Picking up the Pacing in Obesity: Medtronic acquires Transneuronix

Medtronic soon will be able to offer a less invasive and safer surgical alternative to gastric bypass surgery, now that it has acquired Transneuronix for $260 million. Transneuronix has developed a gastric pacing device known as Transcend, which stimulates the stomach, and it appears to affect multiple mechanisms in obesity. The device has been approved in Europe, and has been implanted in more than 700 patients worldwide. In the US, Transneuronix has completed enrollment for its pivotal clinical trial.

You can't pick up a newspaper these days without finding obesity discussed as an epidemic in the US. In fact, there are 23 million Americans with a body mass index of 35 or greater, which means that they exceed their ideal weight by about 100 pounds. There are 8 million Americans that are even worse off, with a body mass index of 40 or more. This isn't just a cosmetic concern; the co-morbidities of obesity include cardiopulmonary failure, diabetes, hypertension, sleep apnea and asthma; consequences so deadly, that, when they occur in 30 million severely obese people, justify surgery, according to a 1991 consensus statement from the National Institutes of Health . That consensus hasn't been updated, but Elizabeth H. Singer, a spokesperson for the institutes does admit that, at least as observed from uncontrolled studies, surgical procedures can produce larger and more sustained weight loss than non-surgical treatments, including exercise, lifestyle modification or even drugs.

Drug treatments for obesity largely don't work, chiefly because it is a multifactorial disease in a system that has many redundancies. Gary Lubben, VP and general manager of Medtronic Inc. 's new business unit Medtronic Obesity Management says, "The digestive system has a very strong self-preservation mode." Lubben explains that obesity involves the brain, the digestive system, psychosocial factors and other variables, and that's why a single pill is rarely helpful. Surgeries on the other hand, which shrink the stomach and rewire the process of food absorption, do result in sustained weight loss. The tradeoff is the risk of dire consequences such as pulmonary embolism, respiratory failure, gastrointestinal leaks, bleeding and even death. Soon, though, Medtronic will be able to offer a less invasive and safer surgical alternative to gastric bypass surgery, now that it has acquired Transneuronix Inc. for $260 million [See Deal].

Transneuronix, founded in 1997 around work begun by Italian surgeon Valerio Cigaina, MD, of the University of Verona, has developed a gastric pacing device known as Transcend. The device has been approved in Europe, and has been implanted in more than 700 patients worldwide. In the US, Transneuronix has completed enrollment for its pivotal clinical trial.

Transcend comprises a pulse generator that a bariatric or general surgeon implants in the abdomen under the skin, and pacing leads placed in the lesser curvature of the upper stomach near the main nerve bundle. The generator can be programmed through radio frequency modulation, just like a pacemaker. The lead system stimulates the stomach, and it appears to affect multiple mechanisms in obesity. Stimulating the stomach has the direct effect of slowing it down, contributing to a feeling of satiety. Electrical impulses also directly affect neural activity between the brain and the stomach, via vagal signaling pathways. Indirectly, gastric pacing may also be influencing the release of hormones, several of which are implicated in appetite control: ghrelin, leptin, orexin, and CCK. The exact mechanisms of the therapy aren't known, but that's not surprising because the mechanisms of obesity itself aren't completely understood. However, Lubben believes Transcend succeeds where drugs fail precisely because it is affecting multiple pathways.

In clinical trials, the device appears to result in weight loss that is roughly equivalent to that experienced by recipients of the Lap-Band, a minimally invasive and reversible stomach banding procedure that Inamed Corp. introduced in 2001 as an alternative to gastric bypass surgery. However, the Transneuronix device appears to have a much better safety profile than Lap-Band, and it avoids the major complications of gastric bypass. "Gastric bypass has a 0.5% risk of a serious health consequence and or death," says Lubben. "That sounds like a low number, but it's one out of 200 patients. Our device is completely adjustable and removable. The safety profile of bypass surgery isn't anywhere near what we have," he says.

Initially, Medtronic is seeking approval of the device for the same population that is now eligible for surgical intervention, which includes 10 million Class 3 morbidly obese patients and another 15-18 million Class 2 obesity patients. A device with a good safety profile could eventually reach an even larger population of patients, perhaps 30 million additional patients in earlier stages of obesity. This is becoming an increasingly important goal as evidence suggests that weight loss in patients with Type 2 diabetes can completely reverse the condition, according to a study published in 2003 by Philip Schauer, MD, director of bariatric surgery at the University of Pittsburgh . Schauer and his colleagues studied 144 women and 48 men who had Type 2 diabetes before undergoing a Roux-en-Y gastric bypass procedure. In 97% of the patients, the diabetes went away, and it was reversed sooner in patients that had had the disease for the shortest period of time. The study argues for early intervention, although that is a future, far-off market. Nevertheless, Medtronic has already begun a feasibility trial called "Appetite Suppression Induced by Stimulation Trial" or ASSIST, for which it is recruiting patients with Type 2 diabetes. Endpoints include both weight loss and glycemic control.

Obesity is a new market for Medtronic, and Lubben says the company anticipates creating a targeted sales force to call on the multi-specialty weight loss centers that are cropping up with increasing frequency. Such centers aggregate bariatric surgeons, endocrinologists, nutritionists, psychiatrists and gastroenteroloists, and make accessible an otherwise fragmented and diffuse market.

Although the company doesn't currently have any other products in obesity, the acquisition makes sense for a number of reasons. In terms of therapeutic markets, obesity does dovetail into Medtronic's interest in diabetes. Also, says Stephen N. Oesterle, SVP of medicine and technology, "The technology is an obvious place for Medtronic to be. We often think about extending existing technologies into new markets. One of these is deep brain stimulation for Parkinsons' disease, and another is stimulation for obesity."

Oesterle refers to the fact that Medtronic has been a leader in implantable neurostimulation devices since the early 1960s, and now has programs in pain, Parkinson's disease, dystonia, obsessive compulsive disorder, bladder control and other disorders, as well as intrathecal drug delivery. Medtronic already had a minority investment in Transneuronix, and was its OEM supplier on the pulse generator and programmer for Transcend.

Oesterle believes Medtronic will be able to show surgeons that Transcend does less harm than existing surgical technologies, while doing good. Oesterle says, "will it ever achieve as much weight loss as gastric bypass? I don't think we need to show that." An interventional cardiologist by training, Oesterle believes a comparison with the tradeoff between angioplasty and CABG (coronary artery bypass grafting) surgery is apt. "No one ever said that angioplasty would be better or even as good as CABG in terms of outcomes. People spent 15 years after the introduction of angioplasty doing comparison trials against surgery, and not one ever showed that it was better. But it eroded and eroded the CABG market because it was phenomenally less morbid. People were willing to trade off a less effective outcome for substantially better morbidity." Morbidity and mortality are issues of gastric bypass that won't be issues with gastric stimulation, he claims. "Will gastric pacing have the same outcome? Even if it has half the success of gastric bypass, patients will prefer it." Besides the morbidity, patients also might prefer to avoid the occasional side effects of gastric bypass—vomiting, "dumping syndrome" and malnutrition.

A number of companies have taken up this very challenge—of trying to offer a safer and less invasive alternative to an effective, but somewhat risky surgical intervention. Satiety Inc. , BaroSense Inc. , GI Dynamics Inc. and EnteroMedics Inc. are all early stage companies developing minimally invasive devices for the treatment of obesity. (See,"Obesity: Super-Sized Medical Device Market," START-UP, March 2003), (Also see "Obesity: Super-Sized Medical Device Market " - Medtech Insight, 1 Mar, 2003.).) A few companies will compete directly with Medtronic in the realm of electrical stimulation as well--established companies like Cyberonics Inc. , and Boston Scientific Corp. , after its acquisition of Advanced Bionics Corp. [See Deal], and start-ups IntraPace Inc. and Metacure Ltd. , a division of Impulse Dynamics Israel Ltd. Medtronic has critical mass advantages over these; it brings electronic technologies and remote sensing capabilities from its cardiac rhythm business as well as experience in other neurostimulation markets to help it shore up IP. With a hoped-for market launch for Transcend in 2007, Medtronic is also at least two years ahead of competitors, Lubben believes.