Downsizing innovations: Devicemakers developing new surgical options for obesity

For years, Mike Magnant of Carver, Mass., struggled with his weight. He tried dieting many times, but after losing 25 pounds, he'd quickly gain it back. At 5 feet 6 inches tall, he weighed 291 pounds.

He had considered gastric bypass surgery, which reduces the amount of food a person can eat. But he resisted the idea because a friend had suffered debilitating side effects from the procedure. Then he heard on the radio about a clinical trial of a new device that is implanted near the stomach and sends signals to the brain that the person is not hungry. So he called to find out if he could enroll.

“I was tired, I was winded, I couldn't do any exercise or strenuous work, and my blood pressure was high,” he said. Then in his late 50s, he decided he had to try something different.

In December 2011, Magnant enrolled in a clinical trial at Tufts University in which he received a pacemaker-like device implanted subcutaneously just above the junction between the esophagus and stomach. The device, called the Maestro System and marketed by St. Paul, Minn.-based EnteroMedics, is designed to help obese patients with a body mass index of at least 40 by intermittently blocking the primary nerve that regulates the digestive system, reducing feelings of hunger. The device can be non-invasively programmed, and it can be adjusted, deactivated, reactivated or removed if desired.

Following the implant, Magnant lost 50 pounds on top of the 20 he had shed before the operation, and he's since maintained a weight of about 221 pounds.

In January, the Food and Drug Administration approved the Maestro System implant. It's the first new type of medical device approved by the FDA to treat obesity in more than a decade. Its approval in January is drawing interest from investors, physicians and patients who have seen little innovation in the obesity treatment market, which has the potential to reach 20 million obese Americans who are candidates for surgical interventions. The approval likely will mean more companies will try to bring new types of obesity devices to market, experts say.

“It's a very hot area,” said Charlie Whelan, a director of the healthcare and life sciences consulting practice at Frost & Sullivan.

But there are lingering questions about the willingness of insurers and employers to cover these procedures as well as a clinical debate about the appropriateness and safety of using surgery rather than diet and exercise for patients at the lower end of the obesity range.

The same day that EnteroMedics announced its FDA approval, San Diego-based Obalon Therapeutics said it had closed $20 million in Series D financing and received a $10 million loan to fund a clinical trial to be completed this year in the U.S. for a weight-loss balloon. The balloon is swallowed in a capsule and then expanded with gas using a microcatheter. It takes up space in the stomach, limiting how much a patient can eat. The procedure doesn't require hospitalization or anesthesia and is reversible.

The company plans to file for premarket approval with the FDA this year, said CEO Andy Rasdal. “There's great interest in obesity because of the size of the market,” he said. He indicated that his device would be geared toward patients who are on the lower end of the obesity range. “We're working to offer a solution that is somewhere between diet and exercise and surgery,” Rasdal said.

At least three companies are developing minimally invasive, reversible devices for weight loss.

Developers of these products believe there are millions of Americans who would be interested in new medical and surgical treatments to lose weight and improve their health. But patient interest has been limited because doctors and patients are aware that most of the available surgeries and therapies come with high price tags, side effects and medical risks.

Bariatric surgeries such as gastric bypass and sleeve gastrectomy—in which the stomach is greatly reduced in size through surgery—are not reversible and have significant health risks. Another type of bariatric surgery, called gastric banding, is reversible, but studies have found that gastric banding is not as effective as other forms of bariatric surgery in helping patients maintain weight loss.

What has made the need for innovation more pressing is that the drug industry has largely failed to bring a successful weight-loss drug to market. “The only thing left was these very anatomically altering surgeries that very few people undergo,” said Mark Knudson, CEO of EnteroMedics.

Each year, about 200,000 Americans undergo bariatric surgery. Many commercial health plans, as well as Medicare, cover certain bariatric procedures for indicated patients; these procedures can cost between $10,000 and $30,000. The procedure to implant the Maestro System is expected to cost about $15,000. It is not yet covered by any commercial insurers.

The FDA had last approved a device to treat obesity in 2007, but that was simply a new version of an older device. It was the Realize gastric band marketed by Johnson & Johnson's Ethicon Endo-Surgery business unit. The first gastric banding system, the Lap-Band, received FDA approval in 2001.

“For quite a period of time, the FDA didn't approve anything in this space,” Knudson said. “It has had a negative effect on investors' interest.”

Obalon's Rasdal said no companies have successfully marketed devices that treat obesity. In 2013, Irvine, Calif.-based Allergan sold its obesity intervention business, which includes the Lap-Band, to Apollo Endosurgery for $110 million because of declining sales. Annual sales in that business fell to $159.5 million in 2012 from $243.3 million in 2010.

Besides Obalon, other companies developing gastric balloon devices are San Clemente, Calif.-based ReShape Medical and Austin, Texas-based Apollo Endosurgery. Apollo's device was first developed at Allergan. But that company never sought FDA approval for the technology, although it is approved outside the U.S.

About 400 patients in the U.S. have received the Maestro implant. The device is indicated for patients who have a BMI of 40 or over, though it's also indicated for patients with a BMI as low as 35 if they have a related condition such as high blood pressure or high cholesterol.

Recent FDA policy has encouraged developers to enter the obesity treatment field. In 2012, the agency proposed a regulatory risk-benefit framework that would take into account the differences between devices that allow for greater weight loss compared with products that aim to deliver lower weight loss. “We are proposing a new paradigm to assess benefit-risk for devices intended to treat obesity,” FDA officials wrote in the December 2012 issue of Surgical Endoscopy. “In doing so, we are moving away from our 'one-size-fits-all' approach to clinical trial outcomes for these devices.”

This has whetted the appetite of device developers because it expanded the size of the potential market and potentially lowered the regulatory hurdles.

As less invasive and potentially safer treatments become available for obesity treatment, experts say more patients may be willing to undergo the procedures. And the range of physicians offering these procedures may expand. “Weight loss and obesity management are becoming more and more multidisciplinary,” Frost & Sullivan's Whelan said.

Even as new devices are being developed to treat obesity, there are new efforts to study the available surgical treatments such as sleeve gastrectomy and gastric banding. Last month, the Patient-Centered Outcomes Research Institute, a not-for-profit established and funded by the Affordable Care Act to conduct comparative-effectiveness research, announced plans to spend up to $9 million to fund two obesity-related studies. One will be an observational study comparing sleeve gastrectomy and gastric banding using a clinical research network composed of 25 million patients.

Dr. Joe Selby, PCORI's executive director, said that while studies have found that gastric bypass patients are more likely than gastric banding patients to maintain weight loss and see improvements and remission of Type 2 diabetes, there is uncertainty about the effectiveness of sleeve procedures.

Patients and their doctors need better data on effectiveness and safety because these patients often are desperate. They “have tried everything else,” Selby said. “They are willing to do everything.”

Magnant, now 63, said that since he received the Maestro implant in 2011 and lost 50 pounds, he's been able to walk 3 miles a day because he feels more energetic.

“I was able to eat whatever I wanted to eat, I was able to do whatever I wanted to do, and I had absolutely no side effects,” he said in a video posted on EnteroMedics' website. “I've lost the weight and the weight has stayed off.”

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