Europe to try 'cardio-vest' first Device invented here still awaits U.S. OK, new FDA regulation

September 06, 1996|By Mark Guidera | Mark Guidera,SUN STAFF

Residents of Britain and other European countries will be the first to see a new medical device, engineered and made in Baltimore, thanks to $8 million raised as a result of investor interest stirred up last fall at a venture capital fair.

Baltimore-based Cardiologic Systems hopes to launch sales of its innovative vest for reviving heart attack victims in Europe this January as a result of the cash infusion, its president, Jeffrey Koepsell, said yesterday.

The vest is said to increase blood flow to the brain and heart, and stabilize blood pressure to near normal levels within minutes. Research has shown that improved blood flow to the heart and brain improves survival, but the device must be used within about 10 minutes of a cardiac arrest.

It primarily would be marketed for use by paramedics and emergency room physicians.

Cardiologic, which was formed to bring to market the "cardio-vest" developed by a bioengineering team at the Johns Hopkins School of Medicine, can't sell the device in the United States yet because it's been unable to launch U.S. clinical studies to prove it's safe and effective.

That's because a new government regulation, which would permit the vest to be tested on emergency patients without their prior consent, has been put on hold while the Food and Drug Administration writes new regulations governing tobacco.

Koepsell said the $8 million is expected to be enough to hire

staff for manufacturing operations in Baltimore and marketing support staff in Europe, where the device has been tested and approved.

The company, he said, already has hired a director for international sales and is lining up distribution partners.

The venture financing stirred up from the fair, he said, would also foot the $2 million to $3 million price tag for U.S. clinical trials of the device. The trials should take 12-16 months to complete.

Meanwhile, the company expects the new venture money raised from five investors to keep the company growing until it is ready to go public, possibly in 1998 or 1999.

The five investors are Anthem Capital, a venture capital firm in Baltimore; Berjaya Group Equity Ltd., a Malaysian investment firm; two California venture firms -- Cupertino Ventures Partnership III and BKP Partners; and Allstate Insurance Co.

Allstate is Cardiologic's largest investment partner with $6.1 million invested since the company was launched in 1993.

Koepsell said executives initially expected to seek about $5 million in venture financing, the second time the company has raised private money.

But they decided to seek more when they learned that proposed changes to the so-called "informed-consent provision" weren't likely to be passed this summer.

"We decided to take a much more pessimistic, or perhaps realistic, view of the time frames we were looking at given dealing with the government," said Koepsell.

In September, the Food and Drug Administration proposed changing the regulation that prevented testing experimental drugs and medical equipment, such as the cardio-vest, on patients without first telling them about its potential drawbacks and getting their consent to use it.

The new proposal has drawn wide support from the medical and emergency medicine research communities.

The proposal would require that hospitals and other health care centers be required to have independent oversight boards to ensure that the emergency care devices and medicines being tested are used only in life-threatening situations.

Cardiologic had expected the new rule to take effect this summer and to have clinical trials already started at 10 hospitals.

The new rule eliminating patient consent in emergencies is now being reviewed by the Office of Management and Budget, which has until Oct. 18 to issue its findings.

The company next year plans to ship 250 of the devices to Europe, where the market for the vest is estimated to be $800 million.

Cardiologic was one of just two Maryland companies to land venture capital and other financing from the Mid-Atlantic Venture Fair held in Baltimore in November; 10 Maryland companies were invited to make presentations.

The other Maryland company to get investors was Visual Networks Inc., based in Rockville.

It provides computerized managed access systems and support for networks such as ATM machines and the Internet. Visual Networks landed a $4 million infusion of equity financing.

Pub Date: 9/06/96

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