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Medical device maker Cytori loses approval fight

By David Ingram

WASHINGTON (Reuters) - An appeals court ruled on Friday that the Food and Drug Administration acted correctly when it denied fast-track approval of two stem cell-related medical devices made by Cytori Therapeutics Inc.

The FDA had reasonable evidence to find that the devices were not substantially equivalent to devices already on the market, according to the unanimous ruling from the U.S. Court of Appeals for the District of Columbia Circuit.

The FDA's decision meant that Cytori had to conduct extensive clinical research as part of premarket approval.

Tom Baker, Cytori's director of investor relations, said the court ruling does not change the status quo because the company has a clinical trial under way.

"That will continue to be our priority and primary path to market," Baker said in a phone interview on Friday.

The clinical trial started last year and the company plans to have initial data in the first half of 2014, he said.

Cytori is hoping to develop a treatment for heart failure in which regenerative stem cells from a patient's own fat tissue would be injected into heart muscle, all in one procedure.

The appeals court ruling relates to two medical devices designed to extract stem cells from fat tissue, the Celution 700 and the StemSource 900.

Cytori and the FDA disagreed over how similar the devices are to existing devices that extract stem cells from blood or bone marrow. Devices that are similar to already approved ones require less testing.

Judge Brett Kavanaugh wrote for a three-judge panel that the appeals court must be careful when questioning the scientific judgment of an agency such as the FDA.

"FDA concluded and explained that fat is not blood and that the difference matters. A court is ill-equipped to second-guess that kind of agency scientific judgment," Kavanaugh wrote.

An FDA spokeswoman declined to comment.

(Editing by Gerald E. McCormick and Kenneth Barry)

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