Surmodics’ SurVeil drug-coated balloon (DCB) system, which helps treat peripheral artery disease, has been on the market in Europe and countries outside the European Union that recognize the CE mark since 2020, but it failed a second time to get the green light from FDA this month.

Surmodics first submitted the device to FDA for premarket approval (PMA) following a clinical trial in 2021. At that time, the agency requested additional clinical data before coming to a decision. Surmodics provided that information, but this time the agency deferred approval, requesting to see more information about the biocompatibility of the device and its labelling. The silver lining, such as it is, is that “the agency did not question the human clinical data submitted nor did it ask for additional clinical data,” reported sister media outlet MD+DI.

There's a lot at stake for Surmodics. If FDA eventually approves the SurVeil device, it will trigger a $27 million payment ($25 million recognized as revenue) from Abbott, the company's commercial partner, writes MD+DI.

Surmodics CEO Gary Maharaj expressed disappointment in FDA’s response, noting that the company continues to have “confidence in our SurVeil DCB including its compelling performance in the TRANSCEND clinical study.” As he and his team of advisors determine the “appropriate path forward,” an immediate concern involves investigating “options to reduce our use of cash given this development.” When the news was announced on Jan. 19, the company’s shares fell by more than 28%.

The drop in share price has led one law firm to begin an investigation into possible securities fraud that could result in a class action on behalf of investors. In a press release distributed on Jan. 24, Los Angeles–based Portnoy Law Firm said it “is looking into whether Surmodics . . . made false and/or misleading statements and/or failed to disclose important information to its investors.” The firm is encouraging investors to come forward and discuss their legal rights and potentially join the case.

Described as a “next-generation device for the treatment of peripheral artery disease,” the SurVeil DCB includes a proprietary drug-excipient formulation that improves coating uniformity. The innovation reportedly requires a lower dosage of the Paclitaxel drug than other devices while achieving similar outcomes.

A meta-analysis of randomized clinical trials published in 2019 concluded that higher mortality rates may be associated with Paclitaxel-coated balloons and drug-eluting stents. An FDA panel concluded, however, that the specific cause of the increased risk of death was unknown, and that the considerable benefits of Paclitaxel-coated devices must also be taken into account.