Apollo Endosurgery touts results of stomach-stapling study

 

Apollo Endosurgery’s OverStitch device

Apollo Endosurgery (NSDQ:APEN) has reported key data from 1,000 patients who underwent endoscopic gastroplasty using the company’s OverStitch device.

Published in the journal Gastrointestinal Endoscopy, the data include a mean total weight loss of 14.8%±8.5% at 18 months. Three months following surgery, the impact on obesity-related comorbidities included the complete remission of:

    • 13 of 17 cases of type 2 diabetes.
    • All 28 cases of hypertension.
    • 18 of 32 cases of dyslipidemia.

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Analyst downgrades pressure medtech stocks

thumbs downSeveral medical device companies took hits yesterday after analysts on Wall Street downgraded their stocks, on a day when the major market indices each closed up a hair, and even medtech firms that enjoyed upgrades came under pressure.

Globus Medical (NYSE:GMED) suffered the most after Morgan Stanley analyst David Lewis cut his rating on the stock from “overweight” to “equal-weight,” sliding -8.5% to a $39.61-per-share close yesterday, compared with the prior day’s closing price.

In fact, Lewis’s downgrades led the pack in terms of impact, taking Insulet (NSDQ:PODD) and Hologic (NSDQ:HOLX) shares down some -7.4% and -6.5%, respectively. Here’s a look at some of yesterday’s downgrade action:

DOWNGRADES
Company Analyst Old rating New rating Close 1/2/19 %
Globus (GMED) Morgan Stanley Overweight Equal-Weight $39.61 -8.5%
Insulet (PODD) Morgan Stanley Hold Hold* $73.43 -7.4%
Hologic (HOLX) Morgan Stanley Equal-Weight Under-Weight $38.42 -6.5%
Abbott (ABT) Citigroup Neutral Sell $69.50 -3.9%
Medtronic (MDT) Citigroup Buy Neutral $87.92 -3.3%
Henry Schein (HSIC) Robert W. Baird Outperform Neutral $76.39 -2.7%
Smith & Nephew (SNN) JP Morgan Overweight Neutral $36.40 -2.6%
Bayer (BAYN) JP Morgan Overweight Neutral $17.40 -1.0%
*cut price target

The upgrade picture was murkier, with a trio of medical device companies taking hits despite upgrades, but three others gaining (including a bullish move from Lewis on shares of Baxter (NYSE:BAX)):

UPGRADES
Company Analyst Old rating New rating Close 1/2/2019 %
Tactile Systems (TCMD) Northland Capital Under Perform Market Perform $44.59 -2.1%
Stryker (SYK) Evercore ISI In-line Outperform $154.50 -1.4%
Zimmer Biomet (ZBH) Citigroup Neutral Buy $102.28 -1.4%
Bausch Health (BHC) Piper Jaffray Neutral Overweight $20.23 0.1%
Baxter (BAX) Morgan Stanley Under-Weight Overweight $65.30 0.8%
Citigroup Neutral Buy
Apollo Endosurgery (APEN) Northland Capital Under Perform Market Perform $3.65 5.8%

By way of comparison, the three major U.S. market indices all closed up a hair yesterday, with the Dow Jones Industrial Average closing up 0.1% at 23,346.24. The S&P 500 also closed up 0.1%, at 2,510.03, and the NASDAQ index ended at 6,665.94, up 0.5%.

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Apollo Endosurgery deals Lap-Band to ReShape Lifesciences for up to $17m

Apollo Endosurgery deals Lap-Band to ReShape LifesciencesApollo Endosurgery (NSDQ:APEN) said today that it dealt its Lap-Band gastric banding device to ReShape Lifesciences (NSDQ:RSLS) in return for up to $17 million and ReShape’s intra-gastric balloon, which Apollo plans to eventually discontinue.

Austin, Texas-based Apollo said the exchange closed yesterday with $10 million in cash and the balloon from ReShape. Further payments of $2 million are due Dec. 17, 2019, and Dec. 17, 2020, respectively, plus a final $3 million payout on the deal’s third anniversary. Apollo pledged to keep making the Lap-Band device for up to two years and distribute them outside the U.S. for another year, but said it will keep San Clemente, Calif.-based ReShape’s balloon for the short term before discontinuing it in favor of its own Orbera offering.

“Our surgical product line has served an important purpose for us, but it is no longer a strategic fit with our focus on our endobariatric products and therapies,” CEO Todd Newton said in prepared remarks. “The future for therapeutic endoscopy is very promising, especially due to flexible endoscopic suturing delivered by our OverStitch technology. By allowing physicians to suture with precision and assurance from a flexible endoscope, OverStitch enables many improved core gastrointestinal and bariatric therapy options for physicians and their patients. We also remain very bullish on the potential of the intra-gastric balloon market. We believe it is in the best interest of Apollo’s customers and shareholders that we direct our attention exclusively to the growth opportunities being afforded to us from these products.”

“The acquisition of the Lap-Band product line adds a clinically proven, FDA-approved, minimally invasive technology with broad insurance coverage and meaningful established revenue and margins to ReShape Lifesciences,” added ReShape chairman & CEO Dan Gladney. “We believe that shifting our product focus from the ReShape balloon to the Lap-Band will significantly enhance our financial profile, bringing to our business a product that generated almost $15 million in revenue in the last nine months, with high associated gross margins and very low investment needs, allowing us more financial flexibility to fund our exciting technologies in development. We believe the Lap-Band system, which can leverage our historically strong relationships with the bariatric surgeon, is a more optimal market opportunity that is better aligned with our core strengths as an organization.”

Apollo said it plans to use the $10 million cash payment to pay down its debt.

The news sent RSLS shares, which closed down -19.4% at 41.11¢ yesterday, up 14.3% to 47¢ today in pre-market trading. APEN shares closed own -11.4% yesterday at $3.57 apiece.

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Apollo Endosurgery wins expanded FDA nod for OverStitch Sx system

Apollo Endosurgery said today it won special FDA 510(k) clearance for its OverStitch Sx endoscopic suturing system, an accessory for its already cleared OverStitch Sx system intended to simplify attachment of the device to compatible endoscopes.

The Austin, Texas-based company said that the special clearance is the last regulatory nod it needed before it could introduce the system into the US market.

The newly cleared accessory makes the system, which was previously limited in compatibility to a select number of dual-channel endoscopes, compatible with a wider range of endoscopes, Apollo said in a press release.

Earlier this month, Apollo Endosurgery said it closed a $23.7 million round of financing.

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FDA warns of 5 new deaths from liquid-filled intragastric balloons

The FDA today released a notice warning of five new patient deaths related to two liquid-filled intragastric balloon systems used to treat obesity, produced by Apollo Endosurgery (NSDQ:APEN) and ReShape Lifesciences (NSDQ:RSLS).

The additional deaths bring the total number of deaths worldwide from the Orbera intragastric balloon and ReShape integrated dual balloon system up to 12 since 2016, the agency said.

The federal watchdog said that it continues to monitor complications related to the placement and use of the devices, which include perforation of the stomach wall or esophagus, inflammation of the pancreas and the balloon filling with air and enlarging.

The FDA said it is continuing to work with the device makers as it tries to better understand the issues, and advised healthcare providers to closely monitor patients with intragastric balloons for complications and inform them of signs of serious or life-threatening problems and what to do if they occur.

“We have been carefully tracking adverse events, including a total of 12 deaths over the past two years, that have been reported in patients with two balloon devices used to treat obesity. The FDA continues to work with the companies that manufacture these liquid-filled intragastric balloons to better understand the complications associated with these devices, and to ensure the product labeling adequately addresses these risks. While these devices remain an appropriate treatment option for some patients with obesity, patients should always discuss with their doctors which treatment option is best for them,” FDA Center for Devices and Radiological Health Office of Device Evaluation director Dr. William Maisel said in a prepared statement.

The notice comes shortly after the FDA approved labeling changes which reflected information about deaths possibly associated with the device, the agency said.

In a statement released today, ReShape that one of the deaths reported since August 2017 involved a patient implanted with its balloon,

“The patient death was due to a pulmonary embolization secondary to a surgical repair of a gastric perforation,” the company said. “ReShape has received no product liability-related claims in connection with this case.”

“Patient safety is our highest priority at ReShape Lifesciences, and safety was the main driver behind the unique dual balloon design of our ReShape balloon,” chairman & CEO Dan Gladney said in prepared remarks. “We worked closely with FDA to review and enhance our Instructions for Use (IFU), patient information and physician training materials and we will continue to work with the FDA to mitigate patient risk and optimize outcomes so that we can continue to safely and effectively change lives with our obesity solutions.”

“Unfortunately, all health care procedures have a certain amount of associated risk, especially when they are dealing with a patient population that often has many associated difficult medical conditions,” added Dr. Scott Shikora of Boston’s Brigham & Women’s Hospital. “It is important to note that FDA’s recommendation to providers remains the same: Intragastric balloon patients should be closely monitored during the entire term of their treatment.”

Although it did not comment on the warning, Apollo Endosurgery today released results from a meta-analysis of intragstric balloons, including its Orbera, touting superior weight loss with the liquid-filled devicse as compared to gas-filled balloons.

The analysis examined 21 randomized clinical trials with 877 patients and found that fluid-filled balloons resulted in 60% more total body weight loss at six months compared with gas-filled balloons. The company touted that the Orbera had the highest average weight loss of the balloons in the analysis.

“Gastric emptying is the key to how Orbera helps patients lose weight. When a patient has an Orbera balloon in their stomach it acts like a valve that slowly allows food they eat to pass through their stomach. Without a balloon a normal meal will typically pass through a patients stomach in 20-30 minutes. Now with an Orbera balloon in their stomach, we have data that a large portion of that meal would still be in their stomach 2 hours after eating. This delayed emptying helps patients feel full, helps them learn proper portion control and most importantly helps them lose a clinically significant amount of weight,” chief medical officer Dr. Christopher Gostout said in a prepared statement.

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FDA clears shutdown of Lap-Band study for Apollo Endosurgery

Apollo Endosurgery (NSDQ:APEN) said late yesterday that the FDA approved the company’s move to terminate the Lap-Band lower body mass index post-approval study based on availability of long-term safety and effectiveness data on the device.

The trial was part of a bid for expanded indications, through which the FDA required the Austin, Texas-based company to conduct a prospective, multicenter, open-label, post-approval study to evaluate safety and effectiveness of the device in patients with BMIs between 30 and 39.9.

The study was slated to enroll 325 patients at 20 sites, with 181 subjects enrolled at 13 sites when it was terminated. Apollo said that with the early termination, it expects to save approximately $5.1 million, according to a press release.

Termination was approved based on the availability of long-term safety and effectiveness data on the Lap-Band in the lower BMI indications from existing published evidence. The company produced a final study report to the FDA which referenced 25 published studies exploring the use of the Lap-Band in lower BMI individuals.

Shares in Apollo Endosurgery have fallen 1.8% today, at $6.28 as of 10:34 a.m. EDT.

Earlier this month, Apollo Endosurgery saw shares fall after the medical device maker missed earnings per share expectations on Wall Street with its fourth quarter and full fiscal year 2017 earnings report.

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Deaths prompt renewed FDA warning on intragastric balloons

The FDA yesterday updated its warning of the risks associated with fluid-filled intragastric balloons after receiving new reports of the deaths of patients implanted with the devices.

Intragastric balloons, made by Apollo Endosurgery (NSDQ:APEN) and ReShape Medical, are used to treat obesity. Placed in the stomach orally in a minimally invasive endoscopic procedure, they’re designed to be filled with fluid and stay in the stomach for six months. Apollo’s Orbera intragastric balloon system is composed of a single balloon which is filled with saline, while ReShape’s integrated dual balloon system uses 2 balloons filled with saline and methylene blue dye.

Earlier this year the federal safety watchdog warned of the risk of two types of adverse event associated with the balloons, including over-inflation requiring premature removal and the development of acute pancreatitis, also requiring premature device removal.

Yesterday the FDA said it received five reports of “unanticipated” deaths since 2016 in patients treated with the balloons, four with Apollo’s Orbera and another with ReShape’s dual-balloon system; in a press release, Apollo said there have been five deaths of Orbera patients since the agency approved the device in August 2015.

The FDA said the reports it received since 2016 indicate that the patients died within a month of implantation, with three as soon as three days later. The root causes for the deaths are unknown, the agency said, “nor have we been able to definitively attribute the deaths to the devices or the insertion procedures for these devices (e.g., gastric and esophageal perforation, or intestinal obstruction).”

The FDA also said another two patients died from complications from balloon implantation: a gastric perforation in an Orbera patient and an esophageal perforation in a ReShape patient.

Apollo said it reported all five deaths of Orbera patients in the U.s., Mexico, Brazil and Great Britain to the FDA and has had no indication that any were related to the device or its insertion procedure. No product liability lawsuits have been filed against it, the Austin, Texas-based company said, claiming an incident rate since the beginning of 2006 of less than 0.01%.

“Patient safety is a key priority in everything we do at Apollo Endosurgery and we take adverse event reporting obligations related to our products very seriously. The FDA letter is an important reminder to the physician community that obesity is a serious disease and many obese patients are affected by one or more co-morbid conditions due to their obesity. In our physician training, we are diligent to emphasize the factors that support the safe and effective use of Orbera and we will continue to do so,” CEO Todd Newton said in prepared remarks.

“The FDA’s letter reinforces the fact that complications and adverse events can occur within patients having obesity-related co-morbid conditions. Each patient must be appropriately evaluated prior to the decision to place the balloon, especially the potential risks of anesthesia and an endoscopic procedure. Patients must be monitored closely during the entire term of treatment in order to detect the development of possible complications and each patient should be instructed to contact his or her physician immediately upon the onset of any unexpected symptoms,” added CMO Dr. Christopher Gostout.

APEN shares closed down -23.3% at $4.34 apiece yesterday.

See the best minds in medtech live at DeviceTalks Boston on Oct. 2.

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