Trump’s tariffs on $34B of Chinese products kick in

Tariffs imposed by President Donald Trump on $34 billion of Chinese goods, including a slew of medical devices, went into effect on Friday. China immediately retaliated, kicking off tariffs of equal size for American goods.

Trump said this week that his administration will implement tariffs for another $16 billion worth of Chinese goods in the coming weeks. He’s also reportedly considering additional tariffs on $500 billion worth of products, according to CNBC.

The China-made medical devices on the list of products affected by new U.S. tariffs include pacemakers, X-ray generators, anesthetic devices and optical instruments, CNN reported.

All told, the levies imposed by the Trump administration could take a $5 billion bite out of the U.S. medtech industry, according to AdvaMed public affairs EVP Greg Crist.

Industry representatives lobbied against the move, arguing that the tariffs could damage their companies’ ability to compete. Executives from GE Healthcare reportedly asked the Trump administration to remove certain components made in China from the list of products slated to take a hit from the tariffs.

“GE’s requests for adjustments to the proposed tariff list have been limited … to those products that should be removed because tariffs would impose significant and disproportionate costs on U.S. business, workers and consumers without advancing — or potentially even undermining — the President’s goals,” GE wrote to the US Trade Representative, according to the BBJ.

Beyond the medical technology industry, there is the looming concern that the relationship between the U.S. and China economies has devolved into an escalating ‘tit-for-tat.’

“We’ll probably see escalation upon escalation. China has made it absolutely clear,” Australia’s former ambassador to China, Geoff Raby, told CNBC.

In a statement, China’s Ministry of Commerce declared that the U.S. has “violated [World Trade Organization] rules and launched the largest trade war in economic history to date.”

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Venture investing in medtech and digital health: Here’s advice from the trenches

Medtech entrepreneurs agree that it’s still tough to find funding at the Series A level. Here’s their advice about how to find it.

Bill Evans

[Image is public domain]

Competition for medtech venture investing is fierce, at the same time that traditional investors pull back from the space.

To get to the bottom of what’s going on, I reached out to entrepreneurs at the Series A stage, as well as bankers, startup accelerator programs and industry observers. The result is a three-part series:

Read on the find out about the best types of investors to have and how to find them, what types of organizations offer valuable help, regulatory tips, the special issues in digital health and advice on running your startup.

Get the full story on our sister site Medical Design & Outsourcing.

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CHF Solutions closes $5m round

CHF Solutions (NSDQ:CHFS) today closed a $5.4 million offering with a fully-exercised underwriter’s over-allotment option.

The Eden Prairie, Minn.-based company floated 2.2 million shares of its common stock at $2.12 per share and an additional 332,239 shares at the public offering price as part of a 45-day underwriter’s option to purchase additional shares.

Ladenburg Thalmann & Co acted as sole book-running manager for the offering, with Dawson James Securities acting as co-manager, according to a press release.

CHF Solutions said it plans to use net proceeds for general corporate purposes, including the expansion of its field sales force and commercial organization.

In May, CHF Solutions saw shares fall after the heart-focused medical device maker missed expectations on Wall Street with its first quarter earnings results.

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Augmenix wins Japanese reimbursement for SpaceOar hydrogel

Augmenix said yesterday that its SpaceOar hydrogel won national reimbursement in Japan from the Ministry of Health, Labour & Welfare.

The Belford, Mass.-based company’s SpaceOar hydrogel is designed to separate the prostate from the rectal wall during radiation treatment for prostate cancer.

The product is delivered through a small needle as a liquid, which then solidifies into a soft gel that expands the space between the prostate and rectum during radiotherapy. The substance then liquefies and is absorbed and cleared from the body in the patient’s urine, Augmenix said.

“We are delighted that SpaceOar hydrogel is now available through the MHLW national reimbursement programme for all men undergoing prostate cancer radiotherapy treatment throughout Japan. We believe the commitment of the Japanese MHLW to reimburse SpaceOar is a significant leap forward to improving radiotherapy outcomes and reducing the associated risks. It is our goal to be able to provide global access to SpaceOar hydrogel, a minimally invasive intervention, that significantly benefits patients by reducing the side effects of radiation exposure. The opening of our new Augmenix K.K. headquarters and successful reimbursement are positive steps in that direction,” Augmenix international GM Stephen McGill said in a press release.

Augmenix said that SpaceOar became available in Japan beginning June 25.

“SpaceOar hydrogel is a proven solution that can make a life-changing difference to men receiving prostate cancer radiotherapy. We hope that by working closely with the many Japanese clinicians that have already expressed an interest in this product, we can help enable the advancement of radiotherapy and make prostate-rectum spacing the standard of care for all patients,” Augmenix Japan GM Yoshi Kuratani said in a prepared statement.

Last November, Augmenix said that the American Medical Association established a Current Procedural Terminology code for its SpaceOar hydrogel and similar devices, with the Centers for Medicare and Medicaid Services setting a payment rate for procedures with the injectable.

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Globus Medical launches trauma devices

Globus Medical (NYSE:GMED) said today it launched the Anthem ankle fracture system and Anthem proximal humerus fracture system.

The Audobon, Penn.-based company touted the release as its trauma division’s fourth and fifth product line over the past 10 months.

The recently launched Anthem ankle fracture system includes seven plating options and is designed to minimize soft tissue irritation from implant prominence, Globus Medical said.

The Anthem proximal humerus fracture system is intended to treat shoulder fractures and features polyaxial screw technology the company

“This is an exciting time for Globus Trauma as we continue to execute our product launch strategy and build a comprehensive Trauma product portfolio. With each new product introduction, our goal is to design systems that help streamline the procedure, increase versatility, reduce operative time, and improve patient care,” orthopedic trauma VP Barclay Davis said in a press release.

In May, Globus Medical topped estimates with its first-quarter results and raised its outlook for the rest of the year.

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Gore touts first use of Tag conformable thoracic stent graft in Australia

W.L. Gore & Associates said yesterday that it launched its Gore Tag conformable thoracic stent graft with active control in Australia, touting that the first procedures with the device have been performed in the region.

The first implant procedures with the device were performed by Dr. Ian Spark of Adelaide, Australia’s Flinders Medical Centre, Gore said.

“The Gore Tag conformable stent graft is a reliable and trusted device that I have used for TEVAR procedures with my patients for many years. The availability of the new Gore Active Control System is an exciting advancement because it significantly enhances the control I have when deploying the stent graft, making it easier to accommodate challenging anatomies. The angulation and precision deployment capabilities could decrease the risk of common complications and reduce the likelihood for future interventions that result in additional trauma for patients and costs to providers. Both the control in the delivery system and long-term benefits of the stent graft mark significant advancement for the medical community,” Dr. Spark said in a press release.

The Gore Tag conformable thoracic stent graft is designed for thoracic endovascular aortic repair procedures, and features a new delivery system intended for controlled, staged deployment, the Flagstaff, Ariz.-based company said.

The device’s active control system is intended to improve conformability, Gore said, to allow for optimal wall apposition to improve performance in complex anatomies.

“Since Gore pioneered the first TEVAR device in Europe two decades ago, we have welcomed feedback from our physician partners to innovate and evolve our stent graft offerings for better long-term patient care. The Gore Tag Device family has a legacy of trusted performance and durability, and we knew we could build on that by enhancing control during deployment which would help make TEVAR procedures more predictable for physicians. Physicians can now deploy our thoracic stent graft in the descending thoracic aorta with more operative ease, even in those patients with extremely angulated aortic arches, and meet the clinical and practical challenges of TEVAR with confidence. With this latest product iteration, Gore is continuing its unparalleled commitment to developing solutions that advance endovascular solutions for diseases of the aorta,” Gore vascular biz lead Eric Zacharias said in a prepared statement.

In April, Gore said it won expanded FDA indications for its Cardioform septal occluder, now cleared for the closure of patent foramen ovale to reduce the risk of recurrent ischemic stroke in certain patients.

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Henry Schein, Internet Brands form dental-software focused JV Henry Schein One

Henry Schein (NSDQ:HSIC) said yesterday that it and Internet Brands formed joint venture Henry Schein One, which aims to produce integrated dental technology focused on improving practice management, marketing and patient communication.

The deal was originally announced on April 3, Melville, N.Y.-based Henry Schein said, and financial terms of the agreement have not been disclosed.

“With the creation of Henry Schein One, we have advanced our dental business strategy by bringing together leaders in dental software and web-based applications to build a powerful new engine that will enable dental professionals to be more efficient and to enhance their ability to deliver high-quality care to patients. We firmly believe that the products, services, and solutions we will deliver through our combined expertise are fundamental to what practitioners value and essential to driving demand for their business success,” Henry Schein CEO & board chair Stanley Bergman said in a press release.

The joint venture combines Henry Schein’s Practice Solutions products and services including Dentrix, Dentrix Ascend, Easy Dental and TechCentral and its international dental practice management systems including its Software of Excellence, Logiciel Julie, InfoMed, Exan and Labnet. Internet Brands will supply its dental business, including web-based Demandforce, Sesame Communications, Officite and DentalPlans.com, the companies said.

“With Henry Schein One, we intend to leverage Henry Schein’s strength in practice management software with our leading digital marketing applications to help each member of the dental team work smarter and faster to improve the practice and the entire patient experience. We are very excited about what we can do together to strengthen and expand our combined product offerings to enable dental teams to be better business managers, clinicians to be more efficient, and patients more loyal to the practice,” Internet Brands CEO Bob Brisco said in a prepared release.

The newly formed JV had pro-forma 2017 sales of approximately $400 million, with $100 million coming from Internet Brands’ dental biz, Henry Schein said. The company hopes to realize between $20 million and $30 million in annual synergies by the end of its third year.

Henry Schein will maintain a more-than 70% ownership position with senior managers from both companies serving on the board. The company is slated to be headquartered in American Fork, Utah.

“Henry Schein One’s vision is to deliver technology innovation to improve every aspect of practice management. We plan to connect our existing and future portfolio of practice technology and products so it all works together as one integrated system to automate more tasks and simplify the digital workflow,” Henry Schein One CEO and former Henry Schein CTO James Harding said in prepared remarks.

In May, Henry Schein saw shares fall despite the medical device maker beating expectations on Wall Street with its first quarter 2018 earnings release.

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Medtech cybersecurity group MedCrypt raises $2m in seed round

Medical device cybersecurity group MedCrypt said today it raised $1.9 million in a seed round of financing to help support its medtech-specific embedded cybersecurity software.

The round was led by Eniac Ventures and joined by Sway Ventures, Nex, Cubed, Oronoco Investments and Friedman BioVentures, the Encinitas, Calif.-based company said.

“Cyber threats are an exponentially increasing problem that is threatening businesses, governments, households and, in healthcare, even lives. MedCrypt has already set itself apart with a seasoned technical team and proprietary technology that is helping the largest medical device makers in the world protect their devices and the underlying users. Our team is excited to support Mike Kijewski and Eric Pancostin continuing to build out MedCrypt as the most comprehensive security layer for healthcare IT,” Eniac Ventures founding general partner Tim Young said in a press release.

MedCrypt is developing cryptographically embedded security software intended to help vendors protect their products from outside assault and monitor the behavior of the devices after they’ve been deployed.

“The FDA is cracking down on medical device cybersecurity by releasing more robust regulations by which medical device vendors and healthcare delivery organizations are required to abide. Our solution lets these organizations protect their devices – and patients – with just a few lines of code. We’re thrilled to gain additional funding and support to help accelerate our technology,” co-founder & CEO Mike Kijewski said in a prepared statement.

The financing brings the total the company has raised to date up to $3 million, MedCrypt said.

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Neurologic-focused digital therapeutics group MedRhythms raises $5m

Early stage medtech company MedRhythms said today it raised $5.3 million in a Series A round of financing to help support its platform intended to use neurologic interventions to measure and improve walking.

The Portland, Maine-based company said it initially intended to raise $4 million, but found “substantial interest” and ended up netting extra funds. MedRhythms added that it has already closed $5 million from the round.

Funds will support continued development and a potential launch of MedRhythm’s digital therapeutics platform intended to aid individuals with neurologic injuries and diseases and improve walking.

MedRhythm’s first product will focus on the post-stroke population, while pipeline products aim at treating Parkinson’s Disease, Multiple Sclerosis, Aging-In-Place and traumatic brain injury.

In connection with the funding, MedRhythms said it expanded its board from three to five members, adding Chemwerth prez & chair Peter Werth, who led the Series A round, and former Biogen and Novartis CIO Ray Pawlicki.

“Developing digital therapeutics based on music requires the right mix of talent on the team, including experts in music, biotech, healthcare and technology. We are thrilled to have Peter Werth lead this financing round, as his track record of success building and investing in healthcare businesses is the right balance of expertise that will allow us to achieve MedRhythms’ mission and vision of making a high-quality clinical impact in the lives of millions of people,” CEO & co-founder Brian Harris said in a press release.

“We found MedRhythms’ strategy and business plan to build digital therapeutics for walking a compelling investment opportunity. MedRhythms has excellent growth prospects with a pipeline of therapeutic and diagnostic products in large, growing markets and is building the right team to execute,” Werth said in prepared remarks.

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Precision Therapeutics finalizes Helomics buy, completes pivot to personalized medicine

Precision Therapeutics (NSDQ:AIPT) said yesterday it inked a definitive merger agreement with Helomics, completing the company’s plan to pivot towards artificial-intelligence powered personalized medicine.

Minneapolis-based Precision Therapeutics inked a deal to acquire the remaining 75% equity stake in Helomics in April, after having purchased preferred stock in the company convertible into a 20% stake in January and converting a previous $500,000 loan with Helomics into a 5% equity stake in March.

Pittsburgh, Penn.-based Helomics developed and maintains the D-Chip database which contains de-identified data from clinical tests of tumor responses to drugs and uses artificial intelligence powered bioinformatics to generate insights from the data, Precision Therapeutics said.

The acquisition will provide Precision Therapeutics full access to Helomics artificial intelligence, precision diagnostic and integrated CRO capabilities to improve patient care. The company added that it hopes the addition will make it more competitive in the precision oncology department, and will drive revenue generation for the current year.

“Completing this definitive merger agreement represents a milestone in our strategy to cement our leadership position in the precision oncology market. Upon completion of the merger, we will have complete ownership of Helomics’ one of a kind tumor database, which has been developed over 15 years of clinical testing and contains drug response profiles of over 149,000 patient cancer tumors, and its D-CHIP bioinformatics engine that provides actionable insights into this data. There is significant demand from pharma companies for rich molecular data as it has the potential to revolutionize the effectiveness of clinical trials and drug development, and we believe that Helomics has a truly unique and best-in-class offering, combining artificial intelligence with personalized oncology. Our focus now will be on monetizing this offering to drive revenue generation to Precision Therapeutics in 2018 and beyond,” Precision Therapeutics CEO Dr. Carl Schwartz said in a press release.

Through the deal, all outstanding shares of Helomic’s stock not already held by Precision will be converted into the right to receive a proportionate share of 7.5 million shares of newly issued Precision stock, in addition to 1.1 million Precision shares already issued for its 20% ownership.

The merger includes a condition of at least 75% of Helomic’s $7.6 million in outstanding promissory notes being exchanged for additional Precision shares at $1 per share, the company said.

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