FDA Won’t Extend Its Gallstone Device OK

Medstone International Inc. said the U.S. Food and Drug Administration has refused to extend its approval of a device for breaking up gallstones.

The Aliso Viejo company said it is “deeply disappointed” by the decision, which came despite an advisory panel’s recommendation that the device be cleared for use in a limited number of patients. The device treats kidney stones with high-energy impulses.

It is unusual for the FDA to overrule one of its advisory panels, said David Radlinski, chairman and chief executive officer at Medstone.

Medstone’s shares fell to $6, a 52-week low, before closing at $7.63, down 88 cents for the day.

Officials at Medstone were not immediately available for additional comment. The company did not provide information about why the FDA rejected the application.

To win the panel’s recommendation in April, the company had to overcome criticism from some of the FDA’s expert reviewers. FDA statisticians questioned the accuracy of company data intended to show that the device’s shock waves could break up gallstones and make them easier to dissolve with drugs. Several panel members said the company had not shown that the device reduced pain or other symptoms.

Still, the panel voted 7-1 to recommend approval for the new use of the device along with a gallstone-dissolving drug in a limited group of patients, if the company provided additional data.

The FDA decision is yet another setback for Medstone, which tried unsuccessfully in 1989 to win panel backing and FDA approval to market the device, called a lithotripter, as a stand-alone treatment for gallstones.

At the time, Medstone shares lost more than half their value and the company ultimately settled insider-trading and false-information suits filed by shareholders for about $5.5 million. The FDA repeatedly denied Medstone’s attempts to refile an application until January, company representatives told the panel in April.

Approval to treat gallstones could have doubled the number of patients that doctors could treat with the company’s device, analysts said. Because Medstone offers doctors pay-per-procedure use of the mobile devices it maintains, it could have expected increased revenue shortly after an approval, analysts said.

An estimated 20 million Americans have gallstones, according to Medstone, and about 1.2 million have the kind that could be treated with the device.

Medstone is one of several companies making devices that use pulses of energy similar to sound waves to break apart kidney stones. Other manufacturers, including German technology giants Siemens AG and Dornier Gmbh, hold most of the market, analysts said.

About 180,000 kidney stone procedures are performed each year using the shock wave devices.