Online Extra: Medtronic's Uncertain Endeavor
On Oct. 15, Medtronic began recalling a component used with defibrillators, implantable devices that keep the heart beating regularly. Recalls like this make for alarming headlines, and this one will cost Medtronic millions in lost sales. But defibrillators are only part of Medtronic's troubles these days. The Minneapolis company is also seeking approval from the Food & Drug Administration to market a drug-coated stent—a tiny metal tube used to prop open clogged arteries. Over the past year, a series of studies have raised concerns about whether drug-coated stents cause potentially deadly blood clots, making the FDA particularly vigilant about reviewing new stents.
That became all too clear on Oct. 5, when an advisory panel to the FDA raised a question: Did Medtronic (MDT ) study the stent, named Endeavor, long enough to prove that it is safe? New data suggest that in clinical trials, Endeavor caused more blood clots than Taxus, a market-leading drug-coated stent made by Boston Scientific (BSX ). Medtronic's stock fell nearly 4% on the news, to $54.82. Then, on Oct. 15, the company's shares took another hit, falling to $49.35 on the recall of the component, which is used to connect a popular defibrillator to patients' hearts.
NEW STENTS UNDER INTENSE SCRUTINY.
It's a touchy time to be in the business of cardiac devices. The recall could erase up to $250 million from Medtronic's top line this quarter alone, the company estimates. The new stent might help make up for the loss, but even there, Medtronic is facing a massive marketing challenge. In addition to mulling over the blood-clot concerns, cardiologists have been debating whether stents are more effective than drugs for treating coronary artery disease. All told, the worldwide market for drug-coated stents could fall 23% this year, to $4.1 billion, estimates Michael Weinstein, an analyst for JPMorgan Chase (JPM ). "Medtronic makes the argument their product is safer, but whether that's true is up for debate," Weinstein says.
In data released on Oct. 5, Endeavor showed a 0.8% rate of blood clots after nine months, as opposed to a 0.1% rate for Boston Scientific's Taxus. Most of the recent safety concerns have been around "late-stent thrombosis," a potentially deadly blood clot that can form a year or more after a drug-coated stent is implanted. The company said in a statement that safety signals after one year were consistent with earlier trials and didn't result in exceptionally high rates of blood clots, heart attack, or death. Boston Scientific Chief Medical and Scientific Officer Dr. Donald Baim says in an e-mail that Endeavor hasn't been proven to be any more effective than currently marketed stents. "The question is why would one wish to use a less effective drug-eluting stent, if there are no clear safety benefits?" he asks.
Ultimately, an advisory panel to the FDA recommended that the agency approve the device. The product could be the first new entrant in the market for drug-coated stents since 2003. Still, Medtronic will have to follow patients in its clinical trials for five years after Endeavor is approved, to reassure the FDA—not to mention doctors and patients—that the long-term safety profile is at least equivalent to that of older stents.
The next stentmaker to face regulatory scrutiny will be Abbott Laboratories (ABT ), which is preparing to launch its new drug-coated stent, called Xience. While early data have been promising, investors are reserving judgment until later this month, when the company will release one-year results from a trial that will be pivotal for gaining FDA approval. John Capek , Abbott's executive vice-president for medical devices, is confident that recent concerns about safety and efficacy will spark interest in the second generation of drug-coated stents. "It's not that physicians don't believe in the concept, it's that the first generation isn't perfect," he says. "We learn, we improve, we bring the next technology forward." The FDA will review Xience later this year.
IMPROVING POTENTIALLY RISKY POLYMERS.
In designing new stents, device makers have been focusing on polymers, thin films that elute healing medication for a month or so. After the drug is gone, the polymer stays behind. The potential for blood clots to form later "is thought to be multifactorial, but in part could be due to inflammation from the polymer," explains Scott Ward , senior vice-president and president of Medtronic's CardioVascular Div. Endeavor's polymer is made of a chemical that the human body normally recognizes as a naturally occurring substance. That could lessen the chance of an inflammatory response, Ward says. Both Abbott and Medtronic are working on developing stents with biodegradable polymers that will dissolve completely over time. That could reduce the risk of blood clots even further.
Despite all the activity in stent development, Medtronic executives have a sober view of the market they're about to enter. Says Ward: "We expect there will be renewed usage of drug-eluting stents. But we don't think the market will return to its peak."
By Arlene Weintraub