter and identifies the exact times the patient experiences a low (hypoglycemic) or high (hyperglycemic) glucose pattern.

– When you’re the president and CEO of a major national real estate development firm, it’s probably not a good idea to make insulting online comments to a reporter — especially when it’s the first time you’ve spoken publicly about the troubled Elk Run BioBusiness Park in Pine Island, Minnesota. Yet that’s exactly what Steve Marks, CEO of Tower Investments in California did upon reading Thomas Lee’s Tuesday story about the economic development project.

– And here’s the story on which Marks commented: “There are two things that we know about the universe,” Abraham Algadi said. “We can only control the things we can control. The rest, we leave to a higher power.” Algadi is not a priest or philosopher, at least professionally. Algadi, the city administrator for Pine Island, Minnesota, was referring to the fate of the much maligned, often delayed Elk Run BioBusiness Park.

– Longtime medical device industry champions Minnesota Sens. Amy Klobuchar and Al Franken along with Rep. Erik Paulsen have kicked up their 510(k) campaign a notch. With the FDA close to releasing its recommendations on the regulation for approving new medical devices, a bipartisan group of 15 senators sent a letter to FDA Commissioner Dr. Margaret Hamburg urging her agency, among other things, to adopt a deliberate, cautious approach to amending 510(k).

– It was inevitable that healthcare would suffer cuts in the face of Ohio’s crushing $8 billion budget deficit, and state Republicans look likely to put Medicaid eligibility on the chopping block. A supposedly bipartisan committee of Ohio lawmakers was tasked with coming up with ways to relieve the state’s looming budget deficit, yet the committee issued two reports: one from Republicans and one from Democrats. Since the GOP will take control of the governorship and both the Senate and House next year, it’s highly likely that the Republican budget-cutting plan will receive much more serious consideration.

Highlights of the important and interesting in the world of healthcare:

Women anguish over Avastin pull. The Food and Drug Administration on Thursday moved toward revoking approval of the blockbuster cancer drug Avastin as a treatment for breast cancer, drawing criticism for limiting treatment options for desperately ill women, reports the Chicago Tribune.

Second federal judge threatens individual mandate. A federal judge in Florida said Thursday it would be “a giant leap” for the Supreme Court to accept the Obama administration’s defense of the so-called individual mandate — a central provision of the new health care law — suggesting he may become the second judge to strike it down as unconstitutional, according to the New York Times.

Analysts fret over Brilinta setback. The FDA has handed AstraZeneca a painful setback on its biggest late-stage pipeline prospect: Rather than approve the blood thinner Brilinta, the agency issued a response letter demanding a fresh round of data analysis from a late-stage trial, according to FierceBiotech.

Unraveling Medicaid would be foolish. Medicaid may not provide great access to care. But it does provide access — access its recipients very much need and that, according to research, has measurably improved their health, according to a column in The New Republic and Kaiser Health News.

Steere central to Pfizer drama. For all the chatter about the sudden departure of CEO Jeff Kindler, the Pfizer boardroom drama might focus on Bill Steere: As chairman emeritus for nearly a decade, the 73-year-old Steere has wielded tangible influence over the drug maker and its strategic direction, including the push for out-sized acquisitions, according to Pharmalot blog’s Ed Silverman.

Mass layoffs could hit record at hospitals. The most recent mass-layoff statistics for the hospital industry suggest that 2010 will be a near-record year, according to an American Medical News report on the latest Bureau of Labor Statistics release.

Highlights of the important and interesting in the world of healthcare:

It’s a generational thing. As the history of social legislation suggests — and as this week’s federal court ruling on the so-called individual mandate makes clear, the effects of healthcare reform on our politics may not be settled until a lot of President Obama’s aides are collecting Medicare checks, according to the New York Times.

Is Biomet eyeing Smith & Nephew? The latest rumor in orthopedics circles is that Warsaw, Indiana-based Biomet Inc. is trying to acquire rival Smith & Nephew Inc. But on Wednesday, a veteran industry analyst pooh-poohed the idea to The Journal Gazette.

More AIDS drugs needed in developing countries. More than three dozen non-profit organizations — largely international patient advocacy groups — are imploring the top execs at nine drugmakers to license HIV-related patents and data rights to the Medicines Patent Pool, according to the Pharmalot blog.

Philips pushes wireless monitors into hospitals. Royal Philips Electronics’ medical arm is planning a push into wireless monitoring of patients in hospital wards, according to mobihealthnews. Wireless hospital patient monitors, which transmit information from patient to nearby monitors, are expected to grow at about 13 percent between now and 2014.

CEO hopefuls at J&J running neck and neck. Two Johnson & Johnson execs, Alex Gorsky and Sherilyn McCoy, are the lead candidates to succeed CEO William Weldon, who is expected to retire in the next year or so, reports the Wall Street Journal’s Health blog.

Ramius buys Cypress Bioscience for $255M. After months of wrangling over a price, the investor group Ramius has finally landed a deal to acquire San Diego-based Cypress Bioscience for $255 million — a whopping 63 percent premium over its initial offer, FierceBiotech reports. (By the way, Ramius is in a gentlemen’s proxy fight with SurModics, the drug, medical devices and diagnostics company in Eden Prairie, Minnesota.)

Highlights of the important and interesting in the world of healthcare:

Grinch or Sanity Clause? The U.S. Constitution’s Commerce Clause states that Congress has the power to “regulate Commerce … among the several States.”  To supporters of health reform, the Commerce Clause is the Grinch that stole Obamacare, writes the Health Care Blog. To opponents, it might seem like a Sanity Clause.

Stryker sues Zimmer over surgical device. Stryker Corp., a maker of artificial knees and hips, has filed a patent-infringement lawsuit against Zimmer Holdings Inc. to block sales of a device that removes damaged tissue and cleans bones during joint surgery, Bloomberg reports.

Minnesota nurses respond to ‘blistering attack.’ The Minnesota Nurses Association has responded to a “blistering attack on state employee unions, including state-employed nurses” by soon-to-be-former Minnesota Gov. Tim Pawlenty.

Everyday Health buys MedPage Today. One month after canceling its $20 million IPO, Everyday Health is expanding beyond the consumer market with the purchase of MedPage Today, an online news site designed to keep doctors up to date on breaking medical news their patients may be reading, according to paidContent.org.

Novartis sweetens Alcon pot. Novartis’ drawn-out efforts to buy out the 23 percent stake of eye care specialist Alcon seem to have borne fruit after the Swiss major sweetened the deal to minority shareholders, according to Pharma Times.

Eli Lilly stops cancer trial because of deaths. Indianapolis drug maker Eli Lilly & Co. has stopped a late-stage clinical trial of its investigational skin cancer drug tasisulam after 12 study participants died, reports Pharma Times.

Hospitals say cost-savings report ‘completely unbelievable.’ A group of large hospital systems has sent a letter to the Medical Device Manufacturers Association disputing as “completely unbelievable” the association’s recent findings that up to $37.5 billion in healthcare cost savings could be realized if Congress repeals the safe harbor law, according to ModernHealthcare.com.

The Akron maker of implantable hardware for spinal fusion surgery is consolidating four facilities at a Medina building, which will be renovated and used for offices, warehousing and product manufacturing, the Ohio Department of Development said.

Theken Spine designs, develops, makes and distributes a range of spinal fixation products and devices. Its $1.6 million project is expected to create 83 jobs and retain 77, according to the development department.

Founded in 1998 by Northeast Ohio orthopedic devices entrepreneur Randy Theken, the family of four spine companies was acquired by Integra LifeSciences Holdings Corp. in Plainsboro, New Jersey, in 2008 for $75 million in cash and the potential for $125 million more in milestone payments.

A magnet outside the guide tube (A) works with a guide wire and magnet inside the tube (B) to clean the chest tube without breaking the sterile field.

Cleveland Clinic spinoff Clear Catheter Systems, which recently closed a $1.2 million angel investment round, has received FDA approval to sell its PleuraFlow Active Tube-Clearance System in the United States.

PleuraFlow keeps catheters clear while draining blood and other fluids from the chest after heart or lung surgery. The device has the potential to improve patient outcomes, said Dr. Edward Boyle, Clear Catheter’s CEO.

“We think this is a product that is going to be a huge breakthrough in managing patients after heart and lung surgery,” Boyle said. When chest tubes don’t drain well people end up with trouble after surgery.”

The device, which already is cleared for sale in Europe and Canada, also could lower healthcare costs by enabling hospitals to increase their efficiency and lower the risk of patient complications — both goals of recent healthcare reform laws.

It could even help doctors better and more safely manage the growing number of patients with a tendency to bleed when they’re put on powerful anti-platelet agents after surgery.

Boyle, a cardiovascular and thoracic surgeon in Oregon, came up with the idea for an active-clearing catheter system while watching his patients endure the discomfort of having large tubes — the patients called them “garden hoses” — inserted in their chests to drain fluid and air after heart or lung surgery.

Worse, the tubes, called catheters, tended to clog. That led to buildup of blood around the heart and lungs, which could lead to complications and even death.

While researching patents on such devices, Boyle found a patent by the Cleveland Clinic’s Dr. Marc Gillinov, also a cardiovascular and thoracic surgeon. The two agreed to work together on PleuraFlow.

The Clinic spun off Clear Catheter Systems, then known as PleuraFlow LLC, in 2007. The company closed its initial round of seed investment (pdf) from the Cleveland Clinic and Bend Venture Angel Investors in August of that year.

A year later, the company raised $600,000 from the Cleveland Clinic-led Global Cardiovascular Innovation Center; Xgen Ltd., a Cleveland investment partnership primarily owned by the family of radio and dot-com mogul Tom Embrescia; and angel investors in Oregon.

During its latest funding cycle, Clear Catheter evaluated more Ohio investment opportunities but decided to go with $1.2 million from a West Coast group led by Oregon Angel Fund, Boyle said. The recent funding brings to $2.2 million the amount the company has raised since its founding. Cleveland Clinic remains a development partner.

Boyle, who had been his company’s sole employee, has hired a global director of sales and marketing to strike relationships with specialty critical care and cardiovascular products distributors. An Arizona company makes the PleuraFlow system.

“This is a huge step for us,” Boyle said. “It positions us so we can begin the commercialization efforts here in the U.S.”

Highlights of the important and interesting in the world of healthcare:

On the road to rationing. Unequal access to healthcare is hardly a new phenomenon in the United States, but the country is moving toward rationing at an unprecedented pace. The underlying problem is that doctors are reimbursed at different rates, reports the New York Times.

Prodded by activists. The FDA is reviewing the evidence used to declare that the amount of mercury in dental amalgam is “not high enough to cause harm” to patients, according to the Los Angeles Times.

Pfizer ends Thelin studies. Pfizer has ended worldwide clinical trials of blood pressure medicine Thelin, pulling the drug off shelves in the European Union, Australia and Canada because the drug poses a serious liver damage risk.

Pittsburgh angel fund looks for more money. Pittsburgh Equity Partners, an angel fund formed four years ago to fund early stage companies in western Pennsylvania, has retained Trustmont Financial Group to help it raise as much as $50 million through a private offering, reports the Pittsburgh Business Times.

ObamaCare oops. Drug companies Genentech and Allergan are discontinuing orphan drug discounts for children’s hospitals, another unintended consequence of helth reform law that failed to extend the discounts, according to the New York Times.

Here are some of the top stories at MedCity News this week:

– Minnesota Sens. Amy Klobuchar and Al Franken along with Rep. Erik Paulsen have championed the medical device industry’s fears about upcoming changes to the FDA’s 510(k) approval program. I doubted the campaign would do much. But with the FDA close to recommending its changes, a bipartisan group of 15 senators sent a letter to FDA Commissioner Dr. Margaret Hamburg urging her agency, among other things, to adopt a more deliberate, cautious approach to amending 510(k).

– Orthopedics company Stryker Corp. (NYSE:SYK) has agreed to sell a product line including the bone growth putty that has caused the company so much legal grief to Olympus Corp. for $60 million. Kalamazoo, Michigan-based Stryker plans to record a loss on the sale of its OP-1 product line — which includes OP-1 implant, OP-1 putty, Opgenra and Osigraft — as well as a manufacturing plant in Lebanon, New Hampshire, of between $75 million and $80 million. That would erase between 19 cents and 20 cents a share from the company’s fourth-quarter earnings.

– A group of University of Minnesota professors want the board of regents to investigate the suicide of a patient enrolled in a university-run drug study. Led by Dr. Carl Elliott, the professors demand the regents appoint an independent outside panel of experts to examine the death of Dan Markingson, a mentally ill patient who killed himself after taking an experimental psychiatric drug developed by AstraZeneca. The professors accuse the school of several ethics violations, including financial conflict of interest and enrolling Markingson even though he may have been too sick to consent.

– Medical device startup NeuroWave Systems Inc. has received its first regulatory clearance from the Food and Drug Administration to begin selling a brain-activity monitoring system. The Cleveland Heights, Ohio-based company’s NeuroFAST Monitoring System is intended for use in hospital operating rooms, emergency departments and intensive care units, plus for clinical research.

– Neoprobe Corp. (OTCBB:NEOP) continues to take steps down the regulatory path to restart development efforts for its RIGScan cancer-detecting technology. The Dublin, Ohio-based company has been granted a first-quarter meeting with the Food and Drug Administration to discuss its plans to begin clinical testing that would lead to an Investigational New Drug application for RIGScan, which works by attaching itself to cancerous cells in the body, making them identified by a hand-held radiation-detection device.

A rendering of the Cleveland medical mart

The long-awaited groundbreaking for Cleveland’s $465 million medical mart project will be… drum roll, please… Jan. 14, 2011.

The ceremonial turning of the ground “on the historic Cleveland Malls” will happen at 11 a.m. that Friday, according to MMPI, the Chicago-based property developer that’s leading the project. The event, which also will feature remarks from civic, business and government leaders, is free and open to the public.

Construction on the Cleveland Medical Mart & Convention Center will begin before that date, however — on Jan. 3.

MMPI has yet to sign tenants for the 100,000-square-foot medical mart, a planned collection of medical product showrooms that will be populated by sellers of medical devices, information technology, furnishings and other equipment. The mart will be connected to a newly renovated convention center in downtown Cleveland.

The mart project has been controversial for years — for its proposed cost, proposed location, even what company was proposed to build it. Two years ago, Cleveland was competing with Nashville, Tennessee, and New York City to launch its medical mart first. Now, it looks like Cleveland will beat Nashville, and NYC may have dropped the idea.

And many, most recently former Pittsburgh Mayor Tom Murphy, now a senior resident fellow at the Urban Land Institute, have been skeptical whether the pricey public investment is worth the untested concept’s risk. The medical mart could end up costing Cuyahoga County taxpayers up to $840 million.

Hand-wringing aside, the mart and adjoining convention center are expected to open in September 2013, MMPI said.

Highlights of the important and interesting in the world of healthcare:

All hail Medicare bill. The U.S. House gave final approval on Thursday to a bill that would avert a 25 percent cut in Medicare payments to doctors by freezing reimbursement rates at current levels until the end of next year, reports the New York Times. President Obama, who hailed the nearly unanimous action by Congress, promised to sign the legislation.

Tenet rebuffs Community Health’s attentions. Community Health Systems Inc. has renewed its pursuit of Tenet Healthcare Corp. with an unsolicited $7.3 billion offer that may prompt rival suitors as the Franklin, Tennessee, for-profit hospital company seeks to become the largest U.S. hospital operator, reports Bloomberg Businessweek.

Investors push Charles River to look for buyer. Relational Investors LLC and the California teachers’ pension fund have upped their stakes in contract research organization Charles River Laboratories International Inc. and are pushing it to explore a sale, according to the Wall Street Journal.

iPads the thing for medical sales. Medical companies like Abbott Laboratories, Medtronic and Boston Scientific are passing out thousands of iPad tablet computers to salespeople to spruce up their pitches to doctors — and at the same time giving Apple Inc. a crucial foot in the door to business customers, reports the Wall Street Journal.

Golden parachute for Kindler. Pfizer Inc., the world’s biggest drug maker, said former Chief Executive Officer Jeffrey Kindler will take about $9.6 million in severance, bonus and short-term incentive pay for 2010 with him as he leaves the company, reports Bloomberg Businessweek.

Ven-A-Care guys score big. The four principals of the tiny Florida Keys home infusion company who turned professional whistleblowers nearly two decades ago have claimed three more drug company scalps Abbott, Roxane Laboratories and B. Braun Medical worth $421 million, according to the PharmaGossip blog.

Highlights of the important and interesting in the world of healthcare:

Big HIE fish swallow small. With Aetna picking up health information exchange vendor Medicity for $500 million earlier this week, and UnitedHealth Group’s Ingenix buying Medicity’s top competitor, Axolotl, earlier this year, the HIE market is going through a major upheaval with few (one could even argue no) strong, independent vendors left, according to Chilmark Research.

Health reform game changer. The future of health reform will be shaped more by interest group agendas and state-level actions than by the plans of new Republican leadership in the U.S. House, according to a Kaiser Health News opinion piece. Not only has the health reform game changed, but so have the most important players.

Could this be a record? Early Tuesday, Abbott Laboratories agreed to pay $126.5 million to settle charges of deliberately misreporting pricing information to hike reimbursements from Medicare and Medicaid, writes Pharmalot blogger Ed Silverman. A few hours later, Abbott agreed to pay $41 million to resolve criminal and civil charges that its Kos Pharmaceuticals unit engaged in kickbacks and off-label marketing.

Med device makers lose clout. Medical-device makers, already battling slumping markets and sliding product prices, are losing their grip on a key tool for driving sales — influence over doctors whose practices increasingly are being bought by hospitals, Dow Jones Newswires reports.

Medtronic subpoenaed over neurostimulators. Fridley, Minnesota’s Medtronic, the largest maker of heart devices, has been subpoenaed by the U.S. Attorney in western New York related to sales, marketing and reimbursement practices for its brain stimulation products, according to Bloomberg.

Age of the $1,000 genome. San Francisco molecular diagnostics company Sequenta Inc. has raised $13 million in a Series B venture round to develop fast, cheap DNA sequencing that could help doctors figure out whether patients’ immune systems have gone out of whack, according to Xconomy.

Highlights of the important and interesting in the world of healthcare:

Blame Medicare, not private insurers. Health spending continues to be a concern in America, with projections as high as $4.5 trillion by 2019. But a new study in the journal Health Affairs suggests that we should blame Medicare more than private insurance companies for the spending trend, reports FierceHealthcare.

GSK to buy Chinese drug company. GlaxoSmithKline will buy a Chinese pharmaceutical company for about $70 million, a small deal that reinforces the drug maker’s efforts to expand in important emerging markets, according to the News & Observer.

U.S. economic horizon brightens. Wall Street economists are ready to ratchet up their economic-growth forecasts for 2011 in light of the tax deal struck by President Barack Obama and congressional Republicans, particularly the surprise one-year reduction in payroll taxes, according to a MarketWatch story in the Columbus Dispatch.

Stem cells are hope for disabled. Adult stem cell companies like Athersys Inc. in Cleveland, Ohio, are giving hope for brain and spinal cord injury cures to the disabled, writes the Disability Rights for the Physically Challenged blog.

On Bill Hawkins’ reading table? Bill Hawkins, chairman and CEO of medical device giant Medtronic, is reading Start Up Nation, by Saul Singer. “This is a truly inspiring book on how nations and their culture can directly influence innovation,” reports FastCompany.

Orexigen wins while rivals lose. Orexigen Therapeutics Inc.’s success in winning the first U.S. panel recommendation for a long-sought prescription diet pill shows the company benefited from earlier difficulties of rivals, according to Bloomberg BusinessWeek.

Saying goodbye. Elizabeth Edwards, who as the wife of former Sen. John Edwards gave America an intimate look at a candidate’s marriage by sharing his quest for the 2008 presidential nomination as she struggled with incurable cancer, died Tuesday morning at her home in Chapel Hill, North Carolina, the New York Times reports. She was 61.

Highlights of the important and interesting in the world of healthcare:

Sagent Pharma plans $100M IPO. Sagent Holding Co., the Schaumburg, Illinois, company that is developing generic injectable pharmaceuticals, has filed for a $100 million initial public offering just as a host of drug companies tap public capital markets, with many seeking to raise proceeds for research, according to the Wall Street Journal.

Health IT attracts private equity. Healthcare insiders — especially savvy venture capitalists — know there’s more true reform in the $27 billion electronic medical record subsidy program than in the so-called “healthcare reform” legislation passed this year that mostly throws more money down the same volume-based fee-for-service rat hole, according to FierceHealthIT.

Pfizer’s Kindler out because of inaction. Jeffrey Kindler’s refusal to name an operations chief in response to a push from senior managers cost him his job as chief executive officer of Pfizer Inc., according to BloombergBusinessweek.

Minnesota hospitals renege, nurses say. An internal Minnesota Hospital Association memo recently obtained by the Minnesota Nurses Association reveals that Minnesota hospital executives have no intention of honoring their pledge to work hand-in-hand with nurses to solve the unsafe staffing crisis highlighted this summer, the nurses association said.

Americans divided over health reform. While 40 percent of Americans want to repeal all or most of last year’s health care reform bill, 31 percent want all or most of the reforms, according to a Harris Interactive Poll conducted with HealthDay, Mass High Tech reports.

Hospitals’ future brightening? Five reasons for hospitals to be optimistic in 2011, brought to you by Becker’s Hospital Review.

Stryker's OP-1 bone putty

Orthopedics company Stryker Corp. (NYSE:SYK) has agreed to sell a product line including the bone growth putty that has caused the company so much legal grief to Olympus Corp. for $60 million.

Kalamazoo, Michigan-based Stryker plans to record a loss on the sale of its OP-1 product line — which includes OP-1 implant, OP-1 putty, Opgenra and Osigraft — as well as a manufacturing plant in Lebanon, New Hampshire, of between $75 million and $80 million. That would erase between 19 cents and 20 cents a share from the company’s fourth-quarter earnings.

The planned sale is “aligned with strategic objectives for both companies,” Stryker said in a written statement. The Michigan company plans to redirect a portion of its OP-1 R&D spending to other projects, “which it believes offer the potential for greater shareholder returns, including its clinical efforts already underway with BMP-7 for potential use in osteoarthritis and research into other non-orthopaedic applications,” it said.

Commercialization of Bone Morphogenetic Protein-7 is not expected for at least five years because of the early stage of the company’s clinical efforts and the expected scope of data to be required by the Food and Drug Administration, the company said.

Stryker Biotech, its former president and three sales reps have been sparing with federal prosecutors about criminal charges pending against them in a case alleging the illegal promotion of bone putties, including OP-1 putty.

In August, it took less than 24 hours — and $1.35 million — for Stryker to settle claims by Massachusetts Attorney General Martha Coakley that its biotech unit illegally promoted the combined use of a pair of its bone growth products and falsified Institutional Review Board documents.

Stryker, which recently agreed to buy Boston Scientific’s neurovascular unit for $1.5 billion, still expects to make between $3.27 and $3.30 per share in 2010, an increase of between 10 percent and 12 percent from 2009. The company’s shares lost 58 cents, or 1 percent, on the New York Stock Exchange Monday, ending at $51.53.

Jeff Kindler

Highlights of the important and interesting in the world of healthcare:

Pfizer unexpectedly switches CEOs. Jeff Kindler, a lawyer tapped as a fresh face to lead drug maker Pfizer out of its doldrums, is out, after just a little over four years as chairman and chief executive, reports NPR’s health blog. Kindler’s executive bio already has been erased from Pfizer’s website. Ian C. Read, 57,  head of the company’s global biopharmaceuticals operations, is in. Here’s Pfizer’s release.

Biotech cowboys come clean. Here’s how — especially in today’s sluggish economy — people muster up the guts, raise the mountains of cash, and find the staying power to do something truly big and unprecedented — like create a regenerative medicine based on stem cells, according to Xconomy.

Thumbs up for hospitals, but… Americans trust their hospitals, according to a recent HarrisInteractive poll. But managed care, health insurance and pharmaceutical companies, not so much, reports the HEALTHPopuli blog.

Health IT wrong solution? Health Care Renewal blog makes a compelling point about the current Health IT push: The expectations for major quality improvements in healthcare from the hundreds of billions of dollars spent on health IT might be vastly overstated, based on false assumptions about the causes of adverse events.

GE Healthcare extends Clarient offer. GE Healthcare is extending its tender offer for molecular diagnostics firm Clarient Inc. shares until Thursday, Dec. 16. Apparently, investors in the $587 million acquisition need more time to mull new information about a proposed settlement of a shareholder lawsuit over the deal.

FDA panel vote could expand Lap-Band use. A federal advisory panel Friday endorsed an expansion of the use of Allergan’s Lap-Band stomach-restricting device to patients who are less-than-severely obese. The vote could double the number of Americans who qualify for weight-loss surgery, reports the New York Times.

Where there’s smoke… Abbott sales representative spent $2,159 to buy a whole, slow-smoked pig, peach cobbler and other fixings for a barbecue dinner at the home of Dr. Mark Midei, the Baltimore cardiologist who reportedly inserted 30 of the company’s cardiac stents in a single day in 2008. Now, the Senate Finance Committee, which oversees Medicare, is looking into whether all those implanted patients really needed stents, according to the New York Times.

Here are some of the top stories at MedCity News this week:

– Wanna buy a medical device startup? A down payment would be nice. As competition for medical device acquisitions heats up, Medtronic Inc. (NYSE:MDT) and Boston Scientific Corp. (NYSE:BSX) are redeeming early bets on promising startups.

– During a conference call with analysts last week, Medtronic Inc. (NYSE:MDT) CEO Bill Hawkins extolled the company’s operations in China: $500 million in annualized sales, 20 percent yearly growth rate, a state-of-the-art patient center in Beijing, and a shiny new headquarters in Shanghai. It wasn’t so long ago that medical device firms spoke in equally glowing terms about Ireland. Today, Ireland’s economy lies in ruins, a victim of shaky banks and severe recession.

– Medtronic Inc. spinout Inspire Medical Systems Inc. has received the go-ahead from regulators to sell its obstructive sleep apnea device in Europe and test it for the U.S. market. CE Marking in hand, the Maple Grove, Minnesota, device developer expects to mount a market development push for its Inspire Upper Airway Stimulation therapy in Europe near year-end 2011.

– Arteriocyte Inc. has launched a stem cell-based product that allows researchers to grow red blood cells outside the human body. The product, NANEX, is available only for research use and is engineered to create blood cells like bone marrow. “This product is the first internally developed product that Arteriocyte has placed on the market to date,” said Adam Sorkin, a company spokesman.

– Two Ohio hospitals were among 65 named to a coalition of healthcare buyers’ list of the top U.S. hospitals, in terms of quality and safety.The Christ Hospital in Cincinnati and the Ohio State University Comprehensive Cancer Center in Columbus took the honors from Leapfrog Group, which advocates for employers that purchase healthcare.

The country was a beacon of high tech economic growth, Europe’s version of Silicon Valley.Thanks to low taxes and a highly skilled workforce, Ireland attracted manufacturing and research and development operations from big medical device makers like Medtronic, based in Fridley, Minnesota, and Boston Scientific Corp. (NYSE:BSX), based in Natick, Massachusetts with major operations in Arden Hills, Minnesota.

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Today, Ireland’s economy lies in ruins, a victim of shaky banks and severe recession. Earlier this week, after much reluctance, the Irish government officially applied for a bailout from the European Union worth over $100 billion.Obviously, no country wants an economic bailout because there is no such thing as a free lunch. A rescue package likely means conditions the recipient isn’t going to like. And in Ireland’s case, that could mean the end of its beloved 12.5 percent corporate tax rate, the lowest in the EU and the reason why foreign companies flocked to the country in the first place.

[UPDATE: Ireland Wednesday unveiled its budget plan, which raises personal income taxes and cuts spending, but leaves its corporate income tax in place. However, such an austerity program could depress consumer demand and worsen the unemployment rate.]

But like fellow EU member Greece, Ireland lacks money to run its government and may need to raise taxes.

Ireland’s other attractive asset, its educated and highly skilled workforce, is disappearing. A poor economy has forced its people to seek jobs abroad. Experts say about 65,000 people left Ireland last year, and some estimate that the number may be more like 120,000 this year.

To be sure, medical devices remain a crucial component to Ireland’s economy. The country boasts the highest per capita employment of medical technology workers in Europe, with more than 25,000 employed in the industry. Medical devices exports totaled $8 billion last year.

Medical device makers are unlikely to leave anytime soon. Medtronic spokesman Brian Henry said Ireland’s bailout woes has not impacted its operations.

But how long can that possibly last? With its economy in tatters and skilled workforce in jeopardy, Ireland, to put it kindly, is no longer the medical device mecca it used to be.

After all, a country that applies for a $100 billion bailout doesn’t exactly inspire confidence in foreign investors.

Thomas Lee

Thomas Lee is the Minnesota Bureau Chief for MedCityNews.

Tags: Arden Hills, bailout, Boston Scientific, BSX, Business, European Union, Fridley, Ireland, MDT, medical devices, Medtronic, Minnesota, NYSE:BSX, NYSE:MDT

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Highlights of the important and interesting in the world of healthcare:

Who’s living with less? While questioning each other’s money-making techniques, the chiefs of Massachusetts’ most prominent hospital network and private health insurer agreed that controlling soaring healthcare costs begins with a shift in thinking: adjust to a climate of limited resources and learn to live with less, reports MetroWest Daily News.

Merck to buy insulin developer SmartCells. With an eye on remaining one of the leaders in the diabetes field, Merck (NYSE:MRK) has agreed to pay more than $500 million to acquire SmartCells, a Beverly, Massachusetts, biotech with some intriguing insulin technology that originated at MIT, according to FierceBiotech.

Hospital perks: Are they worth the cost? As healthcare reform moves forward, we need to decide whether hospital amenities like hotel-style room service, massage therapy and magnificent views are worth their cost, according to a perspective in the New England Journal of Medicine.

A pearl of a COPD therapy. Pearl Therapeutics bagged a $69 million venture round last month, and now its clear why. The Redwood City, California, biotech has clinical trial results that show its inhalable drug for chronic obstructive pulmonary disease works better than standard Tiotropium (Spiriva), a $3 billion annual seller for Pfizer and Boehringer Ingelheim, reports Xconomy San Francisco.

M&A the hot ticket in med devices. From Medtronic’s (NYSE:MDT) deal to buy Ardian for $800 million to Stryker’s (NYSE:SYK) agreement to buy Boston Scientific’s (NYSE:BSX) neurovascular business for $1.5 billion, mergers and acquisitions are picking up in the medical device industry, Reuters reports.

Asthmatx device holds $443.5M of promise. And how promising is Asthmatx Inc.’s device to treat patients with severe asthma? Up to $443.5 million-worth, based on how much Boston Scientific is willing to pay for the Sunnyvale, California, company if it hits revenue targets laid out in its acquisition deal, according to the Silicon Valley/San Jose Business Journal.

St. Jude Medical's Penta surgical lead

St. Jude Medical Inc. (NYSE:STJ) reintroduced physicians at the North American Neuromodulation Society meeting in Las Vegas today to its Penta surgical lead for neurostimulation therapy.

Since last year’s society meeting, during which St. Jude announced Food and Drug Administration clearance to sell the device in the United States, St. Jude has received CE Mark approval to sell the device in Europe and reimbursement approval from the Australian Therapeutic Goods Administration.

The Little Canada, Minnesota, device maker bills the five-column surgical lead as the first of its kind, having the smallest electrodes on the market. Because of its design and ability to deliver more electricity through smaller electrodes, the device may enable doctors to better manage patients’ chronic back pain after surgery has failed, the company said in a written statement.

“Early adoption of the Penta lead in the [United States] has been very promising, and we are encouraged by how well this paddle lead is aiding physicians in controlling low back pain,” Chris Chavez, president of the St. Jude’s Neuromodulation Division, in the statement. “We are excited to be able to make this first-of-its-kind product available to physicians in Europe and Australia.”

While the uninsured are pummeling the businesses of most medical device makers in the United States, St. Jude continues to make smart acquisitions that add to sales.

Known mostly for its pacemakers and implantable cardio defibrillators, St. Jude got into the neurostimulation business in a big way in 2005 when it purchased Advanced Neuromodulation Systems (ANS) in Plano, Texas. The smooth acquisition gave the Little Canada device maker a much-needed boost in revenue at a time when global demand for mechanical heart devices started to wane.

ANS also has helped St. Jude narrow the considerable lead of neurostimulation industry giant Medtronic Inc. (NYSE:MDT) in Fridley, Minnesota. Last year, St. Jude won European approval for its Libra deep brain stimulation device to treat Parkinson’s disease. It hopes to challenge Medtronic’s Activa devices in the United States. St. Jude is conducting clinical trials on a deep brain stimulation device to treat depression. And the company recently entered China and Japan.

Medtronic's CD Horizon Legacy system

Spinal device leader Medtronic Inc. (NYSE:MDT) has received Food and Drug Administration approval to use its CD Horizon vertebral bone screw system to treat  scoliosis that develops during adolescence.

It’s the first clearance by the FDA under its new category for pediatric adolescent idiopathic scoliosis (AIS) patients who are treated with posterior pedicle screw instruments, Medtronic said in a written statement.

The clearance also may help the Minnesota medical device giant revive its struggling spine business in Memphis, Tennessee, which is near the end of a three-year overhaul just as insurers take a harder look at whether surgery is the most cost-effective way to treat back pain, according to a Reuters analysis.

“This is a major milestone for surgeons and their pediatric patients,” said Doug King, general manager of Medtronic’s Spine business, in the statement. “With this clearance, we will now be able to provide training and education to surgeons to treat children diagnosed with AIS.”

Adolescent idiopathic (unknown cause) scoliosis is the most common type of abnormal spine curvature in children and affects nearly one million children in the United States alone, Medtronic said. AIS occurs between 10 years of age and adulthood.

Pedicle screws often are used  to affix rods to the spine to correct deformities like scoliosis.

“Using pedicle screws in the treatment of adolescent idiopathic scoliosis gives my patients the best chance of correcting their spine and chest deformity, and preventing future surgeries,” said Dr. David L. Skaggs, professor and chief of Orthopaedic Surgery at Children’s Hospital in Los Angeles, Caliornia, in the Medtronic statement.

Pedicle screws also can enable children to get back to their active lives and may reduce the need for additional surgeries (and additional cost), Skaggs said.

“The opportunity to further research and study this patient population will allow us to move forward with our commitment and investment in pediatric innovation,” King said.

Highlights of the important and interesting in the world of healthcare:

No vote for prostate drugs. Would the Food and Drug Administration advisory committee recommend that the labels of two drugs — dutasteride, made by GlaxoSmithKline and sold as Avodart; and finasteride, a generic made by Merck and sold as Proscar — be changed to say they can reduce a man’s risk of getting prostate cancer? The answer was no, reports the New York Times.

GE, Dutch company look for Alzheimer’s marker. GE Healthcare and Janssen Pharmaceutica NV LLC will work together to use data integration, informatics, genomics and imaging to identify a biosignature for Alzheimer’s disease.

Having your cake… UnitedHealth Group is predicting lower profit in 2011, in part because of federal health reform, while at the same time painting itself as well-positioned for the changes reform will bring, according to the Star Tribune.

A life’s savings for medical expenses. Some medical costs have fallen this year, thanks to healthcare reform laws, but U.S. retirees will still need hundreds of thousands of dollars in savings to cover their lifetime medical expenses, according to a Reuters report about an Employee Benefits Research Institute study.

Union puts off HCA strike. SEIU United Healthcare Workers-West union members have decided to postpone until Friday a planned one-day strike at five Hospital Corporation of America (NYSE:HCA) hospitals in California to return to the bargaining table, according to FierceHealthcare.

Bariatric surgeon charged with embezzlement. Dr. Eric De Maria, former director of Duke University’s bariatric surgery program, and his former department business manager have been charged with embezzling $267,000 from the university, reports the News & Observer. Both De Maria and John William Cotton ended their positions on Aug. 1 for undisclosed reasons.

Chicago plastic surgeon suing patients. Dr. Jay Pensler, a Chicago cosmetic surgeon, is suing three patients for $100,000 apiece in compensatory and punitive damages for attempting to “ruin the professional reputation of a well respected plastic surgeon, through false and defamatory statements” by using Yelp and Citysearch to review Pensler, who the patients say botched their breast surgeries, ABC News reports.