Visiomed awaits FDA clearance for Funhaler

Visiomed (ASX: VSG) is readying itself to commence marketing and distribution of its Funhaler device worldwide, although it is still awaiting US FDA clearance for the product.

The company recently filed its 510(k) application with the FDA, after clinical trials in the US showed that the asthma spacer performed as well or better than the leading predicate asthma spacer. Pre-market clearance is anticipated for January 2005, paving the way for the US launch of the product in the first half of 2005.

According to CEO Saliba Sassine, the company also plans to file for CE mark approval in Europe in the next six weeks.

And in Australia, where the device has already received its TGA listing, Visiomed has just announced the appointment of Advanced Healthcare Group subsidiary Cottman Australia as distributor.

Manufacturing of the device is expected to start at contract manufacturer ITL's FDA and CE-Mark compliant Malaysian facility in November, and distribution will be rolled out in Australia in December or January.

The Funhaler device is an asthma spacer, which is used to ensure that children receive the appropriate dose of asthma medication from an inhaler. Visiomed's innovation is the use of an incentive toy module -- a whistle and spinning disk -- to ensure that the child inhales the medication properly.

"When you test it on kids, you notice very quickly that they respond to the spinning disk and whistle," Sassine said.

"Clinical studies have shown that children are 60 per cent more likely to use the Funhaler correctly than other spacer devices, to get drug delivery to the lungs. And parents were 38 per cent more likely to encourage the use of the Funhaler than other devices."

The device is targeted at the 18 month to 8-year-old age group, where non-compliance with asthma medication regimes frequently leads to hospitalisation, and can be used with the major asthma inhalers including ventolin, flixotide and Intel Forte.

While Sassine would not be drawn on sales forecasts, he said that sales of 300,000 units annually would equate to approximately $2 million net profit. In Western countries, asthma affects one in four children and is the biggest single cause of hospitalisation of children.

Initial target markets for the device include the US, Canada, UK, Germany, France, Italy, Spain, Japan and Sweden in addition to Australia. After the initial launch, the company also plans to expand into other European markets, New Zealand, Singapore and Malaysia.

The company has also recently restructured, following the sale of the skin cancer applications of its MicroDERM diagnostic imaging platform and German subsidiary Visomed AG to its German partner ZN GmbH for a consideration of up to AUD$2 million.

The restructuring will have immediate effects on the company's bottom line, Sassine said, including reduction in costs by AUD$1 million, removal of a $1.2 million debt and a reduction in capital by 14 per cent. Visiomed may also earn up to $500,000 in royalties from future sales of the product.

But the company has retained its worldwide rights for other applications of the imaging technology, and is currently evaluating target applications. Further product development is expected to take place in Australia.

"Skin cancer diagnostic imaging has been a hard market for everyone," said Sassine. He said that take-up of this application of the technology was likely to take some years.

"The application of expert imaging systems is still very worthwhile -- it just has to address unmet medical needs."