Following a February warning letter from the FDA, Anulex Technologies Inc. has had to adjust by having a round of layoffs.
President and general manager Tim Miller declined to say how many people were let go but acknowledged that such letters were “extremely disruptive to business.”
Anulex won 510(k) clearance from the The Food & Drug Administration for marketing its Xclose tissure repair system for general and orthopaedic surgery, but did not seek proper regulatory approvals to test the device for other indications, according to the FDA’s warning letter.
The Minnetonka, Minn.-based company did a post-market study to see how Xclose performed when used to repair the annulus, but the company had not applied for an investigational device exemption prior to doing so, the FDA said.
“You failed to submit an IDE application to the FDA and ensure that an FDA-approved IDE was obtained before allowing subjects to participate in the ‘Randomized Study of Anular Repair with the Xclose Tissue Repair System’,” the warning letter said. “Specifically, you permitted the Xclose device, a significant risk device…, to be implanted in… 4 of the 750 subjects enrolled in this study prior to submission to FDA and FDA approval of an IDE application.”
The annulus fibrosus is a strong, protective covering that shields the soft material located at the center of an intervertebral disc.
In an interview, Miller contended that the company had consulted with institutional review boards at 34 centers and none had advised getting an IDE from the FDA. Further, the company obtained informed consent from patients involved in the post-market study. He believes that the FDA has mistakenly exaggerated the risk of using Xclose in spine procedures.
“Repairing the annulus is an adjunctive procedure to a discectomy,” he said. “The risk of approximating the tissue of the annulus fibrosus, following a discectomy procedure, is incremental.”
Although, Miller feels the warning letter is unfair, he knows such admonitions are not to be trifled with. As a result, all marketing of Xclose related to spine procedures have halted, leading to jobs and revenue loss; Miller would discuss neither. Currently there are 46 employees at the firm, he said. The website, including the company’s logo, has also been modified to remove any links between Xclose and annular repair. However, a Google search managed to yield an old web page with the previous logo touting the company’s ability to repair the annulus.
Regulatory filings show that the company has raised $66.4 million since late 2003. In a 2010 filing with the Securities & Exchange Commission, the company indicated it had revenue between $5 million and $25 million.
Miller said he hopes to meet with FDA officials in May to impress upon them that using Xclose in annular repair is not highly risky and that an IDE, followed by a pre-market approval (PMA) application is not required. Aside from the time and money PMAs take, “it is not an appropriate pathway for the product,” Miller said.
Meanwhile, Anulex’s previous CEO Rich Lunsford has left the company. Board member Buzz Benson, managing director at Minneapolis-based venture capital firm SightLine Partners, said via e-mail that Lunsford’s departure is unrelated to the FDA’s February warning letter. He declined all other comments other than to say the company is working with the FDA to resolve the issue.
Miller said that Lunsford left for personal reasons because he wanted to be in Colorado where he has a home. Lunsford is now a vice president and general manager, cardiac surgery systems at Edwards Lifesciences Corp. (NYSE:EW), the Irvine, Calif. medical device company where he has been since February.