We’d been warned. Many times, in fact.

Pehaps the most straightforward advisory came from Christa Babcock back in August 2020, as the world struggled to control the deadly SARS-CoV-2 virus. A director of strategic initiatives at The Switch back then, Babcock urged entrepreneurs to embrace the difficulties they currently faced. In an article she penned for MIT’s alumni newsletter, Babcock wrote, “Expect that things will not return to the way they were and be thrilled about it.”

Babcock was right. Things have not returned to the way they were, and they probably never will.

The change induced by the COVID-19 pandemic subsequently has spawned a new “normal,” if such a concept even exists. 

Fifty-six months removed from the pandemic’s official start, “normal” life looks much different now than it did in 2020. Caseloads are no longer tracked by the CDC, yet the threat remains. Resuming a “normal” life means accepting the changes in the virus itself and the ways in which it can affect daily living. 

Accepting those changes will be more difficult for some than others. In the medtech industry, change is a constant and, arguably, essential for technological innovation. Advanced treatments and therapies would be virtually impossible without a general receptivity to new ideas. 

COVID-19’s gradual fade to endemic status proved to be a double-edged sword for medical device manufacturers this year. While they were mostly free of the pandemic-induced supply chain challenges, they nevertheless had to overcome hiccups from ongoing wars and unpredictable weather across the globe. 

Under the post-pandemic’s new “normal,” the industry was forced to confront various issues it pushed to the back burner. It was a year in which it was best for companies to follow Babcock’s advice: “We are best off embracing change and carving out new paths for our future.” 

Again, Babcock is right: It’s possible those paths can lead somewhere wonderful. 

EtO TKO

Sharon Lavigne longs to breathe clean air.

It’s a simple wish, but a critical one to Lavigne at this point in her life. Lavigne’s wish is shared by countless others in her hometown, yet it is likely to go unrealized, as the air quality there is ranked among the worst in the United States.

The air (and water) is so foul, in fact, that Lavigne and many of her neighbors have placed signs in their front yards that read, “We live on death row.” The slogan is pure hyperbole, of course, meant to accentuate their perceived punishment from Corporate America, but it’s based partially in truth—Lavigne and her fellow death row inmates live in one of the most polluted places on Earth.

That locale—tiny Welcome, La., (pop. 672)—sits in the bullseye of “Cancer Alley,” an 85-mile strip of gritty terrain crammed with fossil fuel and petrochemical plants. Roughly 200 of these steel beasts line the Mississippi River corridor between Baton Rouge and New Orleans, their cylindrical tubes bleeding blue fluid into deteriorating wetlands and towering smokestacks belching acrid vapor into the grimy air. 

“We’re dying from inhaling the industries’ pollution,” Lavigne, 74, president/founder of the grassroots environmental group Rise St. James, told Human Rights Watch in March 2023. “I feel like it’s a death sentence. Like we are getting cremated but not getting burnt.” 

Cremated slowly, at that. The figurative funeral pyre for Lavigne and her Cancer Alley cohorts has been burning for nearly half a century, gradually poisoning them from the inside out. Statistics show the neighborhoods surrounding these massive petrochemical plants—comprised mostly of Black and/or impoverished residents—have some of the highest cancer rates in America (Lavigne, for one, knows of at least 30 people who succumbed to the disease). 

Corroborating evidence can be found within a 2021 Tulane Environmental Law Clinic study that ranked nearly every census tract between Baton Rouge and New Orleans in the top 5% nationally for air pollution cancer risk and the top 10% for respiratory hazards.

But new research indicates the cancer risk among Cancer Alley residents is significantly higher than previously estimated. Johns Hopkins University data published this past June suggest the U.S. Environmental Protection Agency (EPA) has dramatically underestimated ethylene oxide (EtO) levels in southeastern Louisiana. Study investigators found EtO levels in Cancer Alley’s core were more than 1,000 times higher than the agency’s acceptable (safe) limit. Levels near industrial facilities reached 40 parts per trillion and overall average levels were more than double the acceptable threshold of 11 parts per trillion. 

“I don’t think there’s any census track in the area that wasn’t at higher risk for cancer than we would deem acceptable,” senior study author Peter DeCarlo, associate professor in John Hopkins’ Department of Environmental Health and Engineering who studies air quality, said in a news release announcing the results. “We expected to see ethylene oxide in this area. But we didn’t expect the levels that we saw, and they certainly were much, much higher than EPA’s estimated levels.”

Those levels, however, may soon fall back to Earth. This past spring, the EPA set new EtO and chloroprene emissions standards designed to improve air quality around sterilization and chemical plants. Through two separate final rules, the agency is requiring commercial sterilizers to reduce EtO emissions by 21 tons annually (90%) and synthetic organic chemical manufacturers to cut their annual EtO and chloroprene discharge by 54 tons and 14 tons, respectively.

“We have followed the science and listened to communities to fulfill our responsibility to safeguard public health from this pollution,” EPA Administrator Michael Regan said in a March 14 statement, “including the health of children, who are particularly vulnerable to carcinogens early in life.”

The EPA, truthfully, had no choice but to listen to communities in recent years as the outcry over EtO’s potential health hazards grew increasingly louder. Besides the clamor from Cancer Alley activists like Lavigne, there has been a growing backlash against EtO exposure from grassroots groups in Illinois, Georgia, California, New Mexico, and Michigan whose members live alongside medical device sterilization plants.

That backlash and the underlying debate over ethylene oxide’s biological harms has led to several sterilization plant closings and nearly 1,000 legal claims that eventually were settled for hundreds of millions of dollars. 

Those consequences, as well as the long-simmering controversy itself, have prompted a vociferous pushback from the medtech industry, which relies on ethylene oxide to sterilize half of all medical devices manufactured in the United States annually (20 billion products). The industry’s two trade groups—the Medical Device Manufacturers Association and Advanced Medical Technology Association (AdvaMed)—have repeatedly warned of supply chain disruptions and product shortages that are likely to accompany the new EtO regulations. The two organizations have dialed back their public dialogue since the rules’ mid-March finalization, with both CEOs releasing similar statements about reviewing the regulations and working to safeguard the medical device supply chain from any adverse impacts. 

“We have made clear that we value much-needed updates to the rule,” AdvaMed President/CEO Scott Whitaker said upon the new regulations’ announcement. “We have always approached government agencies with relevant oversight as partners and not as adversaries because this rule has a far-reaching impact on patients and public health. We will be reviewing the rule through that lens and remain hopeful that these changes will not have a negative impact on the healthcare system or the patients we serve.”

The Ethylene Oxide Sterilization Association (EOSA), however, isn’t leaving anything to chance (or hope). The sterilizer/device manufacturer trade group sued the EPA in June, claiming the new regulations are based on inappropriate EtO cancer risk estimates, disregard emission-capturing equipment installation costs, and set unrealistic compliance deadlines.

The latter accusation is debatable (and arbitrary), as the EPA actually extended the compliance deadlines in its final rule. Commercial sterilizers have two to three years to meet the new emissions limits, with exact timelines dependent upon annual EtO use. Facilities using more than 60 tons must comply with the rules in two years, while those using less than one ton have a three-year window (double the original 18-month deadline in EPA’s initial proposal). Facilities using between one and 60 tons of EtO per year have two to three years to comply with the rules. 

Despite EOSA’s compliance deadline protestations, the extension gives medical device manufacturers additional time to find suitable EtO sterilization alternatives. The U.S. Food and Drug Administration (FDA) has held public meetings to discuss substitute methods, launched a program to better facilitate sterilization process changes, and initiated innovation challenges to foster the development of EtO cleaning alternatives. 

One such substitute is vaporized hydrogen peroxide (VHP), a process commonly used in hospitals to clean reusable devices. VHP sterilization uses H2O2 vapor to fill the sterilizer chamber and clean exposed product surfaces. After the sterilization cycle is completed, the vapor is vacuumed from the chamber and converted to water and oxygen. 

VHP works well for temperature-sensitive devices, pre-filled syringes, implants, and products with electronics, but is incompatible with cellulose-based and highly absorbent materials. The FDA in early January officially recognized VHP as a Category A sterilization method in an effort to facilitate its broader adoption.

“Vaporized hydrogen peroxide’s addition as an established sterilization method helps us build a more resilient supply chain for sterilized device that can help prevent medical device shortages,” Suzanne Schwartz, M.D., director of the Office of Strategic Partnerships and Technology Innovation in the FDA’s Center for Devices and Radiological Health, said in a statement. “As innovations in sterilization advance, the FDA will continue to seek additional modalities that deliver safe and effective sterilization methods that best protect public health.”

For Cancer Alley residents like Lavigne, that protection is a small but important victory in their multi-faceted battle for clean air. Although they commended the EPA for establishing new EtO emission limits, the area’s activists are acutely aware their battle is far from over.

“While there is a lot to cheer about,” environmental scientist Wilma Subra, who was part of an environmental justice team that advised the EPA on the finalized rule for chemical plants, told digital news site DeSmog. “…only time will tell if they will ever be enacted.”

Unfortunately, Cancer Alley lifers don’t have that kind of time to spare.

Read more: bit.ly/3TYP8UN

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Much Ado About New LDT Review

It’s time to play the blame game.

Sound familiar? It should, since it’s long been a popular human pastime. Most everyone knows how the game is played—find a controversial topic (a distinctively relevant issue with two clear opposing sides) and assign fault. It’s that simple.

Or is it?

Take, for example, the U.S. Food and Drug Administration’s (FDA) springtime decision to expand regulatory oversight of laboratory-developed tests (LDTs), a growing category of assays that are manufactured and used within a single lab. 

The agency released a 528-page final rule in late April that replaces its existing LDT enforcement discretion policy with one that subjects the assays to the same regulatory framework as medical devices and other in-vitro diagnostics. The rule amends FDA statutes to classify in-vitro diagnostic (IVD) products as devices under the Federal Food, Drug and Cosmetic Act (FDCA), including those manufactured by a laboratory. 

Exceptions to the new edict (i.e., potentially “grandfathered” tests) include LDTs currently on the market or approved by the New York State Clinical Lab Association, assays for rare red blood cell antigens, and certain diagnostics offered by integrated health systems for patients with unmet needs. 

The final rule establishes a gradual five-stage phase-out of enforcement discretion over four years and requires increasing compliance from labs. Once the phase-out period ends, all IVD makers must meet the same applicable device mandates (barring exceptions). The clock began ticking in early July upon the rule’s implementation.

Game on. Controversial topic identified.

Next up: Opposing viewpoints.

First off—FDA. The agency claims its LDT policy change will help improve patient safety. During the long, drawn-out revision process, the FDA repeatedly (and assertively) spoke of the new rule’s various public benefits, including improved test accuracy, reduced patient risk, and more advanced health equity.

Without greater LDT oversight, the FDA contends, patients are more likely to be harmed through unnecessary testing and/or delayed/foregone treatment (due largely to inaccurate test results). The new rule also will give the agency, patients, and healthcare providers more confidence in LDTs regardless of their manufacturing origin, officials claim, because they must now comply with basic FDA requirements such as adverse event reporting, establishment registration and device listing, labeling standards, investigational use requirements, current good manufacturing practices, and premarket review.

“Today’s action is a critical step toward helping to ensure the safety and effectiveness of LDTs while also taking into account other public health considerations, including continued access to critical tests patients rely upon,” Jeff Shuren, M.D., J.D., director of the FDA’s Center for Devices and Radiological Health, said upon announcing the final rule on April 29. “Through targeted enforcement discretion policies for certain categories of tests manufactured by a laboratory, we expect patients and healthcare professionals will continue to have access to the tests they need while having greater confidence that the tests they rely on are accurate.”

Opposition to FDA’s viewpoint has come from various sources. Yale researchers fear the new rule will backfire by introducing significant burdens to LDT access. They also believe the protracted approval process could discourage rare disease patients from getting appropriate testing and handicap a laboratory’s response to a future pandemic or national emergency.

“The new rules could be significantly detrimental to the patient care that we provide, especially at large academic institutions like Yale New Haven Hospital,” Alexa Siddon, M.D., associate professor of laboratory medicine and pathology at Yale School of Medicine, told the school’s news service in February. 

The American Hospital Association (AHA) has expressed similar concerns for hospital and health system-developed lab tests, calling the new rule “misguided” and a drastically costly burden to both the agency and hospitals. The organization also took issue with the IVD classification switch and presumed the FDA would easily be overwhelmed by the number of LDT applications required under the rule. 

“Subjecting all hospitals and health system LDTs to the FDA’s device regulations would result in a tremendous surge in the number of applications submitted to the FDA. This is because under these regulations, nearly all LDTs would require a PMA a 510(k), or other application to the FDA,” AHA Executive Vice President Stacey Hughes wrote in an April 1 letter to U.S. Sen. Bill Cassidy, M.D., (R-La.), ranking member of the Committee on Health, Education, Labor, and Pensions. “Even under the current scope of the FDA’s oversight, the agency does not have a strong track record for the timely processing of submissions for PMAs, 510(k)s, and emergency use authorizations. Because a substantial number of AHA’s nearly 5,000 member hospitals likely develop LDTs, such a change would quickly result in overwhelming burdens on the FDA, hospitals and health systems.”

The FDA acquiesced on this latter argument, considering the rule’s broad exemption for LDTs presently being sold. “The FDA has faced widespread criticism for its slow pace of reviewing millions of e-cigarette marketing submissions and is unlikely to want to place itself in a similar position with a high volume of LDT filings,” Rob Smith, managing director at policy research firm Capital Alpha Partners, explained to the Pink Sheet upon the rule’s release. 

Despite acknowledging (indirectly) its Achilles heel in timely application processing, the FDA stood its ground against accusations it overstepped its authority in developing the new LDT rule. 

The most serious allegations have come from the American Clinical Laboratory Association (ACLA), which is suing the FDA to block its oversight of LDTs. In a lawsuit filed May 30 in East Texas federal court, the ACLA calls the new rule “arbitrary, capricious, and contrary to law” and says it exceeds the FDA’s legal authority. The group claims the FDA cannot arbitrarily change its oversight of LDTs without first being granted the authority to do so by Congress.

“In asserting authority to transform the regulatory framework that has applied for decades, FDA cannot point to any new statutory authority granted by Congress,” the 450-page lawsuit states. “FDA is taking the position that a ‘long existent statute’ grants it vast, ‘transformative’ regulatory powers that it has not previously exercised—a position that courts have rightly approached with deep skepticism.”

The FDA disagrees, insisting the FDCA gives it authority to regulate LDTs as medical devices.

The ACLA, however, is equally insistent that LDTs are professional services, not products, and thus fall outside the FDA’s jurisdiction. In its complaint—which lists Texas-based infectious disease test provider HealthTrackRx as a co-plaintiff—the trade group says LDTs are already regulated under CLIA (Clinical Laboratory Improvement Amendments) rules. The FDA’s new decree, the organizations charge, creates an “untenable situation of regulatory uncertainty” that threatens to upend the U.S. laboratory profession.

The ACLA has lawmakers on its side: Both the U.S. House of Representatives and U.S. Senate passed resolutions this past spring to repeal the rule, and a House Appropriations Committee urged the FDA in July to suspend work on the new decree and partner with Congress to modernize LDT regulations. 

“This rule is the biggest unilateral expansion of FDA regulation in recent years,” U.S. Rep. Dan Crenshaw (R-Texas) said upon introducing the LDT repeal resolution with fellow Republican Congressman Brad Finstad (R-Minn.). “Unelected bureaucrats are saying they know better than the diagnostic developers and clinicians that make Houston a capitol for medical innovation. This is a clear case of unreasonable overregulation that will cost billions of dollars and put lives at risk by stifling medical innovation.”

Case closed. Contrasting viewpoints presented.

Now for the fun part: Assigning fault.

The most obvious scapegoat, of course, is the FDA—the sole architect and administrator of the LDT rule change. But the agency is not the only guilty party in this case.

Partial blame goes to U.S. politicians, who had been toying with the idea of LDT regulatory reform for nearly a decade. In 2022, Congress introduced legislation that would have established a risk-based framework for LDT and IVD regulation, but lawmakers never voted on the proposal. A House subcommittee revisited the legislation this past March, and while lawmakers appeared interested, the bill’s future remains unclear.

Congress’ failure forced FDA’s hand, leaving the agency virtually no choice but to rewrite its own statutes. While the agency had long hoped (and supported) a regulatory rule change through Congressional action, the VALID Act’s flameout forced FDA to take matters into its own hands. “After that, everyone was sure the FDA would start to move on this new ruling,” Henry Rinder, M.D., Yale professor of laboratory medicine and hematology, said in February. “And they moved very rapidly [in announcing their proposal].”

It may have seemed that way, but the new rule’s impetus has been decades in the making, receiving an unexpected yet key boost from that most infamous Stanford University dropout and corporate swindler, Elizabeth Holmes.

Indeed, the disgraced Theranos founder/CEO (and convicted felon) bears some responsibility for the LDT controversy too. It was Holmes, after all, who exploited the FDA’s regulatory loophole to her benefit—she was able to market her miracle blood tests without the agency’s approval. When a 2015 New Yorker profile called her explanations of Theranos’s technology “comically vague,” she (now) famously replied, “This is what happens when you work to change things, first they think you’re crazy, then they fight you, and then all of a sudden you change the world.”

True to her word (a rarity), Holmes really did change the (medtech) world—just not in the way she originally intended. 

Way to go, Elizabeth. 

Read more: bit.ly/403WnPm

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Generative AI’s Generous Future 

They called it the Woodstock of AI. And in some respects it was, despite the lack of hippie fashion, live music, open drug use, mud, and carnivalesque atmosphere. Yet the comradery and cultural community bonding that helped define the iconic three-day festival in Bethel, N.Y., more than a half-century ago resurfaced this past March on the opposite side of the continent.

While nowhere near as large as Woodstock, the GTC 2024 crowd in San Jose, Calif., nevertheless shared the same sense of purpose and robust sense of belonging as the free-love counter-culture movement two generations ago. Rather than forming bonds of solidarity against war and the political establishment, GTC attendees bonded over technological advancements and hope for a brighter future through artificial intelligence (AI).

“In 2017, the transformer arrived. 2022—ChatGPT captured the world’s imagination. People realized the importance and capabilities of artificial intelligence,” NVIDIA CEO Jensen Huang remarked in a conference keynote address. “And 2023, generative AI emerged and a new industry begins. So how can we prepare today for what’s to come next?”

Huang answered his own question by unveiling a new AI processor (Blackwell) the software and fabless multinational firm bills as the world’s most powerful computer chip. Packed with 208 billion transistors, Blackwell architecture GPUs enable organizations to build and run real-time generative AI on trillion-parameter large language models at up to 25x less cost and energy consumption than its predecessor.

“We need another way of doing computing,” Huang noted upon unveiling the Blackwell platform. “We need even larger models. The future is generative…we created a processor for the generative AI era. A new industry has emerged.”

And that new industry—powered by the Blackwell platform—is liable to foster boundless AI-driven possibilities for humankind. The prospects are particularly promising for healthcare, a sector that is just beginning to realize the full benefits of artificial intelligence technology.

While computer-simulated intelligence has been augmenting human medical acumen for at least half a century, AI’s presence (and acceptance) in the healthcare field surged in the early part of the 21st century with the advent of sophisticated deep learning models. Over the last decade, AI-powered medical applications have skyrocketed as software advancements and sophisticated algorithms have improved the technology’s ability to emulate human cognition and analyze, interpret, and understand complex healthcare data.

Still, the medical profession has barely scratched the surface of AI’s virtually limitless capabilities.

“Every day, we learn more about the potential of AI to improve healthcare. One recent study by the U.K.’s Royal Marsden NHS Foundation Trust and the Institute of Cancer Research showed that AI was ‘almost twice as accurate as a biopsy at judging the aggressiveness of some cancers,’” a Jan. 17 article by the World Economic Forum stated. “These developments are incredibly promising. The excitement and uncertainty about what AI could ultimately mean for healthcare and people everywhere…has only grown in the last 12 months as AI developments have seemingly accelerated from week to week.”

More like day to day: Through the first half of 2024 (182.5 days), the U.S. Food and Drug Administration (FDA) approved 107 AI/ML (machine learning)-enabled medical devices. The annual total has grown steadily in the last decade (only six AI-enhanced devices were sanctioned in 2015) and the cumulative total (since 1995) is approaching 1,000, according to FDA data.

GE Healthcare has been the most prolific contributor to that running total, winning 72 510(k) clearances/authorizations to date in the United States. Siemens Healthineers ranks second with 64 AI-based approvals, followed by Canon with 28 and Royal Philips with 27.

“GE Healthcare’s continued leadership in AI-based medical device authorizations shows our dedication to deliver groundbreaking technology that transforms healthcare and enhances patient outcomes,” GE Healthcare Chief Science and Technology Officer Dr. Taha Kass-Hout said in May, after the company topped the FDA’s list of AI-enabled device approvals for the third consecutive year. “GE Healthcare is committed to pushing the boundaries of what is possible, utilizing advanced technologies like AI to help deliver the future of healthcare.”

That future is looking significantly brighter, thanks to GE Healthcare innovations like Precision DL and Contour ProtegeAI+. The former is deep learning-based image processing software that provides increased small, low-contrast lesion detectability compared to the company’s conventional Time-of-Flight PET/CT scanner. Contour ProtegeAI+, on the other hand, automatically generates contours for radiation oncology treatment planning, helping reduce simulation to treatment times. 

GE Healthcare bolstered its AI-enhanced product offering this year by teaming up with NVIDIA (again) and Amazon Web Services (AWS), and purchasing Intelligent Ultrasound Group’s clinical artificial intelligence software business for $51 million. The summertime deal gives GE Healthcare AI-driven image analysis tools for improving workflows and ease of use. The solutions will be incorporated into the company’s ultrasound portfolio, which gained further AI prowess through GE Healthcare’s latest NVIDIA collaboration. The longtime partners are developing an AI-powered ultrasound research model—SonoSAMTrack—that delineates and tracks organs, structures, or lesions in medical images with a few clicks. The solution aims to simplify and streamline ultrasound analysis for clinicians. 

GE Healthcare and NVIDIA announced their SonoSAMTrack development plans at GTC 2024 in March. It was one of several joint ventures NVIDIA disclosed during the four-day event—it also forged alliances with Abridge, Hippocratic AI, Johnson & Johnson MedTech, and Microsoft in an effort to expand its generative AI capabilities into healthcare and life sciences.

NVIDIA has agreed to help Abridge scale a multilingual clinical conversational platform across the entire U.S. healthcare system, and work with Hippocratic AI to develop empathetic artificial intelligence healthcare agents for super-low-latency conversational interactions. For Johnson & Johnson MedTech, NVIDIA is linking its IGX edge and Holoscan edge AI platforms with the medtech giant’s surgery suites to deploy AI-powered software applications in the operating room. Likewise, NVIDIA is pairing the NVIDIA DGX Cloud and NVIDIA Clara suite of microservices with Microsoft’s Azure cloud computing platform to foster innovation within clinical research and healthcare delivery.

“AI is transforming our daily lives—opening up a world of new opportunities,” Huang said in announcing the Microsoft partnership. “Through our collaboration with Microsoft, we’re building a future that unlocks the promise of AI for customers, helping them deliver innovative solutions to the world.” 

GE Healthcare is pursuing that same future through its AWS hookup; the company intends to use Amazon Bedrock, a fully-managed service that provides secure access to leading industry foundation models, to create and deploy bespoke generative AI applications. Leveraging Bedrock’s enterprise-grade security and privacy as well as various foundation models, the company will build and scale its own proprietary generative AI healthcare applications to enhance efficiency, care delivery, and the patient experience. 

GE HealthCare will accelerate software development with the help of Amazon Q Developer, a generative AI-powered assistant. The company also expects to use Amazon Q Business to explore the intersection of multi-modal clinical and operational data to reduce the cognitive burden on physicians, foster personalized care, and increase efficiency. Leveraging AWS’s generative AI technology, GE HealthCare expects to reduce clinical application development cycles from years to months and to accelerate the delivery of new healthcare solutions. 

“By combining generative AI with our deep expertise, we’re igniting a new era in healthcare,” Kass-Hout said of GE Healthcare’s collaboration with AWS. “Our work with AWS is a big step towards helping clinicians make medical care simpler, more efficient, and deeply personalized. It’s about advancing the way we care for people everywhere, one innovative solution at a time.”

That step-by-step approach is also being embraced by Philips, which boosted its AI capabilities with a steady stream of new products and partnerships throughout the year.

At the 2024 European Congress of Radiology (ECR) in February, the company launched the Philips CT 5300, a computed tomography scanner with a new detector that optimizes the use of AI image reconstruction algorithms. The CT 5300’s AI features are specifically designed to improve patient throughput in short-staffed radiology departments.

Philips also showcased its AI-driven radiology workspace at ECR, and together with Swedish software solutions company Synthetic MR, unveiled an objective decision support solution for diagnosing and assessing therapeutic options for brain disorders like multiple sclerosis, dementia, and traumatic brain injury. Smart Quant Neuro 3D combines Philips’ AI-based SmartSpeed image-reconstruction technology, Philips’3 SyntAc clinical application, and Synthetic MR’s SyMRI NEURO 3D quantitative tissue assessment software. As a result of the collaboration, Philips is now the only company offering SyMRI NEURO 3D capability on MRI scanners.

Smart Quant Neuro 3D leverages AI to provide fully verified automatic, precise 3D segmentation and volume measurements of brain tissue—i.e., white matter, gray matter, cerebrospinal fluid, and myelin. Such measurements can help clinicians more accurately diagnose brain disorders.

At HIMSS24 in March, Philips announced an expanded partnership with AWS in order to scale digitized pathology slides in the cloud. Philips said it will use AWS HealthImaging and Amazon Bedrock to advance pathology image analysis, simplify workflows, and support generative AI application development and integration. 

After a bit of a break, Philips debuted its latest AI-enabled cardiovascular ultrasound platform at the European Society of Cardiology Congress 2024 in late summer. The platform includes automated AI heart assessment tools and has been integrated with the company’s EPIQ CVx and Affiniti CVx cardiovascular ultrasound scanners.

Also introduced at ESC 2024 was Philips’ new mini ultrasound transducer X11 4t, launched earlier this year. Compatible with the EPIQ CVx ultrasound system, the transducer expands care access for more patients, including the smallest undergoing complex intracardiac procedures like valve repairs.

“There has never been a greater potential for making a positive impact on the lives of people across the world, [both] in healthcare in the vast potential of life sciences,” Philips Chief Innovation & Strategy Officer Shez Partovi said during an

HIMSS24 Executive Summit panel discussion. “With increasing patient age, increasing demand, and at the same time, the reduction of the workforce and the limitation of access to the workforce in different parts of the world—this imbalance is where a lot of people are placing their hopes for AI.”

Here’s hoping AI can correct that imbalance.

Read more: bit.ly/3UeDo0A

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Muted M&A

“It’s tough to make predictions, especially about the future.”— Yogi Berra

The art of prognostication is not an exact science.

The reason? Forecasting is neither completely an art nor a science but rather a combination of both, mixing intuition and creative interpretation with metrics, predictive modeling, and data analysis to draw conclusions about the future. 

At best, this harmonious brew of mortal insight and analytical rigor produces remarkably accurate forecasts. Deepwater Asset Management’s Gene Munster, for example, leveraged this blend to predict Apple’s world-first trillion-dollar valuation six years before it transpired (it was worth just $500 billion then). 

Often, however, forecasting is purely a guessing game. Wharton School professor Philip E. Tetlock proved as much in a 2005 study that showed expert predictions are only slightly better than chance yet still worse than “dart-throwing chimps.”

Further evidence in support of the chimps arrived with the COVID -19 pandemic. As the world shifted into lockdown mode four springs ago, a plethora of soothsayers began issuing doom-and-gloom predictions about SARS-CoV-2’s impact on national economies. Financial experts, scholars, and civic leaders alike prevised a grim future defined by secular stagnation, economic nationalism, globalization reassessments, political power shifts, and most chillingly, “decades of economic fallout.”

“As the lockdowns began, the first impulse was to search for historical analogies…Since then, what has come ever more to the fore is the historical novelty of the shock we are living through. There is something new under the sun. And it is horrifying,” Columbia University history professor Adam Tooze, director of the school’s European Institute, said in an April 2020 foreignpolicy.com roundup of the pandemic’s future economic impacts.

“The longer we sustain the lockdown,” he predicted, “the deeper the economic scars, and the slower the recovery. The economic fallout defies calculation.”

Three months after Tooze sounded the economic decimation alarm, the Congressional Budget Office predicted a 10-year recovery (at minimum) for the post-pandemic labor market.

A full decade or more. 

Score one for those dart-throwing chimps: U.S. employment levels were higher last year than in 2019.  And by the end of 2023, the pandemic’s effect on real U.S. GDP per person had completely disappeared, according to Scott Fulford, Ph.D., a senior economist at the Consumer Financial Protection Bureau.

“By the end of 2023, real U.S. GDP per person was back to where it would have been if the pandemic had never happened and the economy had just kept growing the way it had in the previous 10 years,” Fulford wrote in a May 2024 Princeton University Press essay. “By 2023, it was as if the pandemic hadn’t happened, macro-economically speaking.”

With such a surprisingly speedy recovery to America’s post-pandemic economy, it wouldn’t be unreasonable to expect the upsurge to benefit most, if not all, business sectors. 

Score another one for the chimps.

The U.S. economy may have shaken off all traces of the COVID-19 pandemic, but the medtech industry is still nursing a slight hangover.  Financing is down and companies are struggling to maintain top-line growth amid reimbursement challenges, slowing procedure volumes, and tighter hospital budgets.

The IPO (initial public offering) market remains closed, and cash reserves among the major OEMs are shrinking, concludes EY’s Pulse of the Medtech Industry Report 2024. Dealmaking remains tepid, too: the 99 M&A transactions completed between July 2023 and June 2024 comprise the lowest annual total in 15 years, the analysis states.

J.P. Morgan pundits, however, paint a more rosy picture of medtech financing this year. In a July report, the company trumpeted a positive first half for M&A transactions, noting that deal volume in the first six months nearly matches the annual total for 2023 (114 in H1 vs. 127 for FY23). 

EY and J.P. Morgan analysts agreed that M&A deal value and venture funding rose in 2024, with the former reporting an 18% jump in M&A transaction value between July 2023 and June 2024, and the latter predicting 20% growth in funding ($19.4 billion total) this year based on the first half’s $9.7 billion in investments.

Time will tell if the dart-throwing chimps prevail in this forecast.

“From a venture standpoint, value ticked up a little bit but the overall pace of those [investments] has slowed a little bit,” EY Global MedTech Leader Jim Welch noted. “Deal-making continues to be a little bit slow. The deals are not as big, but the dollar value is up.”

The higher dollar value is likely a consequence of more than a half-dozen billion-dollar-plus deals during the first eight months of 2024. The largest of those transactions was Johnson & Johnson MedTech’s $13.1 billion purchase of intravascular lithotripsy (IVL) technology developer Shockwave Medical Inc. The April deal expands Johnson & Johnson MedTech’s footprint in the high-growth cardiovascular interventional areas of coronary and peripheral artery disease.

Shockwave Medical’s IVL technology treats calcified arterial plaque using sonic pressure waves delivered through a catheter.  The technology helps restore blood flow by creating sonic pressure waves that create a localized field effect and travel through soft vascular tissue, selectively cracking intimal and medial calcium within the vessel wall. 

Completed in May, Shockwave Medical is one of the latest building blocks in Johnson & Johnson MedTech’s newly-fortified cardiac health division. The company has also buttressed this unit with the $16.6 billion buyout of Abiomed in late 2022, the $400 million acquisition of left atrial appendage device maker Laminar in November 2023, and the still-pending $1.7 billion takeover of V-Wave Ltd.

V-Wave’s device—the Ventura Interatrial Shunt—reduces elevated left atrial pressure in congestive heart failure patients by creating a shunt between the left and right atrium. Awarded U.S. Food and Drug Administration Breakthrough Device Designation in 2019 and CE Mark approval the following year, the hourglass-shaped Ventura shunt could be the first product of its kind to reach the market, according to Johnson & Johnson MedTech.  

“Cardiovascular intervention is one of the largest and fastest-growing disease areas in medtech. It has significant unmet patient need,” noted Jennifer Kozak, vice president of Business Development, MedTech, at Johnson & Johnson. “[the] acquisitions accelerated our ongoing effort to shift into high-growth markets where we feel we have the capabilities that add value and where we can have a leadership position.” 

That same mindset prompted Boston Scientific Corp. to target the neuromodulation sector via a $3.7 billion bid for Axonics. The deal has not yet closed (it is under review by the Federal Trade Commission), but is expected to be completed by year’s end.

Once finalized, the Boston Scientific-Axonics union will give Medtronic a direct competitor within the urinary/fecal incontinence neurostimulation therapy market, a sector Boston Scientific considers an “underpenetrated opportunity” in the United States. Like Medtronic, Axonics sells rechargeable and recharge-free sacral implants.

In addition to creating a new product offering through M&A, Boston Scientific bulked up its existing vascular portfolio through its $1.18 billion purchase of Silk Road Medical Inc., developer of a minimally invasive procedure—transcarotid artery revascularization—to treat carotid artery plaque buildup. 

Though slightly delayed by another FTC review, the acquisition closed in mid-September.

“We view this deal as a tuck-in for BSX that will help expand its Peripheral Interventions segment by reaching existing physician call points,” BTIG analyst Marie Thibault wrote in a research note upon the deal’s announcement in June.

Tuck-in deals helped expand product offerings from Nordson Corporation and Edwards Lifesciences this year as well.

Nordson augmented its infusion and cardiovascular therapies lineups by purchasing Atrion Corporation in May. The Allen, Texas-based firm markets infusion fluid delivery solutions, including single-use OEM medical components such as swabable and pressure relief valves through its Halkey Roberts label; myocardial protection devices and single-use consumables for real-time precise drug administration during cardiovascular surgery under its Quest Medical brand; and interventional inflation devices for balloon catheterization, stent deployment and fluid delivery in structural heart, ENT and GI procedures.

Atrion will be folded into Nordson’s medical and fluid solutions segment, which encompasses valves, tubing, and delivery tools.

Following its rivals’ leads, Edwards Lifesciences expanded its structural heart offerings through a string of summertime acquisitions. Within a two-week span in July, Edwards shelled out nearly $2 billion to further its prowess in transcatheter mitral valve replacement technology (purchasing Israeli startup Innovalve Bio Medical and buying a 9.21% equity stake in France-based Affluent Medical SA), aortic regurgitation (acquiring JenaValve Technology), and pulmonary artery pressure sensor know-how (Endotronix). 

Edwards continued its buying binge in August with the purchase of Genesis Medtech’s transcatheter aortic valve replacement (TAVR) solution, including intellectual property and commercial rights for the Singapore-based firm’s J-Valve system. The company also made a $25 million equity investment in Genesis to support product and market development efforts.

Edwards financed its spending spree by divesting its critical care business to BD for $4.2 billion in June. Officials with both companies said the sale would be mutually beneficial, allowing Edwards to focus on its cardiac devices and procedure-based segments (TAVR and transcatheter mitral and triscuspid therapies) and enhancing BD’s connected care product and AI-enabled tools offerings. 

“From a strategic fit, the [critical care] portfolio expands Becton’s smart connected care solutions and can potentially allow for accelerating clinical decision-making,” William Blair analysts wrote in a note to investors. “It should also help defend and potentially grow share in areas such as medication management.”

Edward’s decision to sell its critical care business marked a strategic shift from its initial intent to spin off the unit. Baxter International had a similar change of heart, deciding in mid-August after months of consideration to divest its Kidney Care segment (dubbed Vantive) to global investment firm Carlyle for $3.8 billion. Baxter’s CEO said the sale would help transform the company into a more focused and efficient entity that is “better positioned to redefine healthcare delivery and advance innovation.”

That innovation is likely to come from future deals. EY analysts say the M&A tactics employed by medtech OEMs and contract manufacturers over the last few years have fostered a conducive atmosphere for mergers and acquisitions, with the potential for mega-deals.

“All the portfolio moves in the past few years have created the opportunity for big deals,” Jim Welch, EY Global MedTech Leader, presaged. “J&J has sharpened their portfolio and then redeployed that capital. Baxter has put themselves in a good position, GE Healthcare and Solventum are the beneficiaries of nice, clean balance sheets…they can invest their own capital. I think this all makes for a ripe environment for more M&A in the future.”

Careful with those forecasts—the chimps have a pretty good track record.

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