Pfizer, J&J; See Promise, Make Investment in Cancer Device Company

Full article reprinted from Start Up - September/October 2009

Pfizer's venture group invested alongside Johnson & Johnson Development Corp. and Index Ventures in NovoCure Ltd., a device company developing a treatment to bolster the affect of chemotherapies. Read more...

Pfizer, J&J See Promise, Make Investment in Cancer Device Company

Full article reprinted from Start Up - September/October 2009

Schering-Plough Corp. CEO Fred Hassan isn't too keen on the idea of pharmaceutical companies moving back into the medical device business. The retiring CEO, in a wide-ranging talk last month at our Pharmaceutical Strategic Alliances conference in New York, warned pharma folks against straying too far afield and acquiring or incorporating drug and diagnostic companies into their main business. Such entities are best left separate or in a decentralized structure, he said. (See "What Fred Said: Schering-Plough's Hassan on Life in Big Pharma," The Pink Sheet, September 28, 2009.)

To some, his warning serves as another signal that pharmaceutical companies have renewed interest in investing in and possibly acquiring medical device companies after many shed themselves of device-oriented businesses a decade or more ago. At least one pharmaceutical company "kicked the tires" when Ardian Inc., maker of a catheter treatment for hypertension, raised a $47 million Series C round. Perhaps the recent investment in a low-profile company, NovoCure Ltd., by Pfizer Inc. and Johnson & Johnson Development Corp. is the first indication that there's truth to those whispers.

Johnson & Johnson counts on medical devices for more than one-third of its annual revenue, so its JJDC group invests regularly in device start-ups. But Pfizer's venture group isn't typically seen in device deals. The pharmaceutical company had taken an active interest in diagnostics that can pinpoint the need for its drug products, but it hadn't taken an interest in therapeutic devices since divesting itself of its device businesses including Howmedica, American Medical Systems Holding Inc., Schneider, and Valleylab over a decade ago. NovoCure, an Israeli company with offices in the US, presents a unique opportunity for a drug company.

NovoCure is hoping to harness a very specific frequency of electrical energy. Many devices today use electrical energy. Low-frequency devices like defibrillators and other stimulators cause muscles to contract. Meanwhile, higher-frequency energy can literally cook tissue, making it useful in ablation. NovoCure is working somewhere in between where electric stimulation was thought to have no impact on living tissue. However, Yoram Palti, MD, PhD, a former professor of the Technion Israel Institute of Technology, theorized and later proved that an electrical field at a specific frequency may not affect healthy living cells but it can kill cells as they divide, making it an ideal treatment for rapidly growing cancer.

NovoCure's Novo TTF-100A device administers a very low intensity, alternating electric field through an electrode on the skin. The fields—which the company is calling Tumor Treating Fields or Novo-TTF—wash over all the tissue but affect only cells at the moment of division. The company says the Novo-TTFs cause the building blocks of the new and old cells to pile up in such a way that the cells and their building blocks physically break apart. Novo-TTF treatment has been found to slow—and even reverse—progression of cancer.

--Tom Salemi

JUST PUBLISHED: Medical Device Market 2009: Interventional Cardiology - Find out who’s going beyond catheters and drug-eluting stents in this vibrant space with this 86-page Special Report previously published in IN VIVO: The Business & Medicine Report. Order yours now!

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Companies mentioned in this article:

American Medical Systems Holdings Inc.

Ardian Inc.

Boston Scientific Corp.

Schneider Worldwide

Covidien Ltd.

Valleylab Inc.

Eli Lilly & Co.

Johnson & Johnson

Biosense Webster Inc.

NeoVista Inc.

Oraya Therapeutics Inc.

Pfizer Inc.

Roche

Genentech Inc.

Schering-Plough Corp.

Technion Israel Institute of Technology

About Start Up

No publication reviews leading edge companies and technology better than START-UP. Each issue of START-UP profiles the most important new product companies, identifies the hottest technology areas, reviews funds flowing into private companies and investment trends, and reports on university tech transfer licensing. Industries covered: pharmaceuticals, biotechnology, medical equipment & devices, and in vitro diagnostics.