Breakthrough developments by MedTech (Medical Device) companies present investment opportunities for those who understand which events to monitor. Filing a Premarket Approval ((PMA)) application is a major milestone for any MedTech company, much like the filing of a New Drug Application ((NDA)) for a drug company.

The FDA requires PMA pathway clearance for devices designated as Class 3, which ‘support or sustain human life’ or are of ‘substantial importance in preventing impairment of human health.’ Class 3 devices are therefore generally higher value than Class 1/2 devices, which are used in less critical situations, or are essentially replicas of other approved devices, and undergo the less intensive 510(k) approval pathway.

Before diving into the valuation process, here is a quick recap of recent Provenge history, and what to expect in the near future.

Provenge, developed by Dendreon Corporation (DNDN), is an active cellular immunotherapy (i.e. vaccine) for treatment of metastatic, androgen independent prostate cancer ((AIPC)). On 11/13/2006, Dendreon filed the final portion of its Provenge Biologics License Application ((BLA)) with the FDA. The primary basis for the BLA was Phase III study DEN-9901, which showed median survival of 25.9 months vs. 21.4 months for placebo, and a 41% risk of death reduction. Shortly thereafter, on 1/16/2007, the FDA granted Priority Review for Provenge, which allowed for an accelerated review process reserved for therapies that address unmet medical needs. In late March 2007, an FDA Advisory Committee voted 17-0 supporting Provenge’s safety profile and 13-4 backing its efficacy. Then, in May 2007, Dendreon received an FDA Approvable Letter.

While debates will continue as to the motives for and future effects of the healthcare IT initiatives in the American Recovery and Reinvestment Act of 2009 stimulus bill signed by President Obama in February, the essential cannot be denied: the widespread transition to Electronic Health Records (EHRs) is imminent.

Wal-Mart’s (WMT) Sam’s Club and eClinicalWorks’ recently announced partnership to provide EHR systems to independent physician practices is a sign that the EHR revolution is quickly gaining momentum. Perhaps just as important as the financial incentives the government is offering to providers who make the switch prior to 2015 are the penalties that will begin to accrue for physicians who have not made the full transition by 2015. GroupOne healthsource sums it up well in its recent post The Stimulus Bill, the EHR, and the Physician - Frequently Asked Questions:

The recent lifting of the ban on federal funding of embryonic stem cell research has spurred many to ask, “Who stands to benefit?” In the process of attempting to answer this question, I came across several companies—some low profile—pursuing fascinating, and in some cases promising, embryonic stem cell projects:

Advanced Cell Technology (ACTC.PK) [MC: 8M] harnesses a technique for generating hES cells from an 8-cell embryo without impacting the embryo’s development potential. Advanced Cell’s hES program is currently in preclinical stages. Other programs include a myoblast (adult stem cell) program which is expected to begin a phase 2 heart failure trial shortly. The firm is also engaged in preclinical research to generate cell therapies for treatment of eye diseases, including age-related macular degeneration ((AMD)).