Bloomberg News

Edwards Heart Valve Skirts Rib-Cracking for $2.5 Billion

March 23, 2012

A half decade after Edwards Lifesciences Corp. (EW) and Medtronic Inc. (MDT) introduced devices in Europe that make heart-valve surgery easier to endure, most U.S. patients are waiting for safety data to clear their use.

Edwards is leading a charge into a potential $2.5 billion U.S. market for the $30,000 valves, which are threaded into the aorta without cracking open the chest. In November, the Irvine, California-based company won U.S. approval for its Sapien valve in patients who probably wouldn’t survive open-heart surgery. Now Edwards is awaiting test results that may allow it to sell the valve to more patients who would qualify for surgery.

While Sapien speeds recovery by as much as a week and can calm patient fears about more disruptive surgery, its U.S. prospects are clouded by concerns about stroke risk and questions of durability. Data to be reported at the American College of Cardiology meeting March 26 may clarify the device’s safety, said Jason Mills, an analyst with Canaccord Adams Inc.

The results “are important for all physicians worldwide,” Mills, based in San Francisco, said in a telephone interview. “It is the first data showing what the actual comparisons are at two years in a gold-standard study.”

The study will show whether Sapien patients have a higher risk of stroke than those who underwent traditional surgery two years after treatment, a key guidepost for “conservative physicians to get over their skepticism” and for “mavericks” already using the devices, Mills said.

Aortic Repair

In traditional aortic repair, a surgeon makes an 8-inch incision in the chest and cracks apart the breastbone to remove the valve. A replacement is sewn in, allowing blood to again flow properly to the rest of the body. While the valves have been proven to work well for decades, the surgery is arduous, particularly for the elderly and sickest patients.

With the Edwards system, a new valve is tightly crimped inside a stent. The doctor cuts open the femoral artery near the groin and slides the device, inside a catheter, through the vessel until it reaches the damaged valve. The stent is then expanded, forcing the valve into place.

‘Any time you bring along new technology like this, there is a great need for information on how things are going with the patients,’’ said David Holmes, president of ACC and a professor at the Mayo Clinic in Rochester, Minnesota. “The law of unintended consequences continues to raise its head with many different devices and drugs.”

200,000 Americans

About 200,000 Americans suffer from narrowing of the aortic valve, the three-flapped spigot between the heart’s main pumping chamber and the artery that carries oxygen-rich blood to the body. The valve gathers calcium deposits over the years that stop it from fully opening and closing, causing fatigue and raising the risk of death from heart failure.

Edwards and Minneapolis-based Medtronic split the $700 million-a-year European market. In 2007, Edwards became the first of the companies to begin U.S. studies to prove the so- called transcatheter valves hold up against conventional therapy. Medtronic, which bought its technology from CoreValve in 2009, started its U.S. trials in December 2010.

By the time Medtronic’s product is approved, Edwards’s may have penetrated one-fourth of the estimated $2.5 billion U.S. market, generating $750 million a year, Mills said in a telephone interview.

Laborious Path

The path to the U.S. market has been laborious because of new skills needed to implant the device.

The procedure requires a team approach with interventional cardiologists, specialists who focus on catheter-based treatments of the heart’s veins and arteries, and cardiac surgeons, who operate directly on the heart or its large vessels, working together to improve results.

“The roll out is slow and tempered and the training is high,” said Joanne Wuensch, an analyst with BMO Capital Markets in New York. “It’s an expensive product. You want to make sure you get the best result, not a bunch of cowboys who think they can put this in anyone.”

About 1,100 medical centers provide surgical aortic valve repair, said Ralph Brindis, a cardiologist at Kaiser Permanente in Oakland, California. The number of approved heart teams is now expected to be half of what Edwards originally planned as medical societies and insurers say fewer centers will ensure greater expertise. From 150 to 200 should be first accredited, Brindis said.

‘Difficult Time’

“We’re in a difficult time right now,” Brindis said. “We’re all wrestling with what the absolutely right number of centers is and we’re waiting” for insurance coverage decisions, he said. “Patients lives may be at risk by the delay in having the technology available.”

While the delays led analysts to cut early sales forecasts for Sapien, Edwards is introducing the technology more quickly in the U.S. than it did in Europe, said Chief Executive Officer Michael Mussallem.

Training programs are established, more than 25,000 patients worldwide have been treated and information on the benefits of the valves continues to accumulate, he said.

The first Edwards study showed 69 percent of the oldest, frailest Sapien patients survived for at least a year, compared with 49 percent of those given medical therapy. A second study in patients who were healthy enough to undergo chest-splitting surgery found survival rates were similar at about 75 percent, though strokes were twice as common with Sapien.

The side effects seen in the trials have delayed a decision by the Food and Drug Administration on whether to expand the initial approval beyond use in patients who can’t have open- heart surgery. Positive two-year safety data would bolster the case for approval for those patients.

Medicare, the U.S. health insurance program for the elderly and disabled, hasn’t issued final rules for covering the device, which costs five times more than the $5,000 to $7,000 expense for traditional valves, as it grapples with requirements to ensure appropriate use and physician expertise.

To contact the reporter on this story: Michelle Fay Cortez in Minneapolis at mcortez@bloomberg.net

To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net


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