A review of life science current events reported by MedCity News this week:

Are more than 10 percent of doctors liars? Survey says ‘yes.’ About 11 percent of doctors have knowingly lied to a patient in the last year, according to a new survey published in Health Affairs.

15 healthcare Twitter hashtags you should follow. We offer the following list of 15 useful hashtags for those interested in keeping up with the latest buzz in the healthcare industry.

Watch local 2012 Super Bowl ads from Cleveland Clinic, other hospitals. Healthcare was nowhere to be found between Budweiser and Clint Eastwood Super Bowl commercials. Instead, healthcare systems chose the local route for their 2012 Super Bowl advertising. If you were in California, Minnesota, Ohio, Virginia or other markets you saw local hospitals and healthcare Super Bowl ads.

Could this be the magic bullet reducing R&D cycles of new medical devices? Two professors at the University of Minnesota have come up with a 3-D visualization device that aims to revolutionize how medical devices are designed and tested, thereby shortening R&D cycles and the costs associated.

Tale of 2 pharmas: GSK’s pipeline shows promise, AZN’s prospects dim. GSK’s results and outlook mark a strong contrast to Britain’s second-largest pharma company, AstraZeneca (NYSE:AZN). With apologies and all due respect to Dickens, call it “A Tale of Two Pharmas.”

Now here’s the best of what YOU had to say:

How long can you go? Creating value with cheap medical devices. Medtronic may be able to play the price disruption game, but we ask ourselves whether the small emerging med-tech company can achieve success (and funding) with a ’tons cheaper’ value proposition. In theory, any company starting fresh with design and manufacturing should be able to take advantage of Moore’s law in a way that the big guys with vast installed bases and capital investments can’t. The opportunity for success is there, but not every company or technology is cut out to win at price-cutting.

A huge American opportunity waiting to happen. Mr. Hague tells me his Cellsonic machines do it all — but none of these indications are FDA cleared — and, without a predicate device on the market, trials will be very, very expensive. Andrew explained the opportunity and outlined what he needs to do next.

Doctors fire patients over money? Sometimes. Health? Definitely. The more typical reason why we fire patients from the practice is because of continued behaviors and actions which place them and me at risk. For example, if a patient with cirrhosis, a severe liver condition, will not keep scheduled medical appointments, we may have to cut him loose.

Big Pharma marketing could teach the FDA about communication. Turns out the Food and Drug Administration doesn’t achieve the impact it’s looking for in communications with physicians. That finding is drawn from a new paper that evaluates the impact of FDA warning labels and public health advisories over the past 20 years.

Meaningful Use Attestations and Audits: A Word to the Wise. 2012 will see the first audits for the CMS EHR Incentives and there will be some real horror stories coming out when incentives are taken back due to incomplete or missing security documentation. Don’t be one of those. As Aunt Bee used to say: “a stitch in time saves nine.”

Heart monitoring company CardioNet (NASDAQ:BEAT),which diagnoses and monitors irregular heartbeats, has acquired another cardiac monitoring company in a deal valued at more than $6 million.

The acquisition target, Ohio-based ECG Scanning & Medical Services, will enable the Philadelphia, Pennsylvania-based company to expand its customer base across the Midwest, a company statement said.

CardioNet President and Chief Executive Officer Joseph Capper said: “ECG Scanning is a respected cardiac monitoring provider that affords CardioNet access to established relationships with healthcare providers and payers in the Midwest. This acquisition demonstrates our commitment to augment the growth of our core business through strategic transactions.”

Although the cash deal is for $5.8 million, meeting additional milestones would push the deal value up to $6.4 million.

CardioNet’s customers wear a lightweight senor on a neck strap or belt with three leads attached to it. The leads continuously transmit two channels of electrocardiogram data to the monitor. When there is an irregular rhythm, the data is automatically sent to the CardioNet Monitoring Center since many arrhythmic events go unnoticed by patients. But when users do experience symptoms of an irregular heartbeat, they can transmit the data themselves using the monitor’s touchscreen.

More than 4 million people suffer from recurrent arrhythmias in the United States. Among the diseases and conditions that cause them are congestive heart failure, heart disease and heart valve disorders.

Twitter user Emma Sandoe, a self-described health policy budgeteer, started it all when she tweeted: “I would competitively bid for you #healthpolicyvalentines last week. And since then a gush of tweets have emanated each competing with the next to get the most laughs.”

My favorite one (for the moment) comes courtesy of @tamiswenson who writes simply: “Let’s get bundled.”

Keep checking the hashtag to find some cute Valentine’s Day quotes that will make your healthcare wonk flutter. But below are some of my favorite.

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.

StartX is Stanford University’s nonprofit student startup accelerator, operated independently from the university. Its fifth class of startups from the fall of 2011 includes four new companies devoted to healthcare technology. Below are quick summaries and videos from their presentations.

AgeTak Inc.

AgeTak Inc. has developed an IT platform to privacy protect Big Data for healthcare so that providers and payers can gain valuable insights on the cost and outcomes of care in a timely manner. It’s middleware technology that pulls in data scattered across hospitals and insurance companies while maintaining patient privacy.

The company brought in $3.7 million in revenue last year from customers like UnitedHealthcare, founder Pratik Verma said.

Breakthrough

Breakthrough addresses the fact that counseling for mental health is expensive, hard to access, stigmatizing and hard to find a good provider for. It’s a tele-counseling system that enables secure, high-definition, one-on-one and group video sessions without geographical or time constraints.

For providers, it expands their billable hours and allows them to set up a profile, online co-payment system and appointment system. Breakthrough also partners with health insurers to ensure that care is covered under existing health plans.

Tip Top Med

With more consumers signing onto high-deductible insurance plans, Tip Top Med thinks it can help healthcare consumers make better decisions by providing an online marketplace that enables them to get clear, up-front pricing from providers in their area. Tip Top contains information and reviews on providers and handles the payment up front. For physicians, it exposes them to new patients and facilitates direct and timely payments.

The company is launching its private beta at the end of February and is currently raising seed money.

Bell Biosystems

Bell Biosystems has developed a technology that creates “a heritable magnetic signature in therapeutic cells,” with implications for diagnostics, regenerative medicine and cancer. Its noninvasive, in-vivo cell tracking and imaging system also allows for a triggered kill switch, in case the treatment were to go awry.

Startupalooza NJ is a competition in which technology, digital health and medical device companies competed for the chance to present their products before a wider audience of private equity investors in New York next month. This is one of a series of posts I’m publishing that includes elevator pitches from three of the companies I liked.

MedSonics uses a handheld diagnostic ultrasound device to detect, monitor and chart bone abnormalities and fractures cheaply and more efficiently to determine whether the patient needs to be moved to a healthcare facility for an X-Ray or scan.

The Newark, New Jersey-based company’s six-member team includes a pediatric orthopedic surgeon at the Children’s Hospital of Philadelphia and associate clinical professor of orthopedics at the Perelman School of Medicine at the University of Pennsylvania as well as a physician emeritus from the New York Giants football team. It is raising $1.5 million to develop its prototype for clinical trials.

It sees applications for the product in sports medicine, nursing homes and rehabilitation centers. It also sees applications in the horse racing industry. “Our mantra is better, faster and cheaper,” said CEO Sanford Roth, whose background includes working in engineering, business and product development for Lockheed Martin and RCA.

PPD routinely strikes strategic partnerships with pharmaceutical companies. But the clinical research organization has entered a different kind of partnership in Scotland with the goal of  streamlining the clinical trials process and speeding the regulatory process for new therapies.

Wilmington, North Carolina-based PPD has entered an alliance with the National Health Services’s Research Scotland (NRS), the government body that oversees clinical trials in Scotland. When clinical trials are conducted in Scotland, CROs must work with hospitals individually. But under the new alliance, PPD can work with NRS to manage clinical trial processes and procedures consistently across all of Scotland’s hospital sites.

“This is probably the first alliance of this type and certainly the first of its kind that PPD has developed,” PPD spokesman Ned Glascock said. “We believe this represents a new way of working with hospital sites to enable success through shared goals.”

The goals include reducing study startup times, streamlining regulatory processes and improving patient recruitment for trials. The initiative will cover clinical trials in all phases across multiple therapeutic areas, as well as biosimilar and post-approval studies.

“We are pleased to build on our relationship with PPD to advance our mission of securing lasting improvements to the health of the people of Scotland,” Cabinet Secretary for Health Nicola Sturgeon said in a prepared statement. “This initiative will further Scotland’s growing reputation as a global center of excellence for clinical research, offering a significant number of world-leading research sites and clinical investigators with expertise across a wide range of disease indications.”

Scotland’s population of 5.3 million people includes many who have participated in clinical research. PPD says Scotland has a high incidence and prevalence of diseases in key therapeutic areas that are targeted by clinical research. The PPD and NRS partnership will focus on a range of health conditions that include cardiovascular disease, gastrointestinal disease, stroke and women’s health.

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]

Startupalooza NJ is a competition in which technology, digital health and medical device companies competed for the chance to present their products before a wider audience of private equity investors in New York next month. This is one of a series of posts I’m publishing that includes elevator pitches from three of the companies I liked.

Cancerlife is a social platform for cancer centers and their patients to communicate with supporters such as friends, family, people who share their disease and physicians. Users keep a journal of how they are feeling. But what sets Cancerlife apart from rival programs, says its president and cofounder, Charles Coltman, is that patients can track the side effects they experience from their medications, which allows them to work with their physicians to better tailor the level and types of medication they take.

The company currently has two monetization avenues: pharmaceutical companies and research organizations who want to better understand the effects of certain drugs on patients; and cancer centers, which under new guidelines are now required to better manage cancer patients’ physiological care when they go into distress. Although patient data is provided without identifying information, users are given the choice of opting out.

The company is launching into three oncology practices next month in Florida, New York and New Jersey, and is currently looking for beta testers. It was recently accepted into a new Philadelphia incubator called Seed Philly.

CMS clearly states that there will be audits: “All providers attesting to receive an EHR incentive payment for either Medicare or Medicaid EHR Incentive Programs should retain ALL relevant supporting documentation (in either paper or electronic format used in the completion of the Attestation Module responses). Documentation to support the attestation should be retained for six years post-attestation. Documentation to support payment calculations (such as cost report data) should continue to follow the current documentation retention processes.” CMS even tells us how to prepare for an audit: “To ensure you are prepared for a potential audit, save the supporting electronic or paper documentation that support your attestation. Also save the documentation to support your Clinical Quality Measures (CQMs). Hospitals should also maintain documentation to support their payment calculations.”

I won’t be the one doing any Medicare or Medicaid audits but if I was I would tell you what I would examine as soon as I walked through your door. I would ask to see your Security Risk Analysis documentation for either EPs or EHs: “Protect electronic health information created or maintained by the certified EHR technology through the implementation of appropriate technical capabilities.” If you can’t produce it, or it is incomplete then you do not have the documentation to support the incentives you have received.

During the attestation process I suggest you pause before you check that little attestation box that says: “Yes, I have conducted or reviewed a security risk analysis in accordance with the requirements under 45 CFR 164.308(a)(1) and implemented security updates as necessary and corrected identified security deficiencies”. During the recent HIT Policy Committee Meeting it was revealed that numerous EPs are checking that box without adequate documentation to support that action. There is real risk here and not too many EHR vendors understand what the issues are. The RECs certainly know what is involved and can provide direction and clarification.

2012 will see the first audits for the CMS EHR Incentives and there will be some real horror stories coming out when incentives are taken back due to incomplete or missing security documentation. Don’t be one of those. As Aunt Bee used to say: “a stitch in time saves nine”.

Startupalooza NJ is a competition in which technology, digital health and medical device companies competed for the chance to present their products before a wider audience of private equity investors in New York next month.  This is one of a series of posts I’m publishing that includes elevator pitches from three of the companies I liked.

Epion Health is a digital health company focusing on improving health literacy in the one place it can be reasonably sure it will have the patient’s undivided attention — the physician’s waiting room.

The Lebanon, New Jersey-based company’s president and cofounder, Joe Hogan, was the head of commercial operations at Abraxis Oncology, part of Abraxis BioScience, which was acquired by Celgene (NYSE:CELG) for $2.9 billion in 2010. Its CEO, Joe Blewitt, previously worked on education products for the pharmaceutical industry. Content comes from the Mayo Clinic, among other sources.

It is finishing up a pilot program with one of the five largest pharmaceutical companies in the world focusing on hypertension and osteoporosis across six healthcare centers in five states, including New York. Although the information is disseminated through tablets, provided free to physicians, it is about to embark on a second pilot program that will expand the program to smartphones.

Epion Health CEO Joe Blewitt

DePuy's AOX Antioxidant Polyethylene on the Sigma knee replacement

DePuy Orthopaedics launched several new surgical products this week for knee, shoulder and hip revisions.

The Johnson & Johnson (NYSE:JNJ) subsidiary accounted for $5.8 billion in sales in 2011, but those sales were offset by $521 million in costs associated with the 2010 recall of its metal-on-metal ASR hip replacement system. That line of products had such a high failure rate that it was pulled from the market and even more costs were racked up with a slew of lawsuits filed against DePuy.

Presumably the company hopes to regain consumer confidence by continue producing out new technology for its implants. The following products were launched at the 2012 American Academy of Orthopaedic Surgeons meeting this week.

Knee surgery

The newly released AOX Antioxidant Polyethylene is a new formulation of polyethylene, which is a material commonly used as a bearing surface in joint replacements. When exposed to oxygen, it creates free radicals that can weaken the implant. This new formulation includes antioxidants to provide wear resistance in DePuy’s Sigma rotating platform total knee replacement and LCS complete mobile bearing knee systems.

The technology received premarket FDA approval in December of last year and is similar to fellow Indiana orthopedics company Biomet’s antioxidant infused technology for knee bearings.

Another new product, Trumatch Personalized Solutions technology for use with SIGMA Fixed-Knee Bearing Knee System, aids implant positioning and can reduce procedure time by up to 35 minutes. It uses CT scans and computer software to guide the personalized development of femoral and tibial cutting blocks that match the bone surfaces of each patient.

Hip surgery

Cleared by the FDA last February, the Reclaim Modular Revision Hip System includes novel instrument technology to improve intraoperative handling, flexibility and efficiency, the company says.

Another hip system, the Gription TF Acetabular Augment System, uses commercially pure titanium foam, a strong, corrosion-resistant metal with high surface roughness and elasticity that’s similar to bone, and fills the gap between the acetabular bone and cup in patients with severe bone defects. Its advantage, the company says, is that it’s engineered to provide numerous options and configurations for customization.

“The new DePuy hip and knee implants are produced using a new, never-before-used titanium foam. Their effectiveness will hopefully prove more successful than the recalled DePuy ASR XL Acetabular System and ASR Hip Resurfacing system hip implants,” said David Floyd, DePuy’s worldwide president who resigned last March, in an article from 2011.

Shoulder surgery

A unique feature of the Global Unite Platform Shoulder Arthroplasty System is that it can easily be converted to a reverse shoulder arthroplasty later for treatment of arthritis with a torn rotator cuff. It is also supposed to help improve healing, the company says.

Finally, the Global Steptech Anchor Peg Glenoid is designed to correct excessive retroversion caused by posterior glenoid bone loss and minimize the removal of healthy bone.

This post is sponsored by NextGen:Health.

NextGen:Health   is a new way of doing conferences: An invitation-only live event with world-leading experts giving “TED.com-style” Talks that are DYNAMIC, INSPIRING and SHORT (between 6-18 minutes). The topics are game-changing BIG ideas on:  improving experiences of professionals, patients, and families; enabling innovation through research and data-sharing; mobile and tech; growing and fostering healthcare businesses; and much more.
Continuing Education Credits are given at no extra charge to:  Physicians (ACCME), PAs (AAPA), Pharmacists (ACPE), Nurses (ANCC), NPs (AANP), Dietitians (CDR).

Only 499 are admitted to this March 29-30 event in NYC, so apply now. (Use code “MedCity12″ to get in.)

Agenda Overview:

Day 1: Talks (“TED.com style”) from the World’s Leading Experts:

•  Mayo Clinic (Nicholas LaRusso MD) , Harvard (John Ratey MD) , UNC  (Douglas Drossman MD) , Dartmouth (Lisa Schwartz MD, Steven Wolshin MD) , MIT Media Lab (John Moore MD) , Columbia, IBM Watson Project (Herbert Chase MD) , NYTimes (Sandeep Jauhar MD) , The Innovators Prescription (Jason Hwang MD) , NYU (Joseph Ravenell, MD) , Mayo Clinic Center for Social Media/Doximity (Howard Luks MD)
•  PLUS: Breakfast, Lunch, Networking, Happy Hour, Live Entertainment

Day 2:

• SYMPOSIUM: NYC Health Business Leaders and The Drapin Group Inc @ NextGen:Health: Can mHealth Improve Healthcare Delivery and Outcomes? In this highly interactive symposium, you’ll hear from industry CEOs, experts, and visionaries, as well as experience innovative mobile applications with documented outcomes. (See more on website)
• WORKSHOP: Dr. Douglas Drossman : Perfecting the Patient Interview INTENSIVE (only 50 spots available)(CME OFFERED!)
• WORKSHOP: Dr. Howard Luks: Social Media for Physicians and Groups (only 299 spots available)

Both Days:

• StartUp Health Hall of Innovation — Demo today’s hottest healthcare start-ups and meet their founders!
• Structured networking
• Breakfast, lunch, coffee, tea, snacks
• Live entertainment

Only 499 are admitted, so apply now. (Use code “MedCity12″ to get in.)

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.

Earlier in an interview with MedCity News, Phraxis CEO Michael Kallok had said that the company intends to raise $5 million. After the filing, he noted that the $1 million is a bridge financing and that he still hopes to raise $5 million.

“It has taken longer than we anticipated to find investors, so we wanted to keep the development momentum going while we negotiate with venture investors and they do their diligence,” Kallok wrote in an email.

Phraxis is trying to develop an implanted device that will serve as an alternative to how hemodialysis treatment is provided to patients with the goal of reducing infection. The device has a novel connector design that allows one end to be attached to the artery. A synthetic graft material is then attached to this connector and is tunneled under the skin, and the other end is connected to a vein in the patient. The graft doesn’t require any sutures to implant.

The technology was developed by Phraxis’ chief scientific officer Alexander Yevzlin, a professor at the University of Wisconsin-Madison and a director of Interventional Nephrology and the university’s chronic kidney disease clinic. Yevzlin founded the company in 2009 and currently serves as a part-time chief scientific officer.

While the company readies for the larger fundraise and gets close to a final design, Kallok said he has been able to confirm the regulatory path of the implanted device: it will be to require a 510(k) FDA clearance and not the more lengthy and expensive premarket approval. Phraxis also has some data to share about the device — it will present results of animal testing and mechanical modeling at the American Society of Diagnostic and Interventional Nephrologists (ASDIN) annual meeting in New Orleans to be held Feb. 24 through 26.

Current medical news and unique business news for anyone who cares about healthcare.

Rules for biosimilar drugs. The U.S. Food and Drug Administration released on Thursday its draft rules for biosimilars,or generic versions of biotech medications made with biologically engineered living cells designed to produce certain proteins in the  body. Manufacturers of biosimilars would need to demonstrate that their products have the same effects on patients as the original medications, although a universal process for biosimilars would not be put in place, and in some cases full-scale clinical trials to prove effectiveness would not be needed

The federal government wants to open this market to manufacturers in the hopes of driving down prices for widely used medications like insulin and anti-retroviral drugs to cut national healthcare spending. But creating these biosimilars is quite an art. Because even small manufacturing changes would make a biosimilar different from the original, they’re harder to produce and pose more safety issues than traditional generics.

Insurers take on mHealth. Big insurance providers like Aetna, UnitedHealth and WellPoint are leading the way in providing their customers with mobile health apps to help navigate the world of medical billing and administration. It’s great for patient engagement and lowering costs, but they must make privacy protection a top priority.

Healthcare social media makes clinical trials easier. Web-based technology and social media is making it easier for medical professionals to recruit patients for research trials, collect their data and connect with other physicians. In this Orthopedics Today roundtable, physicians discuss the advantages of using these platforms to find and track patients.

(Little) diversity in doctors. In the U.S., the physician workforce hardly reflects the general population. Only one in 15 doctors is African American, compared with one in 8 Americans, and the ratio of Hispanic and Latino doctors is even worse. One doctor argues that we need more minorities in medicine, because underrepresented minorities are more likely to serve underserved communities, better able to connect with minority patients and provide a greater perspective to the field of medicine.

Hospital infection rates vary widely. There are big differences in the rates of hospital infectionscaused by central line catheter errors throughout the country, according to Centers for Disease Control data. About a fourth of patients who get these infections die from them. Hospitals in Maryland, Mississippi and Louisiana have the highest rates of blood infections from central lines, while Hawaii, Alaska and South Dakota have the lowest rates.

Cytomedix‘s (OTC:CMXI) Aldagen acquisition signaled the company’s intention to establish a strong presence in regenerative medicine therapies and the deal fills needs for both companies. Aldagen, who had tried twice to go public only to withdraw both times amid poor market conditions, gets a partner interested in developing its stem cell treatments. Cytomedix gains prospective regenerative medicine therapies for its pipeline.

But for Aldagen, the acquisition is not quite an exit. It’s more like another door that allows the company to continue moving forward with its stem cell therapy research. For both companies to see this deal pay off, they need a successful phase 2 clinical trial for Aldagen’s experimental ischemic stroke therapy. And even then, the ultimate goal is for Aldagen’s therapy to draw interest from a Big Pharma partner.

Aldagen’s “bright cell” technology isolates stem cells that express high levels of the ALDH enzyme, which have the potential to promote cell and tissue regeneration. The Durham, North Carolina company was formed in 2000 as StemCo Biomedical based on technology licensed from Duke University and Johns Hopkins University.

With Aldagen now in the fold of Gaithersburg, Maryland-based Cytomedix, the focus now turns to Aldagen’s clinical trials on ALD-401, its experimental treatment for ischemic stroke. Dr. James Hinson, Cytomedix’s chief medical officer, said that the stroke opportunity comes down to time. Stroke patients have a small time window for treatment, which gives patients few treatment options. But Hinson said that Aldagen’s bright stem cells widen that window to days rather than hours.

Although the deal is valued at up to $40 million, Aldagen gets just $16 million up front in the form of preferred Cytomedix shares. The rest of the payoff is heavily linked to milestones. That leaves Aldagen shouldering a lot of the development risk. Cytomedix chief financial officer Andrew Maslin explained that the company structured the deal in a way that reduces risks to its own shareholders. Depending on the progress of clinical trials, Aldagen could gain up to an additional 20.3 million Cytomedix shares in three milestone payments. But more than just spreading the risk and deferring the payoff, Aldagen is also sharing the costs. The more than $10 million cost for clinical trials will be partially covered by $5 million kicked in by Aldagen’s investors in the form of a private placement investment in Cytomedix. In other words, Aldagen investors — who according to securities filings have pumped more than $50 million into Aldagen already — are paying Cytomedix to study its experimental stroke treatment in clinical trials.

Aldagen’s $16 million up-front payment in stock represents a 17.3 percent stake in Cytomedix. In a conference call with analysts, Cytomedix CEO Martin Rosendale noted that it wasn’t long ago that Cytomedix’s entire valuation was $16 million. He did little to disguise his satisfaction at acquiring Aldagen for discount compared to the valuations of other stem cell therapy companies.

Cytomedix expects to see its valuation climb and Aldagen must see that, too. Rosendale said Cytomedix is close to a licensing deal with a “top 20 global pharmaceutical company” on its Autologel wound care system. The company is also seeking to add indications for its Angel Whole Blood Separation System. A 510(k) clearance could give the company a piece of the $800 million-a-year biologics market associated with spinal fusion procedures.

Cytomedix sees Aldagen as another key piece to building the company’s regenerative medicine heft. Both companies believe in the technology’s promise in stroke and other indications. That means the investors who bet on stem cell regenerative therapies must continue to be patient. The financial and therapeutic payoff is still further down the road.

Photo from Flickr user C.P.Storm

NexImmune is an early stage biopharmaceutical company engineering artificial cells that can stimulate the immune system to treat cancer, transplant rejection, autoimmunity and infectious diseases. Its first candidate, AIM101, is intended for advanced-stage melanoma patients.

The idea of treating cancer through immunotherapy certainly isn’t novel, but the company says its particular approach is different from others being developed.

“The big caveat is that all of them are based either on raw administration of antigens that you hope the immune system will take up, or on taking cells out of the body, loading them with an antigen and put them back in body,” said CEO Kenneth Carter.

That process is expensive and tricky since the immune cells are already compromised and tend to get beaten up in the process, Carter said, which is why recently approved immunotherapies like Dendreon’s Provenge for prostate cancer and Bristol-Myers Squibb’s Yervoy for melanoma tend to be expensive with fairly low and short-term effectiveness.

NexImmune’s Artificial IMmune nanotechnology platform takes the approach of creating highly controllable and reproducible artificial cells that can be used either in vitro or ex vitro to orchestrate a specific immune attack on foreign substances or cell types.

Carter said the company has raised $500,000 in seed financing and is planning a $5 million to $10 million series A round this spring ahead of an IND filing in 2013. It will also be looking to form partnerships with larger pharmaceutical companies. Its goal is to have two cancer products in clinical trials by 2014.

NexImmune was founded in the fall of 2011 by a group of Johns Hopkins University School of Medicine staff members and entrepreneurs affiliated with Noble Life Sciences in Gaithersburg, Maryland, where the company is located.

The ongoing battle to repeal the medical device tax continues with the latest campaign being led by House GOP freshman Todd Rokita from Indiana.

Rokita, along with 74 cosigners, sent a letter Monday to Speaker John Boehner that asked him to bring a bill to the floor that would essentially kill the $2.2 billion annual tax to be paid by the device industry starting next year.

Whether it will be an effective strategy remains to be seen.

But the letter appears to link some hard-to-connect dots. It specifically refers to a study called “Employment Effects of the New Excise Tax on the Medical Device Industry,” by Hudson Institute senior fellows Diana Furchtgott-Roth and Harold Furchtgott-Roth. The study concludes that “device manufacturers will be more likely to close plants in the U.S. and replace them with plants in foreign countries” if the tax is implemented.

That seems to be a stretch.

Medical device manufacturers have had operations in the Asian nation of Japan for years. No one claimed that jobs were being lost here then. And now medical device manufacturers are ramping up their presence in Asia and other international markets, while slowing down in the U.S. precisely because they are smart business people.

All they have to do each quarter is to take a look at their international sales figure and see how the demand from countries like China, India and Brazil are far outstripping demand in the U.S. No wonder CEOs of major companies like Medtronic and Boston Scientific have a new mantra: Go East.

To suggest that the burden of the device tax is leading them to do this is naive at best, disingenuous at worst.

A successful medical device entrepreneur used that very term — disingenuous — to describe Stryker’s claim that it is laying off 5 percent of its workforce and reducing its operating budget by $100 million because of the medical device tax. (The GOP letter also alludes to Stryker.)

But he had this to say about the medical device tax: “You tax something you want less of.”

That sounds reasonable and will likely happen, but it may be hard to measure in the stark terms the device industry and some politicians would have people believe.

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.

Watson Pharmaceuticals (NYSE:WPI) wants to add a branded drugs focus alongside its generics business and is setting aside $6 billion for acquisitions to do it, according to a report by Bloomberg.

Chief executive officer Paul Bisaro said: “Everything we need to be a branded pharma company we have, except for the sales force. … And we can create that,” according to the article.

With the market for generic drugs expected to decrease in the coming years, companies like Teva have sought to add branded drugs to create a hybrid business model and give themselves a competitive edge. According to Michael Faerm, an analyst with Credit Suisse cited in the article, branded drugs account for one-third of the Israeli drugmaker’s sales.

Bisaro said the New Jersey-based company would seek to avoid the mistake that other generic manufacturers have made in the past of trying to run their branded business like their generics business. “With brands, you have to pass on those things that, even though you like the idea, if it’s not in your wheelhouse and you don’t have the sales force, you probably ought not to spend the money on it.”

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.”

The New York-based venture firm invests in “companies that create competitive advantage through data,” usually in pre-revenue stages. With its second fund, IA will try to balance its portfolio with both seed and later-stage companies, doing more follow-on investing as well as funding new companies, founder Roger Ehrenberg told TechCrunch.

Might one of those new companies be a healthcare startup? Well, there aren’t any health-related companies in IA’s existing portfolio.

But, it’s hard to imagine investors aren’t taking note of all of the new companies emerging as floods of data arise from digital health devices and platforms, some of which have already garnered investments from high-profile firms like Bain Capital, Morgan Stanley and North Bridge Venture Partners.

North Carolina clinical research organization Clinipace Worldwide is flexing its muscles abroad with an executive hire that boosts the CRO’s European operations.

Dr. Jurgen Frisch has been named chief medical officer for Clinipace’s European operations. He will be based in the company’s offices in Zurich, Switzerland.

Clinipace, headquartered in Morrisville, North Carolina, has experienced considerable global growth in recent years from a series of acquisitions. The company got a foothold into Switzerland last year with its acquisition of Swiss firm PFC Pharma Focus. That deal also brought PFC’s sites in Germany, Israel and India. Clinipace expanded to Latin America with its 2009 acquisition of Worldwide Clinical Research, a Kansas-based CRO. Clinipace last fall closed a $15 million series C financing round led by Morgan Stanley Expansion Capital. Clinipace raised the money to support its global growth plans.

Frisch, who is board certified in internal medicine, brings to Clinipace experience from several pharmaceutical and biotechnology companies that include Eidetica Biopharma, a subsidiary of Biogen Idec (NASDAQ:BIIB). He has also worked as a medical reviewer for Switzerland’s therapeutics regulatory body Swissmedic.