business

Up until three years ago, the medical device start-up NeuroVasx Inc. looked like it was on a trajectory to success.

The Maple Grove company raised $33 million and developed a product to treat very large brain aneurysms, which can lead to strokes. In 2007, the company submitted a 510k application to the Food and Drug Administration (FDA) -- a type of regulatory approval that requires the applicant to show that its product is similar to one already on the market.

But the company experienced numerous delays and received mixed signals as the FDA reviewed the cPax device. It has yet to secure clearance from the federal agency to sell the product, and NeuroVasx CEO Eric Timko says he's considering "strategic options" for the struggling firm.

The company's narrative is not uncommon in Minnesota's formidable medical technology economy, as the FDA seeks to toughen regulation of medical devices under the Obama administration.

In recent weeks, some members of Minnesota's congressional delegation, including Sens. Amy Klobuchar and Al Franken and Rep. Erik Paulsen, have weighed in on the debate -- all in support of the industry, which sees some proposed rules as onerous.

Many of the same bipartisan players rallied earlier this year over a proposed $40 billion tax on medical device companies to help pay for health care reform -- a levy that was eventually whittled to $20 billion.

At issue this time is the FDA's 510k approval process, which is the way most medical devices are approved before being marketed in the United States, often without clinical studies on patients. NeuroVasx didn't do U.S. trials, but conducted a study on 37 patients in South America to bolster its FDA application.

But in the wake of complaints from consumer groups that unsafe devices have infiltrated the market, new leadership at the FDA has requested that the Institute of Medicine conduct an independent study of the 510k approval pathway. A report from the institute, an independent entity that gives advice to policymakers, is expected next year.

"I think it's a wonderful goal to tighten the regulations," said Hunter Shkolnik, a plaintiff's lawyer based in New York. "This was something that was needed -- too many devices are getting to market through the 510k process that needed more review."

Meanwhile, the FDA has proposed several changes to the current 510k system -- including several that have raised the hackles of Minnesota medical device companies that say the new rules would stifle innovation.

In the past month, several members of Minnesota's congressional delegation have held hearings, chaired meetings or appeared in public to discuss the current machinations at the FDA. They warn that excessive regulation will threaten the state's coveted medical device industry, which includes several hundred medical device and life-science firms that employ almost 30,000 people.

"This issue is also about preserving good jobs," said Klobuchar, D-Minn. "This industry and innovation are front and center in what we need to do to bring the country out of the economic rut."

Klobuchar has already expressed her concerns about the FDA with the agency's new commissioner, Margaret Hamburg. She said policies should be consistent and predictable to help small companies raise money -- but at the same time balance the need for product safety.

Franken, D-Minn., also met with local med-tech leaders recently. The senator, who sits on the Senate Health, Education, Labor, and Pensions Committee, which oversees the FDA, said he plans to share industry's concerns when he meets with Hamburg later this month.

"This is an important industry in Minnesota. These are very high-value jobs that we want to keep, obviously, and hopefully create more of them," Franken said last week.

Likewise, Paulsen, R-Minn., held a field hearing last month with several med-tech constituents from his western Twin Cities district. As co-chair of the House Medical Technology Caucus, he said he wants to "raise consciousness" about the 510k issue.

One of the speakers at Paulsen's hearing was NeuroVasx CEO Timko. Although the company has received European regulatory approval for its device, the FDA is requiring NeuroVasx to conduct two new clinical studies on patients that could cost upwards of $20 million, a possibly devastating amount for a small company.

After hearing the NeuroVasx story, Paulsen said, "I found it to be really distressing."

Janet Moore • 612-673-7752