A newly formed University of Illinois spinoff company could be on to something good with a new drug treatment for cancer that targets an enzyme commonly found in various tumor types.

Department of Chemistry professor Paul Hergenrother and a handful of other co-founders of Vanquish Oncology are developing compounds that selectively kill cancer cells by targeting procaspase-3, an enzyme that spurs reactions that kill the cancer cell when it’s activated. Procaspase-3 is present in many brain, breast, lung and colon tumors, Hergenrother said.

In preclinical studies, the compounds were well tolerated and efficacious in mice. One clinical candidate, VO-101, also stabilized or reduced tumor size in dogs with metastatic disease, which Hergenrother said better mimics the course of action in humans.

The next steps for the company are to continue preclinical testing and gathering the appropriate data for an IND filing, Hergenrother said, although it’s too soon to piece together any kind of timeline. The compounds could be used as standalone personalized cancer therapeutics or companion drugs to be used alongside other chemotherapy drugs.

“We’re going to go where the data takes us,” he said.

Vanquish Oncology was founded in 2011 by several University of Illinois researchers plus IllinoisVENTURES, a seed and early-stage technology investment firm, and the life science venture company Level 5 Partners.

Global revenues for small-molecule targeted cancer therapies like the ones Vanquish is developing are expected to reach $27.3 billion by 2015, according to a market report from visiongain. But that means there are lots of competitors in the market, especially as the patent cliff for pharmaceutical companies drives commercialization of generics.

Other targeted cancer therapies that induce apoptosis – or cell death – are already on the market, including Takeda-owned Millenium Pharmaceuticals’ Velcade for multiple myeloma and Allos Therapeutics’ Folotyn for peripheral T-cell lymphoma. Plus, startups including West Lafayette, Indiana-based Endocyte are developing their own approaches to personalized cancer treatment.

But a catch-all-type compound that treats several different forms of tumors could set Vanquish apart.

“Many compounds that are approved only offer minimal lifespan expansion,” Hergenrother said. “There’s a lot of room for really good therapeutics and novel approaches.”

[Photo from flickr user viZZZual.com]

NeuroTherapeutics Pharma Inc. is developing a new class of medicines for neurological and neuropsychiatric conditions that includes its lead molecule, NTP-2014.

In its new round of funding, the company has already secured $12 million from eight investors. Its existing investors include Boston’s Fidelity Biosciences and MPM Capital, Pfizer, and GlaxoSmithKline’s venture fund, SR One.

The series B round in 2010 was expected to carry the drug through proof-of-concept phase 2 trials in 2011 and help expand the company’s pipeline of treatments for neurological disorders. At that time, NeuroTherapeutics Pharma was preparing the compound for an Investigational New Drug application with the U.S. Food and Drug Administration.

Safe and adequate control of pain and epilepsy are unmet medical needs, the company says, as current treatments lack efficacy or cause significant side effects. The market for antiepileptics is expected to experience slow growth between now and 2020 due to increasing use of generics, according to a market report from Decision Resources.

NeuroTherapeutics Pharma is led by CEO Stephen Collins, a former senior director of CNS and pain at Johnson & Johnson, and a former faculty member in the Department of Neurology and Neurosciences at Case Western Reserve University. A message left for a company representative was not returned Thursday.

Hospira (NYSE:HSP) completed a two-year “restructuring and optimization plan” this year that the company expressly stated would  increase shareholder value by  generating annualized savings between $110 million and $140 million. But now the company faces a phalanx of angry shareholders claiming the company did not disclose the extent of problems at a North Carolina plant that could cost even more to fix.

After Hospira disclosed details of the millions it will spend to bring the company’s Rocky Mount, North Carolina site back into compliance with the U.S. Food and Drug Administration, Hospira’s stock price plummeted.

Hospira now faces at least two class action lawsuits filed in U.S. District Court for the Northern District of Illinois. One has been filed by Los Angeles firm Glancy Binkow & Goldberg. Another was filed by New York firm Harwood Feffer. Both suits claim Hospira did not properly disclose the quality-control issues at Rocky Mount, Hospira’s largest site. The suits also claim that any savings from the efficiency and cost-cutting program called Project Fuel have been undermined by the problems at Rocky Mount. The suits cover shareholders who bought stock between March 24, 2009, the day Hospira launched the Project Fuel initiative, and Oct. 18, 2011, the day that Hospira announced preliminary third-quarter results. Those results included  the disclosure that the company’s financial performance was hurt by problems at Rocky Mount. Shareholders who purchased Hospira stock at any time may also have a claim.

A message left with Hospira was not immediately returned.

Hospira’s Rocky Mount plant makes generic injectable drugs, large volumes of solution and also supports Hospira’s contract manufacturing business. At full capacity, the facility employs more than 2,500 and accounts for 25 percent of Hospira’s nearly $4 billion in annual revenue. But in April 2010, Hospira received an FDA warning letter that cited quality assurance and compliance concerns at the Rocky Mount plant. The FDA continues to find problems at the site. Subsequent FDA inspections this year have yielded two Form 483s, reports that list findings inconsistent with current good manufacturing practices.

On Oct. 18, Hospira CEO Michael Ball said that remediation efforts for the Rocky Mount plant have slowed production and added costs that contributed to the lower-than-expected financial results in the third quarter. When the company disclosed the company’s full third-quarter financial results a week later, Ball said that the company would need to spend between $300 million and $375 million on remediation costs. The higher estimate tops earlier projections that remediation would cost between $200 million and $250 million.

That total cost will be split evenly between devices and pharmaceuticals. The bulk of the pharmaceutical half — as much as 80 percent — will be devoted to Rocky Mount. Ball has given no time line for resolving the problems at Rocky Mount. In October, he told analysts he would address it further when the company discusses its fourth-quarter results.

Hospira has scheduled a Feb. 14 conference call to discuss fourth-quarter results, full-year 2011 results and projections for 2012.

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.

Outraged by the arrest of two nurses and a union organizer volunteering at the Occupy Chicago protest over the weekend, National Nurses United is planning a protest at Mayor Rahm Emanuel’s office Monday.

The group, the nation’s largest union of registered nurses, is calling on its membership in Chicago to picket City Hall on Monday morning to demand that misdemeanor trespassing charges against the nurses and all of the protesters be dropped.

The two nurses arrested were among a larger group marching with Occupy Chicago protesters and later set up a tent to provide first aid.

“It was the wrong move,” RoseAnn DeMoro, the group’s executive director, said Sunday. “We were there to make sure if the occupiers get harmed, they have first aid.”

But pictures from the event in Chicago and elsewhere where the group was protesting suggests another more subliminal story line. In this picture the Twitter stream from the National Nurses United union, the police appeared restrained and tolerant of the protestors:

So what kind of “first aid” was being rendered in their tent?

Here are a few pictures from the same group’s “first aid” tent in San Francisco taken from the same Twitter feed:

Hmmm. Were there donuts were in those boxes?

Shucks. Maybe not:

Well, no donuts, but there sure was plenty of splashy red nurses union propaganda available for sympathetic protestors to consume as “first aid.”

The author, Dr. Westby G. Fisher, is a cardiologist at NorthShore University HealthSystem who writes regularly at Dr. Wes.

Seen at yesterday’s “Occupy Chicago” march on State Street:

The entire US Defense budget for 2010: $685.1 Billion

In 2009, the United States federal, state and local governments, corporations and individuals, together spent $2.5 trillion, $8,047 per person, on health care. This amount represented 17.3% of the GDP, up from 16.2% in 2008 and health insurance costs are rising faster than wages or inflation.

Even if every sword was beat into scalpels, it wouldn’t begin to pay for America’s exploding health care bill. Worse, with our new health care reform law, the same old construct for health care delivery remains: burgenoning middle-man costs, pandering to special interests, and endless consumer expectations.

Chicago-based Diagnostic Photonics sourced the funding from seven investors, likely including IllinoisVentures, a seed and early stage investment firm launched by the University of Illinois.

CEO Andrew Cittadine didn’t return a call.

The company says its imaging technology is designed to help doctors evaluate diseased tissue during surgery by visualizing tissue “at the microscopic level.”

Diagnostic Photonics calls its core technology “interferometric synthetic aperture microscopy,” which uses reflected light and a “novel method” of image reconstruction to produce scans. It’s based on optical coherence tomography, a noninvasive imaging technique.

The company was founded in 2008 on technology pioneered at the Beckman Institute for Advanced Science and Technology at the University of Illinois.

The Chicago-based Surgimatix is developing a new medical device that would close wounds and supplant all types of sutures. It would work to heal the wound quickly but with with less scarring than surgical staples.

The company has started raising up to $500,000, according to a recent SEC filing.

The company’s founder, Dr. Jafar Hasan, is a Chicagoland plastic surgeon who devised the wound-closure device during his residency at University of Michigan Hospital and Health Centers, according to an article in UM’s Stephen M. Ross School of Business’ alumni magazine, Dividend. Initial funding for the company came from the Frankel Commercialization Fund, an early-stage investment fund at Ross.

Surgimatix completed pre-clinical testing that showed superior performance of the technology over other types of sutures in June 2010, according to Frankel.

The market for wound-closure products was estimated at more than $6 billion in 2010, according to MarketStrat. It is expected to continue growing 5.8 percent annually over the next 10 years.

ImmuVen is developing a line of T cell receptor-related drugs. At first, the treatment will focus on infectious viral diseases such as methicillin-resistant Staphylococcus aureus (MRSA), which ImmuVen says it can halt by stopping the toxins secreted by MRSA. But the company also thinks that it can go beyond superbugs and use its technology to fight cancer.

The University of Illinois spinoff disclosed in a recent SEC filing that it had raised $250,000 and could continue to raise an unspecified amount of money. “Financially, we’re in the middle of a subscription round, and we’d like to have this subscription round take us through pre-IND meeting with the FDA,” said CEO Cheryl Quinn.

ImmuVen uses technology from University of Illinois professor David Kranz and University of Minnesota professor Patrick Schlievert to engineer protein-based drugs from modified T cell receptors. The drugs bind to and neutralize toxins secreted by bacteria in the body, rather than going after the bacteria itself as other drugs would.

Quinn said establishing a manufacturing process to get to the IND application could easily run $1 million, and the company might eventually seek a partner. Clinical trials are still years away.

The newly established ” Baxter Ventures will invest globally and focus on innovative technologies with sustainable long-term growth” under the watch of the Deerfield, Ill.-based company’s chief scientific officer Norbert Riedel, according to a press release.

“Baxter Ventures will allow us to provide companies with promising, early-stage technologies with the capital and expertise needed to drive successful innovation,” Riedel said in prepared remarks. “Through this additional investment, Baxter will expand its internal pipeline with the goal of further strengthening the company’s history of innovative ‘firsts’ in medical therapies.”

The news comes as med-tech companies are facing increasing competition from private equity firms with renewed interest in medical device acquisitions.

Baxter, which ranked 6th on the MassDevice Big 100 list of the world’s largest medical device companies, recently posted double-digit growth in both its top and bottom line during the second quarter of fiscal year 2011 while cautioning that the the market is still stormy.

“While we’re pleased with improving fundamentals and enhanced financial performance as evidenced by our first half results, I highlight that we continue to navigate through a challenging macro environment that’s evolving on a global basis and continues to absorb ongoing pressures on our business and the healthcare industry more broadly,” president & CEO Robert Parkinson said during a conference call with analysts.

The Abbott Park, Ill.-based conglomerate reported profits of $1.94 billion, or $1.23 per diluted share, on sales of $9.62 billion for the three months ended June 30. That’s a revenue increase of 9.0 percent and a bottom-line surge of 50.4 percent, compared with the $1.29 billion profit (83 cents diluted EPS) on sales of $8.83 billion during the same period last year.

Excluding some one-time items associated with acquisitions, “cost reduction initiatives,” a writedown of intangible assets and a tax gain from 2010, net earnings were $1.77 billion, or $1.12 per diluted share, up 12.0 percent and 10.9 percent, respectively.

The quarter also featured a strong performance by Abbott’s coronary stent unit. Total sales were up 96.8 percent to $1.05 billion; U.S. sales rose 71.3 percent to $478 million and international sales rose 124.8 percent to $571 million.

“Abbott is well-positioned for a strong second half of the year as we remain on track for double-digit EPS growth in 2011,” chairman & CEO Miles White said in prepared remarks. “We’re also pleased with our growth in emerging markets, as well as the progress of our broad-based pipeline, including several new product approvals, regulatory submissions and clinical trial initiations.”

The company boosted its diluted EPS guidance for the fully year to between $4.58 and $4.68, up from $4.54 to $4.64, excluding special items.

That failed to impress The Street, where ABT shares were down about 1 percent to $52.40 in mid-day trading.

The Cincinnati project will involve a $2 million investment in machinery and equipment and building improvements by Medline to expand its “medical liquids” manufacturing capabilities, according to the Ohio Department of Development (ODOD).

The 45 percent, six-year tax credit for Medline, which distributes hospital equipment and supplies, will begin in January 2012. The project is expected to lead to the creation of 35 jobs by the medical equipment supplier that will generate $1.2 million in additional payroll within three years, according to ODOD.

A Medline spokesman declined comment.

The company has existing manufacturing facilities in Illinois and South Carolina that could accommodate the expansion, so “state of Ohio incentives are needed to advance this project and to secure and grow the company’s location in Cincinnati,” according to ODOD.

Mundelein, Illinois-based Medline makes and distributes more than 100,000 products — from gloves to custom procedure trays to surgical instruments — to hospitals, extended-care facilities, surgery centers and other customers. The company, which started in 1966, has 6,800 employees and 10 manufacturing facilities in North America.

Medline bills itself as the nation’s “largest privately held national manufacturer and distributor of healthcare supplies and services.” Publicly traded competitors include Cardinal Health (NYSE:CAH), AmerisourceBergen (NYSE:ABC) and McKesson (NYSE:MCK). Unlike those companies, Medline appears to focus on distributing medical and surgical supplies rather than pharmaceuticals, which make up the bulk of Cardinal’s business, for example.

Last year, Medline bought 19 acres of land in Canton, Ohio, to build a 300,000-square-foot distribution center.

In the mean time, the company warned pharmacies and consumers against products with unusually low prices as an indication that they might be stolen.

Abbott called on all forces, including the the U.S. Food & Drug Administration, the Office of Criminal Investigations, the Federal Bureau of Investigation and others to track down the shipment, which was boosted from a carrier facility in Louisville, Ky.

Diabetes test strips have been at the center of black-market trafficking before.

Just last month federal prosecutors charged Florida man Jacques Duplessis with trafficking counterfeit Johnson & Johnson (NYSE:JNJ) OneTouch diabetes test strips from China and the U.K. to Canada and the U.S. The feds uncovered his scheme to unload 6,000 boxes of counterfeit strips.

JNJ started fighting diabetes test counterfeiting rings in 2006, following the discovery of fakes circulating in the U.S. market. JNJ hasn’t found evidence of any fake strips in the U.S. market in the last three years but the problem persists in other countries, according to Dow Jones.

Boston Scientific (NYSE:BSX) has its own stolen shipments to chase after. Last month the medical device giant warned customers that unsterilized endoscopic, urology and women’s health instruments were pilfered early in April while en route to a sterlilization facility.

*Correction, June 27, 2011: Due to reporter error, this article originally stated that St. Jude Medical’s shipment was stolen, as a subsidiary of Abott Laboratories. St. Jude is not a subsidiary of Abbott Laboratories, and the shipment belonged to Abbott. Return to the corrected sentence.

North Carolina life sciences company Entegrion has licensed its blood-clotting bandage to newly formed Chicago company Beeken BioMedical.

Research Triangle Park-based Entegrion developed the bandage, called Stasilon, which is made of a proprietary weave of glass and bamboo fibers, two materials that promote clotting. Entegrion has received U.S. Food and Drug Administration clearance for Stasilon as a medical device. Now it’s in the hands of Beeken for commercialization. Financial terms of the deal were not disclosed. Beeken CEO Rich Kendall said in an interview that Stasilon is the first of what the company hopes will be many wound care product licensing deals.

“We’re actively looking for other products to add to our portfolio,” he said.

Kendall, a co-founder of Beeken, is based in the Boston area. Fellow co-founder and company Chairman Peter Beemsterboer works from Chicago where Beeken is based. Beeken was founded last September. The Stasilon licensing deal was completed at the beginning of April.

Before starting Beeken, Kendall worked as the vice president of sales and marketing for Entegrion. Beemsterboer owns a company that was handling distribution of Stasilon to non-hospital markets such as physicians offices and clinics. While the product was attracting some sales, Kendall said it became evident that Stasilon needed the financial muscle of a company that could devote resources to its commercialization. Beemsterboer’s mark in the business world is through Beemsterboer Industries, a privately held company whose roots in the coal and steel industries date to the 1920s. More recently, the company has since diversified into other areas including healthcare. Beemsterboer Industries acquired its first healthcare company five years ago with the purchase of diabetes supplies company Horizon MedCorp, based in Winston-Salem, North Carolina.

Kendall said Beeken’s next step is to get Stasilon into hospitals. He said Beeken is also discussing partnerships with several companies that could further broaden the commercial availability of the bandage. The company is building up its sales team and expects to have a formal launch of Stasilon this summer.

Stasilon is the first product from Entegrion, which has a pipeline on blood-based therapies and drug products in development. Entegrion was founded in 2002 and has developed technologies based on intellectual property from both the University of North Carolina at Chapel Hill and East Carolina University.

The company had received 14 complaints about its Pump in Style Advanced electric breast pump that tell of the device’s motors and transformers failing during use, according to the FDA.

The FDA inspected the McHenry, Ill.-based company’s facility in the Fall of 2010 and found that it was falling short of the agency’s “current good manufacturing practice” requirements for medical devices, the warning letter said.

The company responded to the FDA on its observations made during the Fall inspection, but the agency subsequently determined that the company had failed to “adequately establish and maintain procedures for implementing corrective and preventive action,” according to the warning letter. The agency determined that the company did not maintain sufficient records of complaints or establish a system to adequately evaluate the reported device failures. The agency also stated that the company failed to document all testing of the Pump in Style Advanced devices during its manufacture.

The FDA also alleged that the company failed to report two incidences of serious injuries caused by the use of the breast pump.

The FDA considers the breast feeding products medical devices because “they are intended for use in the diagnosis of disease or other conditions or in the cure, mitigation, treatment, or prevention of disease, or are intended to affect the structure or function of the body.”

Related articles

• Tosoh Bioscience gets FDA warning letter for manufacturing violations (medcitynews.com)
• Steris slapped with FDA warning letter for improper marketing claims (medcitynews.com)
• Invacare: How much will ‘burning beds’ warning letter hurt the company? (medcitynews.com)

The technology of North Sydney-based Cavitus is currently used in the food and beverage industries. But Chief Technology Officer Darren Bates said the startup is looking to broaden its platform to encompass chemicals and pharmaceuticals. A move to the Triangle would put Cavitus in close proximity to a number of pharmaceutical manufacturing plants including facilities run by GlaxoSmithKline (NYSE:GSK), Biogen Idec (NASDAQ:BIIB) and Eisai Pharmaceuticals.

Boston, a technology and pharma center in its own right, and Chicago are also on Cavitus’ list of potential sites. Bates said Chicago’s advantage is its central location. But he said a North Carolina location would put the company closer to its European customers. Cavitus plans to complete the move to the United States within the next 18 months.

“We’re looking at North America as our main market area,” Bates said.

In the meantime, Cavitus is looking for expansion capital. The 3-year old company raised $7 million in a Series A round from investors in the United States and Australia. Bates isn’t saying how much the company needs for another round but he does say the company brings in about $2 million in annual revenue.

Cavitus’ technology uses high frequency sound to cause dissolved gas bubbles in liquids to expand and contract thousands of times per second. The agitation can be used in a variety of ways, from cleaning tanks to reducing the viscosity of a liquid to make a process more efficient. Bates said the technology doesn’t replace any existing components in a company’s processes. Instead, the technology is a “bolt on” component that is added to existing processes. One beverage company, for example, added the technology to its production line to reduce foam, which had been wasted product.

Nondisclosure agreements prevent Cavitus from discussing many of the company’s customers. But Bates said that one of the company’s largest clients is Minneapolis-based agribusiness giant Cargill. Bates says Cavitus has had an easier time getting the attention of medium-sized companies because the bigger food and beverage giants are harder to crack.

It’s not going to get any easier targeting the pharmaceutical industry, said Mike Wokasch, a former pharmaceutical industry executive who now runs his own consultancy based in Madison, Wisconsin. Wokasch says pharma companies are always looking for ways to make their processes more time and cost efficient. But  regulations can make it hard to make those changes.

Minor changes can be made with some adjustments to a company’s records, Wokasch said. But any major changes will require the go ahead of the U.S. Food and Drug Administration. If a manufacturing change is significant enough, the FDA will require that a company prove that the product manufactured under the new process is exactly the same as the product produced from the old process. That can require the company go through the time and expense of setting up and running a parallel system.

“It’s more of a hassle than most operations are willing to go through,” he says.

But Wokasch said that the fact that the technology has already been implemented by some companies in the food and beverage industries could help make the case to the FDA for Cavitus’ technology.

Carver Weaver, director of business retention for the Durham Chamber of Commerce, said that while the chamber hopes Cavitus chooses Durham for its U.S. location, incentives to attract the company are not on the table at this time. Any incentives would be based on the company’s capital investment and job creation benchmarks.

“It’s a little too early in the due diligence process for Cavitus to answer those questions,” Weaver said.

Cavitus is small, currently employing 15. But Cavitus will be hiring, Bates said. In particular, the company is looking for engineers. Right now Cavitus’ only Tar Heel tie is Joel Muse, a retired Goodyear (NYSE:GT) chemist who returned to his native North Carolina late last year to become a business development representative for Cavitus.

Related articles

• China-based business group to open in Research Triangle Park (medcitynews.com)

The 1,900 job cuts to the Chicago-area medical products conglomerate’s pharmaceuticals division are the result of “changes in the healthcare industry, including U.S. Health Care Reform and the challenging regulatory environment,” according to company officials.

The grim news obscured solid top-line results for both the fourth quarter and full year. Abbott reported sales of $9.9 billion for the three months ended Dec. 31, up 6.8 percent fompared with $8.8 billion during Q4 2009. But profits were off about 6 percent, at $1.44 billion (or 92 cents per diluted share), compared with $1.54 billion (98 cents diluted EPS) during the same period in 2009.

For the full year, profits slid nearly 20 percent to $4.6 billion ($2.96 diluted EPS) on $35.17 billion in sales. Profits in 2009 were $5.8 billion ($3.69 diluted EPS) on $30.7 billion in sales.

Sales for Abbott’s stents business were up 18.6 percent to $3.19 billion in 2010, compared with $2.66 billion the prior year. International sales, particularly in Japan and the European Union, paced the growth of Abbott’s 40 percent increase in sales outside the U.S. Domestic stent sales jumped a mere 3.9 percent. Overall coronary stent sales showed strong growth over the year, jumping 19.5 percent to $514 million.

Abbott’s vascular business jumped 13.7 percent to $822 million in Q4 sales, paced by a 37 percent increase in OUS sales.

Abbott officials said they expect earnings-per-share of $4.54 to $4.64 for 2011. Rick Wise, an analyst with New York-based investment bank Leerink Swann, called that forecast low in a note to investors.

“We’re inclined to think ABT’s 2011 EPS guidance could prove conservative, as the company drives potentially even better margins through ongoing cost-savings initiatives within Vascular and Diagnostics as well as the just-announced Pharma restructuring,” Wise wrote.

The move will mean a larger pool of stakeholders – from hospital systems to consumers – could have access to the data Blue Health Intelligence culls from its health insurance companies. It also means larger and more vast revenue opportunities for Blue Cross and Blue Shield. Such services are increasingly relevant; healthcare reform legislation, and overall medical industry trends, focus increasingly on data-driven standards of care.

Started four years ago, Blue Health Intelligence analyzes tens of millions of insurance claims to provide details on how healthcare is used by customers.  The association touts its database as larger than the federal government’s. Blue Health Intelligence uses the data to highlight healthcare trend and insights into quality of care, which in turn cuts cost.

Blue Health Intelligence, based in Chicago, currently provides its services only to Blue Cross and Blue Shield plans. The new business, listed simply as Health Intelligence in incorporation documents filed in mid-December, would make that data available to outside organizations as well, BCBS spokesman Brett Lieberman said. Potential customers could include healthcare research organizations, other insurance companies, hospitals, individual customers or anyone who could wield such data to improve their businesses.

BCBS has already devoted more than $28 million to fund the separate business, according to regulatory filings. A chief executive officer should be named in the coming months, Lieberman said. At that point, the company would likely have more specific details about strategies and jobs, Lieberman said.

The new company will do the same thing as Blue Health Intelligence, Lieberman said: “improve the healthcare system, study areas where costs may improve and quality may improve, determine the best treatments … and improve healthcare quality, safety, delivery and costs.”

But the next evolution of a claims-driven data warehouse like Blue Health Intelligence could strike a nerve with physicians groups. Soon after Blue Health Intelligence was announced, the American Medical Association and others repeated their concerns that claims-driven databases are used less to determine quality and more to find and promote cheap doctors to cut payers’ costs.

This debate has become much more nuanced since 2007. Insurers and physicians are slowly working closer together on many data-driven joint projects, including a pilot electronic medical records program. But lawsuits and state laws continue throughout the country. They confront insurance companies saying that claims data is used to isolate more expensive physicians and promote cheaper, in-network doctors.

“Regardless of what data is put together or how it is construed there is always the concern that quality is what costs less. That is not the cornerstone of healthcare delivery and high quality patient care,” said Jason Koma, director of communications and marketing of the Ohio State Medical Association. “I can’t specifically speak to this venture. But it sounds like there is a very slippery slope between making this data available and making some wrongful assumptions on quality care based on dollars and cents.”

Eugene Goldwasser, the University of Chicago biochemist whose agonizingly long but ultimately successful search for a single protein helped launch the biotechnology industry, died Friday in Chicago after a brief illness. He was 88.

The immediate cause of death was renal failure associated with advancing prostate cancer, which he’d lived with for over 20 years. When his kidneys began to fail shortly after Thanksgiving, Goldwasser opted for hospice care instead of dialysis, a procedure revolutionized by his discovery.

Goldwasser, whose government-funded research began as a Cold War experiment to cure radiation sickness, found and purified erythropoietin, or EPO, which is a naturally-occurring hormone produced by the kidneys to stimulate new red blood cell production. Today, genetically-engineered versions of EPO cure anemia in dialysis and cancer patients and generate billions of dollars in sales for Amgen, Johnson & Johnson and Roche.

Unlike its discoverer, EPO has generated numerous headlines over the years. Its high price, which like Goldwasser’s long quest is mostly paid by the government, has generated anger and intense lobbying on Capitol Hill and at the Centers for Medicare and Medicaid Services. It has been used illegally by athletes like Tour de France bicyclists to provide more energy by expanding oxygen-carrying capacity. And, more recently, regulators have issued warnings against EPO overuse after clinical trials showed overdosing raises the risk of heart attacks and strokes in chronic kidney disease patients and premature death in cancer patients.

But none of that was foreseen by Goldwasser when he decided in 1980 to provide California-based Applied Molecular Genetics, later Amgen, with the world’s sole supply of purified EPO, which it had taken him nearly a quarter century to find. Though he disclosed his findings to the University of Chicago as required by his federal funders, the university never patented the discovery.

Insys Therapeutics

Shareholders of privately owned Insys will end up with 95 percent of NeoPharm’s stock through the deal expected to close Nov. 8, Lake Bluff, Illinois-based NeoPharm said in a press release.

Insys will become a wholly owned subsidiary of NeoPharm, but Insys executives and directors will replace those of NeoPharm when they resign at the completion of the merger. So Insys will be the surviving organization, even if its name is NeoPharm.

Insys is connected to NeoPharm by John N. Kapoor, a pharmaceutical industry veteran and investor who founded Insys in 2002 and also is chairman of NeoPharm’s board. Kapoor, who is majority owner of Insys, owns 21 percent of NeoPharm’s shares, which closed at 25 cents Friday on the Pink Sheets quotation service.

To avoid conflict of interest claims, NeoPharm said it formed a special committee of independent directors to evaluate the reverse merger. Their company has struggled for years to get money to develop its drugs, as well as meet stock market listing and public company compliance requirements — highlighting some of the hazards of publicly traded drug development companies.

In February 2009, NeoPharm shares were delisted by the NASDAQ Stock Market because the company failed to meet minimum listing requirements. Laurence P. Birch, then NeoPharm’s president and CEO, said the company would de-register its stock so it could save the money that it would otherwise spend on meeting  post-Sarbanes Oxley compliance requirements.

The company’s stock, which once traded as high as $12 a share, now trades for less than 30 cents. Its share price has declined steadily since 2006, when the firm announced disappointing results from a clinical trial of a once-promising brain cancer drug.

From 2005 to 2007, NeoPharm posted a combined operating loss of about $90 million. It did not file a year-end financial report for 2008 and has stopped filing financial statements since its stock delisting. In 2007, the company began a reorganization that included hiring a new management team, reducing its cash consumption and streamlining its organization.

Birch departed NeoPharm a year ago to pursue other opportunities after helping the company reorganize. By then, Birch already was in the thick of a massive reorganization as chairman of DATATRAK International, the Mayfield Heights, Ohio, company that develops software and services for clinical researchers.

Insys also shares with NeoPharm a common development goal: fighting cancer. The Arizona company discovers, develops and commercializes  products to address cancer chemotherapy-induced nausea and vomiting, pain management and other central nervous system disorders. Meanwhile, NeoPharm is dedicated to the research, development and commercialization of cancer and other therapies.

In January, NeoPharm filed an investigational new drug application with the Food and Drug Administration for a drug that could treat idiopathic pulmonary fibrosis, a deadly lung disease. Founded in 1990 as OncoMed Inc., NeoPharm has multiple drugs in various stages of clinical development, though it has yet to bring a drug to market. It’s also working on drugs to treat breast and ovarian cancer and brain disease.

When its merger with Insys is completed, NeoPharm plans to distribute rights to existing shareholders for contingent payments of up to $20 million if the Food and Drug Administration approves a New Drug Application for any one of its three leading therapies in the next five years.

Care Team Connect was launched in 2008 to create technologies that use evidence-based practices to reduce the risk of patient readmissions by coordinating healthcare among hospitals, community providers, family members and patients.

The company’s Care Team Connect product is aimed at helping hospitals and accountable care organizations make their care management more efficient, and improve patient outcomes and reduce costs.

Hospital readmissions were a costly problem long before Congress and the Centers for Medicare & Medicaid Services addressed them in healthcare reform, said Ben Albert, Care Team Connect’s chief executive.

Albert and Care Team Connect co-founder Jim Wills, now an adviser to the company, watched the eldercare system fail their own grandfathers, who were in and out of hospitals for unnecessary reasons.

“Care coordination is at the root of health reform,” Albert said. “I can’t say I saw this coming at the level that it’s here, but even before heath reform became a topic of conversation… we were in tune with readmission rates as a big financial problem.”

Care Team Connect will use its latest investment to hire sales people and attract new business, said Albert, who expects his employee headcount to grow to 16 from 10 in coming months.

The company took in new investor money of $1.8 million and another $900,000 from the conversion of notes held by existing investors to equity, he said.

Care Team Connect’s funding was led by two strategic healthcare investors: The Martin Companies of Nashville, Tennessee, and National Healthcare Services  of Orange County, California. “Our round was fully subscribed,” Albert said.

“Care Team Connect offers a unique platform that allows hospitals looking to easily coordinate care and reduce preventable readmission rates — and with recent health reform legislation, this is more important than ever before,” said Hal Andrews of The Martin Companies in a Care Team Connect release.

Andrews and Brant Heise of National Healthcare Services will join Care Team Connect’s board of directors. The company also recently added Dr. John Loughnane, a cross-continuum care expert, as medical director; and Salman Khatri, an expert in “software as a service” architecture, as director of technology.

As for the name change, the company’s new name “speaks a lot more to what we do” than its old name, Albert said.

The company’s latest funding round went above that amount, but Endotronix isn’t saying by how much. For competitive reasons, co-founder Harry Rowland is keeping details of the company close to his vest, and he declined to provide the full amount of the company’s latest funding.

However, Rowland did reveal a few facts about Endotronix, which is developing a wireless, implantable heart monitor that would alert doctors about blood pressure changes in heart failure patients, during a phone interview with MedCity News. (Rowland was unavailable for comment Tuesday, when the funding was announced.)

Vice president of engineering and the company’s only full-time employee, Rowlandsaid it’d likely be “a couple years” before the device hits the market, due in part to regulatory uncertainty. It’s too early to tell whether the company will seek Food and Drug Administration clearance to sell the device through the 510(k) process or the more-stringent Premarket Approval Application (PMA) process. The company no doubt would prefer the quicker, cheaper 510(k) route.

The device has been tested in animals but has not yet entered human clinical trials, Rowland said.

Based in East Peoria, Illinois, Endotronix has another office in Richmond Height, a Cleveland, Ohio, suburb. Rowland characterized the Cleveland office as its headquarters for corporate meetings and strategic planning, whereas most product development and prototyping happens in East Peoria.

In addition to the investment from Cleveland economic development group JumpStart, Endotronix has strong ties to Northeast Ohio. The company is conducting animal tests of its device at Cleveland Clinic, has licensed its technology from Cleveland’s NASA Glenn Research Center, and has previously received a grant from the Lorain County Community College Foundation Innovation Fund.

RemCare was Launched in 2008 to create technology platforms that use evidence-based best practices to coordinate healthcare among hospitals, community providers, family members and patients.

At the time, CEO Ben Albert was an executive at PatientKeeper Inc. and Jim Wills, now an adviser to RemCare, was finishing a master’s degree in healthcare policy. Both co-founders watched the eldercare system fail their grandfathers, who were in and out of hospitals for unnecessary reasons.

Remcare released its first technology, MYremcare, in 2009. Home care agencies including Home Instead, Senior Helpers and Right At Home use the software to grow their businesses and develop new services by boosting communication among care team members.

This year, Remcare unveiled its flagship product — Care Team Connect — to reduce hospital readmission rates, power accountable care organizations, make care management more efficient, improve patient outcomes, and increase patient satisfaction, the company said at its website.

Like MYremcare, Care Team Connect enables medical staff to communicate and coordinate their efforts. But these connections are aimed at rooting out the causes of hospital readmissions.

Corrected 8:39 a.m., Aug. 4, 2010

The private equity firm behind the recent acquisition of the Ethicon Endo-Surgery breast care unit near Cincinnati, Ohio, is on its way to raising a $3 billion fund.

GTCR is raising its 10th fund, according to peHUB. The Chicago firm raised $2.75 billion for its ninth fund in 2006 — before the bottom fell out of financial markets.

Chairman Bruce Rauner’s transition to an advisory role (from sourcing deals) becomes official with the new fund, peHUB reported.

Apparently GTCR’s latest fund isn’t doing too well. GTCR Fund IX had an internal rate of return of -16 percent, as of Dec. 31, according to data from the Washington State Investment Board, peHUB said. But Fund VII posted a return of 25.3 percent, while Fund VIII stood at 28.7 percent, the Washington State Board said.

Founded in 1980, GTCR says it pioneered the “leader strategy,” that is, finding and partnering with leaders as the first step to building market-leading companies through acquisitions and organic growth.

In late 2008, the Chicago firm partnered with veteran medical device executive Tom Daulton to set up Devicor Medical Products Group LLC in Pleasant Prairie, Wisconsin, to buy “established interventional medical device businesses that make and sell products to clinicians in hospitals, surgery centers or ambulatory clinics.”

And in early July, Devicor Medical made its first acquisition — the breast care division from Johnson & Johnson’s Ethicon Endo-Surgery unit, for undisclosed terms. The Wisconsin holding company is moving to Sharonville, Ohio, where it has moved the breast care division and its 300 employees, which it renamed Mammotome, a division of Devicor Medical Products.

By the way, Devicor Medical said in a regulatory filing last week that it had raised $151.5 million. Daulton declined to specify his intentions for that investment. But he did tell the Cincinnati Enquirer that he planned to invest nearly $300 million in Mammotome over the next few years.