All posts by SlSavyon

A Closer Look At EndoChoice Holdings IPO

Founded in 2008, EndoChoice is a medical device company that designs cutting edge products for gastrointestinal (GI) caregivers. The company serves over 2,500 GI departments that perform endoscopic procedures. Its range of products and services are comprised of single-use devices and infection control products along with pathology and imaging systems designed to improve clinical outcomes and GI specialists productivity.

EndoChoice’s flagship product is Fuse, a full spectrum endoscopy system allowing GI specialists to see more than twice the anatomy at any one time compared to standard, forward-viewing colonoscopies and has been clinically shown to detect 69 percent more pre-cancerous polyps than standard colonoscopies. The company’s plan going forward is to leverage its product platform, established customer relationships, commercial infrastructure and Fuse® technology to create a benchmark of care for the global GI market.

EndoChoice estimates the global market for its GI endoscopy products and services to be over $6 billion with more than 70 million GI endoscopes performed each year in the U.S., Japan, and Europe. The GI endoscopy products and services market is projected to grow at 7 percent annually driven by increased attention on the screening, prevention, and treatment of colorectal cancer, an aging population worldwide, and changing dietary habits.

The company believes that the GI endoscopy market is highly fragmented and most companies that currently service this segment, focus on only one or two areas of the GI procedure cycle. EndoChoice feels the needs of GI specialists are under-served due to the lack of a well-rounded provider.

Related Link: Hootsuite Eyes Sooner-Than-Expected IPO Following Shopify’s Big Day


Revenue for the first three months of 2015 was $16.7 million, up 17.3 percent from $13.8 million in 2014. 2014 revenue was $61.4 million compared with $50.9 million in 2013. The company derives revenue from the sales of its GI equipment and supplies, as well as its GI pathology services with the majority going towards the former. ECPM’s business is cyclical in nature due to weather conditions and the resetting of annual patient healthcare insurance plan deductibles, which tends to occur in the first quarter and can delay patients’ procedures.

The company’s operating costs include R&D expenses, SG&A, and amortization of intangible assets have continued to weigh down the company’s net income. The majority of costs are towards sales and marketing. The company spent $27.6 million in 2014 up from $18.1 million a year earlier. The spending was used to increase awareness for its products at events, like trade shows, to build its international distributor base.

The company’s net losses continue to mount due to increased spending and support of Fuse commercialization efforts. For the first quarter of 2015, its net loss grew to $15.2 million from $10.9 million in 2014. ECPM’s net losses increased 124 percent to $23.9 million in 2013 from $53.6 million in 2014.

At the end of March 2015, the company reported $33 million in cash and an accumulated deficit of ($112.4) million compared with $13.8 million in cash in December 2014 and an accumulated deficit of ($97.2) million. The company believes that a successful IPO combined with its borrowings, current forecasts and anticipated market conditions, it expects to fund its liquidity needs into 2019.

The company entered into a credit agreement with Triple Growth Capital for $40 million and has since tapped the full amount. The interest was set at 8.50 percent and matures in February 2018.

Conclusion and Pricing Info

Given the company’s history of net losses, competitor’s products being on the market for the past 20 years, and the IPO pricing at the low end of its range, investors should tread carefully on trading this IPO on the first day. In order for the company to progress towards its success, its needs to ramp up its products sales and provide results of more clinical studies.

EndoChoice expects the net proceeds of this offering to be $89.5 million and use them in the following manner:

$29 million for the expansion of its sales and marketing activities.

$27 million to increase working capital requirements related to accounts receivable and inventory.

$17 million for capital expenditures for new product demonstration equipment.

$4 million to expand its manufacturing capacity for its Fuse® system and future products.

The remainder for general corporate purposes and to acquire businesses and/or products or service should the opportunity arise.

Scope maker Olympus expects to settle U.S. claims over marketing

The manufacturer of endoscopes at the center of a string of deadly superbug outbreaks has set aside nearly $450 million for an expected settlement of a U.S. investigation into its marketing of medical products.

Olympus Corp. of Japan did not disclose the details of what federal officials have been investigating other than saying the focus is on possible violations of laws that ban companies from paying kickbacks to doctors and other potential customers.

Superbug outbreaks tied to faulty scopes
Superbug outbreaks tied to faulty scopes
The giant electronics maker said investigators have been looking at its U.S. sales activities from 2006 to 2011. It is not clear what Olympus products may be involved.

In recent months, Olympus has come under harsh criticism for failing to quickly warn American hospitals that one of its medical scopes is extremely difficult to clean. The device known as a duodenoscope has been linked to outbreaks at hospitals across the country that have sickened dozens of patients with antibiotic-resistant superbugs.

lRelated Superbug outbreaks: What we know about scopes linked to deaths
Superbug outbreaks: What we know about scopes linked to deaths

At UCLA Ronald Reagan Medical Center, eight patients were sickened and three died. Another outbreak at Cedars Sinai Medical Center sickened four patients. Both hospitals say they followed the manufacturer’s instructions in cleaning the intricate device but it still transferred bacteria from patient to patient.

This month, a federal panel concluded that the duodenoscope manufactured by Olympus and two other companies was unsafe as designed and urged federal regulators to do more to protect patients.

Olympus’ medical division, which focuses on selling gastrointestinal endoscopes, is its largest revenue generator.

Got something to say? Start the conversation and be the first to comment.

The company has been depending on rising sales of endoscopes and other medical products to help it recover from a massive accounting scandal that was uncovered by a former executive in 2011. The elaborate financial fraud involved executives covering up $1.7 billion of losses over 13 years.

Olympus notified shareholders of the U.S. Justice Department’s investigation in February. The company said officials were looking into possible violations of the Anti-Kickback Statute and the False Claims Act — laws aimed at stopping fraud against the federal government.
In recent years, prosecutors have charged healthcare companies with violating the laws by giving travel, consulting fees and other gifts to doctors. The laws also prohibit companies from making false claims that result in payments by the federal government, including from Medicare.

In a May 8 statement, Olympus said it had decided to set aside 53.9 billion Japanese yen — or about $450 million — to settle claims expected to be brought by U.S. officials. Talks to settle the case are continuing, the company said. It declined to comment further.

Justice Department officials began their investigation into the company’s American subsidiary in November 2011, the firm said.

In summer 2012, Olympus Chairman Yasuyuki Kimoto told Bloomberg News that Justice Department officials were looking at its U.S. marketing operations.

Kimoto also said then that the company had uncovered “irregularities” in a program it operated in Brazil to train doctors on the use of its equipment. Executives told Justice Department officials about the problems, which related to how the company handled doctors’ expenses for travel, meals or entertainment, Kimoto explained.

This month, Olympus announced that Kimoto is retiring.

In response to the superbug outbreaks, the company has said it is working closely with the federal Food and Drug Administration to improve the safety of its duodenoscope known as model TJF-Q180V.

The FDA has declined to recall the scope because officials determined that it is used in a potentially lifesaving procedure with no better alternative.

In March, Olympus issued revised instructions for disinfecting the device. A panel of experts agreed this month, however, that patients are still at risk of getting infections from the scope.

Go Ahead, Let Your Endoscopes Hang Another Day

How long can you store a reprocessed endoscope between uses before it must be reprocessed again? Most facilities set their own rules, and often it’s 5 to 7 days. Recent research suggests, however, that properly cleaned flexible scopes may safely go 3 weeks before use.

“Endoscopes can be stored for as long as 21 days after standard reprocessing with a low risk of pathogenic microbial colonization,” write researchers in the May issue of the journal GIE: Gastrointestinal Endoscopy. What’s more, “extension of reprocessing protocols to 21 days could effect significant cost savings.”

For a small, single-center study, they reprocessed 4 colonoscopes, 4 duodenoscopes and 2 gastroscopes, hung them in a storage closet and microbially tested multiple sites on each scope. This culturing was conducted again 7, 14 and 21 days later.

While the 96 tests turned up 33 positive cultures (a 29.2% contamination rate), 29 of those were “clinically insignificant” skin or environmental contaminants. The other 4 revealed pathogens that included Enterococcus, but since these contaminations only appeared at one time-point and at one site, they were also deemed clinically insignificant.

These findings, the researchers noted, were in line with previous studies that found little threat of microbial colonization in flexible scopes after 5 days of storage.

Gastroenterology, Colonoscopy, Endoscopy and Liver Disease Treatment in Westchester County, NY.

With seven board-certified gastroenterologists, two board-certified pathologists trained in gastroenterology, and a nurse practitioner, Digestive Disease Associates of Rocklandis one of the leading gastroenterological practices servicing Westchester County, NY. Utilizing the latest in advanced technology, our well-trained highly experienced doctors provide the utmost in digestive care for patients from Westchester County, NY and beyond.

Endoscope Linked to Superbug Outbreaks Still Risky: FDA Panel

An advisory panel to the U.S. Food & Drug Administration (FDA) warned today that patients who require routine medical procedures continue to face serious health risks from specialized medical scopes linked to multiple outbreaks of the deadly Carbapenem-Resistant Enterobacteriaceae, or CRE, superbug.

Free CRE Superbug Lawsuit Evaluation: If you or a loved one was diagnosed with a serious systemic infection — including but not limited to CRE — after undergoing an endoscopic retrograde cholangiopancreatography (ERCP) procedure, you should contact our law firm immediately. You may be entitled to compensation by filing a suit and our lawyers can help.

What’s the Problem?

May 14, 2015 – Testimony from doctors and researchers came as the FDA and Olympus Corp., manufacturer of the duodenoscope suspected of passing the CRE superbug in a number of recent outbreaks, took criticism for not taking control of the situation.

A day of technical presentations was contrasted by the testimony of a North Carolina woman whose husband recently died of a CRE infection. “His battle was more than I could bear to watch,” Carla Warner said, pointing the finger at Olympus and the FDA. “They have failed me, my family, and my husband paid the ultimate price with his life.”

Olympus Declines Participation in Hearing

Olympus has thus far refused to participate in the panel. The company was invited to speak at the hearing, but“for various reasons they’ve declined to participate,” the Los Angeles Times quoted Dr. Stephen Ostroff, the FDA’s acting commissioner, as saying. Two other duodenoscope manufacturers, Pentax Medical and Fujifilm, also declined to speak at the hearing.

UCLA Doctor Testifies about Superbug Outbreak

Dr. Zachary Rubin, director of clinical epidemiology and infection prevention at UCLA, testified about the recent superbug outbreak at the Ronald Reagan Medical Center. Rubin said 8 patients at the facility developed CRE infections from 2 contaminated duodenoscopes, and 3 of them — including one that was previously undisclosed — have died.

Rubin speculated that the problem with the scopes is bigger than what’s been reported in the news, describing the difficulty in detecting infections, even with an informed staff and considerable resources that many hospitals lack.

“If you don’t look for these infections,” Rubin said, “you won’t find them.”

Committee to Discuss Endoscope Cleaning Alternatives

The committee is expected to meet today to hear testimony from medical experts about cleaning alternatives for the duodenoscope, and to consider recommendations on how the FDA should respond to the problem. Mark Miller, a spokesman for Olympus who attended the hearing, said the device maker is continuing its dialogue with the FDA. Olympus “will evaluate whether to provide written input” to the advisory panel after the hearing.

Do I have a CRE Superbug Lawsuit?

The Medical Device Litigation Group at our law firm is an experienced team of trial lawyers that focus on the representation of plaintiffs in CRE Superbug Lawsuits. We are handling individual litigation nationwide and currently accepting new CRE infection cases in all 50 states.


The U.S. Justice Dept. subpoenaed 2 more manufacturers of medical scopes linked to deadly “superbug” outbreaks in recent weeks, USA Today reported, citing 2 sources familiar with the investigation.

Last week, reports revealed 1 duodenoscope manufacturer, Olympus (TYO:7733), was being investigated by the federal agency, but the broader reach of the investigation, including subpoenas to other makers Fujifilm Holdings (TSE:4901) and Hoya Corp.‘s (TYO:7741) Pentax subsidiary has not been reported previously, the newspaper said.

Reuters was not able to immediately reach Olympus, Fujifilm and Pentax for comment.

The complex design of these devices – flexible tubes that are threaded through the mouth, throat and stomach to drain fluids from blocked pancreatic and biliary ducts – is associated with a risk of multidrug-resistant infections even when cleaning instructions are followed correctly.

Duodenoscopes have been associated with episodic infections for more than a decade, but those infections could often be treated with antibiotics. However, the rising tide of antibiotic-resistant bacteria or superbugs, are making these infections more dangerous and difficult to treat.

Virginia Mason Hospital in Seattle, which suffered 1 of the largest and deadliest outbreaks of superbug infections linked with contaminated scopes, has also been subpoenaed, said Rando Wick, a lawyer representing the hospital.

The Justice Dept. has asked for “thousands of documents” related to healthcare offenses as defined in federal criminal statutes, he told Reuters.

In recent months, Virginia Mason Medical and others have sued Olympus in connection with bacterial outbreaks associated with its duodenoscopes.

The subpoena pertains to the medical center’s communication with Olympus, the FDA and the U.S. Centers for Disease Control & Prevention, as well as state and local government authorities, Wick added.

Global Medical Fiber Optics Market’s Top Trend: Miniaturization of Medical Devices

Medical fiber optics are a class of optic fiber applications in several fields. Based on the type of medical application, the medical fiber optics market is segmented into fiberoptic dental lights, fiberoptic surgical lights, laser fiberoptics, endoscopes, fiberoptic sensors, and others. Medical optical fibers are transparent and flexible in nature and are made using high-quality plastic, glass, and silica. Fiber optics is mostly used in the medical field in illumination and imaging components of endoscopes. Rigid and flexible multi-fibers made from graded-index imaging rods and step-index fibers are extensively deployed for visualization of internal tissues and organs that are accessible transcutaneously or via natural openings.

Top Trends: Increasing Government Support and Miniaturization of Devices

Several factors are influencing the dynamics of the global medical fiber optics market. Factors such as the growing application of fiber optics for minimally invasive surgeries and elevated demand for innovative diagnostic technologies are fueling the market’s growth. Another main growth driver of the global medical fiber optics market is the trend of miniaturization of medical devices. This trend has significantly added to the demand for medical fiber optics. Furthermore, the rapid development in the medicine field will also propel the global medical fiber optics market. However, the high risk associated with the light intensity and stringent regulations will impede the market growth.

The global medical fiber optics market was estimated at US$863.1 million in 2013. This market is anticipated to demonstrate a 7.6% CAGR from 2013 to 2019. By 2019, the global medical fiber optics market will reach annual revenue of US$1,336.1 million. According to geography, the global medical fiber optics market is divided into Europe, North America, Asia, Latin America, and Rest of the World (RoW). North America is currently leading the global medical fiber optics market. On the other hand, the Asian medical fiber optics market is the fastest growing regional market. Endoscopes are the largest product segment, while laser fiberoptics is the fastest growing technology in the global medical fiber optics market.

Geographical Landscape: North America to Lead Global Fiber Optics Market

North America is leading the global medical fiber optics market due to improved medical infrastructure with elevated usage of medical optical fibers for minimally invasive surgeries. Medical organizations in North America, such as the Canadian Healthcare Association (CHA), the Society of Laparoendoscopic Surgeons, and the Association of Canadian Academic Healthcare Organizations (ACAHO), are supporting the usage of medical fiber optics extensively, aiding the acceptance of the market in the region. Alternatively, the Europe medical fiber optics market will experience moderate growth in the coming years.

In Europe, the enhanced healthcare infrastructure, elevated use of fiber optics in endoscopes, and increased government funding will boost market growth. In Asia, the market for medical fiber optics will grow at the highest CAGR of all regional segments during the forecasting horizon, as medical infrastructure is developing at a rapid pace in the region. Furthermore, the increasing aging population and associated disorders coupled with government initiatives will fuel the growth of this regional medical fiber optics market.

New imaging method could eliminate unnecessary biopsies

New York, June 3 (The News) A new low-cost, portable, battery-powered microendoscope could eventually eliminate the need for costly biopsies for many cancer patients, shows a clinical study of patients in the US and China.

“For patients, biopsies are stressful and sometimes painful,” said lead researcher Rebecca Richards-Kortum, professor at Rice University where the new microendoscope was developed.

“In addition, in low-resourcesettings, pathology costs frequently exceed endoscopy costs. So the microendoscope could both improve patient outcomes and provide a significant cost-saving advantage if used in conjunction with a traditional endoscope,” Richards-Kortum said.

To determine whether a biopsy is needed, health professionals often use endoscopes, small cameras mounted on flexible tubes that can be inserted into the body to visually examine an organ or tissue without surgery.

The new high-resolution microendoscope uses a one-millimetre-wide fibre-optic cable that is attached to the standard endoscope.

The cable transmits images to a high-powered fluorescence microscope, and the endoscopist uses a tablet computer to view the microscope’s output.

The clinical study involved 147 US and Chinese patients undergoing examination for potential esophageal cancer.

In the study, all the patients with suspeect lesions were examined with both a traditional endoscope and the new microendoscope. Biopsies were obtained based upon the results of the traditional endoscopic exam.

A pathology exam revealed that more than half of those receiving biopsies — 58 percent — did not have high-grade pre-cancer or cancer.

The researchers found that the microendoscopic exam could have spared unnecessary biopsies for about 90 percent of the patients with benign lesions.

Clinical studies of the microendoscope are either planned or underway for a dozen types of cancer including cervical, bladder, oral and colon cancers.

The findings were detailed online in the journal Gastroenterology.


How a Dutch Hospital Stopped a Superbug Outbreak in Its Tracks

Specialized endoscopes that are used to perform a common medical procedure have contributed to at least 13 deaths and 121 injuries in recent years by spreading bacteria among patients. A panel of medical experts at the Food and Drug Administration meets this week to consider the safety of the devices. The instruments, known as duodenoscopes, have intricate channels that can harbor pathogens from one patient and spread them to others, even after cleaning. The panel will weigh whether the existing cleaning guidelines are adequate and, if not, how to improve them.

U.S. regulators might take a cue from a Dutch hospital that faced the same problem three years ago: a spike in drug- resistant infections detected in January 2012 among patients who underwent the procedures using the same model of Olympus scope suspected of spreading bacteria in several outbreaks in the United States. Researchers report in a recent article in the journal Endoscopy that the hospital, Erasmus MC University Medical Center, in Rotterdam, halted its outbreak by reverting to an older model of scope that researchers believe is easier to clean.

The problem isn’t isolated to a single model of the device. Nine U.S. hospitals have reported outbreaks linked to scopes from all of the three major manufacturers: Olympus, Pentax, and Fujifilm. But the Olympus scope, model number TJF-Q180V, is getting extra scrutiny for two reasons. Olympus is the dominant maker of the scopes, with about 85 percent of the U.S. market, according to the FDA. And that particular model has not been cleared by the FDA’s process for overseeing medical devices, though earlier versions have.

Olympus didn’t respond to a request for comment. The Japanese device maker is facing 14 lawsuits in California, Pennsylvania, and Washington state “alleging injuries sustained by the use of the same product—the TJF-Q180V duodenoscope,” according to a May 1 filing in U.S. District Court in California.

The model features a sealed channel that may be difficult to rid of trapped organic material. The version it replaced, the Dutch researchers wrote, features a removable cap that can be taken off so the inside pieces of the scope can be flushed clean. In the Rotterdam outbreak, 22 of the 30 patients infected over five months had the procedure done with an Olympus TJF- Q180V. Reverting to using the earlier Olympus scope stopped the outbreak.

Duodenoscopes are used to diagnose and treat problems in tiny ducts connecting the small intestine to the pancreas or gallbladder. The procedure is done more than 600,000 times a year in the U.S., the FDA says.

Under the FDA’s rules for medical devices, manufacturers are allowed to determine on their own whether to notify the regulator about changes to an existing product. Olympus sold the new model to hospitals for years before the FDA determined it needed a separate review and asked the company to submit a new application in March 2014. The lack of clearance wasn’t made public until this year. The agency is still evaluating that submission. The FDA says there’s no evidence the lack of clearance is associated with the infections.

The FDA is aware of the report from Erasmus, agency spokeswoman Jennifer Dooren said in an e-mail. The U.S. regulator hasn’t pulled the scope from the market, citing concerns about causing a shortage of instruments needed for sometimes life-saving treatments. In March, Olympus issued new instructions for cleaning the scopes, which the FDA urged hospitals to adopt “as soon as possible.”

Olympus warned hospitals in Europe about the difficulty in cleaning the new model scopes as early as January 2013, the Los Angeles Times reported in April. That was two years before problems came to light in the U.S. The FDA didn’t publicly warn that effective cleaning of the devices “may not be possible” until a Feb. 19 safety alert, the day after news of an outbreak at UCLA Medical Center made headlines.

The agency and the manufacturer have faced criticism and inquiries from members of Congress. U.S. Sen. Patty Murray, a Democrat from Washington, has asked the FDA for a full review of problems with the devices, including whether the agency’s system for monitoring changes to devices is adequate.

AAMI University Offers Webinar on Flexible and Semi-Rigid Endoscope Processing

The Association for the Advancement of Medical Instrumentation (AAMI) will offer the webinar, “ANSI/AAMI ST91:2015: Flexible and Semi-Rigid Endoscope Processing in Health Care Facilities – What You Need to Know,” on Tuesday, June 16, 2015 at 1 p.m. ET.

With heightened public concern about cleanliness an decontamination, endoscopes and endoscope reprocessing are in the news seemingly every day. Reducing the risk of exposure to improperly reprocessed medical devices is a shared responsibility among the healthcare facilities responsible for cleaning, sterilizing, or disinfecting the devices. This webinar will discuss the need for the ST91 document, a summary of the contents and major provisions of the document including training and competency recommendations, and best practices for personnel processing flexible endoscopes based upon scientific evidence.

After attending this webinar, participants will be able to: Define best practices for processing flexible endoscopes; discuss the key provisions and competency recommendations of the standard; and identify best practices in endoscope reprocessing.

The speakers are Nancy Chobin, RN, CSPM, vice president of sterile processing services for Barnabas Health System; and MaryAnn Drosnock, MS, manager of infection control for Olympus. Instruction is targeted to any area in hospitals to include sterile processing departments, office-based surgery or ambulatory health centers (clinics) that produce sterile products for their patients, OR managers and directors, GI/Endo practitioners and reprocessing personnel, endoscopy suite nurses, endoscopy staff members, perioperative nurses, surgical technologists, central service staff members, and infection prevention nurses.

This program has been approved for 1.50 contact hours by the Certification Board for Sterile Processing and Distribution, Inc. (CBSPD) and the International Association of Healthcare Central Service Materiel Management (IAHCSMM).