Existing surgical options to treat obesity and the metabolic syndrome and type 2 diabetes mellitus that accompanies it in up to one half of obese patients are either restrictive or bypass in nature.  These surgeries involve cutting into the bowel, rearranging the body’s alimentary plumbing or leaving behind a foreign body to force the patient to eat less or make food wind up in the toilet incompletely digested, with potential of creating nutritional cripples.

 

 

     The number of bariatric surgeries has plateaued at approximately 220,000 since 2008 while annual expenditures reached $1.4 billion in 2015 and the obese portion of the population increased, evidencing patient and physician dissatisfaction with the costs, risks and long-term consequences of the current surgical options.  The choices are summarized in the table below.

 

               

 

 

                Following funding infusions for product development to meet the growing unmet need, multiple technologies have recently attained U.S. F.D.A. P.M.A. approval or are on the cusp to do so, positioning the markets for significant growth.  These devices and procedures provide lower cost, less invasive solutions and involve different mechanisms of action.  They may be grouped into those which will be introduced as temporary diet training aides and those with potential of being a more permanent solution.

 

                Allergan PLC (NYSE: AGN) is a multi-specialty health care company focused on discovering, developing and commercializing innovative pharmaceuticals, biologics, medical devices and over-the-counter consumer products that enable people to live life to its greatest potential - to see more clearly, move more freely, express themselves more fully.  The company's LAP-BAND® adjustable gastric band was a proven, minimally invasive laparoscopic weight loss device with both US F.D.A. approval and broad-based insurance coverage.  Finding it a poor fit with flagging revenues due to patients not losing weight, regaining weight lost, or not liking draconian portion limits, Allergan opted to divest itself of the legacy device.

 

                Apollo Endosurgery, Inc., (private) a leading developer of medical devices and endoscopic surgical procedures, entered into a definitive agreement to purchase the obesity intervention division of Allergan.for up to $110 million. The total included an upfront cash payment of $75 million, minority equity interest of $15 million, and up to $20 million in additional contingent consideration to be paid upon achievement of certain regulatory and sales milestones.  The obesity intervention division is responsible for manufacturing and marketing of not just the LAP-BAND® adjustable gastric band system but also the ORBERA™ intra-gastric balloon system, one of the newer less invasive alternatives.      Apollo is currently marketing the ORBERA™ Managed Weight Loss Program that is comprised of the six-month Orbera intragastric balloon system, along with a 12-month professional support program. The ORBERA™ balloon is placed endoscopically and filled with saline to partially fill the stomach. The ORBERA™ balloon has CE Mark certification, is available for commercial sale in 40 countries outside the US, and is the market leading balloon. Apollo submitted a PMA application for ORBERA™ in April 2014 and the 80 patient safety trial is underway as part of a 326 patient PMA.

 

                Similar gastric space occupying products include ReShape Duo® by Reshape Medical (private) which submitted a 326 patient PMA on 7/1/14 and Satisphere™ by Endosphere (private) which  is proceeding with safety studies for its PMA. Nausea and vomiting experienced by some patients and the slim possibility of the 35% fatal Boerhaave’s syndrome (esophageal rupture from severe vomiting) may hinder acceptance.  Furthermore, the stomach is likely to dilate around the device countering its volume filling effect and leading patients to eat more to be satiated after removal, regain any lost weight, and possibly be worse off than before the procedure. 

 

                Temporary malabsorptive alternatives include intraluminal shunts such as Endobarrier™ by GI Dynamics (ASE: GID) and TIPS™ by BAROnova (private). Safety studies of the former for its PMA have been completed and safety studies for the latter are in process.  Since any internal shunt to cause food to bypass digestive enzymes will not peristalse like bowel, it will eventually occlude and need to be replaced or removed.  Furthermore, intestinal villi will inevitably hypertrophy to compensate and become more absorptive distal to those bypassed, not only leading to eventual weight regain but leaving the patient worse off than before the procedure.

 

                Other novel approaches include attempts to stimulate the Vagus Nerve (C.N. X) to induce satiety.  These include Abiliti™ by IntraPace (private) and VBLOC™ by EnteroMedics (NASDAQ: ETRM) which have 150 and 233 patient PMA efficacy studies underway respectively.  These electro-stimulation devices suffer not only from their high costs ($20,000 USD) and the necessity of nightly re-charging, but from the fact that they are also non-anatomic foreign bodies which can cause complications.  The brain’s neuroplasticity makes it likely that it will habituate to the neural stimulation over time, reducing the satiety inducing effect of vagal stimulation, again an undesirable long-term consequence potentially leaving the patient worse off than before the expensive intervention.

 

                In the past decade we have learned that it is the visceral or “belly” fat within the abdomen which is responsible for all the morbidies associated with obesity – sleep apnea and gastric reflux simply by bulk, and type 2 diabetes and hypertension, autoimmune diseases, and cancers by virtue of the cytokines or cellular hormones it secretes.  Omental fat, the apron of fatty tissue that hangs from the stomach, is one location for this fat.  Removing it in conjunction with a LAPBAND® procedure has produced an additive beneficial effect.  It has also added a beneficial effect with carried out in conjunction with roux-en-Y bypass procedures if they were less aggressive and omentectomy was performed more completely.  But, up until now it was not safe or efficient to remove the visceral fat in the mesentery of the small bowel that endocrinologists and gastroenterologists believe to be more metabolically active.  The thickness of this mesentery has been shown to be directly correlated to the intimal thickening of patient’s carotid arteries, providing a clear-cut indicator of the likelihood of vascular disease and stroke.  For the first time, removal of that mesenteric fat safely and efficiently is now possible, leading to a quest for a safer and more permanent  minimally invasive solution rather than just a temporary one.

 

               BioSculpture Technology, Inc. (private) has obtained three method and device patents for a minimally invasive procedure it terms Endoscopic Visceral Lipectomy (“EVL”) to assess which of that fat is most noxious, and remove it.  Unlike all other bariatric interventional alternatives, the results of EVL are expected to be permanent and not require cutting into the bowel or stomach, rearranging the body’s alimentary plumbing, leaving behind a foreign body, or have any danger of creating malabsorption syndromes and nutritional cripples.   The Company filed a Form 1-A for an IPO to fund commercialization of this disruptive treatment of obesity, metabolic syndrome and type 2 diabetes mellitus.  Although safety and efficacy studies are yet to be performed and regulatory approvals obtained, EVL has the potential of doing for obesity treatment what phacoemulsification did for cataract surgery and LASIK did for vision correction.  The Offering was qualified by the SEC on 9/1/16. 

EVL Medical Video

Source: www.ncbi.nih.gov, excerpted from a sector report by Canaccord Genuity dated October 21, 2014.

Current Bariatric Surgery Options

                Obesity has been universally recognized as a medical issue.  Obesity was officially classified as a disease by Centers for Medicare and Medicaid Services (CMS) in 2004 and the AMA in 2013, thus removing a major barrier to access to medical treatment for obese patients. In 2006, and again in 2012, CMS expanded coverage to include more types of devices and procedures, further improving patient access to care. While CMS pays for only 20% of bariatric procedures for obesity, it sets the bar for insurers to follow.

 

                Clinical data about obesity related co-morbidities heightens governmental interest in obesity. The U.S. regulatory environment for obesity companies is favorable with access to the Expedited Access Pathway.  The FDA enacted a benefit-risk paradigm for clinical trial design of obesity devices and is supportive of advancing new technologies to the commercial markets for obesity-related devices and procedures

Quest for New Options

EVL®

BioSculpture Technology

LAP-BAND®

Apollo EndoSurgery

ORBERA

Apollo EndoSurgery

DUO®

Reshape Medical

  TIPS

BAROnova

 Abiliti™

IntraPace