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2014 'a banner year' for GI MedTech
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SAN FRANCISCO — Last year was ‘a banner year’ for gastroenterological medical technology, Pankaj Jay Pasricha, MD, from Johns Hopkins University School of Medicine, said in a presentation at the 6th annual American Gastroenterological Association Tech Summit.
In his talk, Pasricha recapped 2014’s notable successes in GI and metabolic disease medical technology, as well as their impact on the field, and potential future frontiers.
Pankaj Jay Pasricha
Major acquisitions and investment trends
Covidien’s acquisition of Given Imaging, followed by MedTronic’s acquisition of Covidien will impact not just GI and GI surgery but “in fact, the entire MedTech space,” Pasricha said. “It was a $43 billion dollar purchase, which is the largest transaction in medical device history.”
One scenario in which this acquisition will affect the GI space, he said, “is the validation of the space, finally. It took an event like this to put GI and GI MedTech firmly on the map. We hope this is going to actually lead to sustained interest in activity from MedTronic, as well as attract other big surgical players.”
Other small companies like Given, according to Pasricha, can either see themselves as similar targets for acquisition, or look at this trend as “an opportunity to merge. There is a need for consolidation of the GI market.”
In general, 2014 was a good year for life sciences venture investments, Pasricha said. Total venture investments accounted for nearly $50 billion and over 4,000 deals, representing a 61% increase in total dollar amounts and a slight increase in terms of actual numbers of deals, while total life science investments accounted for $8.6 billion, up by 29%, “and of that, roughly a quarter was in medical devices, which totaled about $2.7 billion, again up by 27% although the number of deals did go down slightly.”
For a long time, investors were not putting money in anything except late stage companies, but that trend is now reversing, he said. More than half of all venture capital investments in medical devices last year was in therapeutics, a significant part of which was, for the first time, in endoscopic ventures, he added.
Endoscopic devices
These endoscopic device companies were particularly active last year, he said, citing EndoGastric Solutions and its landmark randomized controlled trial that demonstrated transoral incisionless fundoplication (TIF) was superior to proton pump inhibitors for regurgitation and reflux, and the subsequent CPT code created by the American Medical Association for TIF. “This is the first critical step towards getting coverage [for TIF,]” Pasricha said, “and this is going to legitimize the entire field of TIF for GERD, so this is terrific.” These second generation therapies, he said, “are now establishing a new and high standard for efficacy, and I think this has brought back enthusiasm for endoscopic approaches for reflux.” In 5 years, he added, “they may actually become serious candidates for first-line therapy instead of chronic PPI use.”
Metabolic disease devices
Another “landmark event” in the metabolic disease device field, Pasricha said, was the FDA approval of the Maestro Rechargeable System (EnteroMedics), although this device is probably needs further iterations to improve “simplicity and efficacy.” However, its approval will pave the way for other predicate devices and accelerate interest in neuromodulation, he said. Other companies in this space, like ReShape Medical, are attempting to break into the market with intragastric balloon devices.
“Balloons, as we know, are not particularly effective compared to gastric bypass but their impact goes far beyond just reduction of BMI,” Pasricha said. “Balloons will lower the barrier for entry into bariatric therapy for patients.” Patients are not naturally drawn to surgery, but rather pushed toward it for medical or other reasons, he said, “but with the balloon they get into the system of bariatric therapy, so if the balloon doesn’t work, their threshold for considering further interventions is much lower.” Therefore, companies that offer a spectrum of bariatric procedures benefit most from the balloon approach, he said.
Diagnostics
Regarding major developments in the field of diagnostics, Pasricha cited Mauna Kea Technology’s confocal laser endomicroscopy, which is “raising even more money and expanding,” he said, while getting approvals for new indications such as biliary cancer. “We also know the US company NinePoint is also raising additional money and has been in partnership with Corning last year, so there is a lot of money going into these diagnostics.”
These developments, Pasricha said, indicate a change in target in this space. While the target market for diagnostics has traditionally been Barrett’s esophagus, “we have yet to see this actually translate into a robust business model. We know it’s a clinical problem, but it’s also been a problem to [bring in] viable revenue, and many technologies including ablation and microendoscopy have a stake in the success of this model, and the question that still remains is will this potential be realized?”
Another diagnostic approach that has “stirred a lot of controversy” include the EndoChoice Fuse full spectrum endoscopy platform, “a new way of doing colonoscopy.” Initial study results “suggest lot of problems with this technology,” Pasricha said. And yet another, Cologuard (Exact Sciences) is the “first approved molecular test for colorectal cancer” whose “success from approval to coverage has been unprecedented.”
Future frontiers
The “largest piece of the GI pie,” Pasricha said, includes dyspepsia, IBS, and other disorders “not currently targeted by devices, even though they dwarf other conditions such as morbid obesity.” Some action in diagnostics and therapeutics for this space has been taken by EndoFlip (Crospon), which “is a household name for those of us doing endoscopy now,” Pelvalon’s Eclipse vaginal insert for fecal incontinence, and Vibrant’s vibrating capsule for constipation.
Furthermore, big pharma will be entering the GI MedTech space in the near future, Pasricha said, particularly in the space of electroceuticals, for which clinical trials are currently underway.
“In conclusion, 2014 was a banner year for GI MedTech,” Pasricha said. “I think we have crossed a point of no return now, which is really gratifying after 6 years of watching, and GI is about to finally take off.” – by Adam Leitenberger
Reference:
Pasricha PJ. Presented at: American Gastroenterological Society Tech Summit, March 19-20, 2015; San Francisco.
Disclosure: Pasricha reports he is a co-founder of Apollo and reports current and former consulting relationships with EndoGastric Solutions, GI Dynamics and Pentax. He also reports he owns minor stock in Enteromedics, and some of his research on bioelectronics for diabetes is funded by GlaxoSmithKline.