Steris' System 1E

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

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

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

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

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

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

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

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

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

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

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

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

The latest Alzheimer’s research. Alzheimer’s spreads like an infection in the brain, by way of a distorted protein called tau, according to new research out of Columbia and Harvard. Two mice studies indicate that it may be possible to stop Alzheimer’s disease with an antibody that blocks tau to prevent neuron-to-neuron transmission of the disease. Researchers suspect that other degenerative diseases like Parkinson’s develop and could be blocked in a similar way.

AZN scales back on neuroscience. AstraZeneca will cut 7,300 people from its workforce, including 2,200 from its R&D staff, amid a drop in profits and a weak late-stage pipeline. The company said it will cut back in neuroscience, Part of a broader reorganization that will eliminate 7,300 jobs, AstraZeneca says that it will cut way back on neuroscience and close down facilities in Sweden and Canada. The pharma company has two late-stage neuro projects under way and nine more in early- and mid-stage trials.

Safety net hospitals. Despite concerns about safety-net institutions, there appears to be little difference in a patient’s length of stay in a safety net versus non-safety net emergency department. “Although concerns have been raised that performance measures, particularly those linked to payment, may ultimately penalize safety-net institutions that are already underfunded and that care for a disproportionate volume of patients with poorer health care status, our findings suggest that those concerns about ED length of stay will not penalize safety-net institutions,” the authors say.

Under the terms of a settlement reached with the U.S. Department of Justice, which described its investigation of the company as “groundbreaking,” the company is to bring its facilities in India and the United States in line with good industry practices. The federal injunction was filed against one of the largest pharmaceutical companies in India and its U.S. operations, headquarters in Princeton, New Jersey.

Its three facilities in India have been under an U.S. Food and Drug Administration import alert since 2008.

Among the violations highlighted in the case, Ranbaxy did not adequately separate the production of penicillin and nonpenicillin drugs, and failed to take the proper steps to prevent contamination of sterile medicines, according to a Bloomberg report. One condition of the settlement is that the company agrees to relinquish 180-day marketing exclusivity on any drugs pending FDA approval. Three drugs are referred to in the document cited by Bloomberg, but are not disclosed.

As part of the condition for lifting the injunction, the company is required to hire a third-party expert to carry out an internal review at the facilities and audit applications containing data from the affected facilities.

Ranbaxy also needs to establish procedures and controls to ensure data integrity in the company’s drug applications; and withdraw applications with false statements and data irregularities that could affect approval of the application, the statement from the Department of Justice said.

Although the FDA has suspended exports of 30 drugs produced by Ranbaxy, the action does not appear to affect the company’s generic version of Lipitor, approved by the FDA last year. It has an agreement with Teva Pharmaceuticals’ U.S. arm for a portion of the profits from sales during Ranbaxy’s 180-day, first-to-file exclusivity period.

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

J&J company responds to FDA warning  Johnson & Johnson’s (NYSE: JNJ) subsidiary DePuy Orthopaedics received a warning letter from U.S. regulators not to sell joint replacement products without proper approval.  The Dec. 8 letter said a federal investigation at DePuy’s Warsaw, Indiana facilities revealed the company was selling 14 products without proper approval. It prompted DePuy to stop making some devices rather than face regulatory action. The company is facing lawsuits by hip implant recipients after the implants were found to shed tiny metal particles into the bloodstream. Separately, Johnson & Johnson agreed to a $158 million settlement with Texas over claims by state officials that the drugmaker fraudulently marketed its anti-psychotic drug. The settlement will resolve claims it defrauded the state’s Medicaid program by promoting Risperdal for uses not approved by U.S. regulators, including for children with psychiatric disorders, the company said today.

Revised definition of autism gets mixed reviews A narrower definition of autism that could sharply reduce the number of people classified as autistic or having an autism spectrum disorder is receiving mixed reviews. The new definition is to be included in the fifth edition of the American Psychiatric Association’s Diagnostic and Statistical Manual of Mental Disorders. More than 1 million children and adults are diagnosed with autism or a related disorder, like Asperger syndrome or pervasive developmental disorder. Some psychiatrists believe the change could provide a more accurate diagnosis, but it’s being met with concern by parents who worry they will lose social services for their children.

Mental illness widespread, report finds A new government survey, National Survey on Drug Use and Health, has found that one in five Americans suffers from a serious mental illness. Although 14 percent receive some form of care, only 60 percent of those with a disabling mental illness get treatment each year.

Genzyme and Veracyte collaborate on thyroid treatment Sanofi (NYSE: SNY) biotechnology company Genzyme and Veracyte, a molecular diagnostics company, have formed a partnership to promote treatment for thyroid patients. Under the agreement, Genzyme will market and promote Veracyte’s Afirma Thyroid FNA Analysis, a thyroid nodule diagnostic solution in the United States and later expand it to global markets.

[Photo from flickr user viwabbit]

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

Goodbye, Dimebon: Pfizer and Medivation have pulled the plug on Alzheimer’s disease drug candidate Dimebon after a phase 3 trial failed to demonstrate the drug’s benefits. The decision underscores the risks that Big Pharma faces in trying to bolster drug pipelines with expensive deals. Pfizer paid Medivation $225 million upfront in 2008 to co-develop the drug.

A win for transparency: Regulations from the federal health reform law will soon require drug and device companies to disclose payments to doctors for research, consulting and entertainment. Doctors who take money from drug makers often practice medicine differently from those who do not and they are more willing to prescribe drugs in risky and unapproved ways, the New York Times reports.

Kind of good news on obesity: U.S. obesity rates are leveling off at around 35 percent but that number is still way too high. Americans spend about $147 billion a year on obesity-related health costs.

The OpenNotes movement: An experiment called OpenNotes involves letting patients of more than 100 primary care doctors view their doctors’ notes from medical visits to investigate whether doing so could lead to improved outcomes.

An all-hospital cable channel: North Shore-Long Island Jewish Health System has established its own cable TV channel to feature information on health and wellness and about the system’s facilities. Anytime you see the word “facilities” to describe TV programming, that’s must-ignore TV.

Kraft at TEDMED: Stem cell researcher Dr. Daniel Kraft talks emerging trends in medicine: mobile platforms, 24-hour at-home monitoring, artificial intelligence, social networking, massive data collection, crowd-sourcing.

[Photo from flickr user Patrick Denker]

Blueprint Health will add a second class later this year following the massive response the start-up accelerator received for its inaugural spring class for healthcare IT companies.

Blueprint, led by Mathew Farkash and Dr. Brad Weinberg, received 300 applications for a class of nine.  The company has been able to build an ensemble of 120 mentors from different segments of the healthcare sector, serial entrepreneurs and investor communities.

“We have built what amounts to the largest healthcare community out there,” said Farkash, who added the accelerator was ideally situated in New York.

“There’s no better place than New York to start a healthcare company.  It’s a great ecosystem of thriving companies — from ZocDoc to WebMD, incredible hopsitals including New York Presbyterian and Montefiore, the most doctors of any city in the U.S. and an entrepreneurial supportive government led by Mayor [Michael] Bloomberg.”

One substantial differentiator for Blueprint Health is the technology-based solutions its class of startups is offering to healthcare facilities, pharmaceutical and payer businesses, said Farkash. “We want to make sure that the right problems are being addressed for the healthcare industry’s pain points and that [the industry companies] would be prepared to pay for it.”

Blueprint has benefited from being in the TechStars’ network, which has helped cultivate the referrals that helped it build up the mentor program.

“It was a meticulous process to build that community,” Farkash said. “What’s important for healthcare companies is access to the buy side.”

Its group of specialized mentors provide a holistic view of the healthcare space that can help the accelerator’s startups understand some of the pressing issues in the space such as workflow and reimbursement.

Happtique‘s program would evaluate and certify healthcare apps. The program would articulate quality and performance standards for an app’s clinical relevance and technical functionality, developed by members of a blue ribbon panel in the next six months.

The voluntary program will be open to all app developers and will be funded by developer application fees.

“With more than 20,000 healthcare apps in the marketplace — and more coming out every day — healthcare organizations and professionals are expressing the need for a bona fide mhealth app certification program,” Happtique President Corey Ackerman said in a press statement.

The panel will be chaired by Dr. Howard J. Luks, an orthopedic surgeon and associate professor of orthopedic surgery at New York Medical College and chief of sports medicine and arthroscopy at University Orthopedics and Westchester Medical Center. He also serves on the advisory board at the Mayo Clinic’s Social Media Network.

Other members include Shuvo Roy, director of the Biomedical Microdevices Laboratory and associate professor in the bioengineering and therapeutic sciences department at the School of Pharmacy at the University of California, San Francisco. He previously served at the Cleveland Clinic as codirector of the BioMEMS Laboratory and on the faculty of the Spine Research Laboratory. Dave deBronkart is a patient engagement activist who is a blogger and cancer patient, and is also on the advisory board  of the Mayo Clinic Center for Social Media. Franklin Shaffer is the CEO of CGFNS International, the certification organization for graduates of foreign nursing schools.

Happtique is a subsidiary of the Greater New York Hospital Association‘s business arm, GNYHA Ventures. Through its business, hospitals, physician practices and continuing-care facilities can create individually branded, secure apps for employees and patients to use on their smartphones. Among the 11 healthcare facilities Beta testing Happtique’s custom app store are Mount Sinai Hospital, Mount Sinai School of Medicine and Beth Israel Medical Center. They developed or are developing their own mobile applications.

The U.S. Food and Drug Administration has been developing some type of mobile app certification itself, two years after approving its first mobile health app, Airstrip Technologies’ AirStrip RPM.

Healthcare remained the economic engine for the United States: More than 10 percent of the jobs created in December were healthcare jobs, according to the Bureau of Labor Statistics.

The number is more pronounced when you look at 2011 overall. Healthcare — meaning medical jobs in hospitals, ambulatory care facilities and nursing homes — made up nearly 20 percent of the 1.6 million jobs created last year (about 315,000 positions). That means healthcare grew more than any other industry in the United States

The three categories under the bureau’s healthcare jobs definition include not only administrative and physician positions, but also licensed practical nurses, registered nurses, orderlies and similar other support functions. So which segment was hiring the most in 2011?

• Ambulatory healthcare services created 187,000 jobs
• Hospitals created 89,000 jobs
• Nursing and residential care facilities created 38,600 jobs

In 2011, ambulatory healthcare service accounted for 43.8 percent of overall healthcare jobs; hospitals made up 33.7 percent and nursing and residential care accounted for 22.5 percent of jobs. Compare that to 2008, when ambulatory services made up 42.6 percent of healthcare jobs, hospitals made up 34.6 percent and nursing and residential care made up 22.8 percent.

According to the Bureau of Labor Statistics, the sector is expected to generate 3.2 million new wage and salary jobs between 2008 and 2018, more than any other industry. A rapidly growing elderly population is the primary cause for such an increase.

Nurses, medical technicians and physician assistants have the hottest healthcare job outlook (though the jury is out over how the nursing job market will shift and change).

[Photo from of MC4 Army on Flickr]

Diagnostics firm LipoScience is seeking U.S. Food and Drug Administration clearance for a new lab-based technology platform that tests for heart disease risks.

LipoScience has commercialized a blood test that measures the density of lipoproteins in a sample, a measure that the company says is a better gauge for cardiovascular disease than cholesterol tests. So far, LipoScience has conducted more than 6.5 million lipoprotein tests analyzed by nuclear magnetic resonance, or NMR, technology originally developed at North Carolina State University. But those test samples must be sent to LipoScience’s Raleigh, North Carolina headquarters for processing — the only place with the capability to conduct the analysis.

LipoScience’s 510(k) submission to the FDA aims to broaden the NMR test’s reach. If the FDA grants regulatory clearance for a new analyzer that LipoScience calls Vantera, laboratories in hospitals and research facilities across the country could get their own analyzers to conduct the NMR tests at their own sites.

“In-house testing will allow labs to optimize their accessioning and logistics to leverage their internal quality systems and to facilitate integration into peer proficiency testing,” LipoScience CEO Richard Brajer said in a statement. “In some cases, it could also significantly reduce turnaround time for test results.”

LipoScience is in the midst of plans to go public. The venture capital-backed company last summer filed with securities regulators plans for an initial public offering of stock that could raise up to $86.2 million. No effective date was set for the registration statement, which has since been updated three times. According to the most recent filing, the NMR tests generated $21.7 million in revenue in the first half of 2011, a 12.4 percent increase compared to the first six months of 2010. According to the company’s filings, a small number of diagnostic laboratory customers account for most of the NMR LipoProfile test revenue. LipoScience sees Vantera as crucial for revenue growth.

“A key element of our strategy is to place the Vantera system, our next-generation automated clinical NMR analyzer, on site with selected clinical diagnostic laboratory customers to broaden access to our technology and increase demand for our NMR LipoProfile test and any future diagnostic tests that we may develop,” the company said in a filing.

Vantera has already been pilot tested at several facilities across the country including the Mayo Clinic and the Cleveland Clinic. If cleared by the FDA, LipoScience plans to make Vantera commercially available later this year.

The offer was originally set to expire today, Dec. 20, but has now been extended until Feb. 6, according to a statement from the two companies.

The reason for the extension is to allow Canadian regulators more time to complete their review of the deal. Regulators asked the two companies for unspecified additional information on the deal, though the companies stressed that the requests “were not unexpected.”

At the time of the deal’s announcement in October, Dublin, Ohio-based Cardinal said the Futuremed purchase strengthened its presence in Canada and offered Cardinal new customers for its existing medical products.

Futuremed specializes in selling consumable nursing home supplies and furniture, and equipment to long-term care facilities. The company sells a wide range of products, from syringes to beds to training stairs used for physical therapy.

If the deal doesn’t go through, Futuremed could owe Cardinal a $4.6 million termination fee, the Canadian Press reported. Still, the companies said they expect the acquisition to close by the end of the first quarter, according to the statement.

Cardinal Health Canada is headquartered in Toronto and has seven distribution centers across the country.

Jomo Starke: SynerMed provides a wide range of services to traditional independent physicians, over 10k contracted in California, along with their constituents, over 600k lives, mostly Medi-Cal. Our model allows doctors to thrive serving disadvantaged populations, many of whose only option for primary care is the local emergency room.

We are currently only in California, but have a keen eye toward expansion. We are looking for the sickest and poorest populations in the country, looking to go at risk and deploy our model. There seem to be plenty of opportunities…

Joe Hage: Give us an idea of some of the services you provide. You were saying 25% of business is primary care, 75% specialists.

Jomo Starke: In a nutshell, our business model is to take best practices from across healthcare: Kaiser, Medicare Advantage, commercial insurance, recreate them inexpensively, and deploy them to the Medicaid markets. You hear about administrative costs of 40 to 60% overhead in healthcare … Our number is about 3 percent!

Our long view is that the healthcare crisis will only be solved when you bend the cost curve. Nothing will change until that happens. Current cost trends are simply unsustainable.

Joe Hage: What is your “Wal-Mart” secret? Or is that proprietary?

Jomo Starke: No secrets, just good old fashioned leverage. We believe that the cost curve will be bent by the creative deployance of #HealthIT. We have an internal IT staff of 80 and a three-year application development roadmap. We are in the midst of the transition from being a healthcare company focused on IT to an IT company focused on healthcare. It’s an exciting time.

Joe Hage: And what are the similarities and differences between what you do and my friend Robb Cohen does over at XLHealth? (See: XLHealth on Medicare, Monitoring, and Members.)

Jomo Starke: There seem to be many similarities in our business model to XLHealth’s; the success of our endeavor depends on our ability to effectively manage the entire continuum of care.

The creative capture, harmonization and subsequent integration of key metrics into the clinician workflow will drive positive change. The main difference is that XLHealth seems to be focused on Medicare; we are predominantly in the Medicaid space. Ergo, “kings of the market nobody wants.” But lots of folks need.

Click for Gunter's article

Joe Hage: Let me ask you what I asked Robb. HC reform expert @GunterWessels believes nationalized healthcare is inevitable. (See Economic Turmoil’s Impact on National Healthcare Reform.) Do you agree?

Jomo Starke: Hard to say. I will say that we feel like we have an answer to the healthcare cost crisis, but it is not in a form that most folks would like. It’s effective but not pretty. Our members get a named primary care physician, access to specialty care, access to local hospitals and pharmacy benefits. The difference is the venues you receive the care in are not what most people are used to. The alternative, however, are public health clinics, community hospitals, and the local ER for primary care.

Did you know the traditional public health system only can care for about 30% of the #safetynet. Care for the other 70% is left to our physicians and facilities.

Joe Hage: I hadn’t, no. For our readers, here is a list of DSHs (Disproportionate Share Hospitals). There are 2,700 hospitals on the list, almost half of all hospitals in the country.

Jomo Starke: We at SynerMed have a fix for healthcare right now. The problem is that it is not in a form most people would find palatable (I don’t think).

If the trends in employer-sponsored healthcare continue in the direction they have been, however, people may not have a choice.

Jomo Starke: We plan to continue innovating and optimizing, hope we get the chance to deploy in other underserved markets across the country.

Joe Hage: Something tells me I’ll be calling on you again, Jomo. Thanks for tonight. Who among my readers should contact you?

Jomo Starke: Thanks. I’m currently vetting almost 30 new #mhealth and #healthIT offerings that have promise. I’d invite your readers to tell me about others.

Joe Hage: Check out the posts I wrote with @kmalaspina. You two should talk! Thanks again for tonight, Jomo. #MedDevice
…

>>> Click to review the archive of #MedDevice chats you missed! <<<

Join the #MedDevice Chat Group on LinkedIn to network and grow your business. #MedDevice is held every Thursday, 8 p.m. EST. We cover issues including Sales, Reimbursement, Distribution, EMRs/HIT, FDA, and Marketing Medical Devices.

If a flu pandemic strikes the United States, a Novartis (NYSE:NVS) plant in North Carolina now stands ready to respond with vaccine techniques that offer speed and scalability advantages over traditional vaccine-making methods.

Novartis’ vaccine facility in Holly Springs, North Carolina today became the first cell culture vaccine facility authorized by the U.S. Food and Drug Administration for emergency use during a pandemic. The plant will develop vaccines from cultured animal cells, in contrast to the traditional method of making flu vaccines from chicken eggs.

“Today we’re marking the first change in influenza vaccine manufacturing in the United States in 50 years,” Robin Robinson, director of the Biomedical Advanced Research and Development Authority, or BARDA, said in a statement. “The pandemic readiness of this facility is a major milestone in national preparedness for pandemic influenza and other diseases.”

Egg-based vaccine production comes with problems including possible impurities in the eggs. The egg-based method also takes longer because it can be hard to procure the number of eggs needed for vaccine production. That makes egg-based vaccine production ill-suited to responding quickly to a pandemic. But vaccines cultured in animal cells can be scaled up quickly, which means a faster pandemic response.

The Novartis site is designed to provide 150 million adjuvanted doses of pandemic influenza vaccine within six months of declaration of an influenza pandemic. In the event of an influenza pandemic, the new Novartis facility could produce up to 25 percent of the vaccine needed in the United States. The cell-based technology employed by the plant could also be adapted to produce vaccines for other infectious diseases in an emergency. The new Holly Springs plant came about in partnership with the federal government. Novartis and HHS collaboration committed $1 billion to the facility, with federal funds coming from BARDA.

Novartis was awarded a Department of Health and Human Services contract in 2006 that called for the pharmaceutical company to develop an influenza cell culture vaccine and also to develop and design a U.S. manufacturing facility for that vaccine.  Novartis broke ground for the facility in Holly Springs in 2007.

Novartis executive Russell Thirsk spoke with MedCity News in September regarding the company’s Holly Springs vaccine facility. Here he explains how cell culture vaccine production differs from making vaccine from fertilized eggs.

Novartis’ Holly Springs site is not the only facility that has received federal support to develop new vaccine response capabilities. Biotechnology company Medicago (TSX:MDG) last year received a $21 million contract from the U.S. Defense Advanced Research Projects Agency, or DARPA, which was seeking scalable vaccine manufacturing facilities that can respond to natural and bioterrorism virus outbreaks. Medicago in November opened its new vaccine facility in Research Triangle Park, North Carolina. The facility, which makes virus-like particles from tobacco leaves, is designed to make up to 120 million doses of pandemic flu vaccine and 40 million doses of seasonal influenza vaccine.

Okay, enough of the questions.  How about some answers.  In this interview with Ken McLaren, VP of Product for Millenium Research Group, we learn how MRG’s actionable insights and analytics can help medical device companies create meaningful marketing strategies and gain sustained competitive advantages.

INTERVIEW HIGHLIGHTS WITH KEN MCLAREN

• What is Millenium Research Group (MRG)?
• The unique nature of MRG’s data.  Note: Their data sets are more than simple bar graphs.
• How does Millenium Research Group collect their amazing medical device data sets?
• An in-depth look at some of MRG’s solutions and their impact on medical device companies.
• 2 macro trends in the medical device space that Ken and his team at MRG are noticing.
• Ken’s advice for ambitious medical device doers. Hint: How close to your customers are you?
• And much more!

DOWNLOAD THE INTERVIEW WITH KEN MCLAREN

PDF Transcript of Interview with Ken McLaren – VP of Product at Millenium Research Group

Original Audio Interview with Ken McLaren – VP of Product at Millenium Research Group

WHO IS KEN MCLAREN?
Ken McLaren is the VP of Product for Millenium Research Group. Check out the MRG blog or follow them on Twitter.  Also, don’t forget to take a look at their upcoming webinars.

Hospira (NYSE:HSP) plans to spend up to $375 million over the next three years to bring its manufacturing facilities into regulatory compliance, the bulk of it going to a North Carolina plant saddled under heavy regulatory scrutiny for much of the last two years.

The effort is under way with a hiring blitz over the next month to bring priority hires to the specialty pharmaceutical company’s Rocky Mount, North Carolina plant for positions such as “quality assurance auditor” and “senior biological quality supervisor.” The plant, among the largest of Lake Forest, Illinois-based Hospira’s 13 global sites, has been grappling with a warning letter and subsequent inspection reports from the U.S. Food and Drug Administration.

The FDA sent Hospira an April 2010 warning letter that contained quality assurance and compliance concerns for the Rocky Mount plant. Hospira temporarily shut down the plant to deal with those concerns. But problems persisted. A June inspection resulted in a list of observations that outlined where the plant remained out of line with “current good manufacturing practices,” a document called a Form 483. An August inspection yielded another 483.

Company spokesman Dan Rosenberg referred questions to the public comments that executives made during Hospira’s quarterly conference call.

“Receiving two 483s so close together was a clear signal that we were not making satisfactory progress to fully comply with the FDA’s concerns, and that we needed to ramp up our remediation efforts,” CEO F. Michael Ball told analysts.

Ball said Hospira plans to hire new site leadership and has already brought on regulatory consulting help from Quintiles and IHL Consulting Group. Those firms also consulted with Hospira on issues for its Clayton, North Carolina plant, which returned to compliance following a 2010 FDA warning letter. But Rocky Mount is a much larger site and presents additional challenges.

The Rocky Mount plant, which makes injectable drugs and supports Hospira’s contract manufacturing business, is a crucial one to the company. At full capacity, the site employs more than 2,500 and accounts for 25 percent of Hospira’s nearly $4 billion in annual revenue. Following the 2010 warning letter, Hospira’s annual report showed pre-tax charges of $54.3 million for the site, which included consulting costs, costs for keeping the facility idle and penalties for failing to supply product to customers.

Now Hospira will pour even more money into the plant. Ball said that remediation efforts for Rocky Mount have slowed production and added costs that contributed to the lower-than-expected third-quarter financial results.

Rocky Mount is not the only Hospira site under FDA scrutiny. An Austin, Texas facility is dealing with a 483, though Ball said customer orders there have not been affected. Ball described 483s as “a normal part of business.” But the FDA has had concerns escalating to warning letters at multiple Hospira facilities. When the FDA issued warning letters for Hospira’s Clayton and Rocky Mount facilities last year, the agency noted that the violations were similar to those cited in 2009 for a Hospira site in California.

“It is apparent that Hospira’s attempts to implement global corrective actions after past regulatory actions by the FDA have been inadequate,” the FDA said.

Of the up to $375 million that Hospira plans to spend on its plants in the next three years split between the company’s pharmaceutical and medical device operations, as much as 80 percent of that will be spent on Rocky Mount. An earlier estimate put the total costs at up to $250 million. But CFO Tom Werner told analysts that the figure was revised after “more recent actions regarding Rocky Mount.” Between $100 million and $150 million will be spent in the fourth quarter, Werner said. An estimated 65 percent of those expenses will be one-time costs. Hospira will also devote resources to new hires.

Hospira has 153 Rocky Mount job openings, with more expected in the coming year, said Ali Ghiassi, a Raleigh, North Carolina-based account manager for staffing firm Aerotek, which has been contracted to coordinate hiring. Hospira wants to make 20 to 25 priority hires for permanent positions by Dec. 19, Ghiassi said.  Kelly Scientific Resources is handling hiring of contract workers for the site.

The Rocky Mount plant will continue to operate while Hospira brings the site into FDA compliance, but Ball estimates that it is at between 60 percent to 70 percent of its normal production capacity. Shifting production to other Hospira facilities is not a feasible workaround option. The company would need FDA approval to manufacture a product in another facility, which takes time.

“We basically have to attack the back orders at the root place, which is Rocky Mount,” Ball said.

The company said it could not say how many jobs would be cut when its Bridgewater r&d facilities shut in the fourth quarter of 2012.

It will set up a North America Development Center in Bridgewater will include clinical development, regulatory affairs and other development platforms, according to a press statement from the company.  The development center will be added onto the North America pharmaceuticals headquarters and the recently announced North America global services division, also based in Bridgewater.

In a press statement the pharmaceutical giant said it is adapting its North America pharmaceuticals business “to focus resources on key growth areas and where it can deliver the most impact for patients while sustainably managing costs.”

A spokesman for the company said the move would have no impact on the two research and development sites in Pennsylvania: the Sanofi Pasteur research site in Swiftwater and the Great Valley research facility in Malvern.

Sanofi said US developments in the past year required it to reassess the size and structure of its sales force, including “Genzyme integration, the full impact of patent (expirations and) generic competition, regulatory and payor pressures, a depressed economy, deficit-reduction efforts and health care reform,” according to a press statement.

The US accounted for approximately 25% of Sanofi’s net sales in the third quarter or $2.9 billion.

The move is consistent with with the strategy CEO Chris Viehbacher has spoken about publicly earlier this year following the company’s acquisition of the when he said: “My goal as CEO is never to inaugurate a new research and development center,” describing them as lumbering, resource hungry institutions that aren’t very productive.

The Elyria, Ohio-based company (pdf) announced last week when releasing its third-quarter earnings that it had purchased for $41.5 million California-based Dynamic Medical Systems, which specializes in wound-care and safe-patient-handling products, such as lifts.

The purchase opens up the Western U.S. rentals market to Invacare, which already has a presence in the business in the East, spokeswoman Lara Mahoney said. “This allows us to have nationwide footprint of rental capabilities,” she said.

More importantly, though, demand for rentals by long-term care providers could help offset the stagnant economy and weakness in other markets Invacare sells to, such as home healthcare.

“Uncertainty related to healthcare reform and slowing healthcare spending related to difficult economic conditions around the globe are causing an unanticipated slowness in Invacare’s markets,” CEO Gerald Blouch said in discussing Invacare’s third-quarter earnings.

As a result, the company reduced the upper end of its guidance on 2011 adjusted earnings per share. Invacare now expects a range between $2.05 and $2.10, down from its previous estimate of $2.05 to $2.15.

Blough also cited changing market dynamics as a reason for the Dynamic Medical Systems acquisition.

Mahoney wouldn’t say whether Invacare anticipates greater near-term growth in the sales or rentals market to long-term care providers. Clearly, though, Invacare wants to be ready when and if there’s an upsurge in demand for rentals of products like those sold by Dynamic Medical Systems, such as beds, therapeutic mattresses, bariatric lifts and patient-transfer products.

“Markets are changing and reimbursements are changing,” Mahoney said. “More people like having the option to rent because, without knowing reimbursements, they may not want to [incur] the capital expense of purchasing.”

John Atkins

The North Carolina Biotechnology Center‘s new board chairman is an architect who has had a hand in designing facilities for many of the companies comprising the state’s life sciences industry.

John Atkins, chairman and CEO of Durham, North Carolina design services firm O’Brien/Atkins Associates, has been elected chairman of the Biotech Center, the nonprofit corporation funded by the state to support biotechnology business and education throughout North Carolina.

Atkins succeeds Arthur Pappas, founder and managing partner of Durham venture capital firm Pappas Ventures. Pappas has been board chair since 2008.

Atkins is familiar with the life sciences infrastructure in the Research Triangle and other parts of the state. His firm has done projects for pharmaceutical companies, including GlaxoSmithKline (NYSE:GSK), Novo Nordisk (NYSE:NVO) and Targacept (NASDAQ:TRGT).

Atkins said in a prepared statement that he wants to continue the biotechnology industry’s growth in North Carolina. According to the Biotech Center, the life sciences industry employs 58,495 people at more than 530 companies. Despite the economic downturn, the state’s biotech industry grew 4.1 percent during 2009 and 2010.

“We have great opportunity to create jobs,” Atkins said. “The competition for jobs is now global, and the Biotechnology Center is providing tremendous expertise to assist in attracting those jobs.”

In addition to electing Atkins chairman, the board elected Targacept CEO Donald deBethizy as vice chair. Michael Constantino, managing partner at Ernst & Young’s Raleigh office, was elected treasurer and John F.A.V. Cecil, president of Biltmore Farms, was re-elected secretary.

Atkins holds a bachelor’s degree in architecture from North Carolina State University and a master’s degree in regional planning from the University of North Carolina at Chapel Hill.

The purchase of Futuremed Healthcare Products strengthens Dublin, Ohio-based Cardinal’s presence in Canada and offers Cardinal new customers for its existing medical products.

Futuremed specializes in selling consumable nursing home supplies and furniture, and equipment to long-term care facilities, according to a statement from Cardinal. The company sells a wide range of products, from syringes to beds to training stairs used for physical therapy.

It recently added a dedicated sales force to sell to the physician supply market and offers similar products to doctors.

“We expect to generate significant synergies as we build off our existing platforms and business-partner relationships, enabling more efficient offerings to our customers,” said David Lees, president of Cardinal’s Canadian division.

The deal is subject to the approval of shareholders of Futuremed, which is traded on the Toronto Stock Exchange. The transaction is expected to close in the first quarter of 2012, according to the statement.

Contract drug manufacturer Patheon (TSX:PTI) has won two contracts valued at $18 million to make experimental type 2 diabetes drugs for German pharmaceutical company Boehringer Ingelheim.

Research Triangle Park, North Carolina-based Patheon provides contract manufacturing for drugs that are commercialized as well as for those still in research and development. Patheon said the two three-year Boehringer projects are for fixed-dose combination drugs in development for the treatment of type 2 diabetes.

“I am very gratified that Boehringer Ingelheim recognizes our expertise in formulating, scaling and successfully launching complex formulations such as these molecules,” Patheon President of Pharmaceutical Development Services and Chief Scientific Officer Mark Kontny said in a prepared statement.

Patheon last month announced a reorganization that will consolidate some of its European and North American operations to cut costs. The changes include moving its European headquarters from Zug, Switzerland, to the United Kingdom.

While the reorganization means the closing of some facilities in Europe and Canada, Patheon has identified its pharmaceutical development services business, or PDS, as a growth opportunity. This business unit provides manufacturing for drugs that are still in R&D, such as the Boehringer diabetes drugs in today’s contract announcement. Currently, commercial manufacturing makes up the vast majority of Patheon’s business. Of the company’s $671 million in fiscal 2010 revenue, PDS comprised just $125.9 million.

The layoffs are primarily hitting office workers and affect less than 1 percent of the Elyria, Ohio-based company’s 6,200 global workers, spokeswoman Lara Mahoney said.

Mahoney partially blamed the layoffs on falling reimbursements to nursing homes and other home medical equipment buyers.

“We’re just ensuring that we’re running as efficiently as possible,” she said. “We’re hiring in some positions and having to make tough decisions in others.”

About 30 of the layoffs will come from Invacare’s Northeast Ohio home base. The company is offering severance and outplacement services for laid-off employees, Mahoney said.

In announcing its second-quarter financial data in July, the company maintained its previous full-year guidance of $2.05 to $2.15 in adjusted earnings per share. At the time, Invacare revealed that it had decided to cease operations at two facilities, one in the U.S. and one in Europe.

The price of the deal isn’t being disclosed, according to a statement from Cincinnati-based Ethicon.

With the cost of healthcare in the U.S. continuing to skyrocket, medical device reprocessing could become a service in high demand and SterilMed appears well-positioned to capitalize on the stronger emphasis on cost containment by private firms and the federal government in the coming years.

The company received some recognition with a mention last year in a New York Times article on the growing problem of excessive medical waste generated by healthcare facilities — a problem that could be solved in part by more reprocessing of devices. Along with Ascent Healthcare Solutions, the two companies perform about 95 percent of device reprocessing in the U.S., The Times reported.

Maple Grove, Minnesota-based SterilMed reprocesses a vast array of single-use medical devices that includes guidewires, catheters, laser probes and chest retractors. The company says reprocessed devices typically cost about half the amount of new devices. SterilMed also repairs small healthcare equipment.

Karen Licitra, worldwide franchise chairman for Ethicon, said the acquisition will broaden Ethicon’s portfolio and allow the company to enter a “rapidly growing market segment,” according to the statement.

SterilMed will be managed as part of the Ethicon franchise, but will continue to operate as a stand-alone company and retain its name. SterilMed was acquired last year by two private equity firms, Boston-based Great Hill Partners and Cleveland-based Primus Capital Funds.

SterilMed has some big-name customers, including Cleveland Clinic, Duke University and Massachusetts General Hospital.

Ethicon sells medical devices for use in general and bariatric surgery, as well as gastrointestinal health, gynecology and surgical oncology. A company official wasn’t immediately available for comment.

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

Risky stem cell tourism. Patients are turning up in increasing numbers at hospitals and clinics in countries like China, Russia, India and elsewhere for experimental “stem cell therapies” that are not recognized as standard treatments and have not undergone clinical trials.

Desperate after traditional treatments haven’t worked, many patients pay fees of $20,000 for new “stem cell therapies” they have seen advertised on the Internet. Experts are warning that these treatments are not approved by any regulatory organizations and likely have no data behind them.

Global health meets digital tools…or does it? Only 35 percent of more than 15,000 people surveyed globally by Edelman Digital use the Internet to obtain health information at least weekly. Nearly one-quarter of people didn’t use the Internet at all for health information.

Wireless breathing monitors of the future. Engineers at the University of Utah have devised a system of crisscrossing radio signals from inexpensive wireless transceivers to non-invasively and cheaply monitor breathing in people with sleep apnea or in babies at risk for sudden infant death syndrome.

Orexigen isn’t done yet… San Diego-based Orexigen Therapeutics says it will re-start development of its weight-loss combo drug that was rejected by the FDA earlier this year. The company met with the FDA recently for guidance. Stocks shot up 86 percent in the hours after the announcement.

23K California nurses to strike. About 23,000 northern California nurses are expected to walk off the job on Thursday in what officials are calling the largest nurses’ strike ever. Sutter Health is considering upping health premiums for its nurses and eliminating sick leave and the ability to advocate for patients. Union nurses from Kaiser Permanente facilities are joining Sutter nurses with a “sympathy” walkout.

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

More die from drugs than from car accidents. For the first time since the government started tracking the data in 1979, deaths from drugs now outnumber those from traffic accidents, according to data from the CDC. The death toll from misuse of drugs, particularly prescription pain and anxiety drugs, has doubled in the last decade and is one of the only causes of preventable death that isn’t declining.

AppStore for docs. Earlier this month, Apple decided help doctors with iPhones and iPads find apps by creating a special section of its AppStore just for healthcare.

Sterile scrubs. A Chicago cardiologist has designed and is now marketing scrubs coated with a silver-based substance that stifles bacterial reproduction on clothing to prevent hospital-acquired infections.

Conference for chronic diseases. Today, the United Nations commences a two-day conference to draft a global action plan for reducing instances of noncommunicable diseases like cancer, diabetes, mental illness, heart disease and respiratory disease, which the WHO estimates could kill 52 million people every year by 2030.

A hospital becomes a health insurer. A hospital in Massachusetts is trying something new that will be interesting to follow: selling health insurance coverage. Targeted at small businesses, the plan offers premiums that are 20 to 30 percent cheaper than competitors but come with the stipulation that patients receive care only at the hospital’s facilities (with a few exceptions).

Mayo Clinic

More than just an on-call system of telemedicine, the network aims to establish different venues through which provider groups can interface with Mayo Clinic. These venues include access to a knowledge management system. “It has access to care protocols, other content and questions that we use internally for our own physicians that we extend externally,” said Mayo Clinic Care Network spokesperson Mary Jo Williamson.

Member groups pay a fee to participate in the network, and are provided with access to the internal database, as well as various ways to communicate both electronically and by phone with Mayo Clinic physicians to ask clarifying questions or receive additional information and assistance about specific diseases or situations. Assisting both affiliated practice network members and Mayo Clinic Health System network providers is built into the daily workflow of Mayo Clinic physicians.

Instead of traditional e-mail, provider groups have access to the management system behind their firewall, through a portal, in which they can access toolsets that Mayo Clinic utilizes internally, or have an e-mail exchange regarding clarification of information. Some electronic tools will have less immediate turnaround time standards (such as 48 hours).

The Care Network also has a component centered around business process consulting, “whether that be extension of best practices from Mayo Clinic or helping them focus in on a targeted area where they’re looking for some help and structure as they look to drive improvement into their facility,” Williamson said.

Williamson pointed out that the time is right, given some of the movement in the market, to roll out a network of this type. “We know that healthcare is fragmented and there’s definitely a lack of coordination across systems. That’s really the underpinnings of the whole public debate regarding healthcare, and we believe that by extending this toolset to groups that are willing to invest the time and effort to work with us around that, we’ll benefit local healthcare delivery and we feel that’s an important role for us to play,” she said, adding that the consolidation in the market has created an environment where several provider organizations have contacted Mayo Clinic seeking alignment of some sort. “As we looked at if we were willing to go that route or how we might position it, we very much wanted to establish more structured ways to work with these organizations that are very culturally aligned and high quality,” she explained.

“Mayo is obviously a very large healthcare organization and we know that we have the resources to develop content and knowledge in areas that not all medical centers would have the ability to do, and we’re looking for novel ways to share that information broadly and to extend that knowledge and expertise to benefit healthcare in a variety of settings, not just when a patient is in one of our facilities,” Williamson explained, adding that the goal is to assist providers in improving care locally by extending information from Mayo Clinic to patients that they’re seeing.

The first provider organization to become a member of the network is Altru Health System, a Grand Forks, N.D.-area system with an acute care hospital, a rehabilitation hospital, a large home care network, a congregate living facility and more than a dozen clinics.

Akron General Hospital let go all 70 of its LPNs “as part of a decision to move to a more highly trained nursing staff,” according to a weekend report in the Akron Beacon Journal. That’s a trend that’s resulted in the trimming of LPN jobs by the dozens for years.

Plus, some states have been producing almost twice the number of LPNs as there were jobs for sometime. Meanwhile, schools and recruiters continue to tout the future boom times for LPNs and regularly roll out new programs.

Is this an overhyped LPN job outlook, or is it simply a shift? The era of nursing job growth at hospitals seems to be coming to an end. In the case of Akron, the hospital let go LPNs who work with inpatient care. “The reality is acute patient care is becoming more complex,” Akron General spokesman Jim Gosky told the Journal. “Duties are being taken over by RNs.”

Meanwhile, many tie the future of LPN jobs to both the nursing shortage and the growth of home healthcare. To once again quote the Bureau of Labor Statistics:

In order to contain healthcare costs, many procedures once performed only in hospitals are being performed in physicians’s offices and in outpatient care centers, largely because of advances in technology. As a result, the number of LPNs should increase faster in these facilities than in hospitals. Nevertheless, hospitals will continue to demand the services of LPNs and will remain one of the largest employers of these workers.

But one has to wonder: How long will newly minted LPNs have to wait before  they actually gets to practice their profession?