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Plunging revenue from blood glucose monitors has forced Roche Diagnostics Corp. to cut its staff, the company informed the workers last week. Roche, which operates its North American headquarters out of Indianapolis, suffered a 14-percent decline in revenue in its diabetes care unit during the first six months of the year. Roche has put that unit up for sale, according to a May report by the Reuters news agency. Roche spokesman Todd Siesky declined to disclose the number of workers that will be let go, only saying that jobs will be eliminated over the next several months. The cuts will affect Roche’s customer service group in Fishers and its diabetes manufacturing plant on the far northeast side. Between the two sites, Roche employs more than 900 diabetes care workers in the metro area. During the first six months of this year, Roche’s North American sales of diabetes products totaled $224 million. During the same period of 2012, diabetes sales in North American totaled about $257 million. And it’s going to get worse. The price of blood glucose monitors—which account for 90 percent of Roche’s diabetes care revenue—will be hammered by a new competitive bidding process instituted July 1 by the federal Medicare agency. Some projections indicated the Medicare program would drive down its payments 72 percent.

Indianapolis venture capitalist Matt Neff is the new CEO of Indianapolis-based AIT Laboratories, the drug-testing lab founded by Michael Evans. Evans stepped aside once before, in early 2012, and was replaced by Ron Thieme, who had been vice president of information technology. But the move didn’t work out, and Evans returned to the top job that fall. Now, Evans, 69, is stepping aside again, and Neff is becoming chairman, president and CEO, effective Monday. (See related story above.) Evans will remain chairman emeritus and continue as CEO of AIT sister company AIT Bioscience. Neff, meanwhile, is stepping down as CEO and president of CHV Capital, the venture capital arm of Indiana University Health, a post he held for six years. IU Health said the CHV Capital board would conduct a search for his replacement. AIT, founded in 1990 by Evans, then an Indiana University School of Medicine professor, caught fire about 10 years ago when it became the nation’s pioneer in urine drug tests to help doctors monitor patients taking narcotics for chronic pain. But AIT has been in turnaround mode after failing to respond quickly to deep cuts in Medicare reimbursement rates for basic drug tests. In 2009, Evans sold the company to employees for $90 million, with payments to him staggered over a number of years.

Community Health Network and Johnson Memorial Health opened the doors to a new health pavilion that will house doctors from both Community Physician Network and Johnson Memorial Physician Network, including specialists in family medicine, pediatrics, orthopedics, women’s health and general surgery. The facility will also offer walk-in lab testing, an imaging center, and physical and occupational therapy. Indianapolis-based Community and Franklin-based Johnson Memorial formed a partnership two years ago.

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Eli Lilly and Co. has sued Roche Holding AG’s Genentech unit, asking a court to invalidate patents used to make treatments for cancer and autoimmune diseases, Bloomberg News reported. Lilly wants a court to reaffirm the patents behind its own cancer drug Erbitux. According to Lilly’s lawsuit, filed Thursday in federal court in San Francisco, Genentech deceived the U.S. Patent Office into issuing patents known as “Cabilly” after one of the inventors. Genentech claims that the process and certain starting materials used to produce Erbitux infringe on parts of the patents, and is pursuing an “aggressive litigation policy to protect its products against competition,” according to the complaint. Erbitux, made by Indianapolis-based Lilly’s ImClone unit, is approved in the United States to treat colon cancer and head and neck tumors. Lilly realized about $400 million in revenue from the drug in 2012. A phone call to Genentech’s media office seeking comment about the lawsuit wasn’t immediately returned.

Indianapolis-based CHV Capital joined Kaiser Permanente Ventures to invest an $8 million funding round for Health Catalyst, a Salt Lake City-based data warehousing company. The company already had raised $33 million in Series B funding to develop its technology, which helps hospitals measure quality data from their electronic medical record systems and report it to regulatory agencies and health insurers. Indiana University Health, the hospital system that is the parent of CHV Capital, already is using Health Catalyst’s technology.

The Indiana Senate voted last week to expand Medicaid using the state-run Healthy Indiana Plan. According to the Associated Press, Gov. Mike Pence and the Republican-led General Assembly have beat back efforts by Democrats to expand coverage using the traditional federal-state Medicaid program for the poor. Instead, they say, expansion should be done through the Healthy Indiana Plan or a similar state-run program, giving the state more control over costs. Expanding HIP would cost the state roughly 3 percent less than expanding Medicaid, state actuary Milliman Inc. estimated on Feb. 25. And supporters say HIP would promote more responsible decisions by enrollees. On the table is an expected $10.5 billion in federal aid for the state over the next seven years. But expanding HIP also could cost the state close to $2 billion over the period. House Speaker Brian Bosma, R-Indianapolis, said Tuesday that Pence likes the Senate's request for block grants from the federal government instead of matching funds for Indiana’s spending, as is the case with traditional Medicaid. "At least the leadership is all in favor of not using Medicaid expansion as the vehicle here because of the potential for massive cost in the future," Bosma said. Seven Democratic senators voted with all of the chamber's Republicans for the expansion, despite reservations about using HIP. "We don't agree with the bill the way it was written, but we want to make sure it remains alive," said Sen. Karen Tallian, D-Portage. Tallian asked lawmakers to approve a temporary expansion of Medicaid, for two years, similar to what Florida Gov. Rick Scott, a Republican, is supporting. But her amendment and similar efforts in the House failed.

Warsaw-based Zimmer Holdings Inc. said the U.S. Securities and Exchange Commission and the U.S. Department of Justice have ended their investigation into a possible violation by Zimmer of the Foreign Corrupt Practices Act. The investigation dates to September 2007. Zimmer is the world’s largest maker of orthopedic implants.

The National Science Foundation has awarded $500,000 to West Lafayette-based Tymora Analytical Operations LLC via a Phase II Small Business Innovation Research grant. Tymora will use the two-year grant to develop a technology called pIMAGO that helps lab researchers identify new targets for drugs to fight such diseases as cancer, diabetes, neurological disorders and immune system disorders. Tymora, founded by two Purdue University professors, has also received $450,000 in previous grants from the National Institutes of Health.

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North Carolina-based Quintiles, a contract researcher for drug companies, will lease 12,000 square feet in the Pan Am building for the next five years in a move to get closer to Eli Lilly and Co., one of its major clients. The office, which initially will employ 50 people, is a collaborative project of the two companies, Quintiles spokesman Phil Bridges told the Triangle Business Journal. “The goal of the collaboration has been to develop an integrated approach to optimizing how [human drug] trials are conducted, eliminate costly inefficiencies and use ‘big data’ to drive better drug development decisions,” Bridges said. The office could employ as many as 65 by the end of the year.

Here’s one way to win over skeptical locals in your hometown market: spend $1 million. Indianapolis-based hospital system Indiana University Health, which took that name last year after being called Clarian, will give $1 million to Purdue University to help build a facility that will, in part, house a satellite campus of the IU School of Medicine. IU Health was formed in 1996 by a partnership between the IU medical school and Indianapolis’ Methodist Hospital. IU Health operates one of its hospitals, IU Health Arnett, in the back yard of Purdue’s main campus in West Lafayette. When they made the name change, IU Health executives acknowledged it might present challenges in Lafayette, but they said market research showed the name still was preferred to the vanilla Clarian.

The recent sale of a California-based medical device company sent some money back to Indiana. MindFrame Inc. was acquired for $75 million by Massachusetts-based Covidien Inc. That produced an undisclosed return for Indianapolis-based CHV Capital, the venture capital arm of the Indiana University Health hospital system as well as SV Life Sciences, a Boston-based venture capital firm that has received funds from the $58 million INext Fund raised by Indianapolis-based life sciences development group BioCrossroads. MindFrame develops devices for minimally invasive removal of blood clots from stroke patients. In addition to the cash from Indiana, the company also received technical help from students at Rose-Hulman Institute of Technology in Terre Haute and some consulting advice from participants in the Indiana Clinical and Translational Sciences Institute. “Our relationship with CHV Capital and IU Health became an important element of creating value in the business and was a natural extension of our fund-of-fund relationship with BioCrossroads and INext,” said David Milne, managing director of SV Life Sciences.

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