Following nearly two years of negative reports and speculation regarding the safety of drug-eluting stents, manufacturers of the devices had to be pleased with the almost universally positive clinical findings presented at the recently held joint meeting of the American College of Cardiology (ACC; Washington, DC) and the Society for Cardiovascular Angiography and Interventions (SCAI; Washington, DC) in Chicago. The most significant outcome of the meeting was the general consensus among researchers and industry analysts that drug-eluting stents, while continuing to demonstrate superior performance in preventing restenosis, do not present a greater risk of late-term thrombosis than their bare-metal counterparts.
Mauri: The antiplatelet caveat.
Commenting on one of the key studies that was widely interpreted as vindicating drug-eluting stents, Laura Mauri, MD, an interventional cardiologist at Brigham and Women's Hospital (Boston), said, “I would feel comfortable considering drug-eluting stents on the basis of these results, with the caveats that treated patients must be able to take antiplatelet therapy and that we definitely want to see even longer-term follow-up.” Mauri was the lead investigator for the study.
Many industry analysts who considered the blood-clot issue to have been blown out of proportion cited the comments of SCAI President Bonnie Weiner, MD, who said that concerns regarding late-term thrombosis “have been largely put to rest now that we have a much larger body of data.”
Weiner: Data wins out.
In addition to the positive findings regarding late-term thrombosis, other studies demonstrated that drug-eluting stents are as effective as coronary bypass surgery for preventing adverse cardiac events, including heart attack and death. However, the researchers noted that patients receiving the angioplasty procedure often required revascularization and repeat stenting.
Over the past two and a half years, widespread concern that drug-eluting stents might be linked to blood clots and potentially fatal cardiac events has resulted in a precipitous decline in their usage. The use of drug-eluting stents peaked at the end of 2005, when it represented 85–90% of all implanted coronary stents. By the end of last year, the utilization rate of drug-eluting stents is estimated to have dropped to 65%. During the same period, the U.S. market for drug-eluting stents declined dramatically from nearly $4 billion in annual sales to a current estimated valuation of around $2 billion.
There is general agreement among analysts that market recovery for drug-eluting stents is already under way. But the eventual size of the recovering drug-eluting stent market—and how soon the market will get there—remain questions of interest.
Jan Wald, managing director and medtech analyst at the Stanford Group Co. (Houston), says the drug-eluting stent market began to show signs of recovery at the end of 2007. “The studies presented at the ACC/SCAI meeting should provide a further boost in physician confidence, and increase adoption rates going forward,” he says. Wald expects the U.S. market for drug-eluting stents to reach $2.15 billion this year—a figure that is generally in line with other market forecasts.
Wald: Increasing adoption.
Venkat Rajan, a medtech analyst with Frost & Sullivan (San Antonio, TX), doubts that drug-eluting stents will ever get back to the near-90% penetration rate they enjoyed in 2005. Nevertheless, Rajan still sees significant recovery ahead. “They could get back to the low 80% range, considering both the largely successful resolution of the safety issue and the introduction of more advanced, next-generation devices,” he says.
A More Competitive Market
As recovery proceeds, stent manufacturers will face a market that is much different and more competitive than it was at the start of the downturn. The drug-eluting stent duopoly enjoyed by Cordis Corp. (Miami Lakes, FL), a Johnson & Johnson company, and Boston Scientific Corp. (Natick, MA) no longer exists. Medtronic Inc. (Minneapolis) received FDA approval for its Endeavor stent last February, and Abbott (Abbott Park, IL) expects to enter the market with its Xience drug-eluting stent before the end of the second quarter.
Medtronic's zotarolimus-eluting Endeavor, which received the CE mark in 2005, is based on the company's Driver bare-metal stent platform. Although some initial studies of the Endeavor stent raised concerns about potential blood clots, Medtronic says the stent is now recognized as having a safety profile similar to that of a bare-metal stent. More important, according to the company, is Endeavor's deliverability, which enables cardiologists to implant the stent successfully in more hard-to-reach and difficult lesions.
Gunderson: Meeting expectations.
Thomas Gunderson, managing director and senior medtech analyst with Piper Jaffray & Co. (Minneapolis), says that “Endeavor should meet or beat expectations due to a history of extensive clinical trials and ease of tracking in the artery. However, the stent still does not offer a true rapid-exchange implanting system, which could stunt sales.”
Stanford Group's Wald agrees: “Endeavor will not do well in the United States until it gets a rapid-exchange system,” he says. “Ultimately, it could tap 10–15% of the market. But lingering concerns about late loss with this particular stent may be cause for some concern. Is there enough here for physicians to switch from what they're currently using?”
Among industry analysts, there is wide variance of views about how much of the market Endeavor can capture. Shortly after the device received FDA approval, Medtronic President and CEO William Hawkins said, “If you look at what we've done outside the United States, we've been able to garner in excess of 20%.” According to Scott Ward, president of the cardiovascular unit at Medtronic, the company distributed about 100,000 Endeavor stents in the United States within the first 30 days of regulatory approval.
Abbott's Xience everolimus-eluting stent seemed to generate the greatest buzz at the ACC/SCAI meeting. In a study comparing its performance to the Taxus drug-eluting stent from Boston Scientific, patients with the Xience stent were found to have a reduced rate of restenosis; less need for target lesion revascularization; and fewer major adverse cardiac events (MACE), including heart attack and death.
Abbott's Simonton: Encouraging data.
“At any given point in time, across both the pivotal SPIRIT II and SPIRIT III clinical trials, Xience V consistently reduces observed MACE rates by 40% or more compared to Taxus,” said Charles Simonton, MD, divisional vice president for medical affairs and chief medical officer at Abbott Vascular. “The single-digit MACE rate seen with Xience V out to two years is encouraging data for interventionalists as they look for ways to improve patient outcomes with next-generation drug eluting stents.”
The Xience stent received a 9-1 favorable recommendation from FDA's circulatory systems panel last November, and is expected to receive full agency approval in June.
Abbott is also developing a completely absorbable drug-eluting coronary stent, which has just recently begun clinical trials. Current projections suggest that the stent could be on the market by 2012.
Is the 2008 market entry of Medtronic's Endeavor and Abbott's Xience a stent-market game changer? It could be, particularly considering the heady forecasts for Xience, which, according to several medtech analysts could capture up to 40% of the U.S. market six months after entry.
While stent stalwarts Cordis and Boston Scientific are not expected to sit idly by and risk losing out to newcomers, the market is recovering at a time when both companies are somewhat flatfooted in terms of having readily available new products.
Cordis's Cypher Select and Cypher Select Plus stents—which the company considers to be its next-generation products—are still not available in the United States. The devices are generally considered to represent incremental improvement over the original Cypher, which was introduced in 2003 as the first FDA-approved drug eluting stent.
Cordis had expected that its $1.4 billion acquisition of Conor Medsystems, in November 2006, would provide the company with a product that was generally hailed as a true next-generation stent with both a novel design and innovative drug-eluting system. In May 2007, however, after the Conor Costar stent failed to meet any of the end-points in a pivotal clinical trial comparing its performance with Taxus, Cordis pulled the stent from the market. Costar was originally designed for use with the drug paclitaxel. But last month, Cordis reinstituted clinical trials with a reformulated version of the stent using sirolimus, the drug coating used in its flagship Cypher series.
Boston Scientific's next-generation Liberté is available in Europe and many other countries, and was just cleared for distribution in Canada. The company says Liberté is the first stent designed to accommodate a drug coating, unlike previous drug-eluting stents in which the coating is basically an enhancement to the bare metal version. The more-flexible design of the Liberté device is expected to permit easier deliverability and stent implantation, while its strut structure is intended to ensure more even distribution of the drug. Boston Scientific expects to receive FDA approval later this year following resolution of a warning letter relating to manufacturing issues within its cardiovascular division.
Boston Scientific will also market Abbott's Xience stent under the Promus brand. This marketing arrangement is related to Boston Scientific's $27 billion acquisition of Guidant in 2006, which required the company to divest itself of Guidant's stent business in order to avoid antitrust concerns. Abbott bought Guidant's stent unit for $4.1 billion. Under the terms of the deal, Boston Scientific will gain distribution rights to Promus immediately following FDA approval. Boston Scientific will reportedly pay Abbott a 40% royalty on sales for an undisclosed period of time.
Rajan: Squeezing margins.
According to Frost's Rajan, “The market entry of new drug-eluting stents will likely result in some downward pressure on price—and it will be more difficult to up-sell unless the manufacturer is offering a next-generation stent with some novel design or deliverability features. I don't see a price war, but some squeezing at the margins will occur.”
Piper Jaffray's Gunderson generally agrees. “These companies have participated in oligopolies before and still have not resorted to price wars. Pricing is not what they lead with; high margins will allow any of the current competitors to match on price, negating the initial move. If pricing does become a stronger marketing weapon, the advantage goes to the low-cost producer, which is Boston Scientific.
Stanford Group's Wald concurs. “It's not in the interest of these companies to play the price game. It didn't happen as more devices entered the bare-metal stent market, and I do not see it happening here either.”
Neither Rajan nor Gunderson foresee any significant resistance to new drug-eluting stents coming on the market, now or in the future.
Rajan says that many physicians and hospitals like to keep a “rotating schedule” of stent usage by brand. “It's partly a defensive measure, in case a stent is recalled or becomes subject to legal action,” he says. “By having used stents from different manufacturers, any adverse events can be somewhat contained.”
Gunderson says, “While I suspect Boston Scientific and Cordis attempt to lock in some accounts, it's the nature of interventional cardiologists to give new products a whirl. But the lasting share of such shifts, if any, is the great unknown.”
Wald adds, “Hospitals are increasingly demanding shorter-term buying contracts and there's no exception here. While that means potentially greater receptivity to new products, the issues of physician preference and brand loyalty cannot be easily dismissed.”
In addition to the four major players, there are numerous other coronary stent manufacturers in the United States and around the world. Many of these companies are focusing on drug-eluting stents for particular kinds of coronary lesions or patient conditions that compromise the safety and efficacy of standard stents. While the market may be receptive to innovative technologies that promise greater safety and improved clinical outcomes, it may also prove to be a hostile launch pad for stent manufacturers that offer no significant advantages over current devices.
“New stents will take so long to emerge from FDA requirements that they will have to offer a compelling advantage,” says Gunderson. “Me-too stent manufacturers should abandon their plans.”
In addition to a more competitive market, stent manufacturers will face greater scrutiny from FDA. Last month the agency issued new draft guidelines “to aid the development, testing, and manufacture of coronary drug-eluting stents”. The agency has indicated that under the proposed guidance, the safety data for drug-eluting stents will need to extend out two years before the agency will consider approval. On the postmarket side, studies will be required to follow patients for at least five years.
“This draft guidance is part of FDA's ongoing effort to provide regulated industry with recommendations on measures that can minimize the risks while preserving for patients the benefits of drug-eluting stents,” said Daniel G. Schultz, MD, director of FDA's Center for Devices and Radiological Health (CDRH).
The new guidelines are not expected to affect the Cypher, Taxus, or Endeavor stents—or the expected near-term approval of Abbott's Xience stent. But Cordis, Boston Scientific, Medtronic, Abbott, and other medtech manufacturers seeking FDA approval of new drug-eluting stents will have to conform to the new regulations. Industry response to FDA's proposed guidance was generally favorable, as manufacturers believe the guidelines will establish a more defined and deliberate process.FDA's draft guidance document, Draft Guidance for Industry on Developing Coronary Drug Eluting Stents (Rockville, MD: CDRH, FDA, 2008), is available via the CDRH Web site at www.fda.gov/cdrh/ode/guidance/6255.html.
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