Span-America Buys Medical Bed Frame Manufacturer

Span-America Buys Medical Bed Frame Manufacturer

Span-America Medical Systems Inc. has acquired virtually all the assets of privately held M.C. Healthcare Products Inc. The company expects the acquisition to be accretive to its earnings in fiscal 2012. Beamsville, Ontario, Canada-based M.C. Healthcare Products makes and sells medical bed frames and related products for the long term care market.

Detailing the terms, Span-America said it paid $8 million (Canadian dollars) cash plus 100,000 shares of Span-America common stock for the substantial assets it acquired. The purchase price is subject to certain working capital adjustments.

Span-America will fund the acquisition through a combination of cash on hand and proceeds from a renewal of its $10 million revolving credit facility. The company said transaction is expected to result in goodwill of about $6.5 million in Canadian dollars.

Span-America said it will operate the acquired company under the registered business name M.C. Healthcare Products, a division of Span Medical Products Canada Inc., which is a newly formed British
Columbia corporation and wholly owned subsidiary of Span-America Medical Systems Inc. Span-America will operate the business from M.C. Healthcare’s 50,000- square-foot manufacturing and showroom facility in Beamsville under a five-year lease agreement with an option to buy or continue the lease at the end of the term.

Span-America CEO Jim Ferguson said the acquisition will expand the company’s market potential by bundling a robust line of medical bed frames with the company’s broad line of branded therapeutic support surfaces. M.C. Healthcare Products has 54 employees and 17 independent manufacturer’s representatives. The company reported sales of $12.2 million (Canadian dollars) and operating profit of $170,000 for the fiscal year ended July 31, 2011.

NAMSA Broadensits European Reach
NAMSA, the Northwood, Ohio-based medical device research organization, has said guten tag to Germany. The company has opened its newest office near Frankfurt. Staff with regulatory and quality expertise, clinical managers and local monitors will provide support for European clinical trials as well as European device makers seeking approvals in the United States, according to the company.
This isn’t, however, the firm’s first foray into Europe. NAMSA’s testing laboratory near Lyon, France, has been conducting non-clinical safety and efficacy studies for medical device companies since 1986.

“U.S. companies can have confidence that the high quality support they’ve valued in NAMSA’s U.S. clinical and consulting operations are now available in Europe, ensuring the same responsiveness and thoroughness on both sides of ‘the pond,’” said Elizabeth Kempen, chief operating officer of NAMSA’s clinical research and consulting groups.

European market approval has emerged as a preferred pathway for medical device manufacturers primarily due to more efficient approval processes, Kempen claimed.

“The placement of this office reinforces NAMSA’s commitment to helping our clients design and execute global regulatory and clinical strategies, develop new therapies, and launch them in the most efficient manner possible,” said John Gorski, NAMSA’s president and CEO. “The combination of non-clinical and clinical research expertise at our European locations enables NAMSA to provide our clients with a higher level of continuity, consistency and convenience throughout the product development process.”

NAMSA provides range of services to prove efficacy, non-clinical and clinical safety of medical devices, IVDs and combination products.

Oberg Medical Expands Costa Rica Operations
Oberg Medical, a full-service medical device contract manufacturer providing implants, instruments and complex assemblies, recently announced plans for the expansion of its Costa Rica manufacturing operation.

Company officials said the move was to better serve the expanding device market in Central America and provide “cost optimization solutions” for U.S. OEMs.

“We have been a manufacturer in Costa Rica since 2001 and have seen firsthand the growth of the medical device sector in country. As more of our OEM partners look to Central and South America for growth opportunities, we are expanding our presence in the country to provide them cost-effective manufacturing solutions,” said David Bonvenuto, executive vice president and general manager of Oberg Medical.

The company has more than 100 employees in Costa Rica and officials noted that trade school programs have been used to attract talented employees. In addition, good relationships with investment, government and in-country supply chain partners for materials and services have given the company “the confidence” to expand Costa Rica operations, Bonvenuto added.

Oberg will expand from 24,000 square feet to more than 50,000 square feet within its current home, the Metro Park located just outside of San Jose. The larger facility will support the firm’s growing precision implant and instrument manufacturing, with added capacity in the milling, wire EDM, turning, quality inspection, and related secondary operations areas. The expansion is expected to be completed in the third quarter of 2012.

The growth in Costa Rica comes on the heels of more than $5 million of capital investment into its United States-based medical business over the past year along with an additional $2 million of capital investment in Costa Rica. The U.S. investment included the completion of its facility-wide process validation initiative and the addition of approximately 15 CNC milling machines, EDMs, and lathes.
The company’s U.S. operations are located in the suburbs of Pittsburgh, Pa.

Consumer Group Battling Approval of Brain Stent
A national watchdog group and former U.S. Food and Drug Administration (FDA) scientist have joined forces to reverse the 2005 approval of a brain stent. Public Citizen and 13-year FDA veteran Larry Kessler, Sc.D., petitioned the FDA to pull its humanitarian device exemption (HDE) approval of the Wingspan Stent System, a device used to open blocked blood vessels in the brain. Developed by Natick, Mass.-based Boston Scientific Corp., the Wingspan system consists of a balloon catheter that opens the blocked arteries and a self-expanding nitinol mesh stent tube the keeps the vessels open. The FDA granted HDE approval of the product based on a 45-patient safety study conducted at 12 sites in Europe and Asia; results show the Wingspan had a stent success rate of 100 percent, a procedural success rate of 97.7 percent, and a 4.4 percent death/stroke rate in the same hemisphere of the brain as the lesion 30 days after the procedure. The death rate from stroke in the same hemisphere of the brain after six months was 7 percent, according to the study.

A more recent clinical trial, however, revealed conflicting data, leading Public Citizen members to contend the Wingspan system is unsafe. Results of the Stenting and Aggressive Medical Management for Preventing Recurrent stroke in Intracranial Stenosis (SAMMPRIS) trial revealed that patients receiving aggressive medical therapy alone (without stents) had a significantly lower risk of second stroke and death: 12.2 percent over one year, or less than half the 25 percent rate expected with standard medical therapy. The aggressive medical management—designed specifically for the trial—consisted of early treatment with two platelet-blocking agents as well as medications to significantly lower cholesterol levels and control high blood pressure. In addition to being more effective, the treatment is considerably less expensive than stenting.

By contrast, patients receiving stents experienced a second stroke or died within one year about 20 percent of the time, comparable to the 25 percent rate expected with standard medical therapy—but clearly inferior to the 12.2 percent associated with the new medical management protocol. Results of the SAMMPRIS trial were published last fall in the New England Journal of Medicine.

“The message from the trial could not be clearer: The risks of this intervention substantially outweigh any potential benefit to patients,” said Michael Carome, M.D., deputy director of Public Citizen’s Health Research Group. “The [Wingspan] device poses an imminent threat of serious harm to patients and should be pulled from the market without further delay.”

Carome, two of his colleagues (Sarah Sorscher, a researcher with Public Citizen’s Health Research Group; and Sidney M. Wolfe, M.D., director of Public Citizen’s Health Research Group) and Kessler outlined their concerns about the Wingspan system in a 20-page letter to FDA Commissioner Margaret A. Hamburg, M.D., and Jeffrey E. Shuren, director of the FDA’s Center for Devices and Radiological Health (CDRH). The letter accuses Boston Scientific of using the HDE process to gain approval of Wingspan based on a clinical trial that was “not designed to demonstrate whether treatment with the device was safer or more effective than medical therapy alone.” It also provides details of several studies that have been conducted since the system was cleared, though the writers acknowledge that each of the studies contain methodological weaknesses that could prevent clinicians from reaching any valid conclusions about the risks and benefits of using the Wingspan system rather than medical therapy alone to prevent strokes. Nevertheless, Carome and company claim the studies prove the Wingspan system “carries substantial risk of grave harm, especially in the short term, including the risk of death and stroke. Of particular concern is the significant number of periprocedural adverse events that can be caused by placement of the Wingspan Stent,” the letter said.

“I understand the FDA needs to use its regulatory authority in flexible and not dogmatic ways, and granting of HDEs when data about safety and effectiveness are not complete is a legitimate exercise of regulatory authority,” Kessler wrote in a letter to Wolfe. Kessler is a former director of the CDRH’s Office of Surveillance and Biometrics, and former director of the CDRH Office of Science and Engineering Laboratories who now is a professor at the University of Washington’s School of Public Health.
“However, for that flexibility, the FDA must realize it has an equally important duty to move swiftly to make regulatory changes and announcements when device problems are uncovered. These compelling post-market data about the Wingspan stent provide an opportunity for the FDA to show to industry, the clinical community and most of all to patients that the agency is serious about exercising its authority by withdrawing the HDE immediately and insisting on a recall to ensure the devices on the U.S. market are both safe and effective.”