Appetite for Obesity Devices Stays Strong

Numerous physiologic pathways lead to obesity; those related to hunger, satiety, the breakdown and absorption of nutrients, and the regulation of energy. Given the complexity of obesity, it's not surprising that diet and exercise aren't currently effective and that drugs have had only modest success. Bariatric surgery, on the other hand, which reduces the size of the stomach (and, in some versions, also reroutes part of the small intestine so that food bypasses it) is extremely successful. Many patients that have undergone the Roux-en-Y gastric bypass procedure have sustained losses of 50% of their excess weight out to ten years and beyond. Now companies with minimally invasive devices for the treatment of obesity hope to fill the therapy gap between dieting and invasive surgery. It's too early to claim victory, but start-ups and scientists are benefiting from a better understanding of why gastric bypass surgery works.

Companies with minimally invasive devices for the treatment of obesity hope to fill the therapy gap between dieting and invasive surgery. It's too early to claim victory, but start-ups and scientists are benefiting from a better understanding of why gastric bypass surgery works.

by Mary Stuart

The high rate of obesity may actually shorten the lifespan of the next generation, with its deadly co-morbidities--type 2 diabetes, cardiovascular disease, sleep apnea, cancer and more--adding to the toll.

Drugs, diets and lifestyle changes often fail to control obesity. Surgery can be effective but fewer than 2% of the 14 to 16 million patients eligible for bariatric surgery undergo the procedure due to fear of permanent anatomical alterations and surgical complications. High costs and spotty reimbursement are other limiting factors.

Obesity is a multi-factorial disease, not only encompassing genetic and psychosocial factors, but many underlying physiological mechanisms. The success of bariatric surgery is beginning to reveal some of these disease mechanisms, providing targets for intervention for new companies with minimally invasive surgical devices and non-invasive endoscopic therapies.

As a rule, minimally invasive devices trade away some efficacy in exchange for a reduction in risk, in this case, sacrificing degrees of weight loss for safety. But the field is evolving, and more modest amounts of weight loss compared to bariatric surgery may still translate into a reversal of co-morbidities or options for newly identified segments of the obesity population, or so start-ups hope.

By now, obesity is recognized as the world pandemic that it is: a disease that is not merely a question of excess weight, but of a long string of co-morbidities—diabetes, hypertension, obstructive sleep apnea, hyperlipidemia, stroke, several types of cancer and the list goes on. Obesity not only impairs quality of life, but duration of life. The morbidly obese female gives up about nine years of life expectancy, and the morbidly obese male about 12. Our children's generation may be the first in a century to witness a decrease in lifespan, because of rising obesity rates.

According to the Centers for Disease Control, one-third of the adults in the US—more than 72 million people--are obese. Obesity rates have not only doubled in adults, since 1980, but have tripled in those aged 6 to 19. The prevalence of obesity in this young group portends a dire future for health care. At this rate, obesity related costs will climb to more than $950 billion per year in the US by the year 2030, according to an article in the July 2008 issue of the journal Obesity. It's an epidemic, it's costly, and something needs to be done about it.

For patients with obesity, getting the disease under control isn't as easy as it sounds. Sure, obesity is ultimately a question of caloric intake. But underlying that simple fact is a complex interplay of many factors, genetic, psychosocial, and physiologic. Numerous physiologic pathways lead to the disease, those related to hunger, satiety, the breakdown and absorption of nutrients, and the regulation of energy. Given the complexity of obesity, it's not surprising that diet and exercise aren't currently effective and that drugs have had only modest success. Bariatric surgery, on the other hand, which reduces the size of the stomach (and, in some versions, also reroutes part of the small intestine so that food bypasses it) is extremely successful. Many patients that have undergone the Roux-en-Y gastric bypass procedure have sustained losses of 50% of their excess weight out to ten years and beyond.

An Effective Therapy That Nobody Wants

Bariatric surgery is recommended, and generally reimbursable, for morbidly obese patients (those with a BMI above 40), or obese patients with a BMI of 35 that have co-morbidities, which can include type 2 diabetes, hypertension, sleep apnea, and other cardiovascular problems. That yields a population of 14-16 million patients eligible for bariatric surgery in the US, yet only 300,000 elect to undergo surgery each year, for a number of reasons. At the top of the list is fear. There is a less than 1% preoperative mortality rate from Roux-en-Y gastric bypass surgery, but anastomotic leaks, peritonitis, and pulmonary embolisms, although rare, can be fatal.

Patients also don't like the idea that surgery permanently alters their anatomy, sometimes causing them to live with nausea, the risk of malnutrition, and lingering feelings of insatiable hunger. There is one other limiting factor: existing referral patterns. Given the invasiveness and risks of bariatric surgery, the primary care doctors who see obese patients first are loathe to send them off to surgeons as the very next option after diet and drugs.

Here is an enormous group of patients who need to get their excess weight and co-morbidities under control. They're eligible for treatment and for reimbursement, but, if they refuse surgery, as the majority of them do, there is nothing to help them. This is obviously an enormous market waiting for products, and investors know it. In 2009 venture capitalists funded at least nine start-ups focusing on obesity devices, doling out $130 million. (See Exhibit 1.)

In the past five years, obesity start-ups have been proliferating to serve this pent-up demand in a group of patients that has already been identified as needing treatment. With less invasive alternatives, they also hope to expand into new segments that have no options today--the merely obese (as opposed to morbidly obese) and the overweight. They hope to break down the barriers that prevent patients from seeking treatment by improving safety, and in some cases, by preserving the natural anatomy.

Many Mechanisms, Many Targets for Intervention

Start-ups formed in the last five years are coming of age during a subtle shift in the perception of diabetes and bariatric surgery. Henry Buchwald, MD, PhD, professor of surgery and biomedical engineering at the University of Minnesota first began writing about metabolic surgery in 1978. Buchwald says that now "We are not only treating obesity, or primarily obesity, with bariatric surgery, we are performing metabolic surgery in the management of the co-morbidities themselves." This perception has arisen because of the clear link between weight loss and the resolution of type 2 diabetes. Buchwald co-authored a meta-analysis of the impact of bariatric surgery on type 2 diabetes, published in the March 2009 issue of the American Journal of Medicine. The meta-analysis of more than 135,000 patients demonstrated that coincident with an overall loss of almost 56% of excess weight, type 2 diabetes resolved or was markedly improved in 86% of the patients.

Francesco Rubino, MD, Chief of Gastrointestinal Metabolic Surgery at Weill Cornell Medical College, is also actively characterizing the role of metabolic surgery. (See "Exploring the Bariatric Surgery/Diabetes Link: An Interview with Francesco Rubino, MD," Medtech Insight, March 2009 (Also see "Exploring the Bariatric Surgery/Diabetes Link: An Interview With Francesco Rubino, MD" - Medtech Insight, 1 Mar, 2009.).) Rubino and other researchers aim, by investigating variations of gastric bypass surgery and studying the results at the molecular level, to find out what it is about the Roux-en-Y gastric bypass that makes it the only obesity therapy to yield dramatic excess weight loss. It's the only medical therapy that exists that can yield an 86% improvement in type 2 diabetes. The hope is that these studies will yield new targets for pharmaceutical companies and new points of intervention for medical device companies developing less invasive alternatives to surgery.

Start-ups are starting to think this way too. Many hope to recreate, with a less invasive alternative, some of the conditions of Roux-en-Y—its restrictive aspect, and/or the signaling changes that come from bypassing parts of the gastrointestinal tract. This new way of looking at obesity has given companies several new angles from which to attack obesity, with minimally invasive alternatives to surgeries that restrict food intake, delay gastric emptying, influence hormonal or other signaling mechanisms, or induce satiety.

Replicating Roux-en-Y, Piece by Piece

The ideal intervention for obesity would combine the efficacy of gastric bypass surgery—without its complications, without the lifestyle sacrifices it brings in terms of diets and nausea--with the safety of minimally invasive or endoscopic devices. In the history of the medical device industry, however, minimally invasive versions of open surgeries tend to trade away some efficacy in favor of safety. That is sometimes enough for a product to be successful, and there is a hint that this might be true in obesity. The minimally invasive adjustable gastric band Lap-Band of Allergan Inc. has had good uptake in the market. Lap-Band procedures make up a good percentage of the total number of bariatric surgeries (at 125,000-150,000 procedures) even though gastric banding doesn't achieve the dramatic weight loss of Roux-en-Y. Allergan's Lap-Band sales were $300 million in 2008.

Lap-Band mimics only the restrictive component of gastric bypass surgery. It's an adjustable band that's placed around the top of the stomach in a laparoscopic procedure; it's reversible, and it costs a fraction of the typical bypass procedure--$10,000-$15,000 for Lap-Band vs. $26,000 for an average open gastric bypass and $17,000 for a laparoscopic bypass procedure.

Lap-Band causes patients to lose weight much more slowly than gastric bypass. In the years immediately following the procedures, patients that undergo Roux-en-Y lose significantly more excess weight (although it appears that at ten years, the differences are not so great, but hard numbers aren't available since many patients—particularly the failures—are lost to follow-up). In the short term, the mean excess weight loss for Roux-en-Y at 12 months post-op is 65%; in the PMA supporting the approval of Lap-Band, it was approximately 35%.

Lap-Band is not without its own set of complications, some that come with any laparoscopic procedure in the gastrointestinal tract, and some specific to the device, including band erosion and slippage. Patients often experience nausea and vomiting, and have the device removed. Still, Lap-Band's success, despite the drawbacks, is an early indicator of the demand for less invasive treatments for patients with obesity. Taking the successes and limitations of Lap-Band as a point of departure, many start-ups hope to develop safer ways to restrict the size of the stomach.

Start-Ups Weigh In

One group of companies aims to enable surgeons to work with the anatomy as they do in surgery, in creating a stomach pouch or bypassing a limb of the digestive tract, but with the safety gains of minimally invasive or endoscopic approaches. Into this category fall more seasoned players like CR Bard Inc., with its RS2 endoscopic suturing system (the successor to EndoCinch), and Covidien Ltd., with a laparoscopic version of the sleeve gastrectomy. (Covidien recently bought Power Medical Interventions and its endoscopic stapler [See Deal].) Young companies like EndoGastric Solutions Inc. and USGI Medical Inc. offer trans-oral ways to create a stomach pouch as do BaroSense Inc., SafeStitch Medical Inc. and Satiety Inc., which bets it will be the next company to market with a device for obesity. Newcomer EndoMetabolic Solutions Inc., founded by Dale Spencer, a founder of ev3 Inc. and Velocimed, is in stealth mode. But a poster presentation at the 2009 meeting of the Society of American Gastrointestinal and Endoscopic Surgeons hints that its EndoTract is a device for accomplishing partial bypass by way of a side-to-side duodeno-ileal anastomosis.

Mimicking the malabsorptive component of Roux-en-Y, which is believed to be one of the mechanisms by which bariatric surgery reverses type 2 diabetes independently of weight loss, gastric sleeve developers have developed anatomy-sparing ways of isolating parts of the digestive tract from the passage of food. GI Dynamics Inc. endoscopically delivers a device that lines the small intestine, effectively bypassing it. ValenTx Inc. has also developed an endoscopic gastric sleeve, which extends through the stomach and partially into the proximal duodenum.

Other device companies are tackling obesity from the angle of satiety, with space-occupying devices that reduce the volume of the stomach so that patients will feel full sooner and reduce their food intake. In this category, intragastric balloons are back, in new and improved iterations that increase their durability and comfort. (See Exhibit 2.) ReShape Medical Inc. is a promising new company. New entrant Obalon Therapeutics Inc. is in an early stage of the development of a different type of space-occupying device, a swallowable "pill" that expands in situ.

BAROnova Inc. aims to help patients cut down on their food intake by delaying gastric emptying, with a simple, mechanical, endoscopic device that works in concert with normal peristalsis to accomplish its goal.

Certain neuromodulation companies also hope to get patients to eat less, with devices that stimulate or block nerves implicated in appetite and satiety. This is the space occupied by EnteroMedics Inc., IntraPace Inc., [Leptos Biomedical], MetaCure Inc., and LivaNova PLC, which sold its obesity portfolio to Johnson & Johnson's Ethicon Endo-Surgery Inc. division. [See Deal] These promise patients a way to induce satiety and curtail food intake with the opportunity to tailor neuromodulation programs post-implantation, while preserving a patient's anatomy and lifestyle. (See sidebar, "Neurostim Companies Defend their Role in Obesity.")

So many different approaches to obesity are a function of the complexity of the disease, says Paul LaViolette, the former COO of Boston Scientific and now a venture partner at SV Life Sciences, which has two obesity device companies in its portfolio—ReShape Medical and ValenTx —and another one that's tangentially related to obesity, TransEnterix Inc., which is working on single-port laparoscopic surgery. (See "TransEnterix: Managing Revolutions in Surgery," IN VIVO, May 2009 (Also see "TransEnterix: Managing Revolutions in Surgery " - In Vivo, 1 May, 2009.).) LaViolette says, "Obesity is extraordinarily broad. There aren't that many fields where you find surgical, endoscopic, neurostimulation devices and pharmaceuticals side by side. This speaks to the absolute scale of the obesity problem and the complex mechanistic problem."

LaViolette says that the multiplicity of approaches also serves a growing recognition that the patient population is also complex, ranging from the overweight to the very obese, with and without various co-morbidities. "It's a market that needs refined segmentation. It's going to be served by multiple solutions. We are dealing with patients today with BMIs in the range of 35 to 50. A device like that of ReShape might be ideal for patients with BMIs in the low 30s. ValenTx might serve patients with a BMI of 40 and higher."

The markets are clear, but the regulatory passages are winding and arduous. Start-ups are a long way from clearing the regulatory hurdle of conducting a 200-300 patient pivotal trial, supplying sufficient proof of efficacy, and pursuing the considerable follow-up work. Lap-Band, and Johnson & Johnson's adjustable gastric band Realize, both implanted through laparoscopic surgeries, had primary effectiveness end points of a mean percentage of excess weight loss of 36% at 36 months. The FDA asked neuromodulation firm EnteroMedics to demonstrate a 20-25% greater excess weight loss than a control group at 12 months. The primary effectiveness end point for Satiety, the developer of a trans-oral restrictive procedure, is an excess weight loss of 25% at one year. In addition, because of the high placebo effect seen in obesity clinical trials, the FDA has set the bar at a 15% delta with a control group. As always, it will take hard, cold data to move the market. Satiety at least will have some soon; it's in advanced stages of its pivotal trial and will most likely be the next company to market with an obesity intervention.

Bariatric Surgery without the Surgery

Many start-ups talk about the heterogeneity of the population of patients with obesity, and the need not only to penetrate an existing market but to expand into new patient groups. One set of companies, however, thinks there is less risk in targeting an established patient population by giving bariatric surgeons tools so they can do minimally invasive or even non-invasive surgeries of the type with which they are familiar—sleeve gastrectomies or other stomach reduction procedures. (Several companies pursuing this strategy are discussed in the recent article "New Developments in Obesity Intervention," Medtech Insight, October 2009 (Also see "New Developments in Obesity Intervention" - Medtech Insight, 1 Oct, 2009.).)

Eric Reuter, president and CEO of Satiety, says the company conducted market research and affirmed the top reason why fewer than 2% of eligible patients pursue invasive surgery: safety—the .5% mortality risk—and a 10-35% complication rate with gastric bypass, as well as the long-term risk of migrations and explanting associated with gastric banding. With an emphasis on safety, Satiety has developed a procedure and a set of tools called TOGA (short for trans-oral gastroplasty) by which it is able to create an incisionless sleeve gastrectomy—no incisions on the outside or the inside of the body—through an endoscope passed down the patient's throat and into the stomach.

The TOGA system consists of a device which vacuums stomach and gastroesophageal tissue into it, maintains tissue in the proper configuration, and delivers titanium staples to create a durable sleeve at the top of the stomach, reducing the size of the stomach and replicating the anatomy of purely restrictive procedures. No tissue is cut, and no implant is left behind. Reuter notes that any kind of implant presents a certain amount of ongoing risk. "One doesn't know how long an implant is going to last, or if there are longer term side effects related to the anchoring of these devices or the presence of the devices around the stomach or in the intestinal tract." TOGA, on the other hand, is removed after modifying the stomach to replicate the restrictive anatomical changes that have been scientifically proven to lead to long-term weight loss, Reuter says. "There are no re-charges or adjustments, as with gastric bands, and there are no implants."

Many of the new companies, including Satiety, are focusing a great deal on the metabolic aspects of surgery in addition to the patients' weight loss, because the co-morbidities, rather than the excess weight, are the real concerns.

With gastric bypass, Reuter points out, the literature shows that type 2 diabetes symptoms appear to substantially improve even before patients lose much weight, but the mechanisms aren't well understood. Some non-surgical devices have shown good short-term results, but are as yet unproven as to how patients respond over the long term. However, large meta-analyses have shown that losing weight ultimately does correlate with an improvement in co-morbidities and Satiety's findings with TOGA have mirrored these studies. Reuter notes, "The TOGA patients treated in our pilot trial have lost around 40% of their excess weight, and as they lose weight, they are gaining more traction with their co-morbidities. In many of our pilot study patients thus far, hypertension is reduced, and patients with managed type 2 diabetes are seeing reductions in their A1c [HbA1C] numbers and/or a reduction in their medications."

Reuter points out that Satiety appears to be the furthest along of obesity device companies seeking the PMA route. Satiety is in pivotal trials in the US and has completed its multi-center randomized, sham-controlled pivotal trial enrollment of 273 patients in the US and 30 outside the US. The trial is in the follow-up stage now, and Reuter expects that the data will be unblinded in the third quarter of next year. Results outside the US have been very good, he says. The combined one-year follow-up results from three centers (in Belgium, Italy, and Mexico) have consistently shown an average excess weight loss of approximately 40%. Longer-term follow-up (outside the US), the longest period of which is two years, shows an even greater improvement at an average of 50%, according to Reuter (although the patient numbers are low for this follow-up period). "A 25-30% excess weight loss, if it's maintained over time, can have substantial health benefits for patients, " Reuter says. In fact, the FDA has set the bar at a minimum of 25% excess weight loss at a year combined with a statistically meaningful difference between treated patients and control patients. Reuter says that the TOGA studies outside the US have thus far exceeded the 25% excess weight loss threshold in a high percentage of patients.

Upon FDA approval, Satiety will launch TOGA in the patient pay market, which Reuter estimates at about 30,000 procedures per year. In parallel, he says, "Should the OUS results be reproduced in our pivotal trial, we believe we will have an excellent case for insurers." If it meets its promise, Reuter says, TOGA may ultimately become a minimally-invasive outpatient procedure, done comfortably in less than an hour. The endoscopic procedure is also likely to require less post-operative care and fewer follow-up visits than current surgical alternatives, Reuter believes. (For more on Satiety, see "Satiety: Treating Obesity Beyond Quality of Life," IN VIVO, November 2006 (Also see "Satiety: Treating Obesity Beyond Quality of Life" - In Vivo, 1 Nov, 2006.).)

Replicating the Metabolic Components of Metabolic Surgery

In addition to safety concerns, one of the reasons why patients don't choose bariatric surgery is because of the lifestyle changes that come with altering the anatomy. After bariatric surgery, patients must change what and how they eat, and they often experience nausea, vomiting, and the potential for malnutrition, since the Roux-en-Y bypass partially works by malabsorption.

Device companies focusing on least-invasive approaches contend that changing the anatomy of the stomach results in these unpleasant consequences for patients, and it doesn't matter whether one does it surgically, laparoscopically, or endoscopically. Thus, GI Dynamics set out to replicate the bypass component of Roux-en-Y, with an endoscopically-delivered sleeve that would line the small intestine, simulating a surgical bypass. The EndoBarrier of GI Dynamics is a thin, impermeable liner two feet long, with a nitinol anchoring mechanism at one end. The sleeve lines the small intestine just below the pylorus, keeping food from coming into contact with the intestinal wall, thus preventing any signaling that ordinarily might occur.

At the company's start in 2003, its founders were aware of the research of Walter Pories, MD, a surgeon at East Carolina University who had published, in the early 1990s hypotheses about the metabolic effects of gastric bypass surgery on type 2 diabetes. In early clinical trials of its EndoBarrier gastric sleeve, which GI Dynamics originally developed as a non-invasive, reversible treatment for obesity, the company found the same thing: that patients with type 2 diabetes improved within one week of implantation, even before any weight loss had occurred. The company switched its primary goal to developing an interventional treatment for type 2 diabetes. President and CEO Stuart Randle says, "We started exploring type 2 diabetes as a primary end point in our studies, because of our belief that reimbursement for diabetes is less complicated than reimbursement for weight loss, because of a bias against obesity that exists with the payors." The company is also testing a new restrictive component as an add-on to boost the weight loss effects of the device, and help it reach additional patient populations.

Randle says that more than 250 patients have been treated with EndoBarrier, and that GI Dynamics is "developing a data set of clinical results that are consistent around the world, showing that we have a unique combined effect on type 2 diabetes and weight loss not seen in any other devices or drugs." The company has just entered into clinical trials, which Randle can't discuss. However, as reported on Oct. 27 in the online version of the Annals of Surgery, in a previous small randomized clinical trial (41 patients) investigating the safety and efficacy of EndoBarrier, mean excess weight loss achieved after 12 weeks post-implantation was 19% for the EndoBarrier device vs. 6.9% for the control patients. Eight patients enrolled in the trial suffered from type 2 diabetes; seven showed improvement during the 12 week study period.

The next challenge for the company is to improve the durability of the device, limited today by its anchoring mechanism. (Randle declines to specify the potential durability, but the first product is designed for six months of use, and the next generation will aim for 12 months.) In addition to increasing the longevity of the product, GI Dynamics also faces the challenge of establishing the durability of effect, because if weight and co-morbidities return after device explant, payors may not want to reimburse for the device. Randle says part of the company's R&D effort is focused on extending the duration of the implant. But he also says that many primary care docs, endocrinologists, and patients would actually prefer an option that's not permanent, again pointing out that different patients have different needs.

For example, with an approval for a six-month device, GI Dynamics would be in a position to target a new market in pre-surgery, where weight loss and the remission of type 2 diabetes would help surgical candidates enjoy better outcomes following surgery. The emergence of a new critical care market for glucose monitoring has underscored how diabetes comprises surgical outcomes, particularly in cardiac patients. (See "Devices for a Diabetes Epidemic," START-UP, September 2006 (Also see "Devices for a Diabetes Epidemic" - Medtech Insight, 1 Sep, 2006.).) With respect to bariatric surgery, morbidly obese patients often suffer from respiratory problems that put them at greater risk for complications from anesthesia. From the surgeon's viewpoint, Professor Buchwald points out that when a patient loses weight, even if it is only 20 pounds or so, the liver also loses weight. "For laparoscopic surgery, the liver is an impediment. If the liver is smaller, visualization is better." (For more on GI Dynamics, see "GI Dynamics: In Metabolic Disease a Device Might Trump Drugs," IN VIVO, January 2009 (Also see "GI Dynamics: In Metabolic Disease a Device Might Trump Drugs " - In Vivo, 1 Jan, 2009.).)

ValenTx Inc., which recently raised a $20.3 million Series B round from a large group of investors that included SV Life Sciences and Covidien Ventures, is also in the small class of gastric sleeve developers, but with an approach that's quite different. [See Deal] ValenTx is after the group of patients currently eligible for surgery and reimbursement. The ValenTx sleeve is attached by transmural anchors at the gastroesophageal junction, and extends through the stomach and 100 cm down into the proximal duodenum. The device creates a restriction at the junction, bypassing the stomach and the proximal bowel, so the mixing of food and digestive enzymes doesn't occur until 100 cm distal to the pylorus, an approach that specifically mimics the 100 cm Roux limb of the gastric bypass. ValenTx has completed its animal studies and has begun human clinical trials outside the US. In a study presented at the annual gastroenterology meeting Digestive Disease Week in May 2009, investigator Paul Swain, MD, of the Imperial College London presented the first series of data involving 12 patients with BMIs in the range of 35-51. When the devices were endoscopically removed at 12 weeks, the mean excess weight loss was 40%. The company is focusing on weight loss, but SV Life Science's Paul LaViolette believes the device will deliver metabolic changes in the process. "In an ideal world, you would like a device that kills two birds with one stone: weight loss and metabolic change." He places his bet on ValenTx.

Simple, Non-Surgical Mechanical Devices

After a false start in the 1980s, when certain intragastric balloons were first introduced and then pulled from the market because of failures and deaths, balloons are becoming popular as a category for innovation. Intragastric balloons, and other space-occupying devices (the swallowable, expandable pill under development by Obalon Therapeutics, for example) help patients lose weight in two ways. First, they fill the volume of the stomach so patients eat less, and second, they probably influence satiety signals by the stretching of the stomach walls.

Allergan has been in the market with its Bioenterics Intragastric Balloon (called BIB for short) but its use is associated with a long list of complications—some mild, and some severe. The more benign complications include nausea, vomiting, heartburn, bloating, discomfort and heaviness in the abdomen, and gastroesophageal reflux. Serious complications include migration of the partially deflated balloon, causing intestinal obstruction, and gastric perforation related to the placement or removal of the intragastric balloon. Start-ups with next-generation balloons hope to solve some of these problems.

New company ReShape Medical is developing an intragastric balloon with a novel architecture that improves upon the single-balloon products that came before, particularly in terms of durability, and a fail-safe design. ReShape's product is comprised of two balloons attached to each other by a flexible tube. Each balloon has independent channels so that unintentional leaks or deflation in one balloon do not impact the other. The two-balloon concept also helps the device conform better to the shape of a patient's stomach, making it more tolerable than predecessors' products, which caused nausea and discomfort. Comfort is important, particularly if devices hope to play a role in the patient self-pay market, which relies on word-of-mouth.

Intragastric balloons are temporary devices, residing in the stomach for no more than six months, and it's unclear what role they will play. Buchwald asks, "If the balloon has to come out after six months, will the patients take a break and then get a new one? And if so, will they experience a gradual step-down in weight or will there be a yo-yo effect? The role hasn't been defined yet, but there is the possibility to use space-occupying devices in conjunction with other therapies, in addition to serving pre-surgical candidates." There are already several large self-pay medical markets—aesthetics and ophthalmology, for example—and obesity has the potential to be another, and an enormous one at that. Patients might opt to pay for a non-invasive option like an intragastric balloon to helps them lose significant weight and kick-start a healthier lifestyle.

BAROnova Inc. is in a class by itself. The company was co-founded by Daniel Burnett, MD, founder of several other medical device firms, including NovaShunt in Switzerland, and neurostimulation company EMKinetics. Second co-founder Hugh Narciso, president & CEO, joined BAROnova from obesity company Leptos Biomedical. The company is working on a very simple concept, a free-floating mechanical device that delays gastric emptying. BAROnova's Transpyloric Shuttle is a "corking" device that intermittently seals the pylorus. It's made of silicone and shaped like a wine glass that has a tail where the stem would be, and a bulb at the end of the tail. Narciso says the device is delivered through an endoscope in a compressed state, and then released in the stomach. There is no positioning requirement; it's simply dropped into the stomach.

Narciso says the device doesn't modify the anatomy, is reversible, and is easily deliverable and retrievable endoscopically. It simply relies on natural peristalsis for its operation. Because of the device's shape, normal peristalsis drives it across the pylorus. A portion of the device sits within the gastric space, and the tail crosses the pylorus and fits into the duodenal bulb. There it prevents food from flowing from the stomach into the intestine. When the wave of peristalsis passes to the intestine, the device pops up, allowing food to go around it from the stomach into the intestine. Says Narciso, "It goes through a shuttling motion, and in effect, we think it slows the progression of food from the stomach to the intestine, causing the patient to fill up quicker and stay full longer." Narciso says a great deal of literature supports the hypothesis that slow gastric emptying leads to weight loss.

Narciso emphasizes that the Transpyloric Shuttle is not a space-occupying device. "The volume of our device is only 125 cc's. A filled balloon is typically 500 to 700 cc's." Narciso also anticipates that the Transpyloric Shuttle will be more durable than a balloon, and he says a multiple year device introduces the possibility of inducing behavior modification, which can't likely happen within the six-month residence time of intragastric balloons. "We have data that shows that the device can probably reside in the stomach for 1-2 years without having any failure issues. I think with some small modifications and material adjustments, we can probably get that out to 3-5 years." Narciso declines to reveal exactly where the company is in its clinical development, but he says, "We did our preclinical work with our Series A funding, and we also did a handful of patients in Sweden. Those results were strong enough to attract a partner like Allergan in our Series B round." [See Deal]

Narciso sees as BAROnova's markets the pre-surgical market, and the low BMI patients in the range of 27-35, for which no medical device is approved in the US. "Because we are endoscopically delivered and retrieved, we think those patients would be willing to have a procedure like ours."

Gigantic Markets, if the Premises are Correct. If….

Because of the enormous worldwide population of patients with obesity, it promises to be the largest device market ever. But there is much untrodden territory for device companies working in obesity. For example, while many companies are operating under the premise that obesity patients segment into many different categories within a range of body mass indices from 25-50, with or without co-morbidities, preparing for surgery, or electing to self-pay for a weight loss procedure, today, payors recognize only two categories of patients, as noted: patients with a BMI of at least 35 and a co-morbidity, or patients with BMIs above 40, out-of-date guidelines, Professor Buchwald points out, that were established by the National Institutes of Health in 1991. More data--and a mindset change--will be necessary to change the market. Furthermore, as new companies proffer a range of technologies, some temporary, some longer-term, they'll be up against the historical preference of the bariatric surgery community for permanent fixes. And bariatric surgeries are improving all the time. Buchwald believes it will one day be possible to perform bariatric surgery without general anesthesia, without insufflation, without six ports and laparoscopic instruments. He says his institution is working, in the laboratory, on performing surgery through a mini laparotomy incision, about 6 cm long, on patients under sedation and local anesthesia. "If this is shown to be feasible, it will allow many of the current bariatric procedures, and those being developed, to be done in an outpatient, freestanding clinic setting, at far less cost, with fewer complications and at far greater patient acceptance, because patients really don't like general anesthesia. I may not be right, but I believe that this will be the future."

History has shown that the evolution of invasive procedures into minimally invasive ones isn't always inevitable. For all the success that device companies and investors have had in migrating open surgical procedures to minimally invasive ones, lap choly being the best example, there are probably just as many, if not more examples, of where that strategy failed. Minimally invasive approaches failed to catch a large percentage of procedures like hernia repair. Another case in point, cardiac surgery long ago plateaued at around 20%, with most cardiac surgeons reluctant to adopt these new procedures and preferring the better visualization and larger surgical fields that traditional open approaches provide. Obesity is amenable to endoscopic access, so the comparison might not be totally apt. But here the field starts with an open surgery that is not widely adopted in the first place, so is there any reason to expect that patients will not have the same concerns with minimally invasive approaches?

For today's start-ups, that question is both a challenge and an opportunity. They're betting on the anatomy-sparing features of their devices, and that there are millions upon millions of patients that won't want to irrevocably alter their gastrointestinal system. There's a large enough pie for many.

TKTK

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SIDEBAR: Neurostim Companies Defend Their Role in Obesity

The promise of neuromodulation in obesity—and in medicine in general—is ease of use. The devices don't alter a patient's anatomy, are often easily implanted in an outpatient procedure, are non-invasively reprogrammable, and by every measure, safe. But comfort and safety aren't enough. Companies need to show that these devices work, and that's proven to be an elusive goal.

In early October, EnteroMedics Inc. announced the preliminary results of its vagal nerve blocking approach to obesity. Almost 300 patients with a BMI in the range of 35-45 were enrolled in the EMPOWER study, a randomized, double-blind placebo-controlled trial. The verdict: the study did not meet primary or secondary end points. In a conference call announcing the results, president and CEO Mark Knudson, PhD, revealed that for both the treated and placebo groups the percentage of excess weight loss was in "the mid-teens." In other words, the therapy did not outstrip the placebo.

EnteroMedics has since announced that it will reduce its workforce by 40% to conserve cash, while it studies the results and continues with clinical trials of a wholly implantable device in Europe. In its third quarter financial results, the company reported that as of September 30, it had cash of $27 million, enough to carry it into 2010, the company said. Maybe EnteroMedics faced some challenges that were unique to it—for example, a potential lack of compliance from treated patients, who would circumvent the therapy if they didn't wear external controllers. But this was the second neuromodulation company working in obesity to experience a disappointment in pivotal clinical trials after early results looked so good. Medtronic PLC was the first. In 2005, it reported that its SHAPE trial of a gastric pacing device (gained via the company's acquisition of Transneuronix) failed to meet its efficacy end point. [See Deal]

Perhaps these companies ran up against the challenge that developers of all obesity devices face: the high placebo effect among patients in the control groups of obesity trials.

Several neurostimulation companies are still targeting obesity. Should their investors be worried? Is this troubling news for the field of neuromodulation at large? After all, Northstar Neuroscience Inc., another neurostimulation company, was forced to dissolve recently, despite an extremely successful initial public offering, when it too failed to meet its primary end point in clinical trials. While Northstar's technology was being used to treat stroke, not obesity, it does raise questions about the viability of neurostimulation technology, at least in the minds of investors, because even though Northstar was well-funded, investors chose to dissolve the company rather than pursue alternative clinical applications of the technology. (However, its assets live on under the aegis of St. Jude Medical Inc., which acquired them for $2 million in June 2009).

Not surprisingly, executives from two neurostimulation companies—IntraPace Inc. and [Leptos Biomedical]—answer the questions simply: no and no. Chuck Brynelsen, president and CEO of IntraPace, tells us that his company has designed an "intelligent" obesity intervention intended to detect when food or drink is consumed and then provide stimulation to cause the patient to feel satisfied well before the stomach is full. The company is focused on achieving significant weight loss without the complications and lifestyle restrictions of the current bariatric surgical procedures, namely gastric bypass and banding. Brynelsen says, "The majority of patients motivated to address their obesity through surgical means are concerned about the risks and complications of bariatric surgery and are therefore waiting for better alternatives to emerge."

The IntraPace technology is differentiated by providing sensor-driven control of the gastric stimulation so that the device only stimulates in response to a sensed eating event. Medtronic and EnteroMedics stimulated intermittently for at least half of the day, which may have led to a reduction in effect over time given the body's possible adaptation to the signal, Brynelsen says. IntraPace believes it will avoid this phenomenon by stimulating only in response to an eating event.

In addition to regulating the delivery of therapy, the sensors in the device collect information about a patient's eating habits and physical activity levels. According to Brynelsen, "Obese patients are often not honest with their physicians about their lifestyle choices. This misinformation makes it difficult for the physician to provide optimal health care management." Information recorded in the device can be downloaded by the clinician during an office visit and used to comprehensively manage the diet and exercise habits of the patient. Behavior modification or lifestyle coaching should be a part of any weight management program, but few companies address this aspect of care, Brynelsen feels. In addition, IntraPace has designed its system to minimize the effect of poor patient compliance. The system is fully implantable and automatic; it does not depend on the patient to recharge or activate it. It collects consumption and exercise data continuously, providing the clinician with objective information on patient behavior.

IntraPace is in a European feasibility trial and expects to begin a US pivotal trial next year. The company presented preliminary data at the IFSO (International Federation for the Surgery of Obesity) conference in August. Regarding early results, Brynelsen says, "We have demonstrated the ability to create very strong sensations of fullness, causing our subjects to eat less. This ability is significant as these patients often eat through their early satiety signals. Patients don't dislike the sensation, with no subject in our study asking to have the system turned down or removed. We are pleased with the early weight loss results, particularly given our understanding of patient behavior derived from our sensor data."

IntraPace is initially after those morbidly obese patients eligible for bariatric surgery, as an anatomy-sparing (and complication-free) alternative to gastric bypass and banding, the restrictive component of which brings on some unpleasant effects if patients don't change their lifestyles, including nausea, vomiting, and gastroesophageal reflux. "In our first clinical use of the device we did not ask patients to change their diet in any way," Brynelsen stated. "In spite of this patients have not experienced any of the severe symptoms typical of gastric banding and bypass. In addition, the safety profile has been very good. We are looking to get a result similar to gastric banding with a far less onerous lifestyle and without the surgical complications," says Brynelsen.

Leptos Biomedical would be of the opinion that the first-generation neurostimulation companies did indeed demonstrate that neuromodulation for obesity can be tremendously successful, although they failed end points in a larger patient population. Was all the homework done before embarking on a pivotal trial?

Founded in 2002, Leptos is still in stealth mode, but Hans Neisz, its president and CEO, says the Leptos device stimulates sympathetic nerves in the autonomic nervous system in such a way as to have an effect on two mechanisms in obesity: the control of food intake by satiety, and an influence on lypolytic activity—the conversion of fat into available energy.

Neisz explains that the sympathetic nervous system plays a role in facilitating energy expenditure and the consumption of fat. "By stimulating specific branches of the sympathetic nervous system, the Splanchnic nerves, we target the fat compartments that really matter, in a safe and effective way," Neisz says. That's one of the premises upon which the company was founded by John Dobak, MD, who also founded Innercool Therapies (recently acquired by Royal Philips Electronics NV) and CryoGen (now a division of American Medical Systems Holdings Inc.)

Leptos Biomedical has completed its preclinical phase and has received IDE approval for a feasibility study in the US. Leading up to this stage, the company has taken lots of time to establish the safety and effectiveness of stimulating the sympathetic nervous system. The initial results from the IDE study are very encouraging and broadly endorse the safety of the therapy, says Neisz. Leptos Biomedical is also carefully looking at biomarkers and physiological responses to its electrical stimulation device. Indeed, a profound understanding of the mechanism of action of neurostimulation devices has generally been lacking in the field of neuromodulation, whether in obesity or in any other disease.

Granted, it has taken Leptos Biomedical a long time to get to this point, but Neisz says a lot of companies, including Transneuronix and EnteroMedics, went into clinical trials based on dramatic successes seen in small groups of patients, and were unable to replicate that success in large volumes of patients. Leptos has resisted the temptation to move too quickly into large patient clinical trials, Neisz says. "With a lot of rigor and the help of medical experts from all disciplines, we have mapped the effects of the various stimulation parameters such that every patient that goes into a clinical trial will experience a satisfactory end result."

Neurostimulation companies tend to have long development phases because they have to take into consideration many different parameters: the level of energy, the frequency of application, whether one blocks or propagates a nerve impulse, and exactly where to apply the dose. In fact, in targeting a disease mechanism in a dose-dependent way, the development process for neuromodulation companies more closely resembles that of a pharmaceutical company than a traditional implant company, or least it probably should. Neisz says, "We need to evoke therapeutically meaningful responses as a function of stimulation parameters and avoid those concerning safety or adversely affecting outcome. As with drugs, you apply them, titrate them, and evaluate the therapeutic responses. In obesity, we are dealing with a very complex system that is highly regulated by the body's intrinsic endocrine system. Not surprisingly, the extensive preparatory efforts of drug development should apply to the neuromodulation space."

Neisz says Leptos Biomedical is different. "Obesity and its co-morbidities involve a plurality of organs and bodily functions. We are not stimulating a single organ of the digestive system. We are stimulating the multiple pathways that control food intake and fat consumption to obtain a broad and sustainable effect. Our technology is uniquely addressing the 'bad fat' that is responsible for cardiovascular disease, diabetes hyperlipidemia, hypertension—and the depletion of the health care budget. We are not exclusively aiming at weight loss per se, but equally important, treating co-morbidities associated with excess weight."

Is it reasonable for the failures of three neuromodulation companies to cast a pall on the field? Without data from clinical trials, it's difficult to say. Most companies are still a few years away from answering the ultimate question of efficacy. Only time—and lots of patients—will tell, specifically the 200-300 patient trials with 12 month follow-up that the FDA requires of such devices.