Barrx Medical: Making A Case For Ablation

Barrx Medical set out seven years ago to compile enough clinical trial data to prove not only that ablation is a safe and effective way of treating Barrett's esophagus, but also that is cheaper than endoscopic surveillance. Its patience is beginning to pay off.

Barrx Medical set out seven years ago to compile enough clinical trial data to prove not only that ablation is a safe and effective way of treating Barrett's esophagus, but also that it is cheaper than endoscopic surveillance. Its patience is beginning to pay off.

By Tom Salemi

Six million people in the world have Barrett's esophagus, and nearly all go untreated.

Ten percent of people with the most serious cases – lower- and higher-grade dysplasia – are treated with surgery or now, radiofrequency ablation.

But the five million people with the metaplastic form of the disease must wait until the disease progresses to warrant medical intervention.

Barrx Medical hopes to tap into that huge market by advocating that those patients be treated as well, with its radiofrequency ablation.

Barrx Medical Inc. has done an effective job of navigating its HALO radiofrequency ablation device onto the commercial markets as a new treatment for Barrett's esophagus, a cellular change in the lining of the esophagus caused by chronic injury due to gastroesophageal reflux disease (GERD). Patients with Barrett's face a significantly higher risk for developing esophageal cancer. With predicates in place for both regulatory and reimbursement approval, Barrx moved quickly to establish its ablation technology as a viable treatment or complement to treat higher- and lower-grade dysplasia forms of Barrett's as well as some esophageal cancer.

With the low-hanging fruit in its basket, Barrx's success will largely depend on what the company does next. Treating higher- and lower-grade dysplasia is critical, as people with those diseases face a very real threat of developing esophageal cancer. But Barrx's biggest opportunity rests in addressing the largest market of Barrett's esophagus patients, the 5.5 million people worldwide who have tested positive for non-dysplasia Barrett's, the most benign form of the disease. ( See Exhibit 1.) The company projects the entire Barrett's market to be over $5 billion, with more than three-quarters of that coming from patients with non-dysplasia Barrett's.

Barrx is trying to treat those who currently aren't treated. Current medical practices suggest that patients with non-dysplasia (metaplasia) Barrett's wait and undergo regular endoscopic biopsies. Barrx is advising physicians and patients that the wait isn't worth it. "The opportunity here is to rather than just watch these patients for the rest of their lives, we can effectively remove the Barrett's very similarly to what you do with a colon polyp today in colon cancer," says Greg Barrett, chief executive officer of Barrx. In pursuing this group of patients – who account for 90% of all Barrett's esophagus sufferers – Barrx is trying to tap into a multibillion-dollar market by changing the medical industry's perception of metaplasia Barrett's being a benign, manageable condition.

Barrx is going off script by pushing for treatment that doesn't currently exist. The medical device industry is evolutionary. New devices strive to make things "faster, quicker, cheaper," rendering expensive or extensive treatments such as surgeries obsolete or sometimes completely unnecessary. Barrx successfully employed that formula in its first phase by bringing radiofrequency ablation to the treatment of the more serious cases of Barrett's. People diagnosed with lower-grade dysplasia faced extensive endoscopic surveillance, at a minimum. Those with higher-grade dysplasia would have to undergo endoscopic mucosal resection (EMR) – an endoscope-based removal of tissue – or an esophagectomy, the removal of part or all of the esophagus.

Barrx executives say metaplasia needs to be looked at more seriously by the medical industry, and they're working to elevate metaplasia and esophageal cancer to the level of a colon polyp and colon cancer. "The standard of care, you know, when you're over 50, is to go in, have a colonoscopy, and if you see a colon polyp, you remove it because it's deemed to be pre-cancerous," Barrett says. Metaplasia is just as serious, he says. The odds of that colon polyp progressing to colon cancer are 0.5% each year, the same as Barrett's. And esophageal cancer is far more deadly than colon cancer, Barrett notes, pointing to five-year survivability rates of only 15%, compared with 40 to 60% for colon cancer.

With metaplasia, the question facing physicians is whether patients who have been diagnosed with the stage require any treatment. As noted, the risk for cancer isn't high, but it's there, estimated at 200 times that of the general population. To be sure, these patients with metaplasia Barrett's have a less than 1% chance of developing cancer each year. In that same scenario, patients with lower- and higher-grade dysplasia face a 1.7% and 6.6% chance of being struck with esophageal cancer, respectively. ( See Exhibit 2.) Individuals with Barrett's typically learn of their diagnosis after a bout with GERD or acid reflux. The examination includes endoscopic biopsies, which remove tissue samples from inside the esophagus to test for abnormalities. Barrett's begins to form on the inner lining of the esophagus as acid and bile splash up through the stomach into the esophagus. The esophagus lining undergoes changes at the genetic and cellular level, morphing from squamous or healthy cells, to intestinal metaplasia, a layer that's better able to withstand the corrosive qualities of the stomach's fluid. However, this protective barrier doesn't stop changing. Over time, the lining develops into more severe forms of Barrett's, and possibly into esophageal cancer.

The three forms of Barrett's – metaplasia, lower-grade dysplasia, and higher-grade dysplasia – traditionally have provided physicians with an adequate notice of when treatment would be necessary. Patients who are found to have lower-grade dysplasia or the non-dysplastic form are advised to come in every year or every three years, respectively, for an examination, perhaps earlier if there is a family history. During the examination an endoscope is used to take biopsies from the patient's esophagus to see if the Barrett's has progressed to a higher stage or has developed into cancer. Guidelines require that the endoscopist remove four biopsies every two centimeters of the esophagus. Depending on the length of the Barrett's, the surveillance could require eight, 12, 16, or more biopsies to ensure the disease hasn't progressed, a high number to be sure but one that put the chances of missing dysplasia at less than 10%. Any positive tests indicating a change from metaplasia to either stage of dysplasia tells the physician that the march toward cancer has begun, although no one can be certain of the pace. The per-patient per-year risk of developing cancer from lower-grade dysplasia is 1.75. That risk accumulates with each passing year, so after 10 years, a person with lower-grade dysplasia faces significant risk. Age, health, and genetic makeup all factor into a patient's risk.

But it's largely a game of chance. David E. Fleischer, MD, chairman of the gastroenterology and hepatology department in the Mayo Clinic in Scottsdale, AZ, says that's the principal challenge for physicians – not knowing when Barrett's esophagus will advance into deadly esophageal adenocarcinoma (EAC). "If you take 100 Caucasian males with Barrett's, 15% of them will go on to develop cancer, and 85% won't," Fleischer says. "And right now we can't distinguish between the people who are going to develop cancer and those who aren't." Fleischer hopes to see a molecular diagnostic developed that's capable of detecting a genetic biomarker in all people with esophageal cancer. Work is being done in this area, but there's no help on the horizon. Without such a marker, physicians advising against ablation at the early stages are counting on the fact that only a small percentage of their Barrett's patients will develop cancer.

Fleischer, an advocate of early ablation, says endoscopic surveillance isn't reliable. Even with regular surveillance, Barrett's sometimes advances quickly, jumping from metaplasia to higher-grade dysplasia or worse. Fleischer, who has done work for Barrx but has no ownership in the company, says 50% of the people who have developed cancer while undergoing surveillance didn't test positive for dysplasia on the previous endoscopy, so the diagnosis had to have been a shock. Even if the odds were more favorable, patients with Barrett's have a compromised quality of life. Patients go to bed every night wondering if cancer could be growing inside them. Every twinge of chest pain could be a cause of alarm. "These are the things that aren't particularly scientific, but the way real life works is people think about what their symptoms are, and they know they have a pre-malignant condition, and they ask what can be done."

Barrx Answers The Question

Barrx says the surest way of curing esophageal cancer is stopping it before it starts. Barrx' HALO device offers endoscopists the ability to treat the pre-cancerous condition, Barrett's esophagus, with a balloon-equipped catheter. Inserted down the esophagus, the HALO360 device emits enough radiofrequency energy to burn away 1,000 microns (1 millimeter) of esophageal tissue. This is more than enough to ablate the Barrett's tissue. "Barrett's is about 500 microns thick, so by ablating 750 to 1,000 microns consistently through this radio frequency bipolar energy, you effectively remove the epithelium and the Barrett's cells, and then new healthy squamous cells grow back in their place," says Greg Barrett. The entire esophageal wall is about 3 to 4 millimeters thick. Barrett's HALO ablation goes only as far as the muscularis mucosa, the first inner layer of the esophagus. Other technologies have gone farther, into the submucosa level and muscularis propria level, which can scar the esophagus and leave a band called a stricture that narrows the esophagus and makes swallowing difficult. Barrett says the electrodes on each balloon are circumferential according to the diameter of the esophagus and run 3 centimeters long, with each electrode made of 60 individual bands. In each one-second pulse, radiofrequency energy hops from each adjacent band, generating positive and negative energy. This creates a manageable energy field that won't burn too deeply into tissue, he says, making the procedure relatively easy to perform and, in the company's eyes, safer than past attempts.

Efficacy, safety and the financial impact on the health care system were the three biggest challenges facing Barrx. The company's regulatory and reimbursement paths were relatively straightforward. Barrx, then incubating within another company, got the regulatory green light to begin selling in 2001 when it received its 510(k) clearance on a predicate for electrosurgery. The approval centered on a broad indication for coagulation within the gastrointestinal tract as well as specific indications such as Barrett's esophagus. But executives opted to delay commercialization. "The esophagus is a very unforgiving organ," Barrett says. "There have been several attempts by others to manage GERD with different technologies that have resulted in some really severe complication rates. So our goal was to put safety first because we were dealing with a fairly conservative group of physicians who had come off relatively bad experiences, both with two particular GERD technologies." ( See "Gastroenterology's Elusive Device Opportunity," START-UP, October 2005 (Also see "Gastroenterology's Elusive Device Opportunity" - Medtech Insight, 1 Oct, 2005.).) In one instance, physicians using Curon Medical Inc.'s Stretta radiofrequency catheter for GERD accidentally burned patients too deeply. Boston Scientific Corp., meanwhile, voluntarily recalled its injectable biomaterial Enteryx from the market, after reports of 11 accidents in which physicians punctured the wall of the esophagus during the procedure, and one death, in which a physician inadvertently punctured the aorta.

To clear those challenges, Barrx needed data. David S. Utley, MD, the company's first employee and chief medical officer, says the company had developed a rigorous clinical trial strategy from the first day knowing that adoption by physicians and patients, coverage by third party payors and long term viability "were all predicated on clinical evidence." The company has created and conducted more than 20 clinical trials resulting in the publication of more than 45 papers in peer-reviewed medical literature that report on the clinical benefit of ablating unhealthy esophageal tissue diagnosed as Barrett's esophagus. Such rigor was necessary to demonstrate the efficacy and safety to physicians, patients and insurers. Due partly to past problems and the severity of the disease, gastrointestinal endoscopists historically are slow adopters to new technologies, so the methodical approach was necessary.

It Started With Skin

Barrx' current success follows a decade of discovery and work on the radiofrequency technology that had been inspired by Thermage Inc. (now Solta Medical Inc.), the aesthetics company that was using radiofrequency energy to tighten sagging facial skin. In 2000, two physicians – Brian Zelligson, MD, a dermatologist, and Robert Ganz, MD, a gastroenterologist, saw the potential of using radiofrequency energy to remove layers of external skin and thought the same might be possible for the esophagus. The pair approached Stellartech Research Corp., a device designer and manufacturer that made radiofrequency devices for Boston Scientific Corp. and Thermage.

The work went quickly, and Stellartech obtained 510(k) notification for the radiofrequency device in 2001. The technology was fairly simple, comprising tiny electrodes embedded on the surface of a balloon device. An endoscopist would insert the deflated balloon down the esophagus, inflate it, and deliver RF energy to the electrodes inside to emit enough radiofrequency energy in a one-second burst to burn off the inner lining of the esophagus. The burned cells would slough off, allowing new healthy cells to grow back. By 2003, the idea had advanced enough to warrant a venture round of financing. Alloy Ventures, Delphi Ventures and Charter Ventures committed $6 million for a Series A. [See Deal] The round was followed by the hiring of Barrx's first full-time employee, Utley, an ear-nose-and-throat specialist who also founded once publicly traded Curon Medical, a maker of gastrointestinal devices. (In 2006, Curon went out of business and licensed certain technologies to Barrx. [See Deal]) Utley managed the clinical activities and research and development under Stellartech, but within a year it became clear that Barrx should stand alone. In 2004, Barrett joined the company as CEO with an eye toward moving the company to commercialization. Prior to joining Barrx, Barrett served as president and CEO of ACMI Corp. and held senior positions at Boston Scientific in its Microvasive Endoscopy, Microvasive Urology and Intercontinental International businesses. Barrx raised a Series B round in 2004 to fund early commercialization of the HALO device and followed with a larger Series C round in 2006. [See Deal]

Barrx' clinical studies started in earnest in 2003 when the company began testing the safety and efficacy of its radiofrequency ablation device, having only previously done studies on pigs. The Stretta experience still fresh in the minds of both company executives and physicians, Barrx's first goal was to ensure that its device wouldn't be the cause of similar burning and perforations. Utley says the Barrx executives understood data were the best drivers for physician adoption, so they took no shortcuts. Even with FDA approval in hand, Barrx designed a regimen of animal and human trials, with the latter including a sham arm to serve as a control. In 2003, Barrett says Barrx started with trial studies on live patients with advanced cases of esophageal cancer that needed to be removed. Investigators were permitted to ablate a portion of a patient's esophagus prior to the surgery and then study the depth of penetration. The studies allowed Barrx to fine-tune its radiofrequency generator, which was set to deliver a pre-set dose of energy to ensure the energy didn't burn too deeply. The HALO system also comes with five sizes of balloons, 18 to 31 millimeters. With more than 62,000 cases of radiofrequency performed, the company states that only 124 complications have been reported to the FDA, an overall rate of 0.22%, with no deaths having occurred. Despite the precautions, treatment of Barrett's using the HALO device has created strictures in roughly 100 patients (0.17%). This has been the most common complication. Barrx also reported 10 perforations of the esophagus, a serious and potentially deadly injury. All were treated endoscopically or surgically, and none were related to device malfunction, Barrett says. The safety data demonstrate that radiofrequency ablation, indeed, is safer than doing nothing and potentially allowing the Barrett's to develop into esophageal cancer. Even a patient with non-dysplasia Barrett's stands a 0.6% chance per year of having that develop into esophageal cancer, three times the safety risk of radiofrequency ablation.

Since 2003, the company has run HALO's radiofrequency ablation in approximately 20 clinical trials, treating over 1,000 patients with various types of Barrett's. Results from the most convincing trial, the AIM Dysplasia trial, were published last year in The New England Journal of Medicine. Two- and three-year results have been presented, and the trial will be continued through five years. In the study published with one-year results, 90.5% of the patients with lower-grade dysplasia had their Barrett's completely eradicated by HALO's radiofrequency ablation as compared with 22.7% of those in the control group. Among patients with higher-grade dysplasia, complete eradication occurred in 81.0% of those in the ablation group, as compared with 19.0% of those in the control group. Overall, 77.4% of patients in the ablation group had complete eradication of intestinal metaplasia, as compared with 2.3% of those in the control group. CEO Barrett also points to the progression of the disease in the control group, which received a sham treatment. According to the study, 16.3% of the patients in the sham study saw their disease progress versus 3.6% in the treatment study. The company released additional follow-up data at the Digestive Disease Week conference in New Orleans last year, showing two-year durability for the same study. Ninety-six percent of all treated patients were clear of Barrett's after two years. Three-year follow up data show similar numbers. "The point being that the tissue result from using the HALO technology is very durable, and that when we ablate it; it doesn't come back in the majority of patients."

Early Commercial Launch

By the time of the NEJM study publication in 2009, HALO had been on the market for almost five years. A few hospitals bought the system early on, but the commercial launch coincided with the ramping up of clinical trials. In January 2006, the company initiated a full commercial release, hiring 16 direct-sales reps in the United States. The three years of clinical trials at that point led to an addition to the balloon-based HALO system launched in 2004: the HALO90 system, a small, focal direction ablation device capable of ablating a portion of the esophageal wall rather than the entire circumference of the esophagus. Although the HALO360 device successfully ablated 95% of the tissue in trials, follow-up examinations would sometimes reveal small patches of persistent Barrett's tissue. "Before we released HALO90 the only option for the physician was to do another 360 procedure to get that residual Barrett's to completely cure the patient," Barrett says. "The physicians didn't like that because the residual Barrett's was so small and the HALO360 ablated such a broad area. So they wanted us to come up with what we called a focal ablation device, a device with which we could just go in and touch up the remaining or residual Barrett's." The HALO90 device fits at the end of a gastroscope and delivers the same energy and dosage, ablating just a small rectangular area and eliminating the residual Barrett's. Prior to the release of the HALO90, the HALO system was effectively eliminating all the Barrett's tissue in only 70% of patients, with the other 30% needing repeat procedures to eliminate those small areas. After the release of HALO90, the cure rate went up to 98.4%. "So, effectively, what the HALO90 allowed us to do with the combination of HALO360 was literally cure nearly all patients who were treated," Barrett says. The HALO system has the potential to significantly alter the treatment of Barrett's. The only remaining question is, were physicians justified in ablating people with a metaplastic form of the disease if they only had a small risk of contracting cancer?

In the past, surgeons didn't act until the patient tested positively for higher-grade dysplasia, the most severe form of Barrett's, or cancer. Patients with higher-grade dysplasia carry a 6.6% per-patient per-year risk of developing adenocarcinoma. These patients could opt for more frequent endoscopic checks, but time isn't their ally. After two years, more than 10% of these patients will develop cancer. After four years, the ratio increases to one in four. Surgical intervention includes an esophagectomy. The two primary techniques are transhiatal esophagectomy and transthoracic esophagectomy. In both procedures, surgeons remove the patient's esophagus and top part of the stomach. The surgeons build a new esophagus by pulling the stomach up into the chest and connecting it with the remaining portion of the esophagus. It's a risky procedure for every patient, particularly those who already are older or infirmed. Even experienced surgeons may lose up to 5% of their patients, and the mortality is higher for surgeons who aren't performing the surgery frequently.EMR (endoscopic mucosal resection) is a less invasive surgical procedure for early-stage esophageal cancer in patients in whom the cancer hasn't run too deep. (Or patients who simply couldn't survive the esophagectomy.) EMR is performed by interventional endoscopists who are skilled enough to perform surgical procedures through endoscopes. They're capable of lifting and cutting the abnormal lesions or tumors from the inner mucosal and submuscosal layers of the esophagus. The guidelines for lower-grade dysplasia are evolving. Historically, patients underwent more frequent biopsy tests, as often as every six months to a year, with doctors looking for a telltale red flag that trouble is brewing or a sign that the Barrett's isn't progressing. Biopsies remain a standard procedure, but physicians increasingly are recognizing ablation as an appropriate treatment. M. Brian Fennerty, MD, professor of medicine in the division of gastroenterology at Oregon Health & Science University in Portland, says lower-grade dysplasia still can be effectively watched and managed. "But I think it's also appropriate to offer those patients ablation over [endoscopy surveillance] because they are now developing the cell changes that we're looking for in their esophagus. To me, that's a call to at least offer an ablation." Fennerty says he's still likely to turn to endoscopy to remove tissue (EMR) when the stretch of diseased tissue is 2 centimeters long or less. "The major reason [for doing the EMR] is we get the pathology; we get the tissue back so we're not destroying the tissue. We're chopping it off. We can recover it and the pathologist can tell us exactly what we have." But he's likely to also then ablate any remaining tissue after the EMR.

Barrx Changing Minds

Barrx's favorable clinical trial outcomes are beginning to change minds in the treatment of metaplasia as well. This summer, the Society of American Gastrointestinal and Endoscopic Surgeons (SAGES) put out guidelines for treating GERD. Within those guidelines, SAGES endorsed more aggressive medical intervention through endoscopic-based treatments, including, but not limited to, Barrx's radiofrequency ablation. The guidelines mention photodynamic therapy and EMR as other possible treatments. "Of the ablation modalities available, RFA has been shown to achieve high rates of complete histological eradication … with an acceptable adverse event profile," the guidelines state. "Further, cost-utility studies show that ablative therapy is the preferred strategy over surveillance alone (all grades) and esophagectomy."

The Mayo Clinic's C. Daniel Smith, MD, who had been president of SAGES during the formation of the guidelines, says Barrx put in the work necessary to gain the adoption and overcome the question of whether the use of ablation in the lower grades of Barrett's was treatment overkill. Barrx looks to have successfully answered the concerns over whether physicians might be doing more harm than good if they ablate metaplasia in a patient who wouldn't have developed dysplasia or cancer. Fleischer says given the safety of the device and the success shown in removing Barrett's, he's willing to treat patients with metaplasia and lower-grade dysplasia after advising them of all their options and they're remote chance of contracting cancer. "I think it's appropriate, ethical, moral, and the right thing to do in those patients." But this is far from a uniform position.

Fennerty, president of the American Society for Gastrointestinal Endoscopy, says he'll generally ablate patients with higher-grade and lower-grade dysplasia, as well as perform an EMR, but he remains uncertain whether to ablate metaplasia sufferers. His biggest concern is patient safety, as EMR or ablation for patients with the metaplastic form of Barrett's isn't a necessity since only a tiny percentage are at risk of developing cancer. "There's a large group of the gastroenterology academic community that has been involved in this field that is sitting in the middle," he says. "And if you ask me how I do it, I do it on a case-by-case basis." Physician opinion also might depend on the specialty. Endoscopists, who generally are limited to screening procedures like surveillance endoscopies and colonoscopies, could see ablation as their chance to treat, not just observe, patients. Complex surgical tasks such as esophageal mucosal resection generally fall to therapeutic endoscopists, says Fennerty. Ablative tools like HALO will give him another tool in belt. But "Barrx can be used by people who don't have to have really advanced endoscopy skills," Fennerty says. "EMR requires advanced endoscopy skills."

Perhaps the single strongest driving force of ablation adoption may be the patients themselves. Both Fennerty and Fleischer say patients diagnosed with any level of Barrett's are doing their research and seeking out doctors who are willing to perform the procedure. Fennerty says patients will come to him "armed with the facts and they say, `I want this done.'" Fennerty says he still attempts to steer patients without dysplasia away from having the treatment. "I tell them there's no evidence we're doing any good; we may do harm; but we can get rid of the Barrett's in the majority of them," he says. This doesn't typically deter the patient, so Fennerty works with the patient to obtain coverage from the insurance carrier. Barrx's HALO system is reimbursed by Medicare under existing codes, but private insurance can be spotty. Adoption of the HALO system also could be driven by the desire of endoscopists who don't have the training to perform esophageal surgery. The Barrx system gives them the ability to treat patients they previously would have referred out to someone else.

Utley says Barrx faces a unique challenge in the device world. The questions aren't whether or not the product works, he says, or even if the data show the product to be safe. "The data is there. And it's not just there in anecdotes; it's there in three, randomized controlled trials, a huge registry with 4,200 patients enrolled, and a number of additional studies that we expect to publish in the next year," he says. The debate, Utley says, is whether or not non-dysplasia Barrett's patients should be treated. Utley notes that a patient with Barrett's in the metaplastic phase still has 200 times the risk to contract cancer than a person without Barrett's. ( See Exhibit 3.) "So if you have 100 patients and you follow them for 10 years, five of them will get cancer," Utley says. "If you have 100 patients with colon polyps, for whom we do eight million colonoscopies a year for, and you follow those 100 patients with colon polyps for 10 years, five of them will get cancer. And the medical community spends about $20 billion a year looking for and removing those polyps so they can prevent this colon cancer. The risks of Barrett's esophagus, even the most innocent kind, non-dysplastic, is the same risk as a colon polyp turning into cancer. And nobody would ever allow a patient to walk around with a polyp in his colon. They'd just snip it out."

Measuring Financial Impact

With clinical evidence mounting of RF ablation's effectiveness, Barrx's next significant hurdle is securing broad reimbursement. Barrx found an initial path toward reimbursement. Barrett's old employer Gyrus ACMI (now part of Olympus Corp.) and Boston Scientific both sell radiofrequency devices used in ablation. CMS' reimbursement rate for the facility fee is around $1700, with private insurers paying as high as 50% more than that. Barrx began work in 2003 with the professional societies to obtain recommendations for physicians on how to appropriately code for the ablation service. As of today, 58% of private insurers cover RF ablation under existing codes. Barrett says Barrx wants to secure specific policies for reimbursement, as it's done with 31% of insurers. In 2009, Barrx formed a reimbursement department staffed with experts from the medical device field who review clinical work and follow-up studies with payors and customers to enable a patient to receive the ablation service as a covered service.

A diagnosis of Barrett's at any level is costly to the health care system. One study put the annual cost of endoscopic surveillance at $290 million in the US alone, and those figures are nearly 10 years old. Barrx is getting some help in this area through three recent studies that compare the cost-effectiveness of radiofrequency ablation with endoscopic inspection (and one of the studies even considers no intervention at all). The general consensus of these analyses is that ablation – radiofrequency or otherwise – looks to be a more cost-effective means of treating all Barrett's patients, even those with metaplasia Barrett's who don't currently receive care. A study from the University of California, San Francisco (UCSF), "Cost-utility analysis of ablative therapy for Barrett's esophagus," concludes that endoscopic ablation of Barrett's esophagus "is probably cost-effective, capable of providing over three years of additional quality-adjusted life expectancy at a cost of less than $6,000 per dQALY gained … [T]his strategy is estimated to be more effective and less costly than surveillance or esophagectomy for patients with [Barrett's esophagus] and [high-grade dysplasia]." Barrx funded the study with an unrestricted grant, according to Utley, and had no role in the study or opportunity to approve or disapprove its findings.

The study drew no distinction between different ablation technologies, at least not in effectiveness. The most important conclusion for Barrx may have been the finding that ablating the esophagus in patients with lower-grade dysplasia is more cost-effective than endoscopic surveillance. And in patients with metaplasia Barrett's, "ablation may be the preferred strategy if the proportion of patients in whom complete and permanent ablation is achieved is greater than 40%, and endoscopic surveillance can be discontinued in patients in whom ablation is successful." Barrx, in its studies, has easily beaten the 40% milestone.

The question haunting any analysis is what happens after ablation. If the squamous tissue of those patients returns as healthy and "normal," is further surveillance necessary? With five-year follow-up of its earliest clinical trials, early signs are good. Fleischer led Barrx's AIM-II trial that started in 2003, focusing on non-dysplasia Barrett's patients. Fleischer just published the five-year outcomes for the study, showing that 92% of the patients remained Barrett's free. The other 8% presented at five years with isolated patches of Barrett's that could be ablated with the HALO90 device. If the subjects in the company's trials continue to show only healthy tissue, patients who have undergone ablation could go without additional surveillance. But clinicians aren't there yet. "Currently insufficient data exist to answer this question and presently, we and others are retaining these subjects in endoscopic surveillance programs," the authors of the UCSF study state in their paper. But endoscopic surveillance is increasingly seen as a security blanket for physicians and patients in the treatment of Barrett's or EAC. One recent study conducted at a Veterans Affairs Medical Center in Ann Arbor, MI, suggests that endoscopic surveillance provides a short-term benefit but doesn't improve long-term survival rates. The study – "Effect of a prior endoscopy on outcomes of esophageal adenocarcinoma among United States veterans" – collected data on 155 patients who were diagnosed with EAC between 1995 and 2003 after previously having been told they suffered from GERD. The study compared those patients who underwent endoscopic surveillance with those who didn't. The study concludes the surveillance led to some short-term gains but it failed to decrease mortality. As Fleischer notes, 50% of the people who have biopsies that reveal esophageal cancer didn't register for dysplasia in the last check-up. "So it's not a foolproof system, this endoscopic surveillance," he says.

A Second Study

Fleisher led the writing of a second, independent cost-analysis study of endoscopic ablative therapy for management of non-dysplasia Barrett's esophagus. Compiled by more than a dozen specialists – including pathologists, surgeons and gastroenterologists – it also pointed to a possible cost-benefit of radiofrequency ablation over endoscopic surveillance. The report was built on a statistical model that projected the fate of a hypothetical 50-year-old patient with non-dysplasia Barrett's. The model projected the outcome of three strategies – no intervention or surveillance at all, endoscopic surveillance only, or endoscopic ablative therapy. The study then sliced the accumulated data in three different ways, with each showing ablation was shown to be more effective in developing cancer. "Within the limits of the model, ablation for non-dysplastic Barrett's esophagus is more cost-effective than endoscopic surveillance." However, like the UCSF study, the Mayo study warned that further study on ablation's ability to stave off the return of disease was necessary.

With more attention being paid to utilization of health care technologies and expense, physicians have to ask themselves how many cancers they prevent given the low rate of progression of the lesser stages of Barrett's. It's this dilemma that places Barrx's largest opportunity at the nexus of patient demands and growing demands for cost containment. Fennerty says many patients can't quite discern the statistical differences between the stages of Barrett's. A diagnosis of metaplasia, even in its earlier stages, can be seen by a patient as death sentence. "No matter how cavalier we are as physicians about saying, 'OK, you have non-dysplastic Barrett's; your cancer risk is very small,' … we still have to tell them, 'By the way, I want to take a look down there and sample the tissue every three years just to make sure cancer's not sneaking up on us.'" Physicians see observation as a measured response to a disease with such a low cancer rate, believing the risks of any intervention outweigh the risks of doing nothing and watching. But many patients aren't buying it and push to close the door on the disease through ablation. "You can understand why patients come to us and say, 'I don't care what you say about it's being covered or not. Do something about this stuff,'" he says. This is the academic argument. On one side, conservative physicians may line up with insurers and advocate against treatment. On the other, patient advocates and more aggressive physicians see the value in eliminating Barrett's at any level, just to save patients the difficult of living with the potential of esophageal cancer growing inside of them.

Barrx appears to be convincing physicians to take action. The SAGES guidelines could go a long way toward getting physicians off the fence and intervening at the earliest signs of Barrett's, but the company already has been making strong sales. Barrett says Barrx brought in $25 million in sales in 2009, and its now on pace to increase sales by 70% this year. The company closed on a $15 million Series D this summer, providing it with the capital for commercialization. [See Deal] Bijan Salehizadeh, MD, general partner at Highland Capital Partners, the round's leader, says he recognizes the challenge of getting physicians to adopt a new technology. "The good news is that unlike almost any other company that we've ever taken a look at, Barrx has done an incredible job publishing peer-reviewed, prospective studies such as the New England Journal study," he says. "These are things that I've never seen another venture-backed company do." If Barrx is successful in changing how health care is delivered to patients with Barrett's, more companies may follow the company's lead.

Barrx Is Looking At Asia

Barrett's has been the primary subject of Barrx history, but it's not the company's only story. In March, Barrx announced that it received 510(k) clearance from the FDA to market the HALO systems for radiation proctitis (RP) and gastric antral vascular ectasia (GAVE), two conditions of the gastrointestinal tract associated with chronic bleeding and the need for blood transfusions. Barrx has an even larger opportunity in Asia. It is working with authorities inside China and Japan to offer its ablation device as a tool to treat early esophageal squamous neoplasia, the precursor to squamous cancer of the esophagus. Squamous cell carcinoma is generally brought on by external environmental factors common in some Asian countries including air pollution, drinking alcohol, smoking, and in many cases the type of fuel used for cooking in some homes. It kills about 400,000 patients per year worldwide; over 200,000 in China alone. The prevalence of squamous cell neoplasia, the precursor stage to carcinoma, is 10 times that amount, presenting a potentially large market for Barrx. The company is working along with Fleischer and the National Cancer Institute to study the effects of Barrx's technology in treating squamous neoplasia. Early results of a trial conducted in China are promising. All 29 people treated were cured, according to Barrett. "This represents about a $2.6 billion-dollar market opportunity, whereas the Barrett's market is about right around a $5 billion market," Barrett says. "And interestingly, we didn't have to change our technology in order to effectively treat squamous neoplasia. The target organ, the esophagus, is the same so treatment of squamous neoplasia using our HALO system works very well."

Barrx is awaiting word from China's SFDA on approval for sale of the device in that country. Meanwhile, Barrx executives were invited to Japan to discuss the possibility of using HALO in that country. In Japan, surgeons treat squamous cell carcinoma by dissecting a thin layer of the entire esophagus. Barrx's HALO could be used as a complement to that. Last month, Barrx announced the signing of an exclusive agreement with Medico's Hirata Inc. for distribution of the HALO ablation system in Japan.

The financial impact of a new technology on the bottom line of the health care system hasn't always been a strong consideration for medical device start-ups. Companies once could count on getting paid for their innovative new devices if they successfully convinced influential physicians and surgeons to use. But this blank check has faded over time, starting in the mid-1990s when hospitals and insurance companies concentrated on cutting costs and explored less expensive means of making patients well. Medical device investors increasingly have a hard time investing in companies that aren't pursuing well-worn regulatory, reimbursement and commercial tracts. If Barrx is successful in convincing physicians to ablate patients with the metaplastic form of Barrett's, future device companies will have one more well-worn path to take.