December 19, 2016

December 14, 2016 by Stewart Eisenhart

EMERGO SUMMARY OF KEY POINTS:

• New South African registration requirements for medical devices and IVDs appear to have taken immediate effect from December 9, 2016.
• Registration will initially be required only for devices participating in South Africa’s public tender system.
• The Medicines Control Council (MCC) will continue requiring licensing of local manufacturers, distributors and importers in order to import devices into South Africa.

The South African Department of Health has issued new regulatory requirements covering both medical devices and in vitro diagnostic (IVD) devices, according to Emergo consultants in Cape Town.

The regulations are based heavily on guidance and principles of the International Medical Device Regulators Forum (IMDRF) and its predecessor organization, the Global Harmonization Task Force (GHTF); the new rules appear to take effect immediately, but Emergo offices in South Africa and the US are working to verify implementation and compliance details.

Based on an initial analysis of the new regulations, registration with the South African Medicines Control Council or MCC is for now required only for devices whose manufacturers and sponsors participate in the country’s public tender system. However, the MCC has the authority to impose registration requirements at its discretion for devices not participating in public tenders, as well.

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By NEIL VERSEL

Just when you think the cybersecurity problem couldn’t get any worse in healthcare, along comes a report saying that there were more health data breaches disclosed in November than in any other month in 2016.

In a report released Thursday, Protenus, a startup focused on tracking and preventing healthcare data breaches, said there were 57 such incidents last month. That is 60 percent higher than the 35 in October, based on statistics compiled by DataBreaches.net.

Surprisingly, 31 of the data breaches in October, or 54 percent, were inside jobs, according to the monthly Protenus Breach Barometer, while just nine were traced to hackers. The Ponemon Institute said in May 2015 that criminal activity had become the top source of health data breaches.

“While insiders are always a major source of health data breaches and HIPAA violations in any given month, this month was particularly striking,” Protenus Cofounder and CEO Robert Lord said via email. “In November, there were insider breaches at a few business associates that resulted in a wide array of their clients submitting breach reports.”

At least three of the hacks involved ransomware; a fourth “mentioned ransom/extortion but not ransomware,” the Breach Barometer said.

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Author: Heather Maver – December 7th, 2016

The FDA recently launched a portal for individuals to report allegations of regulatory misconduct of a medical device manufacturer or individuals marketing a medical device. An allegation in this manner is any claim that a medical device manufacturer may be operating in a manner that violates the law and circumvents the FDA’s ability to monitor activity for the safety of patients.

This process was established to help the FDA identify potential risks to patients. It is possible for companies to operate under the radar of the FDA, or import devices that do not meet legal requirements for admission to the U.S. This allegation portal will aid in correcting potential violations.

While the portal and FDA guidance encourages those submitting information to provide contact information in the event additional information is needed, a complaint can be submitted anonymously. Complaints can be submitted via the online form, found here, via mail, or email.

The types of allegations that may be reported could be the failure to register a medical device, marketing of devices that have not been cleared or approved by the FDA, or misleading promotion of a device. Additional examples of allegations can be found on the FDA’s site fully detailing the program.

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December 14, 2016

As an update to the Company’s statement published on November 8, 2016 concerning product supply matters, Zimmer Biomet continues to make excellent progress enhancing certain aspects of its supply chain infrastructure as it harmonizes and optimizes its sourcing, manufacturing and quality management systems.  The Company has been successfully addressing the previously disclosed temporary shipping delays involving certain products and, as expected, most of the impacted product lines have returned to full shipping capacity.

Separately, on December 14, 2016, one or more investment analysts have published reports concerning a recent FDA inspection of a Zimmer Biomet manufacturing facility, and the Company is issuing this statement in response.  Like all medical device companies, Zimmer Biomet is subject to periodic FDA inspections.  Recently, the FDA completed an inspection of the legacy Biomet manufacturing site in Warsaw, Indiana.  As is often the case, at the conclusion of the inspection, the FDA issued various inspectional observations on Form 483.

Zimmer Biomet takes these matters very seriously and is in the process of preparing its written response to the Form 483 observations.  The Company has developed and is executing a remediation plan to fully address the issues cited by the FDA and this work is progressing well.  Additionally, the Company will continue to communicate with the FDA regarding the status of the corrective actions and remediation work.

Zimmer Biomet is committed to operating a first-rate quality management system across its global manufacturing network.  While the Company is taking the necessary steps to address certain regulatory compliance gaps at the legacy Biomet operation in Warsaw, it remains confident in the quality, safety and efficacy of all of its products.  No patient safety concerns have been identified with any of the products manufactured at the site.

In conclusion, the anticipated full impact of all of the above-described matters was included in the Company’s sales and earnings guidance update issued on October 31, 2016.

Cautionary Statement Regarding Forward-Looking Statements

This communication contains forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.  Forward‑looking statements may be identified by the use of forward-looking terms such as “may,” “will,” “expects,” “believes,” “anticipates,” “plans,” “estimates,” “projects,” “assumes,” “guides,” “targets,” “forecasts,” and “seeks” or the negatives of such terms or other variations on such terms or comparable terminology. Such statements are based upon the current beliefs and expectations of management and are subject to significant risks and uncertainties that could cause actual outcomes and results to differ materially.  For a list and description of some of such risks and uncertainties, see the Company’s filings with the Securities and Exchange Commission (the “SEC”).  These factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in the Company’s filings with the SEC.  The Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent it is required to do so by law.  Accordingly, such forward‑looking statements speak only as of the date made.  Readers of this communication are cautioned not to place undue reliance on these forward‑looking statements, since, while management believes the assumptions on which the forward-looking statements are based are reasonable, there can be no assurance that these forward-looking statements will prove to be accurate.  This cautionary statement is applicable to all forward-looking statements contained in this communication.

CAMBRIDGE, Mass., Dec. 14, 2016 (GLOBE NEWSWIRE) — Vericel Corporation (NASDAQ:VCEL), a leading developer of expanded autologous cell therapies for the treatment of patients with serious diseases and conditions, today announced that the U.S. Food and Drug Administration (FDA) has approved MACI^® (autologous cultured chondrocytes on porcine collagen membrane) for the repair of symptomatic single or multiple full-thickness cartilage defects of the knee with or without bone involvement in adults.

“The treatment of articular cartilage defects in the knee is challenging because articular cartilage in adults has minimal capacity to repair itself,” said David Recker, MD, chief medical officer of Vericel.  “While orthopedic surgeons have long understood that autologous chondrocyte implantation can regenerate cartilage tissue, the previous surgical procedure was technically complex and time consuming, and the indicated patient population was limited.  MACI is the first product to show a statistically significantly greater improvement in KOOS pain and function scores compared to microfracture, a commonly performed alternative surgical treatment for cartilage repair, in a well-controlled Phase 3 clinical study.  With the introduction of MACI, orthopedic surgeons will have a simplified treatment option available for a broader patient population supported by solid clinical evidence.”

The approval of MACI is based on the SUMMIT study (Superiority of MACI implant versus Microfracture Treatment in patients with symptomatic articular cartilage defects in the knee), a two-year prospective, multicenter, randomized, open-label, parallel-group study which demonstrated a statistically significantly (p=0.001) greater improvement in KOOS pain and function (SRA) scores in the MACI group compared to the microfracture group at two years.  Patients from the two-year SUMMIT study had the option to enroll in a three-year follow-up study (extension study).  A majority of the patients who completed the SUMMIT study also participated in the extension study.  Overall efficacy data support a long-term clinical benefit from the use of MACI in patients with cartilage defects of the knee.

MACI is the first FDA-approved cellularized scaffold product that applies tissue engineering processes to grow cells on scaffolds using healthy cartilage tissue from the patient’s own knee.

“Bringing an important new therapy to orthopedic surgeons and patients is a significant milestone for Vericel, and I would like to thank the FDA for working closely with us to make MACI available for these patients,” said Nick Colangelo, president and CEO of Vericel. “We believe that the introduction of MACI, along with investments to expand our commercial organization and implement new patient support programs, positions Vericel to generate significant growth in 2017 and beyond.”

Conference Call Information
Today’s conference call will be available live at 9:00am (EST) in the Investors section of the Vericel website at http://investors.vcel.com/events.cfm. Please access the site at least 15 minutes prior to the scheduled start time in order to download the required audio software if necessary. To participate in the live call by telephone, please call (877) 312-5881 and reference Vericel Corporation investor call. If calling from outside the U.S., please use the international phone number (253) 237-1173. If you are unable to participate in the live call, the webcast will be available until December 13, 2017. A replay of the call will also be available until 12:00pm (EDT) on December 18, 2016 by calling (855) 859-2056, or from outside the U.S. (404) 537-3406. The conference ID is 39558058.

About MACI
MACI (autologous cultured chondrocytes on porcine collagen membrane) is an autologous cellular scaffold product that is indicated for the repair of symptomatic single or multiple full-thickness cartilage defects of the knee with or without bone involvement in adults.  The MACI implant consists of autologous cultured chondrocytes seeded onto a resorbable Type I/III collagen membrane.  Autologous cultured chondrocytes are human-derived cells which are obtained from the patient’s own cartilage for the manufacture of MACI.

Clinical Data
The FDA approval is supported by the results of SUMMIT trial¹, a Phase 3 two‑year, prospective, multicenter, randomized, open-label, parallel-group study that enrolled a total of 144 patients, ages 18 to 54 years, with at least one symptomatic Outerbridge Grade III or IV focal cartilage defect on the medial femoral condyle, lateral femoral condyle, and/or the trochlea.  The co-primary efficacy endpoint was change from baseline to Week 104 for the subject’s Knee injury and Osteoarthritis Outcome Score (KOOS) in 2 subscales:  Pain and Function (Sports and Recreational Activities [SRA]).²  At Week 104, KOOS pain and function (SRA) had improved from baseline in both treatment groups, but the improvement was statistically significantly (p<0.001) greater in the MACI group compared with the microfracture group.  In a responder analysis, the proportion of subjects with at least a 10‑point improvement in both KOOS pain and function (SRA) was greater in the MACI^® group (63/72 = 87.5%; 95% CI [77.6%, 94.6%]) compared with the microfracture group (49/72 = 68.1%; 95% CI [56.0%, 78.6%]).

The most frequently occurring adverse reactions (≥5%) reported for MACI^® in the 2‑year randomized, controlled clinical trial were arthralgia, tendonitis, back pain, joint swelling, and joint effusion.  Serious adverse reactions reported for MACI were arthralgia, cartilage injury, meniscus injury, treatment failure, and osteoarthritis.

Important Safety Information

• MACI is contraindicated in patients with a known history of hypersensitivity to gentamicin, other aminoglycosides, or products of porcine or bovine origin. MACI is also contraindicated for patients with severe osteoarthritis of the knee, inflammatory arthritis, inflammatory joint disease, or uncorrected congenital blood coagulation disorders. MACI is also not indicated for use in patients who have undergone prior knee surgery in the past six months, excluding surgery to procure a biopsy or a concomitant procedure to prepare the knee for a MACI implant.
• MACI is contraindicated in patients who are unable to follow a physician-prescribed post-surgical rehabilitation program.
• The safety of MACI in patients with malignancy in the area of cartilage biopsy or implant is unknown. Expansion of present malignant or dysplastic cells during the culturing process or implantation is possible.
• Patients undergoing procedures associated with MACI are not routinely tested for transmissible infectious diseases. A cartilage biopsy and MACI implant may carry the risk of transmitting infectious diseases to healthcare providers handling the tissue. Universal precautions should be employed when handling the biopsy samples and the MACI product.
• Final sterility test results are not available at the time of shipping. In the case of positive sterility results, health care provider(s) will be contacted.
• To create a favorable environment for healing, concomitant pathologies that include meniscal pathology, cruciate ligament instability and joint misalignment, must be addressed prior to or concurrent with the implantation of MACI.
• Local treatment guidelines regarding the use of thromboprophylaxis and antibiotic prophylaxis around orthopaedic surgery should be followed.  Use in patients with local inflammations or active infections in the bone, joint, and surrounding soft tissue should be temporarily deferred until documented recovery.
• The MACI implant is not recommended during pregnancy. For implantations post-pregnancy, the safety of breast feeding to infant has not been determined.
• Use of MACI in pediatric patients or patients over 55 years of age has not been assessed.
• The most frequently occurring adverse reactions reported for MACI (≥5%) were arthralgia, tendonitis, back pain, joint swelling, and joint effusion.
• Serious adverse reactions reported for MACI were arthralgia, cartilage injury, meniscus injury, treatment failure, and osteoarthritis.

About Articular Cartilage Defects of the Knee
Articular cartilage is a highly organized avascular tissue composed of chondrocytes embedded within an extracellular matrix of collagens, proteoglycans and noncollagenous proteins.  Its primary function is to enable the smooth articulation of joint surfaces, and to cushion compressive, tensile and shearing forces.  Articular cartilage damage is caused by both acute and repetitive trauma resulting in knee pain, effusion or mechanical symptoms such as catching and locking, and swelling.  Since articular cartilage is avascular it has little capacity to repair itself or regenerate.  Articular cartilage lesions that are left untreated may progress to debilitating joint pain, dysfunction, and osteoarthritis³.  The prevalence rate for cartilage lesions in the knee has been reported to be 63% in patients undergoing investigational arthroscopies⁴.

About Vericel Corporation
Vericel develops, manufactures, and markets expanded autologous cell therapies for the treatment of patients with serious diseases and conditions.  The company currently markets two cell therapy products in the United States.  Carticel^® (autologous cultured chondrocytes) is an autologous chondrocyte implant for the treatment of cartilage defects in the knee in patients who have had an inadequate response to a prior arthroscopic or other surgical repair procedure.  Epicel^® (cultured epidermal autografts) is a permanent skin replacement for the treatment of patients with deep dermal or full thickness burns greater than or equal to 30% of total body surface area.  Vericel also plans to market MACI^® (autologous cultured chondrocytes on porcine collagen membrane), an autologous cellularized scaffold product indicated for the repair of symptomatic, single or multiple full-thickness cartilage defects of the knee with or without bone involvement in adults, which has just been approved by the FDA.  Vericel is also developing ixmyelocel‑T, an autologous multicellular therapy intended to treat advanced heart failure due to ischemic dilated cardiomyopathy (DCM).  For more information, please visit the company’s website at www.vcel.com.

Epicel^®, Carticel^®, and MACI^® are registered trademarks of Vericel Corporation. © 2016 Vericel Corporation. All rights reserved.

This document contains forward-looking statements, including, without limitation, statements concerning anticipated progress, objectives and expectations regarding the commercial potential of MACI^® and our other products, and timing, and objectives and expectations regarding our company described herein, all of which involve certain risks and uncertainties. These statements are often, but are not always, made through the use of words or phrases such as “anticipates,” “intends,” “estimates,” “plans,” “expects,” “we believe,” “we intend,” and similar words or phrases, or future or conditional verbs such as “will,” “would,” “should,” “potential,” “can continue,” “could,” “may,” or similar expressions. Actual results may differ significantly from the expectations contained in the forward-looking statements. Among the factors that may result in differences are the inherent uncertainties associated with competitive developments, clinical trial and product development activities, regulatory approval requirements, the availability and allocation of resources among different potential uses, estimating the commercial potential of our products and product candidates, market demand for our products, and our ability to supply or meet customer demand for our products. These and other significant factors are discussed in greater detail in Vericel’s Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission (“SEC”) on March 14, 2016, Quarterly Reports on Form 10-Q and other filings with the SEC. These forward-looking statements reflect management’s current views and Vericel does not undertake to update any of these forward-looking statements to reflect a change in its views or events or circumstances that occur after the date of this release except as required by law.

References

¹Saris D, Price A, Widuchowski W, Bertrand-Marchand M, Caron J, Drogset JO, et al. Matrix-applied characterized autologous cultured chondrocytes versus microfracture: two-year follow-up of a prospective randomized trial. Am J Sports Med. 2014 Jun;42(6):1384-94.

²Roos EM, Lohmander LS. The Knee injury and Osteoarthritis Outcome Score (KOOS): from joint injury to osteoarthritis. Health Qual Life Outcomes. 2003;1:64.

³Bedi A, Feeley BT, Williams RJ. Management of articular cartilage defects of the knee. J Bone Joint Surg Am. 2010;92(4):994‑1009.

⁴Curl WW, Krome J, Gordon ES, Rushing J, Smith BP, Poehling GG. Cartilage injuries: a review of 31,516 knee arthroscopies. Arthroscopy. 1997;13(4):456-60.

CONTACT:
Chad Rubin
The Trout Group crubin@troutgroup.com
(646) 378-2947
or
Lee Stern
The Trout Group lstern@troutgroup.com
(646) 378-2922