Orthopedic biomaterials and drug-eluting stents are only the first hint at the potentially transforming nature of combination products: device/biologic combination products that may bring a revolution to clinical therapy and to the device industry. In vascular medicine, catheter-based delivery of cardiac gene therapy may become a significant advance, yet with scant clinical evidence of efficacy and only anecdotal physician experience using catheter delivery systems, the field remains all promise. Many device executives think they see a path emerging, largely due to fundamental changes in the dynamics of their industry that are moving device business models closer to that of their pharma industry cousins.

At the top of the industry, consolidation has frozen out much additional M&A; horizontal mergers among large companies have become much more difficult to get through regulatory authorities as the industries themselves have consolidated. In medical devices, M&A is at a 10-year low, reflecting a paucity of high-value small-company opportunities. Perhaps as important, some successful big-company development programs undermine a basic assumption of medical device investing: that big companies must source innovation from small ones, usually through acquisitions. Meanwhile In biotech, the number and value of M&A is down, despite the apparent logic of consolidation and the unprecedented willingness of sellers to accept low valuations. The key problem is that there are few buyers: those without extremely strong balance sheets aren't willing to take on additional burn rates, having seen some acquirers come to grief as their new, apparently stronger companies are unable to raise money in this bear market.

Angiogenix believes the delivery of its novel growth factor, pleiotrophin, will lessen the need for repeated interventional procedures to treat restenosis at a fraction of the current cost of interventional (device or surgical) therapy, without the use of a permanent device or foreign graft.

DIRECT, the first placebo-controlled trial of a laser myocardial revascularization technology, did not prove any benefit from the therapy, an announcement that has stirred a hornet's nest of controversy in the TMR/PMR industry. Laser companies and physicians who perform the procedures have been in damage control mode since the announcement. The event has exacerbated the challenges that laser companies were already facing in the early adoption phase of a new treatment paradigm. PLC Systems and Eclipse Surgical feel confident that their technologies are sufficiently different from that used in the DIRECT trial and are striving to reassure physicians, patients and investors. In its efforts to convince skeptical physicians or those put off by the DIRECT results, PLC is banking on its perfusion data and its positive 5-year results for its surgical TMR approach. Eclipse hopes positive results from its clinical trial will help it get approval for the first interventional approach.