New vest to assist in heart diagnoses

FDA approval adds to Meridian's triumphs

Small business

March 25, 2002|By TaNoah Morgan | TaNoah Morgan,SUN STAFF

Emergency room doctors who treat patients with chest pains usually diagnose based on readings from a 12-point electrocardiogram, or EKG, test. But soon, they could be outfitting their patients with an 80-point electrocardiac vest, and getting a reading that could allow them to see a three-dimensional picture of the heart.

Meridian Medical Technologies, the Columbia-based company that makes the vest and the electronic hardware that shows the patient's condition, recently won U.S. Food and Drug Administration approval to market its Prime ECG electrocardiac mapping system in the United States.

The company says the Prime ECG will allow for earlier diagnosis of heart attacks and other heart disorders by giving doctors a more complete picture of the heart's electrical activity.

The news is a boost for the company that has had a phenomenal year of growth. And the approval hints at the promise of more success for the company.

Meridian is initially targeting the product for use in the emergency room, but eventually plans to expand to other uses - to monitor the heart during stress tests and to monitor effectiveness of drugs that treat clogged arteries.

"Our consultants call this the first advance in electrocardiology in 60 years," said James H. Miller, president and chief executive officer of the company. "Everyone we talk to is very excited about this."

The news of FDA approval is the latest plus for the specialty pharmaceuticals and cardiopulmonary diagnostics company.

This month, the company reported a 78 percent increase in revenue, and a 414 percent increase in net income for the second quarter, compared with the corresponding period a year ago. The net income increase was before a $645,000, after-tax repayment of a high-coupon debt.

In November, along with reporting record first fiscal quarter earnings, the company announced it had received $6 million in orders for its nerve agent antidotes, in response to terrorist attacks.

Fiscal year 2001, which ended July 31, showed a 24 percent increase in net earnings, and a 6 percent increase in revenue to $58.1 million.

Although Meridian does business in the pharmaceutical and medical diagnostic industries, most of the company's growth has come from the pharmaceutical side through sales of its nerve agent antidote to federal and municipal governments, and sales of its Epi-Pen, an auto-injector system that allows patients to self-administer injected drugs.

Prime ECG, which was 10 years in development, is the company's first major step in producing medical diagnostic tools for use in the United States. The company makes a line of diagnostic products marketed overseas that automatically transmits test results by phone into a computer database.

Use of the disposable, plastic electrocardiac vest - strips of self-adhesive electronic leads that encompass the upper torso of a patient - began in Europe two years ago.

Miller said the device allows physicians to better diagnose a patient's heart condition because it surrounds the heart, and its 80 electrode leads are more sensitive than traditional 12-lead devices.

"This gives you a two-dimensional and a three-dimensional [picture] of the heart," he said. "An earlier, more accurate diagnosis will save the hospital a great deal of money."

Miller said he does not expect sales of the vests, which cost $65, and the monitors, which cost $30,000, to have an impact on the company's bottom line immediately, but within two years, it should make up a significant part of the company's revenues, he said.

Although FDA approval is a major step, one analyst warns that Meridian has another hurdle to jump before Prime ECG is in every hospital emergency room. It must convince insurers that the device is worth a higher rate of reimbursement than traditional EKG scans.

"With a higher reimbursement, acceptance would be easier all around," said Juan V. Noble, senior analyst for medical devices with Fahnestock & Co.

"I think a higher reimbursement is called for considering the amount and quality of information Prime can provide. From a clinical standpoint, this is an impressive device," Noble said.

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