week in review the picture of success breaking news

Transcription

Volume 5, Issue 17 | june 2, 2009
week in review
05
War, Orthopedics and
Great Leaps Forward 
“Hippocrates said, “He who desires to
practice surgery must go to war.” What
have surgeons learned in the Iraq
wars? Read what military surgeons
and historians told OTW at the latest
SOMOS meeting.
11
Billing Gone Bad?
Find an Outsourcer 
Reimbursements going downhill?
Having trouble covering salaries? You
may want to consider an outsourcer,
say two experts, before the lights go
out at the practice.
the picture of success
16
America’s Healthcare Safety
Valve—Mexico  As medical
tourism enters the mainstream of
health care, Mexico could well emerge
as America’s healthcare safety valve
with both patients AND physicians
taking their business across the border.
27
Rotator Cuff Tears:
Hereditary?
Grassley Exposes Infuse Docs
Nightmare on FDA Street
Hyperkyphosis, Osteoporosis,
Early Death
21
Spinal Repair Market:
Swimming Upstream  The
spinal repair and implant market
is feeling the strain of the damaged
economy. But some companies
managed to drive up growth rates with
new products and procedures. How
did they do it? Read here.
breaking news
Wang Latest Media Target
48
Dr. Ralph Gambardella 
A sports medicine specialist
at the Kerlan-Jobe Orthopaedic Clinic
in Los Angeles, Dr. Ralph Gambardella
says he was born on the other side of
the tracks. But this articular cartilage
guru has made his own tracks.
Cell Phone Elbow: High-Tech Pain
New Data on OA Drug EUFLEXXA
Medarex: RA Drug Showing Promise
For all the news that is Ortho,
read on.
1-877-817-6450 | www.ryortho.com
3
Orthopedic Power Rankings
Robin Young’s Entirely Subjective Ordering of Public Orthopedic Companies
This Week: External environment for orthopedic manufacturers is increasingly challenging. Bad press.
Confiscatory and anti-surgeon law in Massachusetts. Precedent for other states? Surgeons getting squeezed all
around. MDT laying off roughly 1,600 employees. It’s all about operations management in this market.
Rank
Last
Company
Week
TTM Op
30-Day Margin Price Change
Comment
Operating margin rose this past quarter. Consensus
analyst estimate for June quarter is flat EPS on 6%
rise in sales.
Takeover rumors bouncing through the
blogosphere. Who wouldn’t like a 30% profit
margin plus ortho market leadership?
JNJ just completes its best month in years. Not
likely to continue as this behemoth sinks in the
Power Rankings. Free DePuy!
Time for a bias admission—we have always liked this
management. They think like their customers and
show it with great products.
1
1
Integra
LifeSciences
12.35%
(0.50%)
2
3
Zimmer
29.96
0.72
3
2
Johnson &
Johnson
25.36
9.05
4
4
Exactech
13.42
18.52
5
6
Orthofix
8.14
45.68
Up one more spot this week. Obviously the market
believes a rebound is in place. We do too.
6
7
Symmetry
11.05
3.92
Based on consensus analysts’ estimates, operating
margins are expected to rise again in 2Q.
7
5
Stryker
23.18
(0.54)
8
8
Synthes
33.70
2.58
9
10
ArthroCare
16.87
25.64
10
9
Medtronic
31.68
8.36
Hard to believe that the market expects SYK to
actually report DOWN EPS this quarter. SYK is
now the 7th cheapest ortho stock.
The Middle Kingdom is not expected to report
results until mid-July. Based on 1Q, we expect
worldwide trauma to rise 6%-8%.
Incredibly but thankfully a couple of analysts still
cover ARTC. Consensus is $350 million in annual
sales and profitable ops.
Lay-offs, continued Spine share declines. Memphis
is hunkering down. No one wants to play Whacka-Mole.
4
Robin Young’s Orthopedic Universe
Top Performers Last 30 Days
Company
Symbol
Price
Worst Performers Last 30 Days
Mkt Cap 30-Day Chg
Company
Symbol
Price
Mkt Cap
30-Day Chg
$2.25
$4.69
$36.11
$38.44
$25.96
$44.55
$100.50
$36.60
$7.69
$5.50
$22
$133
$1,320
$15,270
$737
$9,580
$11,931
$6,460
$275
$134
-23.7%
-12.7%
-4.9%
-0.5%
-0.5%
0.7%
2.6%
2.9%
3.9%
4.8%
1
2
3
4
5
6
7
8
9
10
Orthofix
TiGenix
Mako Surgical
ArthroCare
Orthovita
CONMED
Kensey Nash
Exactech
RTI Biologics Inc
TranS1
OFIX
TIG.BR
MAKO
ARTC
VITA
CNMD
KNSY
EXAC
RTIX
TSON
$25.32
$5.97
$8.71
$9.75
$3.71
$15.75
$25.04
$16.00
$3.87
$8.42
$433
$145
$218
$260
$282
$457
$284
$204
$209
$173
45.7%
35.8%
28.1%
25.6%
22.8%
21.2%
19.6%
18.5%
14.2%
13.9%
1
2
3
4
5
6
7
8
9
10
Company
1
2
3
4
5
ArthroCare
Symmetry Medical
Zimmer Holdings
CryoLife
Medtronic
Symbol
Price
ARTC
SMA
ZMH
CRY
MDT
$9.75
$7.69
$44.55
$4.69
$34.35
Mkt Cap
$260
$275
$9,580
$133
$38,300
P/E
5.73
6.67
10.94
11.62
11.71
1
2
3
4
5
Lowest P/E to Growth Ratio (Earnings Estimates)
Company
1
2
3
4
5
ArthroCare
Symmetry Medical
CryoLife
Exactech
Integra LifeSciences
Symbol
ARTC
SMA
CRY
EXAC
IART
Price
$9.75
$7.69
$4.69
$16.00
$25.96
Mkt Cap
$260
$275
$133
$204
$737
Company
1
2
3
4
5
Symmetry Medical
CONMED
Osteotech
ArthroCare
Orthofix
Symbol
SMA
CNMD
OSTE
ARTC
OFIX
Price
$7.69
$15.75
$4.19
$9.75
$25.32
Mkt Cap
$275
$457
$75
$260
$433
Company
Symbol
Osteotech
Smith & Nephew
I Flow Corp
NuVasive
RTI Biologics Inc
OSTE
SNN
IFLO
NUVA
RTIX
Price
$4.19
$36.60
$5.50
$36.11
$3.87
Mkt Cap
$75
$6,460
$134
$1,320
$209
P/E
135.43
65.44
57.13
41.53
33.22
Highest P/E to Growth Ratio (Earnings Estimates)
PEG
0.23
0.66
0.72
0.77
0.78
Company
1
2
3
4
5
Lowest Price to Sales Ratio (TTM)
RGBO.OB
CRY
NUVA
SYK
IART
ZMH
SYST.VX
SNN
SMA
IFLO
Highest Price / Earnings Ratio (TTM)
Lowest Price / Earnings Ratio (TTM)
Regen Biologics
CryoLife
NuVasive
Stryker
Integra LifeSciences
Zimmer Holdings
Synthes
Smith & Nephew
Symmetry Medical
I Flow Corp
Symbol
NuVasive
RTI Biologics Inc
Johnson & Johnson
Average
CONMED
Price
Mkt Cap
PEG
NUVA
RTIX
JNJ
$36.11
$3.87
$55.16
CNMD
$15.75
$1,320
$209
$152,000
$9,217
$457
8.04
1.96
1.56
1.43
1.38
Highest Price to Sales Ratio (TTM)
PSR
0.63
0.63
0.70
0.77
0.81
Advertise with Orthopedics This Week
Company
1
2
3
4
5
TiGenix
Mako Surgical
Regen Biologics
TranS1
NuVasive
Symbol
TIG.BR
MAKO
RGBO.OB
TSON
NUVA
Price
$5.97
$8.71
$2.25
$8.42
$36.11
Mkt Cap
$145
$218
$22
$173
$1,320
PSR
329.53
33.01
18.40
6.31
4.61
Click Here for more details
or email [email protected]
Tom Bishow: 410.356.2455 (office)
or 410.608.1697 (cell)
5
War, Orthopedics and Great Leaps Forward
By Billie Young
M
ilitary orthopedic surgeons
were talking between
sessions of the December
2008 meeting of the Society of Military
Orthopaedic Surgeons (SOMOS) in
Las Vegas. Their topic was trauma. “I’d
rather get shot with a bullet than take
a hit from a blast device and shrapnel,”
said one to his companions.
His friend nodded. “In Iraq, while
the insurgents use some artillery, it’s
mostly projectiles and improvised
explosive devices. They put glass and
nails and stuff like that in it. There are
more blast injuries now. The soft tissue
gets all mangled.”
A third added, “The wound has to
be debrided. Preventing infection is
the first goal of the surgeon because
once you get an infection you can
lose the whole battle. Bone is the
easiest thing to deal with. Once you
lose your soft tissue coverage—once
it gets infectedthe bone surgery is
basically compromised. If you have a
clean environment you can do almost
anything orthopedic.”
The men reliving their experiences
included Colonel John F. Kragh, Jr.,
M.D., of the U.S. Army Institute of
Surgical Research, Bone and Soft
Tissue Trauma Research Program,
Brooke Army medical Center; Col.
(Retired) Allan Bucknell, M.D.,
Professor of Orthopaedic Surgery,
University of Colorado and Chief of
the Orthopaedic Surgery Section and
Col. (Retired) John A. Feagin, M.D.,
Associate Professor Emeritus, Duke
University. Bucknell and Feagin are
both retired military surgeons and
officers.
of war. Do the experiences of dealing
with new kinds of trauma bring about
new learning, new techniques, new
insights, and new leaps forward for
orthopedics? Eisner had come to the
right place to learn how orthopedic
practice has changed under the
stresses of war.
Col. (Retired) John A. Feagin, M.D.
Joining them was Walter Eisner, senior
writer for Orthopedics This Week.
Eisner wanted to know how surgical
practices change under the stresses
Col. John F. Kragh, Jr., M.D.
advertisement
6
Col. Earnest Dehne is remembered
as one of the true military orthopedic
geniuses. He repaired over 500 cases
of broken tibias with a device called
Lotte’s Nail.
S.O.M.O.S.
SOMOS was founded in 1958 at a
meeting of the American Academy
of Orthopaedic Surgeons by
military surgeons talking over their
unique perspectives in a bar. The
organizational meeting was held in
Biloxi, Mississippi five years later and
the association was off and running.
The 1970’s were formative years for
the association, marked by the conflict
in Southeast Asia and the publication
of the Orthopaedic History of Vietnam.
Orthopedics in War
Wars have always had a major impact
on surgeons. In the Civil War, which
is an American baseline, surgeons
reported a 50% infection rate. Even so,
that war provided a great impetus for
the treatment of wounds and fractures.
According to Dr. Bucknell, those
who survived were so maimed that
Mississippi allotted 68% of its state
budget in 1867-69 for prosthetics. In
the North, a similar situation led to the
founding of the DePuy Company in
Warsaw, Indiana.
It was Napoleon who recognized the
value of transporting injured soldiers
to a medical facility as quickly as
possible and the British, in World
War I, copied his example.
Nevertheless, soldiers with
broken bones were experiencing
a 90% mortality rate from being
transported over the rutted roads
of France to field hospitals until
the British surgeon, Robert Jones,
devised a series of braces and
splints to immobilize the fractures.
The wounded didn’t bleed to death
because the fractures were stabilized.
When that system was put into
practice, mortality dropped to
around 25%.
Enter World War II and antibiotics
were utilized.
Joseph Trueta was the first surgeon to
really use them as tools in the Spanish
Civil War. “He developed a system
of staged wound management which
became the ultimate mantra of my
residency with Bill Burkhalter and his
generation. Surgeons had great ideas
for centuries, they just did not have
the technology,” said Dr. Bucknell.
Pioneers in vascular surgery lowered
the amputation rate from 50% to
25%. When Norm Rich developed the
Vietnam vascular registry amputation
rates continued to drop.
Dr. Bucknell noted, “He, like
everybody else in the military, knew
that when you get 30 to 40 casualties
in all at once you can’t stop what
you are doing to fix one guy’s tibia.
You have to do the best you can for
the greatest number of people, given
the resources that you have. I got to
Fitzsimmons in 1972 where we had
800 orthopedic patients in the wards.
Brooke Medical Center had 1,200.”
Stabilize and Evacuate
The surgeons agreed that the best
practice was still what Napoleon
tried to do which was to stabilize the
injured soldiers and evacuate them to
a clean medical facility as quickly as
possible.
Dr. Feagin observed, “I have great
doubts about putting plates on
fractures in filthy environments in a
combat zone. I think a soldier is better
treated by stabilizing him, keeping
him alive. Imagine doing an operation
through subnormal
tissue to a mangled
extremity, putting
implants on. All the
antibiotics aren’t
going to reduce the
infection rate there.
If you admit your
evacuation system
is so rapid, why
not just ship the
soldier instead of
trying to prove how
good a surgeon you
7
entire limb from the surgeon putting
that tourniquet on. “We were taught to
put a big ‘T’ on their chests to indicate
there was a tourniquet on under
that mess of bloody clothes,” said
Dr. Bucknell.
are—after primary wound care and
debridement, of course. If provisional
fracture stabilization is necessary, then
it should be done.”
Wound Care Is More Important
Than Antibiotics
‘Wound care is more important than
antibiotics,” the surgeons agreed.
“Wounds are more extensive in this
war. There is still resistance to some
of the practices that allow the wound
to stabilize. A lot of people want to
operate while the area is still inflamed”
Fatalities in the Iraq War went down
after every soldier was trained in
the use of tourniquets and pressure
dressings.
Contrary to World War II, all of the
soldiers in Iraq can start an IV, they
can even do chest tubes, stop the
extremity bleeding, maintain the
airway, maintain respirations, provide
acute trauma life support. These
medics are very good at it and get
advertisement
better with experience. “This system
comes from the Israelis. They’re the
ones that promote that. We’re taking a
page out of their book.”
Tourniquets Return
A major change in wound treatment
technology from the Vietnam War
is the return—and new design—of
the tourniquet. For a time doctors
prohibited putting tourniquets on
wounded soldiers.
Dr. Feagin noted, “That is a function
of taking care of a gunshot wound,
which is not a big tourniquet
thing, whereas in a blast
injury everything is bleeding
and you can’t just put your
hand on one artery and
stem that. I would suspect
that the number one cause
of death on the battlefield
is hemorrhage from an
extremity wound.”
One surgeon explained that
the problem with tourniquets
in the past was if you put a
tourniquet on a patient and
shipped him down the road
for who knows how long and
he’s still got that tourniquet
on his leg, he could lose his
Given the tourniquets’ new, more
effective design, the types of soft-tissue
wounds soldiers are experiencing and
the ability to transfer the wounded
quickly, tourniquets are back.
Wound Vacuums
Wound vacuums to cleanse the
wound and reduce swelling have also
changed. Vacuums used to be so heavy
they could hardly be lifted onto a bed
and were too large to be put on the
plane with the patients. Now they
are so small “a handful will fit in a
woman’s purse.”
It started with a company called KCI
in San Antonio that made surgical
beds which were post-operative
pressure reducing beds.
The surgeons noted, “They got into
this negative pressure suction thing—
little sponges hooked up to a suction
device that attendants place directly
on the wounds. For transporting a
soldier in an airplane across the ocean
you need small devices that are nursefriendly, fairly cheap, easy to fix if they
break. A saying in military circles is
bullets, beans and band-aids. Bullets
first, beans for food for the soldiers
and medicine always comes last.”
Major Advances
Key advances in orthopedics in Iraq
are the new tourniquets, the new
wound vacuums to help reduce
8
Military Hospital in Iraq
swelling, fasciotomy procedures to
control limb swelling and external
fixation to hold limbs in place.
Surgeons are no longer using plaster
to immobilize injuries. External
fixation, which was resisted for
a time by orthopedists, said one
surgeon, is one of the major advances.
Surgeons’ resistance, or hesitation, has
diminished as data supports the use of
external fixation.
There is also some new hardware such
as locking plates where the screw
actually locks into place as it goes into
bone; better wound irrigation systems
and better antibiotics.
Another advance is, what one surgeon
described as, “the ultimate lavage
instrument,” called the FirstJet and
made by Smith & Nephew, it can take
the paint off a wall if the pressure is
put up high enough.
Finally, wound dressings salted
with nano particles of silver are
controlling bacteria.
Orthoplasty
Dr. Feagin told us that because of the
destructive nature of blast injuries,
orthopedic surgeons are having to deal
with extensive soft tissue damage and
perform repairs that call for the skills
of a plastic surgeon. He said that Dr.
Scott Levin, at Duke University, calls
this joining of treatment of both bones
and soft tissue “Orthoplasty.”
Linking Defense and the V.A.
The Iraq Wars have illuminated a
glaring problem for veterans: the
Defense Department and the Veterans
Administration do not communicate
because the computers in the two
agencies cannot talk to each other.
As one surgeon explained, “You can’t
find out what type of injury patients
had originally. You know that patients
were injured, probably bone involved,
it’s obvious that they’ve had some soft
tissue damage, but you don’t know
what happened to them and that
data is not retrievable at this point by
the V.A.”
A useful development that has come
out of the two Iraq conflicts is a
data base on hospitalized veterans.
From this we know that 29% of all
injuries in this war are associated
with fractures and that, historically,
at least 50% of all survivors in a war
will eventually become orthopedic
9
patients. Vietnam registered 72% to
73% and the present Iraq War may be
up to nearer 80%.
Dr. Bucknell observed, “To figure that
out, all you had to do is visit the wards
of the military hospitals in the 70’s,
when I did my residency. They were
full of young soldiers, airmen and
sailors with musculoskeletal injuries.
You did not see the guys who were
shot in the head, heart, lungs or liver,
because they were dead.”
Funding and Lessons Learned
This generation of doctors has
done a good job getting money for
necessary research.
“We had great help from our civilian
counterparts in the American
Orthopaedic Association, American
Academy and the Orthopaedic Trauma
Association in helping us get this
through Congress. It is a political thing
and they did a great job. We could not
have made it without them because we
do not have the political expertise to
get funds from Congress. In our day
I could not imagine Congress giving
military orthopedics $66 million for
research. I’d have been lucky to get
$66 for research,” said Dr. Feagin.
The surgeons believe the combination
of the Orthopaedic Trauma Association
with military medicine makes an
excellent team. “As peace returns and
we deal with highway injuries and
everyday trauma we will be much
better as a result of what has been
and will be learned in wartime.”
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11
Billing Gone Bad? Find an Outsourcer
By Elizabeth Hofheinz, M.P.H., M.Ed
A
s a physician, you never want
to reach the point of thinking,
“Well, the billing person has
tried to reach that patient four times.
It’s only $65…I can absorb that.”
Carry that attitude for a few months
and you’ll be running yourself out
of business.
Barry Haitoff, President of Medical
Management Corporation of America,
a billing outsourcer, advises doctors
to hold fast to one principle: you have
done the work and you deserve your
compensation…every penny. Haitoff:
“While physicians are intelligent, they
aren’t magicians. They can’t juggle
every aspect of their practices…and
they usually don’t. I advise surgeons
to do what they do best and outsource
the rest. You don’t do your own
accounting or legal work, so why
should your billing be in house?
Billing, something that arguably
impacts a doctor’s daily life more
than anything else, should not be
dealt with by anyone less than
professional management.”
According to Haitoff, practices,
being led by humans, are subject
to very human tendencies. Haitoff
says, “Most office based doctors
turn to outsourcing when they are
experiencing ‘pain.’ They
are in a panic because the
computer system crashed,
the biller quit, or the
money is fast drying up.
Bringing in an outside
biller during tumultuous
times is not the best
option, however, because
then you don’t have the
opportunity to research
the best outsourcer for
the job.”
So let’s say that those in
charge of the practice
have the prescience to
entrust their billing to an
outside entity…before the
lights go out. Where to
begin? Haitoff advises, “I
would first recommend
checking with the
Healthcare Billing and
Management Association
(HBMA), the association
for third party medical
billing companies. Additionally, it is a
good idea to speak to other practices
to determine which company they
use and if they are satisfied. The most
important thing is that once you
narrow it down to a select few billing
companies you must do your research.
Meet with them, get references, verify
the longevity of the company, and
inquire if there are any billing staff
who are certified by HBMA or coders
who are certified by the American
Academy of Professional Coders.”
Questions about automobile injuries,
accident details, and casting should
also enter into the discussion when
interviewing a potential billing
company. “It is essential,” says
Haitoff, “that you select a biller who
specializes in orthopedics and has
a strong track record of success in
the field. You should determine, for
example, how knowledgeable a billing
company is about automobile injuries
and workers’ compensation issues.
Ask specifically if they know what
insurance companies want to know
about accident details. Also ask what
they can tell you about billing for
injectable drugs and casting material.
Do they know that there is more you
can bill for than the application of the
cast itself?”
Haitoff continues, “On the coding
front, do they know that you can bill
and get paid for certain procedures
using the appropriate modifier (an
additional code that distinguishes
a service performed)? For example,
with modifier 59 (distinct procedural
service), procedures typically
considered inclusive are often times
12
paid. This is the case when a surgeon
performs an arthroscopy of the knee
with menisectomy along with patella
chondroplasty. Overall, there is a lot of
money left on the table for insurance
companies because of improper
coding or billing issues—often
due to inadequate follow up.”
Also part of any due diligence
process, says Haitoff, is a
thorough reference check.
“While seemingly time
consuming, I cannot stress
enough the importance of
checking references. You want
to talk to people who will be
able to say things like, ‘Since
we started billing with ABC
company our outstanding
receivables have gone down,
our collections have gone up,
overhead has been reduced,
etc.’ You want specifics.”
Surgeons can hardly be blamed
for not thinking like CEOs
or accountants: a little thing
called patient care often comes
first. Barry Haitoff says, “One
of the largest expenses of any
practice is for nonclinical
salaries. Many times physicians
want to reduce overhead and
choose to economize in the
category of salary. But some of
those people are the ones you
need to contact the insurers.
The doctors don’t usually think
about adding an employee,
paying ‘X’ and getting ‘2X’ back
as a result of claims follow up.
Many insurance plans have
a stipulation that you have
60/90 days to send in the claim
and to ensure that it is paid.
Their attitude is, ‘Don’t send it
to us on the 91st day. We won’t pay.’
Meaning, of course, that the practice
needs to employ enough people to
dial the phone or check on line where
available—a lot.”
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Haitoff adds, “This is all tied into the
doctor’s revenue for that month. If he
or she takes a vacation for two weeks
and collections go down, he still has
to pay salaries…and the doctor’s
take home compensation is reduced.
Not the case when you outsource.
Since the billing company’s fee is
tied to revenue, when collections
drop because the surgeon went on
vacation, the billing overhead drops
as well.”
Billing, says Haitoff, is an area
where humans and technology can
partner to effectuate a streamlined
process. “Be sure to inquire about
the software a biller uses. They
should be set up to send claims
electronically, as well as having
the ability to accept electronic
remittance advices because many
insurers are beginning to do direct
payments via electronic funds
transfer. The software should also
have an automated system for
accounts receivable follow up.
Traditional billers run accounts
receivable aging reports and then
use that report to follow up.
But a good software system has
an automated mechanism for
doing that. If you send in a claim
electronically, you should have a
payment or denial in as little as two
weeks; if not, then the claim goes
into a work file and the supervisor
manages that to ensure that it is
followed up on.”
If a surgeon has a front desk and
back office full of go getters,
excellent. If not, the bank balance
will suffer, as will the surgeon’s
income. Haitoff: “In the case of in
house billing, when someone takes
a vacation, their work often lays
13
in a pile until the person returns.
That means that services performed
don’t get into the system in a timely
manner and payments aren’t posted
in a timely manner, thus having a
huge negative impact on the money.
Most in house billing departments are
already behind on accounts receivable
follow up—vacation time just makes
it worse. Generally speaking, follow
up of unpaid claims is one thing that’s
not always staring you in the face.
If payments come in and you have
a stack of Explanation of Benefits
(EOBs) someone sees if the work is
not done. But accounts receivable
aging is where there is no payment, no
EOB, nothing visible. So unless you
have an automated system in place
things won’t get handled efficiently,
if at all. The front desk and back
office folks are not going to do what
they don’t see. And they may not be
motivated and/or may be looking
at the clock. Whereas they have no
particular incentive, billing companies
are motivated because we are paid
based on the monies collected.”
To stay on the ethical and legal
straight and narrow, practices
should ensure that their billing
company is on board with the latest
privacy and security regulations.
Haitoff explains, “The biller should
have a compliance program in
place, following guidelines for both
the Office of Inspector General
(OIG) and the Health Insurance
Portability and Accountability Act
(HIPAA). The HIPAA compliance
program should also include the
‘Red Flag Rules,’ new regulations
relating to patient and employee
security targeted at preventing and
mitigating identity theft.”
The other red flags relate to the
gut checks you should do while
interviewing. “Beware if someone has
little or no knowledge of orthopedics,
can’t clearly explain their process, or
can’t adequately respond to questions
about compliance.”
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Before you’re ready to hitch your
future to a billing company, you
should take the time to negotiate a fair
contract. Barry Haitoff: “Most contracts
are two to three years because the
billing company has startup costs to
recuperate. Some contracts provide an
out for cause, although the biller will
likely have a contract that doesn’t let a
practice out without significant cause
because they will be going to great
lengths to set things up. Ideally, they
will be somewhat flexible, however.
If they are confident in their service,
they should be somewhat willing to
negotiate on the terms. While our
contracts are three years, if the doctor
says, ‘What if I get into this and I’m
not happy with the results?’ I will
ask him or her, ‘What will make you
comfortable?’ In the end, the physician
should always have the contract
reviewed by attorney.”
The best news, says Haitoff, is that
outsourced billing works. “We have
seen collections increase in excess
of 30% when a biller comes in. If an
orthopedic surgeon is billing out $1
million per year, an increase of only
5% of the collection ration is $50,000,
which easily covers the expense of
bringing in a billing company…not
to mention the potential reallocation
or reduction of staff. It’s something to
seriously consider.”
Bill Carns, CEO of PracticeMax,
also has substantial experience with
the ins and outs of outsourcing. He
says, “Doctors and practices are often
consumed with what they do well; but
things that their staff don’t understand,
however, go by the wayside. When
that happens, cashflow, the lifeblood
of the group, is negatively affected.
Outsourced billing has gained in
popularity in part because of the
increasing trend for people to focus on
what they do best.”
For most practices, knowing that
it’s time for a billing outsourcer is
a matter of intuition rather than
that of a systematized way of doing
business. Bill Carns explains, “When
reimbursements really slip and a
practice begins to have cashflow
problems, the doctors have a visceral
response along the lines of, ‘Hey, I’m
not making as much as I used to.’ In
14
a more sophisticated practice they
have data and reports and can see that
there’s a problem. Those practices,
however, are the exception.”
Sometimes, adds Carns, it takes an
outside party to open the doctor’s eyes.
“If cashflow is in jeopardy, a group
might approach a bank or other entity
for assistance. At times, banks refer
clients to us, telling their client, ‘There
appears to be an issue here.’”
To identify a pacesetting, trustworthy
billing company, says Carns, “Most
people talk to colleagues or friends
to assess their experiences. They may
discuss their collection rates, or the
percentage they pay for billing.”
Numbers tell part of the story, states
Carns, but other things must be
taken into consideration. Regarding
collection rates, he notes, “Collections
depend on several variables. When
comparing two orthopedic practices,
one practice may collect 60% of
gross charges, while another collects
30% of gross charges. Even though
it compares collection rates, it is like
comparing apples and oranges. If a
practice is getting 60% of charges, the
automatic reaction is that the biller or
billing company must be very good. In
reality it could just mean that the biller
is not helping the practice stay abreast
of fees so charges may be low and they
may be leaving money on the table
from insurance payers.”
“Conversely, collecting 30% of charges
could be excellent because the charges
may be in the 95th percentile for
the local market; a good payer mix
exists, and the billing company may
be collecting a high percentage of ‘net’
charges. A good billing company will
be able to help you make sense of the
apples and oranges.”
Carns goes on to say, “Beyond
that, you should look for billers
with certifications from multiple
associations, including HBMA.
Once you’ve identified a handful of
candidates, you should interview
them, asking things like, ‘How long
have you been in business? What
differentiates you from other billing
companies? Can you provide a
state-of-the-art, certified electronic
health record system to verify
insurance, improve documentation,
and capture all charges? Are your
coders certified? What other kind
of practice management processes
or technology do you have in place
that will help maximize my revenue?
What kind of reports and dashboard
information is available to me
and my partners? Do you provide
insurance contracting services?’”
What’s a two or five dollar unpaid bill
to a million dollar practice? Depending
on the “multiplier,” it could mean
paying the phone bill. Bill Carns:
“Let’s say an insurance company
was expected to have paid $56.00,
but only paid $54.00. An outdated,
in house way of
handing this is to
say, ‘It’s only two
dollars difference,
so let’s just accept
the payment as is
(if the variance was
even noticed!). It’s not worth spending
20 minutes on the phone.’ To avoid
getting into this situation over and
over again, the biller must have an
efficient payment tracking system.
They should have the appropriate
technology and processes to track
each and every expected dollar. And
they should work with the payer on
a project basis so a lot of labor isn’t
spent chasing small under payments.”
Walking the fine line between caring
physician and businessperson can be
challenging indeed. “Collecting from
patients, especially in this recession,”
says Carns, “requires tact and efficiency.
Although challenging, the best option
is to collect payment at the time of
the visit so that the office doesn’t
have to attempt to get it from patients
afterwards. The typical practice sends
multiple statements and if they don’t
receive the money will write it off or
send it to a collection agency. The
more innovative practices employ
billing companies who use call-center
technology to contact patients to work
out payment arrangements.”
Creativity, says Carns, can help smooth
the way forward when collecting
from patients. “Billing companies can
work with practices to help facilitate
interest free loans, interest free credit,
or a schedule whereby the patient
makes payments on a predetermined
basis. Another innovative tool is credit
scoring, used to determine feasibility
and the probability of someone paying
his or her balances. This is increasingly
being implemented in some hospital
systems and by some billing companies.
If the doctor is willing to extend credit,
either on an interest or interest free
basis, they will want to know if the
person is a good credit risk.”
15
“Alternatively, a biller may be able to
help facilitate a medical credit card
for the patient. There are numerous
tools that billers can employ to help
people get back on track with their
financial responsibilities. While
some medical collection agencies
have seen their collections drop up
to 60% in this recession, our billing
company collections from patients
have improved.”
Bill Carns concludes, “A responsible
biller will help recover every dollar
that is legally and ethically due to the
practice.” When doctors aren’t worried
about their money, they are free to
concentrate on what they do best—
care for their patients.
16
America’s Healthcare Safety Valve – Mexico
By Robin Young
are ready to go outside the U.S. to
obtain medical treatment.
Anecdotally, we hear from surgeons
that THEY are ready to go outside the
U.S. to deliver treatment.
Last year, worldwide medical tourism
spending, according to consulting firm
Deloitte, reached $20 billion in annual
expenditures. By 2012, worldwide
spending could be as much as $60
billion for the countries that host it.
F
ive million Americans live
outside the United States.
About a fourth (25%) of those
reside in Mexico, Panama or Costa
Rica—and most are retired Americans
who receive social security and
pension payments in those countries.
In many ways, these expats may be
the front lines of a more general shift
to receiving a high-quality standard
of living—including very high-quality
healthcare—at bargain rates.
Already, Mexican hospitals are
adopting the “luxurious hotel concept”
in contrast to the U.S.’s general ward
ethos. One hospital in Tijuana even
offers limousine service from the
patient’s hotel to the hospital.
Several new polls (most recently a
Gallup Poll from this past April) show
that significant percentages of patients
A Gallup Poll conducted in April
found that up to 29% of Americans
would consider traveling abroad
for medical procedures such as
heart bypass surgery, hip or knee
replacement, plastic surgery, cancer
diagnosis and treatment, or alternative
medical care, even though all are
routinely done in the United States.
In the 1920s, medical tourism was
typically thought of as trips to the
healing hot springs of Arkansas or
Georgia. The better heeled among
As medical tourism enters the
mainstream of health care, Mexico
could well emerge as America’s
healthcare safety valve with both
patients AND physicians taking their
business across the border.
Mexico, where tens of millions of
Americans either have family or have
visited as tourists, is waking up to the
fact that it may well be the perfect
location for medical tourism.
17
us would luxuriate at the spas of Europe. Today, several powerful factors are driving patients and surgeons to leave the
United States. High medical care costs and large numbers of uninsured (at least 48 million people, according to the Kaiser
Commission on Medicaid and the Uninsured) combined with steadily decreasing compensation for surgeons is making
the shiny new hospitals and more patient-centric approach to health care in Mexico, Panama, Brazil and other Latin
American countries compelling alternatives to the strapped hospital wards in America.
In the April Gallup Poll, researchers asked a sample of 5,050 U.S. adults either the direct question, “Would you consider
treatment abroad?” or the qualified question, “Would you consider treatment abroad, assuming the quality was the same
and the costs significantly cheaper?” When the additional phrasing was used, the percentage of respondents who said they
would leave the United States for treatment increased by 12 percentage points, on average.
A recent Deloitte survey reports that 150,000 U.S. citizens traveled
outside the country for medical treatment in 2006—the majority going
to Latin America or Asia. Deloitte estimates that that number soared
in 2007 to about 750,000 and that the rate of growth (which no one
thinks will slow) will likely push the numbers of Americans going
outside the U.S. for medical treatment to as many as six million by
2010. Mexico is ideally suited to serve this rising tide of tourist and
émigré patients and their surgeons.
In the U.S., 46 million people do not have health insurance. When
Gallup’s researchers began to parse through the respondents in their
April poll, they found a distinct trend among uninsured patients
to leave the country for treatment. For example, the percentage of
uninsured respondents who said they would venture abroad for large
joint reconstructive surgery was double the rate for respondents
with insurance.
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18
Again, if the care offered outside the U.S. was of equal quality or significantly cheaper, then the percentages rose further.
In the case of hip/knee replacement, the percentages rose to 4 out of 10.
19
According to the Deloitte report, total
charges for such surgeries as hip or
knee reconstruction can be 50%–75%
less outside the U.S. But cost is only
one factor. The rising quality of
treatment outside the U.S. is the other.
Portability of healthcare coverage is
another. Medicare is still not portable
(unlike social security, which is),
but private insurers are openly
analyzing programs that will allow
their members to obtain treatment
outside the U.S.
Then there is the growing
dissatisfaction among U.S. surgeons
with the trends in their practices in
the U.S. Why not follow their patients
across the border?
Last year, the American Medical
Association (AMA) issued
recommendations for insurance
companies who send patients overseas,
and it acknowledged that the quality
of health care in some countries
outside the U.S. was comparable to
in-country care.
Four factors appear to be driving
medical tourism:
1.T
echnology Development: The
Internet is educating patients about
high-end medical centers outside
the U.S. that rival and in many
cases exceed U.S. institutions in
terms of capabilities. New medical
technologies are often available
outside the U.S. before they receive
FDA approval, and even when
FDA approval is granted to a new
technology (e.g., disc arthroplasty)
it may be more readily available to
patients outside the U.S.
2. C
ost Shift: Under the current
insurance system in the United
States, the overall cost of the
patient care (including the cost
of patients without insurance) is
shifted to those patients with health
insurance. This “cost shifting”
encourages healthcare consumers to
search for cost savings.
3. Demographic Changes:
Demographic change is one of
20
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the vital drivers of the industry.
Baby boomers are driving the
growth—they comprise one of
the biggest market segments for
medical tourism. Almost 75 million
baby boomers are heading towards
retirement in the U.S. and the
cost of private nursing care is too
expensive for many of them here.
4. N
ew Definition of Patient
Care: Imagine a surgery where
a limousine picks the patient up
at the hotel, where there are NO
long lines or reams of forms to fill
out, and where the latest medical
treatments and equipment—even
products that are not available in
the United States—are employed.
To top it off, the surgeon is one of
the top surgeons in the world and
he is from Philadelphia.
One country, South Korea,
has even introduced a new
category of visa in a bid
to promote the country’s
medical tourism industry.
With $60 billion in medical
tourism dollars becoming
available in these next few
years, Korea is logically
making a play for those
patients. According to Korea’s
Ministry for Health, Welfare
and Family Affairs, the new
visa will be issued in two
forms: a 90-day visa for those
seeking short-term treatment
such as plastic surgery, and
a one-year visa for those
seeking long-term care
or rehabilitation.
Wooridul Healthcare, for example,
operates one of the largest private
specialty hospital groups in
the world—rivaling in size and
sophistication such institutions as the
Mayo Clinic. Under the direction of
Dr. Sang-Ho Lee, a world-renowned
neurosurgeon and pioneer in
advancing techniques and materials
for minimally invasive and complex
spine care, Wooridul Healthcare
moved into the pinnacle of spine
care in the world. Its physicians, for
example, have presented the results
of their clinical studies 459 times in
Korea and 442 times in international
conferences, and they have authored
more than 200 articles for peerreviewed journals.
In the early 1900s the Mayo brothers
established a major medical center in
Rochester, Minnesota. For the past 100
years, patients from around the world
have come to Rochester to receive
world-class care. Dr. Sang-Ho Lee is
doing the same thing in Korea. Mexico
may soon follow suit.
In addition to the hospital in South
Korea, Dr. Lee has a hospital in
Shanghai, is developing hospitals in
Abu Dhabi, and is in the planning
stages for a hospital in Japan.
While Dr. Lee is pulling patients and
physicians from around Asia, his
model (indeed the Mayo brothers’
model) is under serious consideration
in Mexico. One rumor we heard
is that the Mexican government is
considering a $1 billion investment in
new, world-class luxury hospitals to
attract the U.S. medical tourist
and physician.
Ultimately, Mexico may prove to be
the American Healthcare System’s
safety valve by providing world-class
care at affordable prices and also
providing U.S. physicians with more
user-friendly operating environments.
21
Spinal Repair Market: Swimming Upstream
By Matt Menze
S
pring has brought the close
of the first quarter, and spinal
repair and implant companies
are fighting against the strong
currents of a damaged economy
with losses in pricing and procedure
volumes. Companies with significant
international exposure also faced
currency headwinds. Who were the
best swimmers? NuVasive Inc., Trans1
Inc., and Alphatec Spine Inc. saw
revenue growth of 56.3%, 45%, and
32%, respectively. In contrast to many
other spine companies this quarter,
procedure volumes and pricing appear
to be strong and stable for NuVasive
and Trans1. These two companies
also derive the majority of their
revenues from proprietary minimally
invasive surgical (MIS) approaches to
spine fusion. In a job market full of
insecurity, are more people opting for
MIS options which can allow for quick
returns to work? Are companies that
focus on procedures and devices with
longer recovery times feeling the strain
of this slow-to-recover economy?
Slowing Growth in the First
Quarter
In Table 1 we list and rank the
quarterly sales for each major spinal
implant company for the first quarter
of 2009 (1Q09). We also provide
our estimates through 2011. As
the table illustrates, we believe that
sales of spinal implants and their
Revenue ($ millions)
Table 1: Spine Market
Revenue Model
Source: PearlDiver estimates, Wall
Street reports, SEC filings
Synthes, Globus, and DePuy are
estimated revenues
Osteotech spine-related revenue
assumes 70% DBM revenue is spine
related
Abbott Spine revenues reported as part
of Zimmer 4Q 2008
ArthroCare Spine has been delisted
from the NASDAQ and has not
reported revenues
related biologic products rose 8.1%
in 1Q09, down from the 15.5%
growth in 1Q08. Not all companies
suffered from slowing growth, but the
companies with the largest share of the
market contributed disproportionately
to industry revenues. Based on our
estimates, Medtronic, DePuy, and
Synthes comprise over 60% of the
industry’s revenues, and, for example,
Medtronic’s nearly stagnant reported
growth of only 1.4% for 1Q09
brought down the growth rate of the
market as a whole.
Because of this slowed growth, we are
reducing our 2009 industry revenue
growth estimates of spinal and related
biologic products to 9.0%-9.5% from
1Q09
2Q09E
3Q09E
4Q09E
2009E
Medtronic
881
883
865
875
3,503
2010E
3,703
Depuy
250
262
230
238
980
1,049
1,082
Synthes
234
241
236
247
958
Stryker
129
138
132
153
552
613
80
82
93
105
359
480
NuVasive
Orthofix / Blackstone
66
68
68
72
274
304
Zimmer
65
67
72
77
280
303
Globus
54
60
63
69
246
339
Biomet
54
57
55
59
225
242
Alphatec
31
30
31
35
127
149
Pioneer Surgical
27
28
28
29
112
134
Orthovita
21
23
23
24
91
116
K2M
20
21
20
22
83
107
Arthrocare
15
15
17
19
65
75
SeaSpine
14
15
15
16
60
75
Scient'X
14
15
15
16
59
67
Osteotech
12
12
12
12
48
50
47
Integra Spine
10
10
10
11
41
RTI Biologics
10
10
11
12
43
43
U.S. Spine
10
10
10
10
39
50
Trans1
9
9
9
10
36
47
LDR
8
9
9
9
35
53
33
Spinal Elements
6
6
6
7
25
Exactech (Altiva)
2
2
2
2
8
9
137
142
141
148
568
653
$2,156
$2,216
$2,170
$2,275
$8,817
$9,821
8.1%
8.4%
9.4%
10.9%
9.2%
11.4%
Other
Total Revenues
Total Growth
22
10%-11%. For all of 2009, we estimate that revenues will rise 9.2% to $8.817 billion. Table 2 illustrates the currency and
foreign exchange impact on growth in 1Q09 for select companies. Growth in constant currency illustrates the company’s
revenue growth without the impact of exchange rate fluctuations.
Table 2: Currency Impact
Reported
Growth
Constant
Currency
Growth
FX Impact
Zimmer Spine
20.0%
24.0%
-4.0%
Stryker Spine
8.0%
11.0%
-3.0%
Medtronic Spine
1.0%
4.0%
-3.0%
3.0%
5.0%
-2.0%
Biologics
-3.0%
-1.0%
-2.0%
Kyphon
3.0%
6.0%
-3.0%
7.0%
9.0%
-2.0%
Company
Core Spinal
Biomet Spine
Source: SEC Filings
Table 3: Market Share Changes
Company
"Est. Market
Share Δ"
1Q08
1Q09
NuVasive
2.6%
3.7%
1.1%
Globus
2.0%
2.5%
0.5%
Zimmer*
2.7%
3.0%
0.3%
10.6%
10.8%
0.2%
Alphatec
1.2%
1.4%
0.2%
Stryker
6.0%
6.1%
0.1%
DePuy
11.5%
11.6%
0.1%
Trans1
0.3%
0.4%
0.1%
Biomet
2.5%
2.5%
0.0%
Orthofix
3.1%
3.0%
-0.1%
43.6%
40.9%
-2.7%
Synthes*
Medtronic
Synthes and Globus revenues are estimated
Zimmer revenue growth includes Abbott acquisition
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Privately Held Spinal implant Companies
Globus Medical has been a sales growth superstar
and is now, we estimate, the largest privately held
spinal implant company in the world. On April
30th, the company announced plans for continued
international expansion. Globus now has operations
in the UK, Belgium, Germany, and India, and the
company expects revenue contributions from these
operations as soon as 2010. But Globus is not the
only fast-growing private company. We are tracking
several other firms, including LDR Spine, SeaSpine
Inc., Pioneer Surgical Technology Inc., K2M Inc.,
Scient’x, and Spinal Elements Inc, which are posting
strong sales growth rates ranging from 20% to 40%—
enough to keep Globus on its toes.
23
NuVasive Inc.
NuVasive is our spine MVP of 1Q09.
First quarter revenues grew 56.3%
to $80 million (vs. $51.2 million in
1Q08). Sales of Osteocel Plus, the
stem cell based biologic, reached
$5 million (6.25% of sales) for the
quarter. Is the slow economy affecting
procedure volumes? Not for NuVasive,
which reported a 10% annual rise in
procedure volumes with no slowdown
in sight! CEO Alex Lukianov believes
NuVasive will become the number four
spinal repair and implant company
in the world in terms of revenues
in the coming years. NuVasive
representatives also stomped on the
rumors of changing reimbursement,
calling them “bologna.”
NuVasive continues to make smart
technological acquisitions such
as its entrance into the stem cell
market via Osteocel. Prior to its
quarterly conference call NuVasive
also announced the acquisition of
Cervitech for $47 million with an
additional payment of $33 million
contingent upon the FDA approval of
their Porous Coated Motion (PCM)
artificial cervical disc. Recognizing
the importance of time to market,
NuVasive believes that the PCM is 3 to
4 years ahead of Cerpass (NuVasive’s
artificial disc in development) in
terms of regulatory approval, and
could provide $100 million in
annual revenues within three years of
commercialization. To us, this seems a
little too optimistic, but NuVasive has
proven doubters wrong in the past.
It’s hard to argue with success. We
are raising our full year revenue
estimates to $359.2 million, a 43.7%
year-over-year (YOY) growth. This
includes an estimated $29 million in
2009 revenues from Osteocel and $14
million in sales outside of the U.S.
Stryker Corporation
The economy has finally caught up
with Stryker Spine. In 1Q09, Stryker’s
spinal repair and implant revenues
grew 8% (11% constant currency) to
$128.6 million (vs. $119.1 million in
1Q08), and led all Stryker divisions
in terms of revenue growth, but it did
fall short of our estimates of $134.1
million. Revenues were driven by
inter-body and lumbar products. The
company reported that international
spine revenues declined 2% during
the quarter (+9% constant currency).
Spine revenues in Japan saw low
double-digit growth and Europe saw
mid single-digit growth.
Management struck a cautious tone
during their quarterly conference
call, noting that hospital capital
expenditures remained constrained,
currency headwinds
continue, and that they
were seeing some “pockets”
of weakness regarding
spine procedure volumes.
While pricing in the spinal
repair and implant market
held up better than that of
the large joint repair and
implant market, management
acknowledged that the
environment was challenging.
Beyond this, Stryker still
believes that the market as a
whole could grow in the high
single digits this year. Based
on this, we are lowering
our 2009 full year revenue
estimates to $552 million (8.8% YOY
growth) and 2Q09 revenues to $138.3
million (7.9% YOY growth).
Alphatec Spine Inc.
On May 4th Alphatec reported strong
first quarter revenues and increased
revenue guidance for 2009. Alphatec’s
first quarter revenues grew 32% to
$30.6 million (vs. $23.2 million in
1Q08). U.S. revenues grew 27.7%
in 1Q09, reaching much higher than
the overall spinal repair and implant
market growth of 10%. This marked
the seventh consecutive quarter of
record revenues and the fourth straight
quarter of YOY revenue growth
exceeding 25%. This was also the first
quarter of positive EBITDA (Earnings
Before Interest, Taxes, Depreciation
and Amortization). Alphatec
acknowledged that they had seen
pricing pressure and some extended
payment terms from customers.
However, they have not seen a
slowdown in procedure volumes. In
our view, the key has been execution.
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24
• Alphatec secured the licensing rights
to AmnioClear, an in vivo wound
covering derived from the amniotic
membrane that delivers a defensive
barrier at the site of surgery.
• The company launched 8 new
products in 2008 and is on track to
launch 11 in 2009.
• Alphatec executed new distribution
agreements in Belgium, Denmark,
Germany, Italy, The Netherlands,
Austria, and Spain.
• The company continues to take
the lead in the treatment of the
aging spine, and entered into a
license agreement with Helix Point,
LLC, which provides Alphatec
Spine with rights to develop and
commercialize Helifix and Helifuse,
proprietary concepts for two
interspinous devices to treat lumbar
spinal stenosis.
• Alphatec now has over 85
distributors in the U.S. representing
over 240 sales reps with a goal of
having over 85% exclusivity.
We are raising full year revenue
estimates to $126.5 million from $124
million. For the second quarter of
2009, we are estimating that sales will
reach $30.2 million. In the second
half of the year, we expect to see
contributions from Alphatec’s growing
aging spine treatment portfolio as well.
Trans1 Inc.
that physicians performed 889 Axial
Lumbar Interbody Fusion (AxiaLIF)
procedures worldwide (751 domestic)
in the quarter (vs. 673 in 1Q08).
AxiLIF procedure growth, a key driver
of revenues, increased 32.1% YOY in
the first quarter. Despite a challenging
economy, Trans1 has not seen a drop
off in procedure volumes.
However, management noted that
some delays were caused by insurers
requiring, in general, a second opinion
before spine fusion procedures.
The average selling price (ASP) was
$10,600, up 13.9% from 1Q08. This
is partly due to the fact that 22% (195
cases) of the procedures were 2-level
(fusing 2 vertebral levels in the lumbar
spine) and 261 of the cases (29%)
were 360° fusions, which command
higher ASPs. The company’s direct
sales force stood at 65 at the end of the
quarter, and there are plans to expand
it to 80 by the year’s end. Eighty-two
surgeons were trained in the quarter
and 205 were trained on the 2-level
procedure.
Encouraged by solid ASPs, an
expanding sales force and the surgeon
training on the 2-level procedure, we
are raising estimates for 2Q09 to $8.8
million (47.9% YOY growth). For the
full year 2009, we estimate revenues to
be $35.8 million.
Zimmer Inc.
Zimmer Spine continues to struggle.
Zimmer reported that spinal implant
and biologic sales in 1Q09 were $65
million (vs. $54 million in 1Q08) up
20% (24% constant currency) YOY.
But the devil is in the details! Abbott
Spine contributed $19.8 million to
revenues, down 10% sequentially from
$22 million in 4Q08. Excluding the
Abbott acquisition, spine revenues
declined 17%, falling from $54 million
in 1Q08 to $44.8 million in 1Q09.
Management acknowledged that they
had seen some de-synergies in both
the Abbott and Zimmer legacy spine
businesses as the company cross-trains
distribution channels. Beyond this,
they are focusing on the strongest
distribution networks, so revenues are
also being lost from the historically
weak channels. The company also
acknowledged competitive and
reimbursement pressures regarding the
Dynesys Dynamic Stabilization system.
While this proves troublesome for
Zimmer, it also implies that competing
companies are possibly gaining share
in this emerging market.
Zimmer noted that this could be the
worst quarter for their spinal repair
and implant division, and we see
the challenges outlined in the first
quarter continuing into 2Q09. We
are reducing our full year estimates
from $310 million to $279.6 million.
We estimate 2Q09 spine revenues to
be $67 million (+21.8% YOY). This
is based on revenue in the Zimmer
legacy business contributing $47
million and Abbott accounting for
$20 million.
Trans1 joined NuVasive as a MIS based
Table 4: Zimmer 1Q09 Sales Growth Contributors
company with a strong start to 2009.
Trans1’s first quarter revenues grew
Total
Volume/
Foreign
45% to $8.7 million (vs $6 million
Price
Growth
Mix
exchange
in 1Q08), exceeding our estimate of
20%
21%
3%
-4%
$7.5 million. The company reported
Source: SEC Filings
Medtronic Inc.
Worldwide spinal
implant and biologics
revenues rose only
25
1.4% to $881 million in the quarter,
(which is Medtronic’s fourth quarter
of its April fiscal year) up from $869
million in same period a year earlier.
Revenues grew 4% on a constant
currency basis. Sales in the April 2009
quarter (which is roughly comparable
to the calendar first quarter) were far
below the overall spinal repair and
implant market. Medtronic’s core
spinal implant and biologic business,
excluding Kyphon, grew 1.1% in the
April quarter. Kyphon registered sales
of $154 million in the quarter, up
2.7%. Sales of biologic products in the
April quarter declined 2.7% to $215
million (vs. $221 million in 4Q08).
Medtronic’s spine division derived
21.6% of its revenues in the April
quarter from outside the U.S. Those
revenues grew 2.2% YOY to $190
million in the just reported quarter.
Spinal implant sales rose 5.2%, which
helped offset declines of -7.7% and
-5.3% in biologics and the Kyphon
business, respectively.
In the quarterly conference call,
management noted that they are
working to revitalize the core product
pipeline, leverage the Kyphon
business by increasing crossselling, and marketing new PEEK
(polyetheretherketone) products.
The company also mentioned that
Medtronic is working on the G5
system, a new posterior pedicel screw
system. There were over 20,000
Kyphoplasty procedures performed in
the quarter.
We estimate that spinal repair and
implant sales in the second quarter of
Medtronic’s fiscal year (May, June and
July) will rise 2.7% to $883 million.
We expect sales of Kyphon products to
Table 5: Medtronic Quarterly Revenue Growth—$ in millions
(Calendar Year Estimates)
1Q08
2Q08
3Q08
4Q08
2008
1Q09
Implants
Total Revenues
477.0
485.0
479.0
1,939.0
512.0
496.0
% growth
5.1%
5.0%
5.3%
6.4%
2.8%
4.0%
Biologics
221.0
198.0
205.0
845.0
215.0
222.5
% growth
16.3%
0.0%
-0.5%
7.6%
-2.7%
0.7%
Kyphon
161.0
146.0
148.0
605.0
154.0
164.0
% growth
0.7%
Total Spine Revenue
859
829
% growth
33.4%
25.6%
832
3.0%
2.7%
3,389
23.0%
881
1.4%
1.9%
883
2.7%
Source: SEC filings and PearlDiver estimates
improve in the current (July) quarter
and that sales of biologic products will
likewise regain some modest traction.
For the remainder of 2009, we are
not expecting to see any catalysts
for increased growth coming from
Medtronic’s expected product launches
and we are estimating that pricing in
2009 will be flat compared to 2008.
The company expects to return to
market growth rates in 2011. Table 3
presents our estimates for Medtronic
by business segment.
Biomet Inc.
Biomet spine is continuing its
turnaround, led by strong domestic
growth. Biomet’s first quarter spinal
repair and implant revenues (Fiscal
3Q09) increased 7% YOY (9%
constant currency) to $53.8 million,
exceeding PearlDiver estimates of $52
million. Sales in the U.S. rose 15%.
The company cited solid growth in
both hardware and spinal stimulation
devices and stated that hardware and
orthobiologics grew 17% in the U.S.
during the quarter. Internationally,
growth was soft in Europe.
In the conference call held on April
14, 2009, the company attributed
the turnaround to the result of solid
execution on new product launches,
upgrades to sales management and
distribution stabilization, and the
focus on a separate spinal product
sales force. During the quarter the
company launched the PEEK version
of the Solitaire anterior spinal system.
The quarter also saw the successful
rollout of the Polaris deformity system
in 5.5mm and 6.35mm diameter rods.
While the company did not disclose
its spinal stimulation sales, it said that
spine stimulation growth was more
related to hardware growth, and that
it was unclear as to whether the recent
controversy over off-label usage of
InFuse was having an impact.
Pressures on spine instrumentation
pricing were less than pressures in
the reconstructive segment, but they
exist nonetheless. Based on the call,
we believe that there may be some
softness on elective procedure volumes
due to economic headwinds, but
that it will not significantly impact
Biomet’s spinal repair and implant
business. We are increasing our
2Q09 (Biomets 4Q09) estimates to
$56.9 million (7.2% YOY revenue
growth) from $52.1 million. Also of
note is that the second generation
Ballista percutaneous pedicle screw
system and the AccuVision MIS spinal
26
Table 6: Orthofix/Blackstone Spine Quarterly Revenue Growth
exposure system was launched near
the end of 2Q and may contribute
more so in the 4Q.
Revenue ($ in millions)
Spine Stimulation
% growth
Hardware / Biologics
Orthofix International
Orthofix spine, we believe, is well
on the road to recovery. First quarter
spinal repair and implant sales rose
5.6% to $66.1 million (vs. $62.5
million in Q108), exceeding our
estimates of $64.6 million. Spine
stimulation revenue increased 12%
to $37.2 million while implant and
biologic revenues decreased 1% to
$28.8 million. It should be noted,
however, that the sales of spine
products through the Blackstone unit
increased 2% from the preceding
quarter. Growth in implants was
lead by thoracolumbar and cervical
spine implants, which increased 5%.
Such sequential quarterly growth
is evidence of a steady turnaround.
Orthofix continues to gain share in the
spine stimulation market, with this
quarter marking the sixth consecutive
quarter of double-digit growth in a
1Q09
2Q09E
3Q09E
4Q09E
37.2
39.0
39.1
40.9
2009E
156.2
11.0%
10.2%
10.0%
9.4%
10.1%
117.8
28.8
28.5
29.0
31.5
-0.7%
4.4%
12.4%
11.7%
6.8%
Total Spine Revenue
66.0
67.5
68.1
72.4
274.0
% growth
5.6%
7.7%
11.0%
10.4%
8.7%
% growth
Source: SEC filings and PearlDiver estimates
market growing only 6%-7%. Orthofix
is estimated to have 50% market share
in spine stimulation, with Biomet and
DJO as the other competitors. Trinity
(Osteocel) saw $6 million in spine
sales and $1.3 million in orthopedics.
• Sales of new products such as the
Firebird Pedicle Screw System and
the PILLAR SA inter-body devices
are strong at the outset.
Here are four key points that should
drive growth:
Orthofix CEO Alan Milinazzo
reiterated that the company is
comfortable with annual revenue
growth of 8%-12% and stated that
they expect sequential growth. Our 2Q
and full year estimates are in Table 6.
• On April 15th, Orthofix announced
an agreement with MBA group to
expand distribution of its spine
implant and biologic products into
the UK market.
• On May 5th Orthofix announced the
limited market release of
Trinity Evolution.
• Orthofix continues to focus on
building its distribution network.
For more articles by this author, please
select the following link: http://www.
pearldiverinc.com/pdi/spine.jsp
Chart 1: Estimated 2009 Spine Market Share
27
company news
Medtronic’s Spine Stabilizes
M
edtronic’s spinal and
biologics business
stabilized in the fourth
quarter of 2009.
That’s the consensus of various
Wall Street analysts after Medtronic
reported fourth quarter revenue
numbers on May 19.
Spinal and biologics revenues for
the quarter increased 1% over the
previous year. The company attributes
that increase to momentum from
new or enhanced products, including
translational and lumbar plates,
PEEK Rods and other minimally
invasive products.
“Although this business continues to
feel the pressure from several external
factors, we were encouraged by the
continued stability of this business in
the U.S.”
Hawkins said the company was
investing heavily beyond just the BMP
fuse. “We are continuing to round out
the portfolio of BBM products and
other products which will complement
our overall biologics component.”
Regarding the continued integration of
Kyphon, Hawkins said the company
was continuing to focus on “making
the changes necessary to get revenue
growth back to double digits and to
realize the underlying potential of
this business. We were encouraged
to see balloon
Medtronic Spinal and Biologics
kyphoplasty
4Q08s
4Q09
($ in millions)
[BKP] sales in
Total Revenues
$869
$881
U.S. continue
Core Spine
$448
$521
to improve. For
the first time,
Biologics
$221
$215
we did over
Kyphon
$150
$154
20,000 BKP
Source: Company reports
cases in the
U.S. in the fourth quarter.”
Bill Hawkins, President and CEO of
the company, told analysts on their
quarterly call that their spine business When asked about specific actions the
company planned to improve results
has “Much work to do, we still have
in the spine division, Hawkins noted:
the most comprehensive line of
innovative products in the market,
“A year ago I put Steve LaNeve
including unique minimally invasive
down in the spine business. Over
solutions, dynamic stabilization
the last year [he] has been working
products, navigation and imaging
to kind of build his team. We just
technologies, and exclusive biologic
appointed someone to head up
solutions. No one can compete with
operations and R&D, a terrific guy
the breadth of our portfolio.”
that came from another business
across Medtronic. We’re getting
Commenting on the decline in
the team solidified. We are very
biologics revenues, Hawkins said,
clear on the priorities, one of
which is to really focus on the
pipeline, it is to make sure we get
the right cross selling initiatives
going on between the Kyphon
organization and between the core
spine organization, a lot of work
on making sure we’ve got the right
priorities around clinical studies
to drive the biologic side of the
business as well as some of the core
spine parts of the business.”
There are a number of things Hawkins
said the company was strengthening
in the pipeline, the biggest of which
is the G5. “It’s really a whole new
posterior screw system that we think
will have a competitive advantage
in the marketplace.” He continues
to be optimistic about some of their
PEEK materials which they area now
annualizing at $300 million in sales.
Finally, Hawkins noted that the new
direct lateral system will be very
competitive in the marketplace.
Medtronic may be losing market share
to companies like NuVasive, with
whom it is involved in a significant
patent lawsuit, but for now their spine
business appears to be stabilizing
and time will tell if their pipeline and
Kyphon integration gives them new
momentum.
—WE (May 20, 2009)
28
company news
Corrance: “AST;
An Attractive Proposition”
C
raig Corrance, the twenty-year
spine industry vet had only
been in his chair as president
of Centinel Spine for about eight
months when a recruiter for Applied
Spine Technologies (AST) came calling
earlier this year.
Admittedly, Corrance was concerned
about how this would look on
his curriculum vitae. However,
after reflecting on the opportunity,
Corrance said, “It was Dr. Panjabi,
the technology and going back to
the motion preservation space that
whetted my appetite to get involved.”
Corrance Joins AST
“It looked like a real opportunity
to perform as a CEO and sit on a
board where they’ve got four mature
funds and be in an arena that is a
comfortable zone for me,” Corrance
told OTW in an interview shortly after
the announcement was made that he
was joining Applied Spine as its CEO
on May 11.
AST CEO: Craig Corrance
AST was without a CEO after the
departure of Tom Wood and it had
voluntarily suspended its clinical trial
for the Stabilimax NZ system after
their pedicle screw had fractured in a
small number of procedures.
The recruiter was fishing around to
see if he’d move after such a short
time. Corrance had only recently
joined Raymedica, which was in the
process of changing direction from
nucleus arthroplasty to stand-alone
fusion in both the cervical and lumbar
spine areas. Raymedica had put its
HydraFlex device on the back burner
and hooked up with Surgicraft to form
Centinel Spine.
Bringing the product to market
via a PMA, (not adjunct to fusion),
his previous experience in pedicle
anchored motion preserving
devices and a chance to revisit prior
relationships were other important
reasons for his decision to join AST.
Corrance had been a senior executive
at Scient’x USA and Altiva Corporation
before joining Raymedica.
with a variable dynamic feature that
maximizes stiffness and support in the
Neutral Zone, thus hopefully returning
the Neutral Zone to its normal, limited
range.
AST Challenges
Was he entering a company in turmoil
and under stress after the departure
of their CEO, Tom Wood and the
voluntary suspension of their clinical
trial?
Corrance told us that to a great extend,
the clinical trial issue had already been
fixed. “The headache had been that
they ‘grit blasted’ their pedicle screw to
try and roughen the surface to reduce
the risk of screw loosening which had
in turn caused the screw fracture in
those small number of procedures.”
“The second generation screw is
manufactured using industry standard
manufacturing protocol. It has been
cycle tested which allows us to have a
great deal of confidence that the screw
won’t fracture going forward,” said
Corrance.
Trial Resumed
According to the company, Stabilimax
NZ is the culmination of more than 30
years of focused research by Manohar
Panjabi, Ph.D.
The underlying premise of Stabilimax
NZ is that painful spine motion
increases in an injured spine and
that this abnormal motion is most
pronounced in the ‘Neutral Zone’—the
area of laxity in the center portion of
the spine’s range of motion. Stabilimax
NZ utilizes a dual-spring mechanism
The FDA has now permitted the
resumption of the trial by allowing
the enrollment of another 20 patients.
The company is four patients into the
20 with another five already in their
diary enlistment. The company wants
to collect the data and present it to the
FDA by the end of July.
In addition, by the end of June or early
July, the company will be in a position
to present one years’ data to the
29
company news
FDA with the first generation screw.
Its hope is that it will be allowed to
continue enrolling from that point
onwards.
that wounded soldiers’ injuries healed
better when Infuse was used, had
serious problems. The investigators
Corrance is quick to point out that he
has inherited a terrific team at every
level. He said Applied Spine did the
right thing with the voluntary recall.
He praised the FDA for responding
well from the company’s point of view.
Speaking of doing the right thing,
Corrance told us that former CEO
Tom Wood came by his office to shake
his hand and offer assistance. “That
was a terrific gesture.”
Corrance concluded, “Panjabi is not
unlike Henry Ford in the automotive
industry. He’s changed the world
in how we think as far as pedicle
anchored motion preservation
is concerned. That was really an
attractive proposition.”
—WE (May 27, 2009)
legal & regulatory
Grassley Exposes Infuse Docs
S
enator Charles Grassley is mad
at Medtronic again. This time
it’s not for something it did, but
for something it didn’t do.
An Army investigation of former Army
surgeon Timothy R. Kuklo, M.D.,
caught the Senator’s attention.
Investigators from the Walter Reid
Medical Center reported that an Infuse
study conducted by Kuklo, showing
That letter contained the names of
consulting surgeons that Grassley
had previously requested from the
company. That list did not contain
Kuklo’s name.
The letter to Medtronic President and
CEO Bill Hawkins said, “Last October,
I sent you a letter asking Medtronic to
disclose payments to àll physicians
with whom Medtronic has consulting
agreements for Infuse.’”
Senator Charles Grassley
said the study reported on more
soldiers and injuries than the hospital
could account for and that Kuklo had
forged the signatures of his co-authors
on the study.
Lt. Col. Romney Anderson, M.D.,
one of the co-authors reported the
problem to the Army last year. He’s
now stationed at a combat hospital
in Baghdad.
Medtronic confirmed that it had
provided financial support for some
of Kuklo’s research but would not say
when he was hired or how much he
was paid.
What set off Senator Grassley was
that Kuklo’s name was not on a list of
surgeons Medtronic sent the Senator
of surgeons who had served as
consultants to the company related
to Infuse.
Grassley went to the floor of the
Senate on May 19 and asked that a
letter he had written to Medtronic be
placed in the record.
He continued, “I am concerned
that Medtronic did not include Dr.
Timothy Kuklo in response to my
written request. It is clear that Dr.
Kuklo had some sort of consulting
agreement with Medtronic and was
named as a Medtronic consultant for
Infuse in an article that ran in The New
York Times on May 13, 2009.”
Here is the list of physicians the
company sent to Grassley in response
to his October 2008 request:
Lisa Cannada Michael Carstens David Cochran Curtis Dickman Rajeev Garapati Judith Gogola David Hak James Hardacker B. Matthew Hicks Thomas Lyons Jay Malmquist Robert Marx Todd Melegari Peter Moy Myron Nevins John O’Donnell Chetan Patel Philip Pryor Kevin Pugh Daniel Spagnoli Gilbert Triplett John-Louis Ugbo $44,400
$99,600
$67,200
$13,000
$8,600
$500
$10,500
$18,400
$70,300
$96,700
$47,200
$109,800
$2,300
$59,900
$35,600
$4,400
$21,100
$11,300
$30,400
$138,400
$51,400
$2,000
30
legal & regulatory
A couple of well known orthopedic
surgeons familiar to OTW readers
told The New York Times that Kuklo,
who has published more than 100
articles on orthopedic topics, said the
allegations around Kuklo were not
in keeping with what they know of
his work.
exhaustive. Dr. Polly has been
identified as a consulting surgeon to
Medtronic for Infuse and his name
does not appear on the list. We also
know of many others. We’ll get back
to readers with more on that.
The letter was quickly leaked to the
press, but ReGen was not copied. No
recall, no suspension of clearance
or any other action to reverse the
decision by the agency to allow ReGen
to begin marketing their device.
—WE (May 22, 2009)
Todd J. Albert, M.D., Chairman
of Orthopedic Surgery at Thomas
Jefferson University Hospital in
Philadelphia, told the Times that it
surprised him to hear this swirling
around Kuklo. “He’s a guy, anything he
tells me, I take to the bank.”
Nightmare on FDA Street
Grassley had asked the Agency to tell
him how the entire process of clearing
the device was handled, including
the actions involving the Office of the
Commissioner and the make-up of
the advisory committee which
concluded that “as far as one can make
those comparisons [to a predicate
device]...it’s the sense of the Panel
(Orthopaedic Device Panel) that, yes
it [Menaflex] is as safe and effective
[as predicate devices].”
David Polly Jr., M.D., a former Walter
Reed colleague and also a Medtronic
consultant, said he believed that Dr.
Kuklo’s data was “strong” and the
episode had been overblown.
Medtronic spokeswoman Mary
Thorsgaard said on May 20 that Kuklo
began consulting for the company in
August 2006, but “is no longer active
as a consultant.”
R
eGen Biologic’s nightmare
with the FDA just won’t end.
On May 8,
the FDA’s new
Principal Deputy
Commissioner
Joshua Sharfstein, M.D., wrote a letter
to U.S. Senator Charles Grassley in
response to questions the senator had
raised about the FDA’s handling of
ReGen’s Menaflex clearance.
“Medtronic is cooperating with
Senator Grassley’s request for more
information, and will provide the
necessary data to the committee,”
Thorsgaard said in a statement.
She did not say why Kuklo was
excluded from the list submitted to
Grassley’s office.
Kuklo has retired from the Army and
is now a Professor of Orthopedic
Surgery at Washington University in
St. Louis.
One final note. The list of Infuse
consultant above is clearly not
ReGen’s Menaflex
Sharfstein told Grassley that the
Agency will address whether a
separate reconsideration of the
decision to clear the device should
be undertaken.
Sharfstein said the review will look at
whether or not established processes
and procedures were followed
and whether or not the integrity
of the Panel and review process
was compromised.
Panel Chair Jay Mabrey, M.D., told
OTW after the FDA cleared the
device that he believed all the panel
members that reviewed the device
were qualified, but told the Wall Street
Journal that he believed the FDA had
“stacked” the panel to get the results
they wanted. Mabrey told us that
he had been surprised by the panel
members that showed up at the
review meeting and wished that they
had been allowed to vote on
clearance instead of just offering
their recommendation.
Sharfstein wrote Grassley that their
internal review, to be conducted by
staff that had played no part in the
31
legal & regulatory
ReGen process, would complete their
work by mid August.
Three days after Sharfstein’s letter to
Grassley, Democratic Representatives
Henry Waxman, Bart Stupak and
Frank Pallone, Jr., forwarded
“key documents” to Sharfstein to use
in the agency’s review of FDA actions.
Wang Latest Media Target
U
CLA’s Chief of Spine Surgery,
Jeffrey Wang, M.D., is the
latest physician with
industry ties to be the target of a
story in the press based on leaked
government documents.
Interestingly, every one of the
forwarded documents were internal
FDA documents. We guess the
Congressmen were concerned the new
Principal Deputy Commissioner hadn’t
had time to find where all the filing
cabinets were at the agency. Who
says it’s hard to make friends
in Washington?
How long is the dysfunction within the
FDA going to subject device companies
to being pawns in the bureaucratic
infighting? There are many who believe
that a contributing factor to this
particular situation is a desire to make
significant changes to the agency
510(k) process.
Jeffrey Wang, M.D.
For now, ReGen is continuing
to train surgeons in the implant
procedures of the device and
is proceeding to market
the Menaflex.
Hopefully the nightmare will
come to an end in the near future
and device makers will wake up
to an FDA that is predictable,
functional and has regained the
confidence of the public.
On May 28, Wall Street Journal
reporters David Armstrong and
Thomas Burton wrote that they had
reviewed a confidential May 21 letter
from Senator Charles Grassley to the
Chancellor of UCLA.
Grassley’s letter, according to the
reporters, alleges that Dr. Wang
“consistently checked no” on
university forms when asked whether
he had received income of $500
or more from companies funding
his clinical research. California
requires that state university
researchers disclose all financial ties
to nongovernmental entities funding
their work. Researcher can be fined,
subject to civil liabilities or disciplined
by their universities if they don’t
disclose those ties.
Specifically, Dr. Wang is accused of
not informing his institution that he
was paid $495,500 by companies from
2004 through 2007. The companies
named in the WSJ story were
Medtronic, DePuy and FzioMed.
The reporters write that Grassley’s
letter says that the payments from
the companies weren’t disclosed to
UCLA until the Senator asked to
see Dr. Wang’s disclosure forms
to the school.
The disclosure form contained in
Grassley’s letter allegedly shows
that the three companies were
sponsoring research by Dr. Wang at
UCLA at the time of the payments.
DePuy and FzioMed declined
to comment to the reporters.
Medtronic spokeswoman Marybeth
—WE (May 22, 2009)
advertisement
32
legal & regulatory
Thorsgaard told us the company had
nothing to add to their quote in the
Journal article. She told the Journal,
“Medtronic is not in a position to
know whether Dr. Wang honored
his respective employer’s conflict-ofinterest requirements.” She confirmed
that his agreement has expired and has
not been renewed.
This is about a contractual agreement
between researchers
and their employers
and the disclosure
of private income
generated by those
researchers. Some
universities require
research employees
to share a portion of
that outside income
with the institution.
Sources within some
institutions have
told Orthopedics This
Week (OTW) that
the reporting of this
private income for
purposes of income
sharing is sometimes
ambiguous and discretionary.
with serious allegations about a well
respected board member of the North
American Spine Society (NASS) is very
troubling. Dr. Wang is also head of
the Society’s CME Committee. NASS
instituted the toughest ethics rules of
any professional medical society earlier
this year and requires leaders of the
society to fully disclose all financial
ties to industry. Sources within NASS
have told OTW that Dr. Wang has
been in full compliance with those
ethics rules.
We requested a copy of the letter from
the reporters and Senator Grassley’s
office. The reporters declined and
sources in the senator’s office told us
the letter was not public. We asked the
reporters who gave them the letter and
told them we heard rumors that the
letter was leaked to them by a federal
agency. The Journal said it “does not
comment on rumors.”
We have written frequently about
Dr. Wang and his work. We’ve had
numerous conversations with him
about financial disclosures and previous
reports about his relationships with
industry. Dr. Wang has consistently
and forcefully told us that he favors
disclosure and welcomes the disclosure
of any of his ties to industry.
The lack of transparency regarding
a leaked government document
There is more here than meets the eye
and as a champion of transparency,
we urge Senator Grassley to disclose
his letter to the Chancellor. If the
letter is private and it was leaked, the
senator should investigate the source
and motivation for the leak. UCLA
should also be forthcoming about the
implementation of their track record
regarding outside income of their
research scientists.
We’ve contacted Dr. Wang’s office
for comment. The only
reported response from
Dr. Wang or UCLA is from
the senator’s leaked letter
alleging that UCLA told
senate investigators that Dr.
Wang “erred in completing”
the disclosures.
How and why was the
alleged “error” made?
Is there a clear and
unambiguous employment
agreement between Dr.
Wang and UCLA? Have
those agreements regarding
private income been
applied consistently with
all other researchers in
the university system? Does the State
of California’s budget crisis have an
impact on the state’s relationships with
their researchers?
We don’t know, because nobody’s
talking right now.
We find no fault with the Wall Street
Journal reporters for reporting on a
leaked document and we find no fault
with Senator Grassley’s mission to pass
a Sunshine Act that requires public
disclosure of payments from industry
to surgeons involved in research and
33
legal & regulatory
product development. In fact, efforts
for full disclosure could go a long way
to restore the trust patients need when
they put their life into the hands
of a physician.
But this situation has now become
something more than just disclosure
of documents. This story is becoming
a flashpoint for examining the
financial relationships between
public universities in California and
their top research scientists. Are
these universities going to be able to
continue to attract and retain their top
talent if the costs for the researchers
like Dr. Wang get too high?
We’ll be examining that in the future
at OTW.
—WE (May 29, 2009)
New FDA Blueprint?
M
argaret Hamburg, M.D.,
was confirmed by the U.S.
Senate on May 18 to be the
new Commissioner of the FDA.
On May 26, Dr. Hamburg and her
Principal Deputy Commissioner,
Joshua Sharfstein, M.D., laid out their
Balancing Risk and Benefits
Joshua Sharfstein, M.D
blueprint for the agency in an essay
written for the New England Journal of
Medicine (10.1056/NEJMp0903764).
Device makers should study the words
of the new FDA leaders carefully for
signs of new or different metrics for
approving their devices. Their essay
addresses a broad array of topics
including drugs and food safety.
We have highlighted their focus on
medical products and devices.
The new leaders believe the ultimate
measure of the FDA’s success “should
reflect its fundamental goal [assuring
the health of the nation] and go
beyond such intermediate measures as
the number of facilities inspected or
drugs approved.”
“Beyond Usual Routines”
Margaret Hamburg, M.D.
of medical products and food,” even if
those threats lie “outside the realm of
the agency’s usual routines.”
Citing their traditional tools of
regulation, approval or disapproval
of applications, they write that the
FDA should, “always ask whether
delays in approval or safety problems
can be prevented.... The FDA should
actively...address threats to the safety
They are aware that there is a
perception that the FDA has just two
speeds of approval—”too fast and too
slow.” They note that products are
“generally approved on the basis of
relatively small studies and that safety
problems often emerge when large
populations are exposed to the products.”
On the other hand, they acknowledge
that often patients have no time to
wait. “Some benefits are not the risk;
some risks are worth taking.” Their
key considerations will be “the
severity of the illness at issue, the
availability of alternative treatments
or preventive interventions, and the
current state of knowledge about
individual responses.”
Post Market Activity
They cite the FDA Amendments
Act of 2007 which strengthened the
agency’s ability to place restrictions at
the time of approval while requiring
that additional safety data be gathered.
This allows the agency to change the
regulatory oversight of products as
they move from limited use in
clinical trials to adoption in the
medical system.
Faster Reimbursement
To make important new treatments
available to patients, they write that
the FDA “should collaborate with the
Centers for Medicare and Medicaid
34
legal & regulatory
Services as well as with industry
and patient and consumer groups to
explore ways of shortening the time
from approval to reimbursement.”
International Oversight
Hamburg and Sharfstein believe the
FDA should facilitate the “development
of safety standards where none exist and
then, working with our international
partners, build a system with multiple
levels of oversight. Safety must be the
shared responsibility of not only the
producer but also the country of origin,
the importer, the importing country, and
the final company in the supply chain.
Some elements of this system, such as
international outreach and coordination,
can be implemented quickly; others will
take years to develop.”
Credibility and Culture
of Science
In a clear reference to the fight
between career scientists and
agency managers that has
spilled over into Congress
and the media, they write that
the FDA’s job is “to minimize
risks through education,
regulation, and enforcement...
to be credible the agency
must communicate frequently
and clearly about risks and
benefits...the FDA cannot
delay in providing reasonable
guidance—guidance that
informs rather than causes
unnecessary anxiety.”
“For these communications
to have credibility,” they note,
“the public must trust the
agency to base its decisions on science.
We recognize the importance of a
management approach that respects
the expertise and dedication of the
FDA’s career scientists.”
They continue, “In recent years,
the agency has struggled to handle
controversies involving the safety
of regulated products, opening the
door to legitimate questions from the
media, the public, and Congress about
whether the public interest is being
served. Establishing the FDA as a
public health agency requires a culture
that encourages scientific exchange and
respects alternative viewpoints along
the path of decision making. It also
requires that the agency define and
protect integrity in its basic processes.”
Device makers have long suffered
from a broken and dysfunctional FDA.
Whether this blueprint will transform
the agency into a functional regulator
and partner in bringing new medical
products and devices to patients
is unknown.
To read the entire essay, click here:
http://content.nejm.org/cgi/content/
full/NEJMp0903764
—WE (May 29, 2009)
extremities
Rotator Cuff Tears: Hereditary?
A
t the next family reunion be
sure to thank your forebears
for passing on problems
with their shoulders. New research
is indicating that those with relatives
who have experienced rotator cuff
tears are at increased risk of similar
tendon tears themselves. The study,
published in the May 2009 issue of
The Journal of Bone and Joint Surgery
(JBJS), was undertaken by Robert Z.
Tashjian, M.D., Associate Professor of
orthopaedic surgery at the University
of Utah School of Medicine
Orthopaedic Center in Salt Lake City.
“This strongly suggests genetic
predisposition as a possible cause for
rotator cuff disease,” said Dr. Tashjian
in the news release.
advertisement
Along with colleagues, Dr. Tashjian
used the Utah Population Database
combined with the University
of Utah Health Sciences Data
Warehouse numbers, and found an
increased risk for these tears in family
members of patients with rotator
cuff tears. The risk extends out and
beyond third-cousin relationships.
35
extremities
“While we have not determined the
exact genetic component,” added
Dr. Tashjian, “our family history
data supports that heredity plays a
role in the development of rotator
cuff tearing.”
The common thinking is that these
tears are believed to have both
mechanical and environmental
influences. The current
theories include
decreased blood flow
leading to tendon
dysfunction and tearing,
impingement of the
rotator cuff on the
undersurface of the
shoulder cap when
moving the arm, and
age-related degeneration.
The researchers indicate
that this work could
lead to an eventual
identification of the exact
genetic component for
this injury. Dr. Tashjian
and his colleagues are
currently collecting
blood samples for DNA
analysis of patients with
rotator cuff tears, which
will be used later for
various genetic analyses
to determine the exact
genetic component.
healing rates,” noted Dr. Tashjian in
the news release.
Commenting on the specifics of such
treatments, Dr. Tashjian told OTW, “At
this point, various ‘biologic augments’
are already being considered and
even used in rotator cuff surgery.
Platelet rich plasma is a spundown concentrate of blood which
Shoulder Joint
The research results can also lead to
future treatment options. “Rotator
cuff healing is often incomplete and
identifying a possible genetic link to
the disease may provide targets for
biologic treatments to improve the
is currently being used to augment
repairs in attempts to stimulate
healing. This concentrate has a high
level of various growth factors which
MAY improve healing. Unfortunately,
we have no idea the exact biologic
mechanism of why healing is impaired
or why tears occur therefore this
“shotgun” method of identifying a
possible adjuvant to repairs may
have significant limitations. The
ultimate goal of our research would
be to identify a specific gene or set of
genes which may be augmented or
suppressed that then leads to tearing.
We could then potentially use a very
directed approach in identifying
possible growth factors which could
then be added to a repair to
enhance healing.
Regarding the specifics of
future research, Dr. Tashjian
told OTW, “We are just in
the initial stages of a large,
multigenerational study. We
are planning on collecting
DNA from approximately
200–300 patients with
documented rotator cuff
tears, as well as 200–300
family members. The family
members are of those
patients identified in the
Utah Population Database
(same database we used in
the published study) of high
risk pedigrees (family lines
where the patients have at
least 3rd degree relatives
with tears as identified
by the UPDB). We are
also collecting a control
population of individuals
with no documented tearing based
upon MRIs of both shoulders. The
blood samples are then sent to a
company in Iceland to be genotyped.
Once this is performed, the other
members of the team who worked
on the published article, including
Dr. Cannon-Albright, will perform a
36
extremities
variety of tests, including a linkage
analysis to attempt to identify a
possible chromosomal location for a
predisposing gene as well as candidate
gene analysis testing based upon other
studies suggesting potential mutated
genes in other tendonopathies
(Collagen 5a and Tenascin C). This
will be an ongoing project for the next
3 to 4 years.”
included the number of casts required,
the rate of percutaneous Achilles
tenotomy, the rate of recurrence,
the failure rate, and the need for
additional surgical procedures.
Patients had similar profiles in terms
of age, sex distribution, laterality of
the clubfoot, and history of treatment.
The mean duration of follow-up was
34 months in the physiotherapist-
of Surgery at the University of
Toronto, who noted, “Once we had
established the physiotherapist run
clubfoot clinic, we were interested in
determining its success. We perceived
that the process was working well,
but felt it would be important to
objectively evaluate this perception.
We were not surprised to find that
the Ponseti method was indeed very
effective in the hands of a trained
—EH (May 21, 2009)
Ponseti Treatment:
Surgeon “vs” Physiotherapist
A
nd the medal goes to???
Investigators from The
Hospital for Sick Children
(“SickKids”), Toronto, Ontario,
Canada, have announced findings
indicating that the Ponseti method of
treating clubfoot is as effective when
directed by a physiotherapist as when
directed by a surgeon.

Orthopedists at SickKids experienced
such success treating clubfoot
with the Ponseti method that the
institution established a clubfoot
clinic in 2003. This clinic is directed
by a physiotherapist who, using the
Ponseti protocol, performs the serial
cast treatment and supervises the
brace management of all children with
idiopathic clubfoot deformity.
All patients with idiopathic clubfoot
deformity treated from 2002 to 2006
were followed for a minimum of
two years. Twenty-five children (34
clubfeet) treated by surgeons were
compared with 95 children (137
clubfeet) treated by a physiotherapist.
The outcomes that were evaluated
Ponseti Method
directed group and 48 months in the
surgeon-directed group. No significant
difference was found between the
two groups with regard to the mean
number of initial casts, the Achilles
tenotomy rate, or the failure rate.
Recurrence requiring additional
treatment occurred in 14% of the feet
in the physiotherapist-directed group
and in 26% of the feet in the surgeondirected group. Additional procedures,
including repeat Achilles tenotomy or
a limited posterior or posteromedial
release, were required in 6% of the feet
in the physiotherapist-directed group
and in 18% of those in the surgeondirected group.
Commenting to OTW was Unni
Narayanan, Assistant Professor
physiotherapist. The successful model
is attributable not only to the skills
of a dedicated physiotherapist, but to
the value of the Ponseti method itself
which is simple to teach, simple to
learn, simple to apply effectively, and
lends itself well to a team approach.
Regarding any further research,
Narayanan told OTW, “We have
established a database of all children
being treated for clubfeet. This will
allow us to answer other questions of
interest pertaining to this population,
which might be influenced by the
model of care we have adopted.”
He added, “Credit should go to the
leadership within our Orthopaedic
Division and at the Hospital for Sick
37
extremities
Children for having the vision to
implement such a model. We have
shown that it has been a great success
in our setting. I don’t think we could
have done things much better.”
—EH (May 22, 2009)
Cell Phone Elbow: High-Tech Pain
H
ang up the phone! Or at least
switch hands. Doctors are
seeing an increasing amount
of patients suffering from cubital
tunnel syndrome, sometimes called
“cell phone elbow.” The human arm
is not made to stay bent at the elbow
for prolonged periods of time, but
now that almost everyone from middle
school kids to grandparents owns
their own cell phone, more and more
people are unknowingly squeezing
their nerves to hold phones to their
ears.
Cubital tunnel syndrome results from
holding the elbow in a flexed position
at an angle of 90 degrees or greater for
prolonged periods of time. The ulnar
nerve, which runs from the collarbone
down to the hand, passes through the
cubital tunnel on the inner side of
the elbow. When you flex your elbow,
the tunnel stretches and squeezes the
ulnar nerve, which can eventually
cause the nerve to misfire. Symptoms
begin with aching, tingling, numbness,
or burning in the hand, forearm, or
elbow, and if the condition worsens,
you can lose strength in your hand
and the ability to type, write, or hold
heavy objects.
According to the article on cubital
tunnel syndrome in this month’s
issue of the Cleveland Clinic Journal
of Medicine, “cellular telephone use
has increased exponentially, with
3.3 billion service contracts active
worldwide—or about one for every
two people on the planet.” It’s no
wonder that the article names “cell
phone elbow” as the “second most
common nerve compression syndrome
in the upper extremities after carpal
tunnel syndrome.” But prolonged
cell phone use isn’t the only way to
develop cubital tunnel syndrome.
Some people keep their elbows bent
for long periods of time at their
computers, and others sleep with their
elbows in flexed positions.
Preventing cubital tunnel syndrome
can be simple. When talking on the
phone for long periods of time, switch
hands or use a hands-free headset. An
elbow pad or a towel can help keep
your elbow straight during the night.
If symptoms arise, straighten and rest
your elbow joint. Anti-inflammatory
medication can also ease the pain, but
if the condition grows serious, you
may need surgery to decompress
the nerve.
For those who fear that cubital tunnel
syndrome will interfere with their
work, President Obama may have
some relief. According to People’s
Weekly World (pww.org, “Obama
Seeking Ways to Curb Repetitive
Motion Injuries,” May 12,
2009), the President is in favor
of implementing job safety rules
that would help reduce the
number of ergonomic injuries,
such as cubital tunnel syndrome.
These sorts of rules disappeared
from the workplace in the
previous administration, but
the President’s acting director
of the Occupational Safety and
Health Administration, Jordan
Barab, says that the current
administration is committed to
bringing these regulations back
to the workplace.
38
extremities
Does this mean we’ll have mandatory
elbow stretches at work? Will all
cell phones come with hands-free
headsets? Or maybe we should just
remember to put our phones down
and take a break.
—DK (May 22, 2009)
Ankle Movement Approved
in America
O
n May 27 the FDA
SBi’s STAR Ankle Replacement
announced that is was
granting approval to the
M.D., director of the FDA’s Center for
Scandinavian Total Ankle Replacement Devices and Radiological Health. “For
(STAR) System. Now Americans
the first time in the United States, a
can get access to the same motion
patient may retain some ankle mobility
preservation technology that patients
with this non-constrained, mobilearound the world have been getting
bearing device.”
for years.
The FDA has already cleared several
The mobile-bearing device, which
fixed-bearing ankle devices, which
relies on a bearing that move across a
are also options to fusion surgery.
surface of polyethylene is owned by
However, in fixed-bearing ankle
Small Bone Innovations, Inc. (SBi).
system, the articulating surface is
molded, locked or attached to one of
Developed as an alternative to fusion
its metallic components.
surgery, the STAR system may allow
for greater rotation and movement in
Patients with the STAR system
the joint.
who were followed for two years
demonstrated similar rates of adverse
Fusion surgery involves cementing
events, surgical interventions, and
the shin bone (tibia)—the thicker of
major complications as fusion surgery
the two bones in the lower leg—to the
talus bone in the ankle. The procedure A company announcement said that
stabilizes the ankle, but significantly
the STAR system has more than 19
decreases the ability to move the foot
years of clinical experience and the
up and down.
current design has been implanted
in over 15,200 patients worldwide.
“This device offers another treatment
Additionally, there have been 35 peeralternative to fusion surgery, and
reviewed clinical outcomes papers
more closely imitates the function of a published on STAR. SBi believes that
natural ankle,” said Daniel G. Schultz, this number of papers is more than
any other mobile-bearing total ankle
arthroplasty device.
Anthony G. Viscogliosi, Chairman and
CEO of SBi, said: “The ‘Instructions for
Use’ and ‘Patient Labeling’ issued by
the FDA indicate that STAR patients
had superior effectiveness compared
to ankle fusion and had comparable
safety results compared to ankle fusion
in the clinical trials. No other total
ankle replacement system can make
this claim.”
Viscogliosi continued, “STAR was less
invasive than fusion, with less blood
loss, shorter operating time, and better
pain relief. We are now able to provide
surgeons and their patients with a
proven, advanced technology that we
believe will change the standard of care
from fusion to total ankle arthroplasty.”
The STAR Ankle Pre-Market Approval
(PMA) application was accepted for
filing by the FDA in March 2006. An
FDA Advisory Panel recommended
approval on April 24, 2007.
On February 3, 2009, SBi
announced that it had completed the
acquisition of Link America, Inc.,
d/b/a Link Orthopaedics, the ankle
system, and certain assets related to
the system from DERU GmbH and
Waldemar Link GmbH & Co. KG of
Hamburg, Germany.
As a condition of FDA approval, the
company will evaluate the safety and
effectiveness of the device during the
next eight years.
—WE (May 28, 2009)
39
large joints
Young Athletes and
Strength Training
N
ote to the young: less
texting…more flexing. A
few weeks of supervised,
organized exercise can establish a
foundation for a lifetime of health.
So says a recent study published in
the May/June issue of Sports Health: A
Multidisciplinary Approach. Co-authors
Katherine Stabenow Dahab, M.D. and
Teri Metcalf McCambridge, M.D.,
FAAP from Johns Hopkins Hospital
in Baltimore, Maryland, report that
participating in even a short-duration
strength-training program during
childhood and especially during
adolescence may not only improve
body composition, but also increase
self-esteem and improve blood lipid
profiles.
• A variety of resistance types (free
weights, weight machines, rubber
tubing, and medicine balls)
• Training the major muscle groups
(chest, shoulders, back, arms, legs,
abdomen, and lower back)
• A balanced effort between flexion
and extension of the upper and
lower body joints
As indicated in the news release, the
latest research demonstrates that
child and pre-adolescent athletes can
improve their strength by 30%–50%
after just 8–12 weeks in a strengthtraining program. The investigators
reviewed relevant research, consensus
guidelines, and position statements
to present a comprehensive review
and guidelines for safe and effective
youth strength training. The study
recommends an individualized
program based on age, maturity, and
personal goals and objectives of the
youth athlete. A comprehensive
youth strength-training routine
should incorporate:
“The goal is to perform two to three
exercises per muscle group. Start with
one to two sets per exercise, with 6 to
15 repetitions in each set,” explained
Dr. Dahab in the news release. “The
participant should rest one to three
minutes between sets. Appropriate
weight should allow 10–15
repetitions to be completed with
proper form, some fatigue, but not
complete exhaustion.”
• Ten to 20 minutes of warm up
and cool down (5–10 minutes for
each segment)
All of this, say the authors, should be
supervised by a trained adult. In the
news release, Dr. Dahab cautioned,
“Injuries that do occur to the youth
athlete are a direct result of lack of
supervision, misuse of equipment,
lifting inappropriate amounts of
weight, or use of improper techniques.
It is crucial that a trained professional
teach youth athletes proper form, as
well as how and when to add weight.”
“The health benefits of strength
training far outweigh the potential
risks,” she added. Strength training,
when done correctly, can improve the
strength, and overall health of children
and adolescents of all athletic abilities.
This is especially important in today’s
society where childhood obesity rates
continue to rise.”
Commenting to OTW, Dr. Dahab said,
“The findings presented in the paper
were not necessarily surprising or new;
they were all from previous studies by
researchers well-known in the field.
This article provided the opportunity
40
large joints
to assemble all of that great work done
by others into one place and to dispel
some common myths about strength
training in children.”
Dr. Dahab also told OTW that she and
her colleagues have no current plans
for further studies.
—EH (May 18, 2009)
ACTEMRA: Effective for RA
They’ve waited two years to pop
the cork...Roche has announced
that new two-year data from the
LITHE study, a randomized, doubleblind, placebo-controlled trial,
shows that ACTEMRA (tocilizumab,
“RoACTEMRA” within the EU)
continues to be highly effective at
inhibiting joint structural damage
and maintaining consistently high
remission rates. ACTEMRA, says
Roche, is the first humanized
interleukin-6 (IL-6) receptorinhibiting monoclonal antibody.
A total of 1,196 patients from 15
countries are included in the LITHE
study; participants have moderate
to severe RA (rheumatoid arthritis)
and had an inadequate response
to MTX (methotrexate). In this
randomized study, patients received
either ACTEMRA (4 mg/kg or 8 mg/
kg, one infusion every four weeks)
in combination with methotrexate or
methotrexate alone.
William M. Burns, CEO Roche
Pharmaceuticals Division, outlined
the implications of the results in the
news release: “These new data build
on the one-year results,
demonstrating that, in
most patients, ACTEMRA
inhibited the progression
of structural joint damage
which is a major cause
of disability and loss
of physical function
for RA patients. LITHE
is the fifth large study
from a comprehensive
development program
and demonstrates
Rheumatoid arthritis in hands
that ACTEMRA offers
rheumatoid arthritis
labeling claims of inhibition of the
patients the chance of achieving a
progression of structural damage and
long-lasting remission from
improvement of physical function.
the disease.”
Roche has researched and developed
The two-year data showed that a
ACTEMRA alongside Chugai.
greater proportion of patients treated
with ACTEMRA in combination with —EH (May 26, 2009)
methotrexate, the current standard
therapy, benefited from a significant
Medarex: RA Drug
inhibition of structural damage
Showing Promise
during 24 months of therapy,
compared to patients in the control
iopharma breakthrough? In a
group. X-rays were utilized to
bit of inflammation of hope,
measure the progression of
Medarex, Inc. is announcing
bone erosions and narrowing of
that the MDX-1100 Phase 2 proof-ofjoint spaces.
concept trial in patients with active
rheumatoid arthritis (RA) receiving
Those taking ACTEMRA reported
methotrexate has successfully met its
an improved ability to perform
primary endpoint. Researchers found
normal daily activities, as assessed
that when compared to placebo, three
by Health Assessment Questionnaire times the number of patients treated
scores. The drug was generally
with 10mg/kg of MDX-1100 achieved
well tolerated by participants and
at least a 20% improvement in RA
the overall safety profile after two
signs and symptoms at 12 weeks, the
years of treatment was consistent
primary endpoint of the study (as
with previously reported trial data.
measured by the American College of
The company plans to use the
Rheumatology (ACR) 20 measurement
complete set of data from this trial to of response). The study, involving
support global regulatory filings for
70 patients at multiple centers, was
B
41
large joints
a randomized, double-blind,
placebo-controlled trial. These
results were statistically significant
when compared with placebo.
The antibody combination with
methotrexate was generally safe and
well-tolerated.

“We are greatly encouraged by this
demonstration of efficacy from a
well-designed and well-executed
study,” said Howard H. Pien,
Chairman and CEO of Medarex,
in the news release. “These
results show that by targeting the
chemokine IP-10 with our MDX1100 antibody, we may be able
to offer a potentially important
and novel treatment option for
rheumatoid arthritis and potentially
other inflammatory indications.”
MDX-1100 (which may also
be helpful in treating ulcerative
colitis) is a fully human antibody
that targets IP-10 (also known as
CXCL-10), a chemokine expressed
in association with multiple
inflammatory disease indications.
Patients were randomized to either
take placebo or MDX-1100 (10 mg/
kg) every two weeks for a total of
six doses. The primary endpoint of
the study was ACR20 response at 12
weeks. Secondary endpoints included
other clinical response assessments,
pharmacokinetics of MDX-1100, and
potential biomarkers of activity.
A Medarex spokesperson told OTW,
“Based on these positive top-line
results, we are actively preparing for
the next stage of clinical development
for MDX-1100 in RA, including the
renown orthopedic surgeon Dr. Rick
B. Delamarter has joined the faculty
of Cedars-Sinai Medical Center as
Co-Director of the Cedars-Sinai
Spine Center. Dr. Delamarter, who
also will serve as Vice Chair of Spine
Services in Cedars-Sinai’s Department
of Surgery, has been the principal
investigator for dozens of research
studies on new artificial discs and is
well known in the literature for his
spine research.
Taking some talent with him, Dr.
Delamarter, previously the Medical
Director of The Spine Institute of
Santa Monica and an Associate
Clinical Professor at the UCLA School
of Medicine, is bringing several
members of his surgical and research
team to the Cedars-Sinai Spine
Center, including Drs. Hyun Bae,
Timothy Davis, Michael Kropf, and
Alexandre Rasouli.
“Dr. Delamarter is respected
nationally as a surgeon and physician/
researcher. His expertise in minimally
invasive back surgery and in artificial
potential for subcutaneous dosing.
Additional information has not been
provided at this time.”
—EH (May 14, 2009)
people
Rick Delamarter
Joins Cedars-Sinai
K
nown for making the spine
stronger, he will now make
a spine center stronger. The
42
people
disc replacement will further enhance
Cedars-Sinai’s position as one of
the nation’s leading spine centers,”
said Bruce Gewertz, M.D., in the
news release. Dr. Gewertz is Chair of
Cedars-Sinai’s Department of Surgery
and the Harriet and Steven Nichols
Endowed Chair in Surgery.
Dr. Delamarter obtained his medical
degree from the University of Oregon
Health Science Center, thencompleted
his surgical internship and orthopedic
residency at UCLA Medical Center.
He followed this up with a spine
fellowship at Case Western Reserve
University and received training at
the Acute Spinal Cord Injury Unit of
Cleveland Veteran’s Hospital.
Dr. Delamarter’s pedigree includes
numerous national and international
research awards, including the Volvo
Award from the International Society
for the Study of the Lumbar Spine, as
well as awards from the Orthopaedic
Research Society and the North
American Spine Society. He can be
found in the lab actively working on
new spine research and treatments,
and has written more than 200
abstracts, articles and book chapters.
Dr. Delamarter told OTW that his
first step as Co-Director is to “take
an already-quality program at
Cedars-Sinai and help turn it into
a more academic-based program
with emphasis on basic science
research. We are already building new
laboratories at the medical center to
accommodate this new focus.”
Regarding research capacity at
the facility, Dr. Delamarter told
OTW that he is “moving both
clinical and research staff (20 to
25 people) and several significant
research projects to Cedars-Sinai.
The research is focused on cellular
regeneration, biomechanical
studies and translational research,
which we anticipate will lead to
significant advances in spinal
surgery techniques.”
—EH (May 19, 2009)
Mainelli Leads Active Implants
on advancing the development
and adoption of our TriboFit Hip
System, which we believe will provide
surgeons with a next-generation
bearing surface system. Subsequently,
we will turn our attention to
developing the NUsurface Implant
knee system, which we believe
will provide surgeons with a new
knee treatment option via an MIS,
arthroscopic approach,” Mainelli
told OTW after his appointment
on May 18.
M
Active Implants incorporates medical
grade polycarbonate urethane
technology into orthopedic products
through its TriboFit Hip and
NUsurface Implant systems.
Mainelli has more than 20 years of
experience in the medical device and
healthcare industry and formerly
served as President of Stryker Spine
and President of Stryker Japan. He
began his career at General Electric
Company, where he worked in a
number of business units, ultimately
rising to an executive role at GE
Medical Systems, now called GE
Healthcare.
The hip system, a CE marked device
now being commercialized in Europe,
is a bearing surface system used with
ichael Mainelli, Jr., is the
new President and CEO
of Memphis-based Active
Implants Corporation.
Mainelli holds an MBA from the
University of Chicago, an MSE from
the University of Pennsylvania and a
BMSE from Northeastern University.
He has been a member of the Board
of Directors of Active since early 2008
and is also a member of the Board of
Directors of Autocam Corporation.
“I’m proud to be joining the Active
Implants organization at this
important point in the company’s
evolution. Initially, we will focus
Michael Mainelli, Jr.
43
people
spine
total and partial hip arthroplasty
systems, and hip resurfacing systems.
The company believes the technology
may enable clinicians to offer their
patients the benefits of improved wear
and improved range of motion and
stability, without the disadvantages
often associated with current
bearing systems.
The knee implant system designed to
treat early-stage knee degeneration by
less invasive arthroscopic technique, is
in early studies in Europe.
Over the past five years, the company
developed its first product, had three
rounds of fundraising and initiated
commercialization of its products in
Europe.
Mainelli succeeds Stephen Bradshaw,
one of Active’s founders.
—WE (May 27, 2009)
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LDR’s Easyspine Approved
in Japan
L
DR announced on May 20
that it has received approval
to market their Easyspine
posterior osteosynthesis pedicle screw
system in Japan.
This was interesting to us because
we see very few device approvals
for Japan.
The system was approved by the
Ministry of Health, Labor and Welfare
on March 9, followed by government
approval for reimbursement on April
1. The company worked closely with
the Yufu Itonaga Company in Tokyo to
obtain this approval.
Kaoru Sakamoto, President and CEO
of Yufu Itonaga commented, “We
have been working very diligently
and closely with LDR for almost
three years to achieve this
important milestone. We
are proud to be the first in
Japan to obtain approval to
market a spine system that
is delivered sterile to the
customer, a very important
benefit of the Easyspine
system. We have a very
strong organization that
is prepared and eager to
serve our Japanese surgeon
customers.”
Easyspine was developed in
France by LDR Medical and
has been used in thousands
of procedures worldwide.
The company says that Easyspine’s
patent-pending pedicle screw design,
with integrated multi-axial capability,
provides flat-on-flat screw to rod
purchase, and can achieve a variety
of rigidities by accommodating
rods of different thicknesses. This
design approach, said the company
statement, uses only one-third the
inventory levels of conventional fusion
systems. Additionally, all LDR implant
products are delivered to the hospital
individually packaged, labeled and
sterilized, thereby reducing sterility
concerns and improving product
traceability—a feature the company
claims that no other spine company
currently offers.
Christophe Lavigne, CEO of LDR
says, “The benefit
of being able to
offer a system that
is delivered sterile
gives us a strong
advantage over
other companies.
We are very
confident that
the Yufu Itonaga
Company will be
hugely successful
in marketing this LDR Easyspine System
system in Japan and our organization
is ready to dedicate the financial
and human resources needed to be
successful in this critical market
in Asia. This reinforces our strong
position in the Asian market and our
strategy as an international global
spine company.”
—WE (May 27, 2009)
44
spine
Medtronic’s Bryan Approved
T
he FDA has approved
Medtronic’s Bryan
Cervical Disc.
The Bryan was approved on May
12 after the Orthopedic and
Rehabilitation Devices advisory panel
voted to recommend approval of
the device back in July 2007. That
recommendation included a variety of
conditions that were considered
by the FDA during its ongoing
review process.
of the cervical spine in patients
suffering from degenerative disc
disease in the neck, as defined by the
study protocol. The surgical procedure
to implant the disc is designed to
relieve pressure on nerve roots and the
spinal cord which helps alleviate neck
and or arm pain.
the disc which will fully characterize
adverse events and complaints and
information on the total number
of devices shipped. Medtronic
will submit revised labeling via a
supplemental PMA to reflect the
results of the post-approval and
enhanced surveillance studies.
The FDA said the device was indicated
in skeletally mature patients for
reconstruction of the disc from C3C7 following single-level discectomy
for intractable radiculopathy and/
or myelopathy. Patients should have
failed at least six weeks of nonoperative treatment before being
The Bryan joins Medtronic’s Prestige
and Synthes’ ProDisc-C cervical discs
approved in 2007.
The marketing history of the Bryan
began outside the U.S. in 2000
and has not been withdrawn from
marketing in those 38 countries for
any reason.
Other cervical discs expected to seek
FDA approval include:
SpinalMotion - Kineflex-C
Globus Medical - Secure-C
LDR Spine - Mobi-C
Stryker - Cervicore
NuVasive - PCM
—WE (May 28, 2009)
Medtronic’s application was filed in
June 2006 and was amended 16 times,
the last time this past March.
The disc is composed of a
polyurethane nucleus surrounded by
titanium endplates and is designed to
replicate normal, physiologic motion
Prestige Cervical Disc
implanted.
ProDisc-C Cervical Disc
Medtronic has agreed to perform
a 10-year post-approval study to
evaluate the longer term safety and
effectiveness of the disc. The data will
be collected at 5 years, 7 years and 10
years.
Bryan Cervical Disc
The company also agreed to a fiveyear enhanced surveillance study of
45
trauma
New Data on OA
Drug EUFLEXXA
H
old the salt…Ferring
Pharmaceuticals has recently
revealed six-month data
indicating that EUFLEXXA (1%
sodium hyaluronate) reduced the pain
of knee osteoarthritis (OA) at
26 weeks and beat out saline in
pain reduction.
Diagram of Osteoarthritic Knee
Those patients who have tried and
had no success with conservative
non-pharmacologic therapy and
simple analgesics may try EUFLEXXA,
a three-injection regimen meant to
reduce pain and improve physical
function by replenishing the
hyaluronic acid (HA) in synovial fluid.
In OA, this fluid becomes thinner,
leading to a decrease in elasticity
and viscosity.
A total of 586 patients with chronic
idiopathic knee OA participated in this
multicenter, 26-week, randomized,
double-blind trial that compared
EUFLEXXA and intra-articular
buffered saline (IA-SA). Patients
were randomized in a 1:1 ratio, did a
50-Foot Walk Test, and received one
weekly injection for 3 weeks with 9
follow-up visits over 26 weeks after
the first injection.
EUFLEXXA is the first non-avian
derived hyaluronic acid approved in
the U.S. for treatment of knee pain
due to OA. According to Ferring,
the process used to manufacture
EUFLEXXA results in highly-purified
HA with properties similar to the HA
in healthy human synovial fluid. The
drug received approval from the
FDA on December 3, 2004, and
became available to the public on
November 8, 2005.
Individuals allergic to hyaluronate
preparations or those with knee joint
infections or skin diseases in the area
of the injection site are advised not to
take EUFLEXXA. Common adverse
events reported were joint pain and
back pain. Temporary knee pain and
swelling may occur after injection.
—EH (May 20, 2009)
Hyperkyphosis, Osteoporosis,
Early Death
A
new study, published in the
May 19 issue of Annals of
Internal Medicine, has found
that hyperkyphosis (“dowager’s
hump”) may predict earlier death
in women whether or not they have
vertebral osteoporosis. Hyperkyphosis
can be caused by a number of
factors besides osteoporosis,
including habitual poor posture and
degenerative diseases of the muscles
and intervertebral discs.
Researchers from the University
of California, Los Angeles, found
that older white women with both
vertebral fractures and the curvature
that results in the bent-over posture
characteristic of hyperkyphosis had
an elevated risk for earlier death.
The finding was independent of
other factors that included age and
underlying spinal osteoporosis.
Women with hyperkyphosis, but no
vertebral fractures, did not show an
increased risk for premature death.

“Just being bent forward may be
an important clinical finding that
should serve as a trigger to seek
medical evaluation for possible spinal
osteoporosis, as vertebral fractures
more often than not are a silent
disease,” said Dr. Deborah Kado, in the
news release. Dr. Kado, an Associate
Professor of orthopedic surgery and
medicine at the David Geffen School
of Medicine at UCLA and the study’s
primary investigator, added, “We
demonstrated that having this agerelated postural change is not a good
thing. It could mean you’re likely to
die sooner.”
Researchers reviewed data on
610 women from a cohort of
9,704 participants in the Study
of Osteoporotic Fractures. The
participants were recruited between
1986 and 1988 in Baltimore,
Maryland; Minneapolis, Minnesota;
Portland, Oregon; and Pennsylvania’s
Monongahela Valley. Researchers
46
trauma
reserved only for those who suffer
from intractable pain and/or
neurological compromise.”
Regarding future research, Dr.
Kado told OTW, “Future research
is planned in multiple areas: 1) to
better understand the epidemiology of
this disorder in older men; 2) to test
treatments to improve hyperkyphosis
and physical functioning; and 3) to
further investigate potential genetic
causes of this disorder.”
—EH (May 27, 2009)
Proteins, Osteoporosis,
and Periodontitis
The Duke and Duchess of Urbino (1465) by Piero della Francesca. Uffizi Gallery, Florence, Italy
measured spinal curvature with a
flexicurve and assessed vertebral
fractures from spinal radiographs; they
assessed mortality based on follow-ups
averaging 13.5 years.
Women with previous vertebral
fractures and increasing degrees of
spinal curvature were found to be
at increased mortality risk from the
spinal condition, regardless of age,
smoking, spinal bone-mineral density,
or the number and severity of their
spinal fractures.
According to the news release, other
studies linking hyperkyphosis to poor
health, such as impaired physical
function, increased fall risk, fractures
and mortality, have been unable to
exclude the possibility that vertebral
fractures alone were the underlying
explanation for the findings.
To be taken under consideration, say
the researchers, is the fact that this
study focused on women, though
the condition also affects men. They
also noted that measurements for
vertebral fractures were based only
on height ratios, which could lead
to misclassification of other causes
of height ratio decreases, such as
Scheuermann disease. Lastly, they
indicate that the timing of the
assessments could have affected the
results, though it’s unlikely to have
made much difference.
Commenting to OTW, Dr. Kado
stated, “These findings indicate
that at the very least, patients with
hyperkyphosis should undergo work
up and treatment for any underlying
vertebral osteoporosis. Beyond that,
other therapeutic options such as
pharmacologic and exercised-based
therapies are currently being studied.
Surgical correction is usually
T
he Zen of bone…seeking
balance. Researchers from the
University of California, Los
Angeles School of Dentistry, along with
scientists at the University of Michigan
and the University of California, San
Diego Osteoporosis are shedding light
on how bone formation is impaired
in osteoporosis and periodontitis.
Their work, published May 17 in the
online edition of the journal Nature
Medicine, suggests that inhibiting
nuclear factor-kB (NF-kB), a master
protein that controls genes associated
with inflammation and immunity,
can prevent disabling bone loss by
maintaining bone formation.
Along with his colleagues, Cun-Yu
Periodonitis
47
Wang, D.D.S., Ph.D., who holds
UCLA’s No-Hee Park Endowed Chair
in the dental school’s division of oral
biology and medicine, seeks to restore
the balance of bone destruction and
formation, and perhaps even improve
upon, by finding new ways to promote
net bone accumulation.
“Most studies focus on the part that
NF-kB plays in the regulation of
osteoclasts—bone-resorbing cells. For
the past five years, we looked closely
at the effect of NF-kB on osteoblasts—
bone-forming cells,” said Dr. Wang in
the news release. The study’s principal
investigator and a member of UCLA’s
Jonsson Comprehensive Cancer
Center, Dr. Wang added, “We knew
that NF-kB promoted resorption.
What we discovered in our in vitro
and in vivo studies is that this protein
also inhibits new bone formation,
giving us a fuller picture of its role in
inflammation and immune responses.”
“This landmark paper by Dr. Wang
and his colleagues is not only topnotch molecular science, but it
also holds promise for clinicians
trying to provide the most
enlightened treatment of women
with postmenopausal osteoporosis,”
said Dr. John Adams, a UCLA
professor of orthopedic surgery, in
the news release. “The paper shows
how the molecular manipulation
of a previously unsuspected proinflammatory pathway in the boneforming cell, the osteoblast, can
regulate the capacity of that cell to
make new bone.”
Many of today’s treatments work to
prevent bone loss but are not able
to increase bone mass. With this
research, there is more hope that a
new drug that prevents the action of
NF-kB in cells may represent a major
therapeutic advance.
“Although it has been known for
some time that inflammation inhibits
bone formation, the groundbreaking
work by Dr. Wang and his colleagues
elucidates the critical role of NFkB in the mechanism that underlies
this phenomenon,” added Philip
Stashenko, a professor at the Harvard
School of Dental Medicine and
president and CEO of the Forsyth
Institute, an oral health treatment and
research organization. “Many drugs
that block NF-kB are in development,
and these findings suggest that
new treatments to preserve bone in
periodontitis, osteoporosis and related
bone diseases are imminent.”
The team’s next move is to test small
molecules that inhibit the specific
bone-resorption and bone-inhibition
actions of NF-kB in osteoporosis and
periodontitis. Dr. Wang told OTW,
“Our hypothesis is that targeting NFkB not only blocks bone resorption,
but also may help to improve
osteoblast functions which will
build new bone. We are screening
potential inhibitors.”
The study was supported by grants
from the National Institute of Dental
and Craniofacial Research and the
National Institute of Diabetes and
Digestive and Kidney Diseases.
—EH (May 18, 2009)
48
The Picture of Success: Dr. Ralph Gambardella
By Elizabeth Hofheinz, M.Ed., M.P.H.
worker or custodian like we did.’ My
brother and I listened—he worked
his way to a Ph.D., and I found my
way through a number of interests,
including music and government,
and ended up at the top of my high
school class.”
A
much sought after sports
medicine specialist at the
Kerlan-Jobe Orthopaedic
Clinic in Los Angeles, Dr. Ralph
Gambardella says his beginnings were
far from “to the manor born.”
“My friends and I were more likely to
steal hubcaps than go to an Ivy
League school,” says Dr. Gambardella
with a smile.
A self-described “townie,” Ralph
Gambardella was born and raised
in a little hamlet near New Haven,
Connecticut. “My parents were first
generation Italian with a smattering
of Polish thrown in. We had a meager
lifestyle, with my dad holding down
two jobs and rushing home for a
quick dinner before heading out
for his evening work. No one in my
family or extended family had ever
attended college. My dad and mom
stressed education, saying, ‘We don’t
want you to have to be a cafeteria
Eager to look beyond the borders
of his adolescent experience, Ralph
Gambardella stepped out of his past
and into the wider world. “I didn’t
want to go to college close to home,
in particular because I had never
been west or south of New York City.
I chose Bowdoin College, a small
school in Maine that opened my eyes
to the fact that the rest of the world
existed. In my sophomore year I was
confronted with four choices: the
draft, the ROTC, a premed track…
or Montreal. I knew I wanted to work
with people, but wasn’t sure which
path to take.”
“One summer during college I went
to Southern California and worked
for a phone company. Taken with
‘The Golden State,’ I signed up for
a summer dental program at the
University of Southern California
(USC) and met people who were
instrumental in my getting accepted to
medical school at that institution.”
Dr. Gambardella, who says he was
never known for his prowess on the
field, would nonetheless shake the
hand of fate and end up linked to a
top sports medicine program. “During
my first year of medical school I got
to know Robert Kerlan Jr., son of the
famous Dr. Robert Kerlan, co-founder
of the Kerlan-Jobe Orthopaedic Clinic
for sports medicine.”
Dr. Gambardella wasn’t inspired to
join a sports team, but his friendship
with the son of the famed doctor did
help him find his true calling. “We
remained friends throughout school,
and I eventually realized that I had an
interest in working with my hands. It
was also appealing that orthopedics
generally offered fast results,
meaning that I could see something
accomplished as a result of what I did.
Also, I wanted to work with younger
patients and those who wanted to ‘get
on with things.’ Cardiology, one of my
other interests, was too slow for me.”
A walk down the aisle would then
lead to a flight back across the country.
“My wife and I were married in 1976,
my last year of medical school. She
was a native Angeleno and wanted
to experience the East Coast, so I
selected Boston for my next step
of the training process. ‘Back east’
they were doing two years of general
surgery and three years of orthopedics,
different from out west where it was
one year of internship and four years
of orthopedics. So when I went to
Boston, I realized that I wasn’t quite
up for two years of general surgery
with the accompanying ER call
schedule every other night. I changed
my mind, and we returned to the west
coast where I began an orthopedic
residency at USC.”
There was something not only familiar
about USC, but about one of his
rotations. “During this time I rotated
at Kerlan-Jobe as part of an elective,
where I was impressed by all the
associates working there, especially
Dr. Jobe. The clinical portion of
my residency was largely at the Los
49
Angeles County Hospital, where I
saw a lot of patients with gunshot
wounds, knife injuries and trauma.
On the supervisory front things were
rather thin…you learned as you
went and were not spoonfed. The
rest was also up to you, meaning
that we were very motivated to read
the literature because at the end of
the day we still needed to know the
academic end of things.”
At some hospitals, people see
unusual things during a full
moon. Dr. Gambardella and
his residency cohorts, however,
thought they were experiencing
lunacy on a daily basis. “We
had a love/hate relationship
with our Chair, Dr. Paul Harvey,
who had earned a reputation
as a crazy guy. He would make
us come in at odd hours of
the morning to round. And if
someone ever presented a case
and didn’t include the person’s
entire background (social history,
family history, etc.), he lost it.
At the time we thought, ‘What
difference does it make if the
person’s got xyz in his past?’”
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“Over time, of course, I came to see
that a patient’s social or work history
is very important and may define how
you treat their injury. Dr. Harvey was
also meticulous about how physicians
should present themselves, never
allowing us to do grand rounds
dressed in scrubs. The day one of
our group showed up in scrubs, Dr.
Harvey made us wait until the guy
went home, showered, put some
cologne on, and donned his best suit.”
The Kerlan-Jobe thread would again
be picked up in 1982 when Dr.
Gambardella entered their sports
medicine fellowship. “The entire year
was filled with new learning about
sports medicine, new techniques,
research and especially information
on how to interact with all different
types of athletes and people. I then
decided to look for a practice on the
East Coast, in part because my family
was there, but also because we had
enjoyed our time in Boston. We ended
up on Long Island where I joined
a private practice as the first sports
medicine trained orthopedic surgeon
on the island. A year and a half later
I received a call from Dr. Kerlan, who
said that one of their senior partners
had decided to move on and asked if I
would like to join the group. I couldn’t
pass up the chance to join the greatest
sports group in the country—really
the opportunity of a lifetime.”
“When I returned in 1985,” says
Dr. Gambardella, “the practice
was beginning to grow, expanding
over the next few years by adding
numerous people in different
specialties. My primary function at
the time was to assist Dr. Jobe with
the Dodgers. This evolved from
Dr. Kerlan’s philosophy that it was
important that as we doctors aged,
we have backup coverage within the
group. It was an exciting time that
led to my having a different level of
interaction with Dr. Jobe, meaning
that we spent many hours together
and I had a teacher, business
partner, surrogate father and
friend all rolled into one. As
is typical of young orthopedic
surgeons, however, I was a little
frustrated because I wanted to
do everything on my own right
away. We evolved into a great
team, though, and as he got older
I took on more responsibility.
To this day he is still active in
the group and involved with
educating the fellows.”
Putting on new hats means that
what goes on under the hats
must be stellar and adaptable.
Dr. Gambardella: “In the mid to
late ‘80s I became involved in
a leadership role for the clinic,
taking up the mantle of Chair of the
Executive Committee. By the late
‘90s I was President of the group,
particularly challenging because I
had my other ‘hats’ as surgeon and
educator. I learned to juggle, though,
and went on to see the fruits of my
labor. The most exciting day yet was
in 1998 when we moved into our new
facility, something that was three years
in the making. It was one of the first
integrated medical plaza buildings in
the country where offices, diagnostic
imaging, PT, a surgery center,
pharmacy and internal medicine
doctors were all under one roof.”
50
Not all of Dr. Gambardella’s patients
have a trophy case or golden bat to
their names. Some are workaday
people whose sports involve lifting
their grandkids or teeing off without
pain. “Beyond the sports icons and
celebrities, there is one patient I recall
very well. She had a difficult shoulder
problem, and despite many surgeries
and our best care, she has always
continued to have a shoulder that
doesn’t stay in place. Regardless of her
many personal difficulties, each year
she brings me homemade Christmas
cookies and blackberry brandy, as
well as gifts for my family. It is really
very touching that although we were
unable to fully cure her, she still
appreciates our efforts.”
The primary challenges are, as you
can guess, time and money. While
young people may have a desire to do
research, there may be no dollars tied
to that. So if you’re not seeing patients
or doing surgery, then you’re not
earning a living.”
He continues, “This gets into the areas
of time management and philosophy.
I try to impart to the fellows an
understanding that life is short and
“Some of the best moments for all
doctors are, for example, when you
receive a letter from someone saying,
‘You may not remember me, but you
fixed my knee. I just wanted to let
you know that because of you I got a
scholarship and was able to graduate
from college.’”
Teaching what you practice then helps
your interests and passions come alive
in others. “I am proud to have helped
develop the Kerlan-Jobe Foundation,
which houses our fellowship training
program. We work with industry
to help teach fellows the newest
techniques and innovations available
in our field. Much of what they learn
applies to my particular interest,
namely, articular cartilage problems. I
try to deepen their understanding of
articular cartilage injuries, as well as
teach them the innovations that are
coming down the road.”
“I especially want to stimulate their
desire to pursue a research career.
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that they better make sure to stop and
smell the roses. I tell them, ‘Look, your
little girl will someday be 22 and you
will have never attended her choir
performances. Go.’ They will leave
here with superior surgical skills but
they should strive to be more than a
physician. Divorce is a very real issue
in doctors’ marriages, so a work/family
balance is critical. I came to find
this out as I was divorced and then
remarried 10 years ago. And given
where medicine is headed, there will
be a continuing shortage of doctors.
There won’t, however, be a shortage
of work…there will always be another
patient to see.”
But when wearing his research, as
opposed to his family man, hat,
Dr. Gambardella is focused on the
complexities of the hard, white
surface that covers the ends of
bones. “Articular cartilage research,
something that has been slow to gain
attention in the U.S., has been moving
at a good pace elsewhere in the world.
Because of this, I have been afforded
the opportunity to work with people
from an array of different countries
and gain insight into their treatment
processes and philosophies. In the
U.S., however, the FDA approval
process has really been an issue (they
require that the product be based on
research done in the U.S.). This is
true in all areas, but it especially s
eems to be the case with articular
cartilage work.”
“For example, there are people in
other countries who are growing
articular cartilage cells and putting
them back into the knee to grow.
In the U.S. these cells were initially
delivered as a liquid. We had to make
a tissue patch, sew it into the defect
and then add the liquid cells…a
long, tedious operation. Now other
countries have developed membranes
that you can put cells in and materials
made like paste that you can more
easily put onto the defect, but none
of these newer generation techniques
and products are available in the U.S.
51
There are now clinical trials in the
U.S. with different types of materials
that are similar to what is available
elsewhere in the world. Unfortunately,
it will be five, seven, or ten years
before FDA approval.”
that uses the patient’s own cells placed
in a membrane. This could be attached
someday with an arthroscopic surgery.
The goal, to provide ingrowth for cells,
will be awhile in coming as we have
no data as of yet.”
He continues, “I’m also involved
in studies to make those second
generation products, including
one with J & J. For this particular
product there is a preliminary human
study underway at four or five
centers, including Kerlan-Jobe. The
investigation, which will be expanded
to 20 centers across the U.S., involves
an implant and a single step operation
On the personal front, Dr.
Gambardella, who once stepped from
his small town into the wider world
and never looked back…is a traveler
at heart. “I have a great wife, two
daughters, and two step-daughters.
One of my favorite pastimes, wine
collecting, began when I realized
that I should subscribe to something
other than orthopedic journals. I also
make time for cycling, skiing, and
international travel. My journeys are
based on the book, ‘One Thousand
Places to See Before You Die: A
Traveler’s Life List.’ I haven’t checked
off most of the list, of course, but it
has been fun chipping away at it with
my wife!”
Dr. Ralph Gambardella…providing
growth for students and ingrowth
for cells.
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