FDA OKs Start of Raymedica’s HydraFlex™ Pilot Study

By Robin R. Young, CFA

Raymedica, the Minneapolis-based company that pioneered the concept of a nucleus replacement, announced this week that it had received FDA approval to begin enrolling patients for the HydraFlex™ Nucleus Arthroplasty System™ clinical trial.

It’s been a long time since Raymedica had good news from the FDA.
When Raymedica sold its first PDN (Prosthetic Disc Nucleus), pedicle screws cost $500 and the BAK cage was a new concept.  Back in 1996, Raymedica’s investors and management fully expected the company to be selling thousands, maybe even tens of thousands of PDNs in the United States by now. 

But the road from invention to commercialization goes through the FDA and that, it turns out, was Raymedica’s toughest test of all.  What went wrong and how did the company right itself? 

That is the back story to Raymedica’s press release and in it, we believe, are lessons for all young medical technology companies.

If Raymedica achieves its eventual goal of being the leading supplier of disc nucleus arthroplasty products, the credit certainly will be shared by many but begins with, we think, one man—John Viscogliosi.

Under John’s tutelage Raymedica found a path back from the brink of extinction with new capital, new hope and a new vision.  But … a vision rooted in the same fundamental concept that prompted Dr. Charles Ray to explore the idea of using a hydrogel to replace the deceased nucleus within the disc space (relieving pain) while also addressing the biological needs of that same space (i.e., fluid flow and motion).

Dr. Ray had this vision in 1988.  By 1996 the first Prosthetic Disc Nucleus (PDN) was implanted.  Ten patients have been walking around eleven years with PDNs.  In total, over 4,000 patients have been treated with the PDN since 1996.  How are they doing?  Actually very well.  But more about that later.

The path from idea to market is always difficult in the medical device world.  For Raymedica and its shareholders it was downright tortuous. 
In the past decade Raymedica has had two failed IDE initiatives in the U.S. and a string of misfires with distributors, corporate partners and surgeons in the U.S. and overseas.

After its last failure with the FDA, the company’s board of directors turned for help to one of its original investors and organizers, the V-Brothers—specifically John Viscogliosi.

In June 2004, John became Raymedica’s chairman and CEO. 

What John found when he came back to the company was a firm with a seriously damaged reputation at both the FDA and among surgeon opinion leaders.  The company had treated literally thousands of patients around the world with the PDN, but had no FDA support and a rapidly sinking reputation in the spine community. 

The smart line on Raymedica in 2004 was that its PDN had the potential to migrate and could subside into adjacent vertebrae bone, and that the company’s sales had migrated from Europe to the rest of the world.

Says John Viscogliosi today: “The philosophy in the company when I arrived was really out of sync with the market.  Management focused on finding quick fixes when problems like migration or subsidence arose.  Their goal was frankly to find a buyer for the company and their approach to problems was like putting a Band-Aid on an open wound.”

John’s first step was to ask for data.  But what he found was, to put it mildly, meager. So he took the company back to the surgeons and started listening.  “They’re the ones with their hands in the patients. We took everything we learned from our experiences with Spine Solutions, SpineNext and fifteen years of working in the industry and applied it to Raymedica’s situation,” John recalls.

“We spent two years analyzing all the issues.  The migration, the subsidence, everything.  And we realized that we’d been selling just an implant and then telling surgeons that they could put it in with any surgical approach they wanted.  The Company should have been focusing on the entire nucleus arthroplasty system.”

“So, during these past two years of very hard work, we changed the company’s mind-set. Today Raymedica is creating not just an implant; we are creating a nucleus arthroplasty system. What does that mean? It means the integration of instruments and implant so that all parts of this system work together.  We are creating a co-functioning of instruments and implant and therefore greater surgical consistency and the potential for less invasive approaches.  We are now presenting more appropriate instrumentation, a more systemized approach with much less fiddle factor.”

There were 40 people in the company when John arrived two years ago.  Today that number is down to 18 people and half of them are new to Raymedica.  The biggest difference in the employee makeup?  “The vast majority of our new people have a history in spine.  Before I arrived, no one had any outside spine experience.  All the employees learned about the spine industry by working at Raymedica.”

And the result of all that hard work?  The HydraFlex™ Nucleus Arthroplasty System.



What is it and why should we care? 

The HydraFlex™ is part of a system to treat patients with pain arising from degenerative disc disease by distracting the disc space with a hydrogel.  The same hydrogel that has been implanted in over 4,000 patients as the PDN.

But with several key differences.  HydraFlex™ is both softer and has a larger “footprint” than the PDN.  And … of course … it is part of an overall nucleus arthroplasty system that includes the appropriate surgical instruments.  These instruments, Viscogliosi maintains, will produce repeatable/reproducible intra-discal sizing.  More consistent sizing = more consistent placement of the HydraFlex™ during surgery.  Raymedica’s new tools are designed to deliver a more thorough and consistent nucleus cleanout as well as the ability to repair the annular incision.

Being softer, the HydraFlex™ should reduce the probability of bone subsidence.  The PDN was made very robustly.  The original design wasn’t wrong, but its focus was more on restoring the natural disc height than on maintaining disc height.  Subtle point.  Critical point.

The HydraFlex™ is designed to maintain disc height.  It also has a wider “footprint,” which reduces the risk of subsidence as it also reduces the risk of migration.  The broader base is meant to disperse loads over a larger surface area.  In effect, HydraFlex™ shares the loads on the spine while the PDN sought to carry more of the load.  The new design should, according to John Viscogliosi, prove to be more conforming to the patient’s anatomy while also maintaining disc height, some measure of fluid flow and motion.

Finally, the HydraFlex™ hydrates about 60% faster than the PDN, which allows it to share loads and function faster than the PDN.

This HydraFlex™ trial is starting immediately and, John Viscogliosi hopes, will be fully enrolled by the end of Q1 2007. 

While the HydraFlex™ is a fourth generation nucleus arthroplasty product, its predecessor, the PDN, was and remains a worthy product which the company continues to sell in 7 countries, on a controlled basis.  The result of John Viscogliosi’s two years of data gathering has shown that the PDN, despite its design flaws, is a very worthy implant.

Data presented at the most recent Spine Arthroplasty meeting in Montreal (SAS6) showed the following from a 75-patient prospective multi-center study of the PDN-Solo device:

• The VAS scores improved from a pre-op average of 7.3 to 2.7 at the two-year time point. 
• The Oswestry scores improved from a pre-op average of 51.8 to 14 at the two-year time point, with a clinical success of these patients at 90%.

There was also a paper presented at SAS6 from a single-site prospective study of 63 patients that showed very similar results.

• VAS scores for PDN patients improved from approximately 8 pre-op to approximately 2 at the two-year follow-up.
• The Oswestry for these patients improved from approximately 60 pre-op to 15 at two-year follow-up.

Raymedica’s own studies of the PDN are consistent with these findings.  “As previously mentioned we also did a lot of anecdotal and retrospective review to truly find as much data, and to know every issue that might be out there.  In that we had found very similar results as with these two studies, you may ask then why was there so much negativity out in the community.  The reason is that there were many surgeons who were not properly trained [in the PDN procedure] if they were even trained at all. Of course, their complication rates were much higher than the surgeons who were trained thoroughly.  What we learned in our review of the PDN is entirely consistent with the experience other companies are having with other non-fusion technologies—namely, that training is critical for success.  And it is just not the technical aspects of the surgery, but the whole philosophy of doing a non-fusion procedure,” said John. 

There are many lessons in the Raymedica saga. Probably the most important is that if you’ve got the V-brothers on your side, you’ve got an excellent chance of succeeding.

Reprinted with permission of Robin R Young, CFA, Orthopedics This Week Newsletter, Volume 2, Issue 22, July 5th, 2006