LITTLE ROCK — For years, the future for CoAxia looked promising.
The U.S. Food and Drug Administration had given the Maple Grove, Minn., medical technology startup approval to use its device to redirect blood flow from the lower body to the torso and to treat people suffering from blood-vessel spasms in the brain.
Then CoAxia asked for permission to use its device on stroke patients - a critical market for CoAxia’s long-term success.
Regulators required an expensive medical trial that took four years to enroll 500 patients. The FDA later refused appeals of data showing the device was beneficial and safe for some stroke patients.
At every turn, CoAxia Chief Executive Officer Andrew Weiss said, the company has been delayed and denied, with new requests for information costing more time and money. After 10 years and $70 million, CoAxia now teeters on the brink, its employee ranks thinned from 40 to just one while it clings to hope for a last-minute appeal.
“I would think we were the last company that would take two years to get through this,” said Weiss, who now works part time for the firm.
Weiss and others in the medical-technology community say CoAxia’s story illustrates an ongoing withering of an industry because of what they describe as a suppressing federal bureaucracy. To highlight their concerns, a petition has been filed with the FDA on behalf of the 150 members of the Minnesota Medical Device Alliance, protesting the lengthening time it takes to get a new device to market.
“There is a sense of desperation out there,” said attorney Mark DuVal, who filed the petition.
A spokesman for the FDA said the agency does not comment on pending applications. She also said the FDAis reviewing the petition and “will respond directly to the petitioner.”
Industry leaders say the FDA - in the wake of medical device recalls, patient deaths and lawsuits - doesn’t want to risk rushing products to the market. But the prolonged approval process is driving away innovators and the venture capital that small med-tech companies need to survive.
The implications for companies like CoAxia are grim, Weiss said: “If you shut down the group of people who work together to make these technologies, it’s hard to put them together again.”
In 2006, the average time to a decision on the most common applications to the FDA for medical device approvals was 99 days, according to the FDA. By 2010, that number had risen to 153 days. The FDA reported that in 2011, a review was expected to take 143 days.In reality, it can take four years or more from beginning to end for lower-risk devices to reach the market.
Time carries a cost for companies: an estimated $1.8 million for an eight-week delay in scheduling a meeting, $10.8 million for an extra year of negotiating an exemption to investigate a device, according to an industry report.
That, in turn, reduces return on investment, industry officials say. It is no coincidence that investors are pulling back.
Venture-capital investment in startup medical-device companies has fallen, from $789 million in 2007 to $184 million in 2012, according to a report for the National Venture Capital Association. Considering that venture capital is the lifeblood for small companies and that 80 percent of medical technology companies employ fewer than 50 people, some fear key jobs will disappear as small firms flounder.
Dr. Jeff Sherman, an Edina, Minn., spine surgeon, was chief medical officer for Disc Dynamics, an Eden Prairie company that developed a minimally invasive device to treat low-back pain.
After years of work, including raising $65 million and conducting positive European and U.S. studies, the Eden Prairie startup closed shop when the FDA kept adding costly new study requirements to its application. Patients are now paying the price, he said, because they don’t have access to something that could have helped them.
“There is nothing out there like that device. There is nothing being done,” he said. “And the clinical results that we had for our European study won a research award from a major spine society.”
Sherman is involved in a number of other startups, and he acknowledges that some devices are being approved. But the FDA’s current stance against risk is stifling “truly transformative” products, he said. “Until the FDA changes some of its process, much of this innovation is going to be done outside the United States.”
LifeScience Alley, a Minnesota-based trade association that is an advocate for the medical-technology industry, has often taken the role of “good cop” in dealing with the FDA - even going so far as to partner with the agency in developing strategies to speed the device-approval process.
Nonetheless, Shaye Mandle, LifeScience Alley’s executive vice president, said approval delays are sapping the industry.
“The facts sort of are the facts,” he said. “Is it getting worse? The holistic answer is, ‘Yes, it is.’”
But Mandle said there are “so many pieces” at play in what is hurting the device industry that it’s too simplistic to lay the blame at the feet of a cautious FDA.
A new medical-device tax, which saps millions a month from med-tech companies, “is relevant,” he said. So, too, are overall poor economic conditions and aggressive competition from Europe, Japan and China to woo jobs overseas.
But the uncertainty of the approval process plays a major role in chasing away investment, he said. An industry that has always been a risky investment now faces reduced return on investment, making it prohibitively risky for some, Mandle said.
The industry was lamenting much the same thing a couple of years ago. What has changed is that politicians are talking about ways to improve it. Minnesota U.S. Sens. Al Franken and Amy Klobuchar and U.S. Rep. Erik Paulsen have called for new efforts to speed the approval process without jeopardizing patient safety. “A lot of the rhetoric has changed,” Mandle said. “So far, on the ground, I would say very little has changed.”
Not everyone, of course, has a beef with the FDA.
Tim Cook, president of Uromedica, said the FDA has been “demanding with respect to clinical data and safety data from us. ”
Uromedica, which is going through a longer process called pre-market approval, has developed devices to treat urinary incontinence. Cook said the key with regulators has been open communication and feedback.
“I don’t have a lot of complaints,” he said. “They have been clear with me.”
Business, Pages 19 on 02/25/2013