A premarket approval application for HealthTronics' OssaTron lithotripter for treatment of chronic heel pain due to planar fasciitis should be submitted to FDA by December.

While the Marietta, Georgia firm earlier had anticipated submitting the PMA this summer, the filing has been delayed pending feedback from the agency on clinical trial results, HealthTronics explained (¹ Also see "HealthTronics' OssaTron Lithotripter PMA Submission Will Focus On Heel Pain" - Medtech Insight, 22 February, 1999.).

Study expenses will be covered in part by the proceeds of an initial public offering completed Aug. 15.

The deal, which consisted of 1 mil. shares at $6 each, netted a total of approximately $5 mil.

While the firm initially will pursue approval for treatment of heel pain, HealthTronics also is studying the device for lateral epicondylitis (tennis elbow) and non-union fractures.

Trial enrollment has been completed for treatment of heel pain, and follow-up is ongoing. Enrollment for tennis elbow is about 50% complete. A feasibility trial for non-union fractures was recently concluded.

The OssaTron lithotripter uses shock waves to accelerate the healing process of bone, tendon and ligament injuries by inducing growth of new blood vessels in the injured area.

The system uses the same shock wave generator found in the firm's electrohydraulic LithoTron lithotripter, which received FDA approval in July 1997 for dissolution of kidney stones.

The orthopedic lithotripter primarily differs from its urological counterpart in that it has an articulating arm that incorporates a shock head, allowing variable positioning on the patient. In addition, the focal point of the shockwaves lands closer to the skin's surface rather than deep in the body, as is needed for treating kidney stones.

The OssaTron and LithoTron were developed by the privately held Swiss firm HMT High Medical Technologies. HealthTronics holds manufacturing rights and exclusive distribution rights to the OssaTron and LithoTron for the U.S., Canada and Mexico. HMT currently supplies the devices to HealthTronics, which has no plans to engage in manufacturing activities. The current manufacturing agreement with HMT expires in July 2002.

The LithoTron Ultra endourological workstation system, for which HealthTronics began taking orders on Aug. 30, incorporates the LithoTron lithotripter and x-ray technology developed by Philips Medical-Germany. HealthTronics holds exclusive North American distribution rights under an agreement with Philips.

HealthTronics' primary competitors in the lithotripsy market include Dornier Medical Systems, Siemens, Medstone International, Prime Medical Services and Storz Medical Systems. HealthTronics maintains that it is the only company currently undergoing U.S. clinical trials for orthopedic indications.

Founded in 1995 for the express purpose of obtaining FDA approval of HMT's products, HealthTronics employs 41 people and is headed by Chairman and CEO Argil Wheelock, and President Roy Brown.

The 1 mil. shares offered by the company in the IPO represent about 9.4% of the firm after the offering. Among HealthTronics' largest shareholders is HMT Group, which owns about 18.8% of the business. All officers and directors as a group own about 42.8%. Overall, the IPO added about 400 new shareholders, the company says.

In addition to the approximately $500,000 in proceeds to be set aside for FDA trials, portions have also been allotted for the purchase of capital equipment for lease, purchase of inventory and for working capital.

Capital Growth Management, Inc. acted as sales agent for the offering. The company has applied for listing of its shares on the Nasdaq exchange and will be notified of a decision within six weeks, according to the firm.

In unaudited financial results for the quarter ended June 30, HealthTronics reported revenues of $7 mil., up 62% from the same period last year. Earnings for the quarter were $800,000, an increase of 33%. As of April 15, HealthTronics had sold, leased or placed approximately 45 LithoTron systems in the U.S.

HealthTronics OssaTron Lithotripter PMA Submission Planned By Year-End

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