Abbott balloon device partner Surmodics cuts jobs after FDA approval delay

Dive Brief:

Surmodics, which is working with Abbott to develop a drug-coated balloon to treat peripheral arterial disease in the legs, said it will lay off 13% of its workforce, or about 60 employees, following a regulatory setback.
The downsizing comes after the Food and Drug Administration last month asked Surmodics for additional data as it considers whether to approve the device, delaying a $24 million milestone payment from Abbott
Surmodics would challenge Medtronic’s IN.PACT Admiral balloon with a device that is coated with a lower dose of paclitaxel, a drug that has raised safety concerns.

Dive Insight:

Surmodics’ restructuring is one of the latest in a string of workforce reductions by medical device makers in recent weeks, including the elimination of 6,000 jobs in a second round of layoffs at recall-plagued Philips.

The Eden Prairie, Minn.-based company, which makes device coatings and chemical components for in-vitro diagnostic tests, said it reduced positions that support manufacturing of the SurVeil balloon. Research and development, clinical and sales operations also had cuts in staff.

The delay in the premarket approval (PMA) process for Surmodics’ SurVeil balloon holds up a $24 million milestone payment from Abbott that hinges on the device receiving approval from the FDA. If the balloon fails to gain the agency’s nod by year end, the payment also will depend on whether Abbott moves forward with commercialization, Surmodics CEO Gary Maharaj said on an earnings call this week.

Surmodics teamed with Abbott in 2018 to develop a balloon treatment for PAD with a new drug-delivery technology. In addition to Medtronic, Boston Scientific, Becton Dickinson and Cook Medical sell versions of the devices, which widen blocked arteries in the legs to restore blood flow and deliver medication to prevent re-clogging.

Balloons coated with paclitaxel came under increased FDA scrutiny after a 2018 study signaled a higher mortality risk in patients two years after treatment. The agency worked with manufacturers to update device labels to reflect the risk and continues to analyze long-term safety data.

Surmodics said its balloon showed similar outcomes to IN.PACT Admiral through two years in a head-to-head study, despite the Medtronic device having 75% more paclitaxel.

In its “not approvable” letter to Surmodics on the PMA application, the FDA asked for label revisions and for data to address questions about biocompatibility. The company said it views the labeling questions as routine, but that the biocompatibility request will require further testing analysis.