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TheStreet Open House

Wide Field Looking to Trim Weight

Over the summer, Minneapolis-based Medtronic (MDT), the largest maker of medical devices for the heart, acquired a small company called Transneuronix for its Transcend stomach stimulator. The device is built to distend the stomach and convince the brain that it's full. The Transcend is currently in trials and could be on the market as early as the first half of next year.

Another big heart device company, St. Jude Medical (STJ), plans to buy Advanced Neuromodulation Systems (ANSI), whose offerings include an experimental device to treat obesity. The product uses electrical stimulation, but Advanced wouldn't comment on the device or the progress of its development. As of Wednesday, St. Jude already owned 89% of the company.

Even with the forays into the weight-loss field, Medtronic and St. Jude have mainly been focused on heart-failure devices, which obviously treat a condition that carries a more immediate risk of death.

"If you need a defibrillator, you need it today," says John Putnam of Stanford Financial Group. "It's not like obesity, where you need to lose some weight, but over a period of time."

Should the experimental gastric stimulators prove effective, Inamed's Lap-Band market would be an obvious target for both Medtronic and St. Jude, according to Jason Wittes of biotech research firm Leerink Swann. Implanting a gastric stimulator, similar to putting a pacemaker in a patient, would be less invasive than inserting the band, he says. Additionally, he says the stimulation products might even be used in a broader set of patients.

Not Just Skin Deep

While about one-third of the U.S. population is considered obese, about 5% of the population -- a small number of whom have the band implanted -- is morbidly obese, or more than 100 pounds overweight, according to the National Institutes of Health.

Inamed's gastric band itself could soon be the property of another firm, as both Medicis (MRX) and Allergan (AGN) are bidding for the company.

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