By Joseph Walker
Medtronic Inc. received U.S. regulatory approval to sell its
minimally invasive heart valve technology, called CoreValve, for
patients too frail for traditional surgery, the medical device
maker said on Friday.
The U.S. Food and Drug Administration granted approval for
CoreValve, used to replace damaged aortic valves, three months
earlier than Medtronic had previously forecast. The approval allows
the Minneapolis-based company to begin competing against rival
Edwards Lifesciences Corp., whose similar device, called the
Sapien, was first approved in the U.S. in 2011. The Sapien has
since been approved for patients, including those who are eligible
for surgery, but who are considered at high risk for
complications.
The CoreValve is approved for patients who are too sick or frail
to undergo open-heart surgery for severe aortic stenosis, a
narrowing of the aorta that blocks the flow of blood into the body,
leaving patients at a high risk for stroke and death. In a clinical
trial, patients receiving the device had a 25.5% rate of death or
major stroke after one year, compared with an estimated rate of 43%
had the patients received medication therapy.
The technology, called transcatheter aortic valve
replacement--or TAVR--is used to implant new valves through a
catheter tube inserted into a patient's artery. It is a
less-invasive method compared with open surgery, which can be
traumatic. However, open surgery is still considered the safest and
most effective option for patients who can withstand it because of
TAVR's increased risk of stroke and other complications. The
introduction of the CoreValve, which comes in different sizes than
the Sapien, will provide patients with more choices, doctors
said.
TAVR devices, which have been available in Europe for several
years, are considered by industry analysts to be a major new source
of sales growth for heart-device makers whose bread-and-butter
product lines, including pacemakers and implantable defibrillators,
have come under pricing pressure from insurers. Medtronic estimates
that roughly 100,000 people in the U.S. have severe, symptomatic
aortic stenosis, and about a third of those are at an extreme risk
from surgery, said Rhonda Robb, Medtronic vice president for
catheter based therapies. The company projects that the world-wide
market could grow to between $2 billion and $2.5 billion annually
by 2020 if further clinical studies expand regulatory approvals to
less-sick patients, said Ms. Robb.
"A lot needs to happen to have that estimate be realized," she
said.
So far, though, the U.S. market hasn't grown as quickly as
Edwards and others had expected because of strict
payment-reimbursement guidelines implemented by Medicare, which
require hospitals to document that patients aren't good candidates
for surgery. The procedure, which costs upward of $30,000 per
procedure, is also a money loser for many hospitals since Medicare
typically doesn't provide extra reimbursement beyond what it pays
for surgery.
The world-wide market for transcatheter aortic valves was $1.1
billion last year, of which Edwards controlled about 65%; Medtronic
had about 31% of the market, according to estimates by Jefferies
LLC. Medtronic and Edwards have been locked in a legal dispute over
patents for the technology, with a federal jury ordering Medtronic
to pay $394 million in damages to Edwards for violating the
company's intellectual property. Medtronic plans to appeal the
verdict.
Edwards is seeking a preliminary injunction that would bar
Medtronic from selling CoreValve in the U.S., but such a ruling is
considered unlikely by analysts. Medtronic said that it would begin
selling the device immediately. There are about 45 medical centers
that have experience with the devices through clinical trials, and
Medtronic will begin training new centers over the next 12 to 18
months, said Ms. Robb.
Medtronic will charge about the same for CoreValve as Edwards
does for its own product, said John Liddicoat, president of
Medtronic's structural heart division, in an interview. He
acknowledged that concerns about the profitability of TAVR "are
real" for some hospitals, depending on where they're located. The
company plans to present data related to the procedure's
cost-effectiveness at an upcoming medical meeting, he said, and the
company will also work with hospitals to help them determine when
and in which patients to use the procedure.
Shares of Edwards Lifesciences fell 5.4% to $68.75 in afternoon
trading on the New York Stock Exchange, with investors surmising
that the early approval will allow Medtronic to take even more
market share away from Edwards than previously estimated. The stock
is down 24.8% over the past 12 months, hurt by disappointing U.S.
sales of the Sapien. The company estimates that world-wide TAVR
sales will be in a range of $700 million to $820 million in
2014.
Write to Joseph Walker at joseph.walker@wsj.com
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