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October 29, 2014

New downtown Rochester fitness studio warming up for opening

A new fitness studio is gearing up to open in downtown Rochester before the holiday feasting begins.

Sarah Pacchetti's Studio on Third is all set to open on Monday at 18 Third Ave. S.W. in the basement of the Merchant Exchange Building.  The 1,000-square-foot fitness center is tucked in next to The Doggery cocktail bar.

10282014studioonthirdThe studio offers hip hop, Barre, Piloxing, Zumba and yoga classes for Rochester folks as well as visitors staying in downtown hotels.

"I've been playing with this idea for years. I wanted to open a place that would be fun and empower others," she said in July, when she announced her plans for the studio.

Pacchetti is a certified instructor previously taught classes at Mayo Clinic's Dan Abraham Healthy Living Center. She has a team of nine instructors or as she calls them "inspire-ers." That team includes a couple of names that are familiar to the Rochester business community, Jess Irhke and Sara Pennington.

Sarah, with her husband John Pacchetti, bought half ownership of the basement level of the Merchants Exchange Building in June. The Pacchettis co-own the space with Scott Hoss, who also handles the leasing as an agent of Rochester's Paramark Real Estate Services.

The Pacchettis also own the Rochester-based Home Instead senior care operation that serves southeastern Minnesota.

October 16, 2014

Accused doctor 'disappointed' by Mayo Clinic lawsuit

A former executive accused of allegedly stealing trade secrets says he's "disappointed" in Mayo Clinic's lawsuit against him, in a statement released by his attorney.

Franklin-cockerillOn Tuesday, Mayo Clinic filed a lawsuit (The complaint is posted here) alleging misappropriation of trade secrets and breach of contract against Dr. Franklin R. Cockerill III, who was president and CEO of the for-profit Mayo Medical Labs for eight years. Mayo Clinic released the lawsuit to the media of Wednesday.

"Dr. Cockerill is disappointed that the Mayo Clinic has made such allegations and publicized its unproven claims in the media," according to a statement released by Nancy Brostrom Vollertsen, a Minneapolis attorney with Lindquist & Vennum LLP, on Wednesday. "Dr. Cockerill holds a stellar reputation in the medical community and has devoted more than 30 years of his life to the Mayo Clinic and the Rochester Community."

The message from Vollertsen also stated that, "We will be filing responsive pleadings in this matter shortly."

The lawsuit alleges that Cockerill covertly accepted a job with a major competitor of Mayo Medical Labs in June, but he told Mayo Clinic that he was "retiring" at the end of September to help his 85-year-old mother run her fertilizer business in Nebraska.  From June to September, he continued to work at Mayo Medical Labs, attending confidential meetings and negotiating contracts.

On Oct. 1, he stepped into the position of vice president and chief laboratory officer with New Jersey-based Quest Diagnostics Inc., a multibillion-dollar public company. The complaint filed by Mayo Clinic claims that Cockerill was in communication with Quest throughout his final months and he left with clinic-owned memory sticks with data downloaded from his workstation.

“By failing to disclose his conflict-of-interest, Dr. Cockerill’s actions were in violation of Mayo Clinic conflict-of-interest/compliance policies that all staff members agree to on an annual basis, and have put at risk the business strategy of Mayo Medical Laboratories," said a statement released by Mayo Clinic spokesman Bryan Anderson.

Vollertsen, a former partner with the Dunlap & Seeger law firm in Rochester, responded that there as nothing sinister about Cockerill's departure.

"He opted for early retirement at the Mayo Clinic's invitation and is not subject to any non-compete or other agreement that would limit his activities after leaving Mayo," she stated.

Cockerill was a high-profile leader at Mayo Clinic during his about 30 year career here. He was the chief of Mayo Medical Labs as well as the chairman of Mayo's Laboratory Medicine and Pathology department since 2006.

He managed more than 3,200 employees in that role, according to Quest. Mayo Medical Labs performs about 20 million tests for more than 4,000 hospitals annually.

Mayo Clinic paid him a total of $591,413 in 2012, according to the clinic's 990 form filed with the Internal Revenue Service.

In August, Cockerill officiated the ceremonial ground-breaking of an almost 70,000-square-foot expansion of its Superior Drive Support Center, where Mayo Medical Labs is based.

"His character and high level of integrity speak for themselves," stated Vollertsen.

October 15, 2014

Ex-Mayo exec accused of stealing trade secrets

A former top Mayo Clinic executive is being sued for allegedly hiding his hiring by a competitor of Mayo Medical Laboratories for months while he continued to work for Mayo and for stealing trade secrets.

Franklin-cockerillMayo Clinic filed a lawsuit alleging misappropriation of trade secrets and breach of contract against Dr. Franklin R. Cockerill III, who was president and chief executive officer of the for-profit Mayo Medical Labs for eight years. The case was filed Tuesday in Olmsted County District Court. Mayo Clinic released the lawsuit to the media this morning.
 
A Mayo Clinic statement released by Bryan Anderson this morning said, “We do not take this action lightly. Dr. Cockerill was a valued Mayo Clinic clinician, leader and colleague.  We will vigorously defend and protect our intellectual property to ensure we can continue to meet our charitable mission,"

A call to Dr. Cockerill's southwest Rochester residence went unanswered this morning. Asked to comment, Quest Director of Media Relations Wendy Bost said the company received the complaint this morning and is reviewing it. "We do not comment on pending litigation," Bost said.

According to the complaint:

On July 17, an emotional Cockerill told his department that he was "retiring" to help his 85-year-old mother run her fertilizer business in Nebraska. Co-workers lauded his almost 30-year career with Mayo Clinic and gave him an appreciative send-off that built up to his final day of work on Sept. 30.

All of that changed on Oct. 1. Instead of retiring to Nebraska, Cockerill went to New Jersey to work for a major MML competitor, Quest Diagnostics Inc. He stepped into the position of vice president and chief laboratory officer for the multibillion public company.

Using emails as evidence, Mayo Clinic contends Cockerill had been talking to Quest about a job since February. He had a phone interview with Quest in March followed by a face-to-face interview in May, when Cockerill said he needed the time off to help his mother with a business problem. The lawsuit alleges he accepted the Quest position in June. Instead of informing Mayo Clinic, he continued to work at Mayo and attend confidential meetings, where issues were discussed that could cause irreparable damage to MML and Mayo Clinic in the hands of Quest.

Cockerill exchanged emails discussing business strategies with Quest CEO Stephen Rusckowski in August, according to Mayo's suit.

Mayo Clinic alleges Cockerill left with at least seven clinic-owned USB memory drives and that he used four of them to "download information from Dr. Cockerill's computer in the days before … (he) started working for Quest."

Mayo Medical Labs and Quest vie for millions in medical test contracts. Mayo Medical Labs performs about 20 million tests for more than 4,000 hospitals annually. Quest says it does 1.5 billion tests a year. Many of the clinical tests conducted by both MML and Quest are proprietary and generate millions in revenue.

The lawsuit also claims Cockerill attempted to recruit "at least one long-term key Mayo employee to consider retiring early to 'consult' with the lab industry," though he did not specifically mention Quest to the female executive.

October 13, 2014

New biotech office launches in Rochester

This one seems to have a lot of local momentum behind it.

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The health care technology arm of a Sri Lanka-based company is officially launching its Rochester office on Tuesday morning.

Brandix i310132014brandixoffice is hosting a grand opening in the morning of its 2,000-square-foot office on the skyway level of Minnesota BioBusiness Center at 221 First Ave. S.W.

The software development firm has been working out of a spot in the Mayo Clinic Business Accelerator, since early summer. The business accelerator is located on the same floor of the Biobusiness Center as Brandix's new office.

Aaron Epps, Brandix's associate vice president of health care, said earlier this year that office would launch with six employees, though he expects it to grow to 12 by the end of the year

"We want to be part of the Destination Medical Center project," he said. "We're looking to expand quickly. We're a start-up, but we're a start-up with the backing of a large 10132014brandixskywaysigncompany."

Brandix's focus is to work with its local partner, Rochester-based Ambient Clinical Analytics. Ambient makes "real-time decision support tools" for doctors and nurses working in the ICU, operating room or emergency departments.

Mayo Clinic launched Ambient in 2013, and it named Al Berning as CEO. Berning is known in Rochester as a former IBMer, a co-founder of Pemstar and former CEO of Hardcore Computers/LiquidCool Solutions. Ambient's management team includes other local business leaders, like former long-time IBM executives Drew Flaada and Deb Sutherland.

Brandix has a three-year lease with the City of Rochester. It pays $20 per rentable foot
is In addition to the leasing the 2,000-square-feet, Brandix's lease promises "first right of refusal" for the other 2,000 square feet of adjacent vacant space to the west.

The city gave Brandix "a one-time fit-up allowance" of $10 per square foot, or $20,000, to build out its offices.

Mayo, Cardio3 sign deal to expand collaboration

Mayo Clinic has deepened its long-time relationship with Cardio3 Biosciences by giving the Belgium firm "preferred access" to new regenerative-medicine discoveries.

Having preferred access means staff from Mayo Clinic Center for Regenerative Medicine meet with Cardio3 on a quarterly basis to discuss technologies and research that are in the "pipeline," according to Michael Pfenning, center administrator. This gives Cardio3 the first chance to ask to license, purchase or otherwise work with the center's regenerative-medicine research.

008661829The access began on Oct. 1 and runs to December 2017. It then could be extended, if both parties agree.

Mayo Clinic and Cardio3 have collaborated for many years on the cardiopoiesis technology the company uses to repair patients' hearts by re-programming their own stem cell to regenerate cardiac tissue. Cardiopoiesis is a process that "re-programs" stem cells taken from a patient's bone marrow from their hip. Those re-programmed cells then are injected back into the patient's heart to repair damaged tissue.

Cardio3 BioSciences has licensed Mayo Clinic's research in this area, since 2007. That research was led by Mayo Clinic's Dr. Andre Terzic and Dr. Atta Behfar. Dr. Terzic, who along with Mayo Clinic has a financial interest in Cardio3, also is the director of Mayo Clinic's Center for Regenerative Medicine.

Mayo Clinic is helping Cardio3 with its new phase III clinical trial of its regenerative therapy. The trial is approved to recruit up to 240 patients and it is expected to begin in January. Rochester Area Economic Development Inc., the City of Rochester and Mayo Clinic are establishing a 2,000-square-foot facility in the Minnesota Biobusiness Center to freeze and prepare patient samples for shipping to Belgium.

"We have a great relationship with them from a commercialization perspective," said Timothy Argo, a technology licensing manager of Mayo Clinic Ventures. "From our perspective, this is all about finding ways to get things from our labs to patients faster."

Cardio3 sees the new relationship as a win-win.

“Mayo will continue to invent new concepts, while Cardio3 will offer its development expertise to those technologies, as well as guidance in the early development phases to the Mayo research teams," stated Cardio3 CEO Dr. Christian Homsy in the announcement of the deal. "This agreement is in line with our business development strategy defined earlier this year, and enables our company to rapidly and significantly enlarge its product portfolio with high quality research programs across multiple therapeutic areas.”

October 08, 2014

Mayo Clinic books sold to publisher in bankruptcy auction

A New York publisher now owns the rights to nine Mayo Clinic books, including the popular Mayo Clinic Diet book, after buying them and other assets for $1.57 million at a bankruptcy auction.

Skyhorse Publishing and The Perseus Books Group submitted the top bid to buy the assets of Good Books last week. Good Books, which had published the Mayo Clinic Diet book since 2010, filed for Chapter 7 bankruptcy in December 2013.

Mayo-clinic-diet“The logistics of this deal were very challenging, and there were many twists and turns, but we found a way to bring the various groups together to make this work for all parties,” stated Skyhorse’s president and publisher Tony Lyons in the announcement of acquisition.

Some industry media reported that Mayo Clinic balked the deal at first. However, it moved ahead when Perseus agreed to pay Mayo Clinic $317,263 to cover past royalties that Good Books had not paid.

"We had a successful relationship with Good Books, as evidenced by the diet book hitting No. 1 on the New York Times bestseller list, and the steady growth of the Mayo Clinic Guide to a Healthy Pregnancy," said Mayo Clinic Spokesman Brian Kilen. "We are pleased to be expanding our relationship with Perseus, who is a major publisher with whom we expect to continue the tradition of publishing Mayo Clinic books that provide evidence-based health information to consumers."

The other Mayo Clinic titles that were part of the deal are, Mayo Clinic Diet Journal, The Mayo Clinic Diabetes Diet, Mayo Clinic Guide to a Healthy Pregnancy, Mayo Clinic Guide to Your Baby's First Year, The Mayo Clinic Breast Cancer Book,The Mayo Clinic Kids' Cookbook and the soon-to-be-published Mayo Clinic Guide to Fertility and Conception.

Perseus will publish the Mayo titles under its Da Capo Lifelong line of books, which already includes The Mayo Clinic Guide to Stress-Free Living and the upcoming Mayo Clinic Handbook for Happiness.

Mayo Clinic says the nine books in this deal represent about about one-third of its line of books. It also publishes titles like Mayo Clinic Book of Alternative Medicine with Time Home Entertainment as well as self-publishing disease- and condition-specific books on topics such as arthritis, diabetes and breast cancer.

Mayo Clinic declined to discuss how much revenue its books generate for the institution annually.

October 07, 2014

OMC expanding its administration offices on Third Avenue

Olmsted Medical Center is expanding its footprint in a Third Avenue office building to house much of its administration staff.

Since 2013, OMC has been leasing 4,200 square feet of office space in the SEH-Yaggy building at 717 Third Ave. S.E., which is near its Southeast Clinic. About 20 senior administrators are based there, said Jeremy Salucka, OMC's communications coordinator.

SEH YaggyNow OMC has launched a construction project to expand its presence within that complex to about 15,000 square feet of office space.

"We're more than tripling the space we have there," said Salucka.

The plan is to eventually move administration staffers currently working in other leased offices into the Third Avenue building to consolidate many of OMC's non-clinical departments, he said. It will  also create much needed conference room space.

"This will help us reduce overhead and bring teams together under one roof," he said.

The exact number of workers that will join the 20 already in the building has not been determined yet. It could possibly double up to 40 people, according to rough ballpark estimate by Salucka.

The project is expected to be completed sometime in January.

CRW Architecture-Design Group moved its team of 10 people out of the building at the end of September. The firm had been based in there, since it spun off from what was previously known as Yaggy-Colby Associates in 2010.

CRW has a new office building plus four apartments under construction at 11th Avenue and Second St. N.W. It is hoped to be completed yet this fall.

August 12, 2014

Sale results in a double shot of juice for downtown Rochester

The result of a recent deal is a double shot of fresh juice plus new food offerings in downtown Rochester.

On Aug. 6, Ann Chafoulias sold her Essential Juice in the First Avenue Food Court to David Hewitt. He also owns Mama Meg's Parlour and co-owns Johnny Mango's Pita Cafe in the same food court.

12082014juicetonictooChafoulias originally opened Essential in December with the goal of introducing downtown to healthy, fresh cold-pressed juice. She says the new business quickly earned many loyal regular customers and it was building a strong foundation. She developed a staff of about five employees.

"It's a beautiful product," she said. "It's the perfect spot for it. I believe in Rochester and in downtown."

Then during the last brutal winter, Chafoulias was offered a very appealing opportunity in Phoenix, Ariz., where she had attended college.

That drove her to find a buyer for Essential with the hope that the new owner would continue what she had built. Hewitt bit on the juicy offer and he brought in Nikki Sylvester, who opened a cold-pressed juice bar and organic food eatery called Tonic in southwest Rochester last fall.

On Monday, Hewitt and Sylvester unveiled a "co-branded" place under the name of Essential Cold-press Juices and Tonic Too.

In addition to Essential's bottles of freshly pressed juice, the new blended business now also serves luncheon options from Tonic's menu and smoothies.

Look for the Tonic/Essential mix to be serving at the popular Thursdays on First and Third street market from Sylvester's distinctive orange-shaped cart. Mama Meg's and Johnny Mango's Pita Cafe also are food vendors at the weekly events.

For her part, Chafoulias is glad that her juice business is still adding a fresh flavor to downtown.

"I'm excited to see what happens next," she said.

August 04, 2014

CrossFit Credence on move to larger space

A Rochester fitness studio has outgrown its current spot, so it's on the move to a larger space.

CrossFit Credence, owned by Dave and Alison Timm, has bulked up to almost 300 members in the three years the boot camp-style workout center has been open. That means its original location at 101 16th St. N.E. is not as roomy as it once was.

04082014crossfitcredence"We're just about out of space," said Dave Timm.

To fix that, the Timms have lined up 9,000 square feet of space in two buildings at 3020 N. Broadway. That's the former home of RSC Equipment Rental on the corner of North Broadway and East Circle Drive.

If everything goes according to plan, CrossFit Credence should make the mile and a half move to the new space by the end of August or in early September.

When the Timms and their team of 10 instructors make the shift, the gym will freshen up its offerings by adding a shower/locker room and new equipment.

Dave Timm believes Rochester's focus on family and faith are strong reasons why CrossFit has become so popular here. Four CrossFit gyms — Crendence, Unshackled, Progression and Epitome — are very active in the Med City.

"This community is pretty family-based and faith-based. I think that helps people to get to the gym and get results," he said.

July 01, 2014

Mayo Clinic-linked Cardio3 making push into China

Cardio3 BioSciences, a Belgium company working closely with Mayo Clinic, recently launched a joint venture in China, the third largest pharmaceutical market in the world.

Cardiobioscience_jpegWorking with Hong Kong-based Medisun International Limited, it created Cardio3 BioSciences Asia Holdings Ltd. to make a serious push into China. As part of the deal, Medisun purchased $34 million in stock. It now owns 8 percent of the company's outstanding shares.

Cardio3 is publicly listed on the European stock markets NYSE Euronext Brussels and NYSE Euronext Paris, though it is not traded publicly in the U.S. Get_photo

The company says that $34 million will finance the U.S. clinical trials for C-Cure, Cardio3's regenerative heart treatment. Cardio3 CEO Dr. Christian Homsy flew to Rochester in January for a press conference at Mayo Clinic to announce that U.S. trial. Mayo Clinic in Rochester is one of the trial sites. Homsy gave a tentative time line of commercialization in Europe possibly by 2017 and by 2018 in the U.S.

Medisun has also committed to buy an additional $34 million shares of Cardio3 stock from existing shareholders in the next eight month at a price per share equivalent to the 10 days average preceding the offer.

This new deal means Medisun's ownership of Cardio3 has quickly leapfrogged Mayo Clinic's investment. As of June 16, Mayo Clinic owned 5.05 percent of the available shares of Cardio3. Medisun had just 4.21 percent at that point. As of June 25, Mayo Clinic controlled 3.1 percent of the shares.

Mayo Clinic researchers Dr. Andre Terzic and Dr. Atta Behfar originally developed the proprietary process of regenerating heart tissue with stem cells drawn from a patient's own bone marrow. Since 2007, Cardio3 has licensed patents and related research from Mayo Clinic. Terzic and Behfar each have a financial interest in the company.

Homsy has previously stated that he hopes to eventually base a few employees in Rochester for office and laboratory work. Cardio3 previously attempted to open a U.S. headquarters here, but that fizzled when the one person based here left.

Many consider what Cardio3 is attempting as the "holy grail" of cardiac treatments. Terzic previously described repairing faulty hearts as a "major unmet need worldwide." He estimated about one-third of all deaths stem from heart disease.

To date, the promising company has raised $121 million in equity and capital.

A recent study also estimated that the global market for such treatments could grow to $18.2 billion by 2019. The U.S. market was valued at $6.1 billion in 2012, with potential to increase to $8.49 billion by 2019.

“With this presence in Greater China, we are very proud to become the first global player in the field of cardiac regenerative medicines, aiming to commercialize our leading edge cell therapy to patients all across the globe,” stated Cardio Chairman Michel Lussier in the announcement of the venture.

Medisun Chairman Danny Wong says that his company is organizing medical conventions in August "to promote cell based medicines as well as Cardio3’s technology" in both Beijing and Shanghai.

"We are passionate about this project and I am certain that our involvement with Cardio3 as a leader in this field, combined with our local knowledge of the regulatory, healthcare and market access capabilities and expertise, will bring success to all the parties involved,” said Wong.

All the costs of Cardio3's moves in China will be funded by Medisun, with a minimum of $27 million committed during a three year period. Cardio 3 has 40 percent ownership in the joint venture, which will drop to 30 percent when clinical trials are up and running.

Success of the Phase III clinical trials that allow Cardio3 to market C-Cure in Asia would trigger  royalties ranging between 20 and 30 percent of net sales depending on total revenue of the joint venture.