Medtronic Inc. (MDT)’s less-invasive heart valve was approved early by U.S. regulators for patients who can’t have open-heart surgery.
Medtronic said the Food and Drug Administration cleared the device, called CoreValve, that is inserted with a catheter, while traditional valve replacement is done through an invasive operation. CoreValve will be priced about the same as Edwards LifeSciences Corp. (EW)’s Sapien, its only U.S. rival, said John Liddicoat, president of Medtronic’s structural heart business.
While the companies engage in patent litigation over the device, Michael Weinstein, a JPMorgan Chase & Co. analyst, said Medtronic may take 30 percent of the market for non-surgical valves that might reach $3 billion by 2019. That’s more than investors expect, Weinstein said in a note to clients.
The FDA clearance “allows Medtronic to launch CoreValve in the U.S. before Edwards gains approval for its next-generation Sapien XT valve,” Derrick Sung, an analyst at Sanford C. Bernstein & Co., said in a note to investors. “This gives Medtronic some time to gain traction in the market before facing competition from the Sapien XT, which has a lower profile that is more similar to CoreValve.”
The CoreValve price won’t be “too dissimilar” from what Edwards charges for Sapien, Liddicoat said today in an interview. He declined to be more specific. The company had expected an FDA decision by April.
Medtronic will start distributing the aortic valves to the 45 centers who participated in the clinical trials needed to win the approval, said Rhonda Robb, the Minneapolis-based company’s vice president of catheter-based therapies. Medtronic estimates there are 300 to 350 centers that may meet government criteria for implanting the devices, she said.
“It’s a very extensive training procedure,” Robb said in a telephone interview. “Our guiding principle is safe growth. It will take several months to years to get to all the sites that could provide this therapy.”
Medtronic rose less than 1 percent to close at $59.51 in New York. The stock has gained 32 percent in the last 12 months. Edwards fell 5.7 percent to $68.54, its biggest single-day decline in about nine months.
A study released last year showed that 25.5 percent of patients who received the CoreValve died or had a stroke within a year, compared with an estimate of 43 percent of patients before the trial started. The study looked at the highest-risk patients and is continuing in others.
“The low rates of stroke and valve leakage with the CoreValve System -- two of the most concerning complications of valve replacement because they increase the risk of death and have a dramatic impact on quality of life -- set a new standard for transcatheter valves,” Jeffrey J. Popma, director of interventional cardiology at Beth Israel Deaconess Medical Center in Boston, and co-principal investigator of the study, said today in a statement from Medtronic.
Sales of Medtronic’s CoreValve will come from Edwards, Lawrence Biegelsen, an analyst at Wells Fargo Securities, said today in a note. Edwards reported $552.1 million in 2012 sales of its transcatheter heart valves.
Edwards’ device was cleared by the FDA in November 2011 and the Irvine, California-based company is waiting for the Sapien XT to be approved. The timing of the new model’s approval, expected in mid-2014, may affect Medtronic’s share gains, Biegelsen said.
Edwards was awarded more than $392 million on Jan. 15 in a patent-infringement lawsuit again Medtronic. Today’s FDA approval hasn’t changed Edwards’ plans to seek a permanent injunction, Sarah Huoh, a company spokeswoman, said in a phone interview.
There are about 300,000 people worldwide with severe aortic stenosis, a narrowing of the valve between the left ventricle and the aorta. Blood can back up in the heart, leading to chest pain, breathlessness and weakness. One in three patients can’t tolerate the open-heart surgery that has been proven to improve quality and lengthen life. Studies show this group has a 50 percent mortality rate at one year without treatment.
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