OBS Medical hopes to capture pharma's heart

January 19, 2009
The latest product to come out of Carmel-based OBS Medical may be just what the doctors ordered.

The doctors working for major pharmaceutical companies, that is.

OBS Medical's BioQT software determines if an experimental drug disturbs patients' hearts and does so, the company claims, more accurately, in less time and for less money than traditional approaches.

Such a pitch, if proven, should catch the interest of major drugmakers, which are struggling to bring new products to market—without breaking the bank—at a time when safety concerns have caused the U.S. Food and Drug Administration to slash the number of new drugs it approves for sale.

"In the last couple years, the high-profile safety issues have really caused the FDA to be much more conservative, and I think that trend is going to continue," said Linda Heitzman, a pharmaceutical consultant for Deloitte in Indianapolis.

The biggest example came in 2004 when Merck Co. & Inc. pulled the painkiller Vioxx from the market because it raised the risk of heart attacks. Since then, Heitzman said, the FDA has been asking more and more drug companies to perform cardiac tests on drugs under development.

OBS Medical, a subsidiary of U.K.-based Oxford BioSignals Ltd., talked up its new software on Jan. 12 at a cardiac safety summit in Philadelphia, Pa. The company also announced its first partnership with a company that performs clinical trials for drugmakers, Wisconsin-based Spaulding Clinical.

Spaulding runs a 48-bed facility that performs Phase 1 clinical trials, hosting healthy volunteers that take experimental drugs in order to test the drugs' safety.

Spaulding tests the cardiac safety of drugs by fitting volunteers with a portable heart-monitoring device.

Those devices send data to OBS Medical's BioQT software, which records heartbeats for 24 hours before volunteers take a medicine, and again for 24 hours after they take it.

It's like using a Tivo machine to record hour after hour of the waves coming across one of those beeping heart monitors.

BioQT examines those recorded waves, looking for differences from before the medicine and after. If high numbers of waves have been lengthened or weakened, it can signal that the drug has harmful heart effects. OBS Medical has a cardiologist read the software's results to double-check them.

Current cardiac tests are done manually, usually for 10 seconds at a time, several times a day. Each 10-second test might record six to eight heartbeats, said Frank Cheng, CEO of OBS Medical.

"It's like looking for a fish in the ocean. You can't check the whole ocean with six buckets of water," Cheng said.

BioQT also operates faster than manual methods, said Randy Spaulding, CEO of OBS Medical's partner, Spaulding Clinical. That's chiefly because traditional methods can test about 10 patients at a time, whereas BioQT can test 200 at a time. It also can begin analyzing the results even before the testing ends.

Spaulding promises his firm can perform and analyze the cardiac tests in half the time needed for traditional methods—typically six to nine months—and that can save money. Traditional tests cost about $500,000—mainly to pay cardiologists to read the results.

"If we can save that 3-1/2 months, that's extremely economically significant" for drug companies, Spaulding said.

Deloitte's Heitzman said pharmaceutical companies would be less interested in saving money on Phase 1 trials, which are cheap compared with later-stage trials that require far more human volunteers. However, she said, drug companies would like to have better cardiac safety data sooner, so they can decide whether to keep spending money on an experimental drug.

Indianapolis-based Eli Lilly and Co. recently touted various steps it has taken to make quicker decisions on whether to end a drug's testing. Lilly is trying to reduce its average development costs per approved drug to $800 million from $1.2 billion.

Whether OBS Medical can sell BioQT to companies like Lilly remains to be seen. The product was first offered for sale in 2008.

OBS Medical has worked with only one pharmaceutical company that used its data to submit to the FDA. Cheng declined to identify the firm, but said it is not Lilly. He said other drug firms have participated in testing the software, including Johnson & Johnson, GlaxoSmithKline plc and Merck & Co. Inc., the maker of Vioxx.

Cheng's challenge is that drug development managers don't want to try a new product because they fear it might cause a hiccup that delays their drug's approval by the FDA.

"The pharmaceutical industry, it's actually very conservative," Cheng said.
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