Stent makers wage war over the heart
Two new drug-coated stents are expected to shake up the market; large safety studies underway.
NEW YORK (CNNMoney.com) -- The still-ailing market for popular heart devices known as stents is headed for a war over market share, with two new products expected soon.
Advisory panels backed approval for both of these products last year with non-binding votes, a strong sign that they could get a green light from the FDA.
"Clearly, there's going to be a very dramatic shake-up in market share," said Phillip Nalbone, analyst with RBC Capital Markets.
The approval of Endeavor could happen within days, analysts say, while Xience could get the go-ahead later in April or May. The new products are set to make their debut even as the market for stents is still reeling from controversy sparked by safety concerns.
The products would compete with the two drug-coated stents that are already on the U.S. market: the Cypher from Johnson & Johnson's (JNJ, Fortune 500) subsidiary Cordis Corp. and the Taxus from Boston Scientific (BSX, Fortune 500).
Chris Cooley, analyst for FTN Midwest Securities Corp., said the new products will fight over existing market share, rather than expand the stagnant, crowded stent market.
"We don't see much change in the U.S. market right now in terms of utilization," said Cooley, who estimates the U.S. market to be less than $2 billion in 2008. He said the use of stents has picked up from its 2006 slump, but he does not expect the overall market to grow.
Nalbone of RBC Capital Markets said that Medtronic's Endeavor "is good enough to take a little bit of share," or at least one-tenth of the $2 billion market, especially since it is expected to enter the market ahead of Abbott's Xience.
But he believes that Xience is a stronger product - superior even to Boston Scientific's leading Taxus stent, which currently has a 55 percent market share - and is destined to become a big player.
"[Xience] is a product that we think will really shake up the market and allow Abbott to take significant market share, maybe north of 20 percent in the first year," Nalbone said.
Stent are metal tubes used to prop open clogged arteries, a condition that can lead to heart attacks. There are two types of stents: the older bare metal ones, and new mesh stents, which are coated with drugs to alleviate scarring along the artery wall.
But drug-coated stents, which debuted in the U.S. in 2003 with J&J's launch of Cypher, came under suspicion in 2006 of causing blood clots.
The stock for J&J and Boston Scientific - the two companies with drug-coated stents on the market - plunged when reports of heightened blood clot risk from these stents first surfaced. J&J's stock has since recovered, but Boston Scientific's has not.
The stents have not been proven to increase the risk of blood clots, but concerns still caused the market to deflate, and then stagnate.
"The actual risks don't seem to come anywhere close to the media hype and sensationalism we were subjected to earlier," said Nalbone.
But in order for the industry to get back on track, drug-coated stents need to be established as having a low safety risk.
Les Funtleyder, analyst for Miller Tabak, said the results from previous stent safety studies are "inconclusive because there are several studies that show different things."
Stent makers say their drug-coated stents are safe, and several industry-funded studies are underway to try and support this claim. The "Protect" study, an 8,000-patient study comparing the blood clot risk of stents from Medtronic and J&J, has been ongoing in Europe since 2006.
A newer study of 11,000 patients called "Adapt" recently started recruiting volunteers and would determine the risk of blood clots in patients with drug-coated stents.
Lead investigator Dr. Greg Stone, research and education director at Columbia University's center for Interventional Vascular Therapy and chairman of the Cardiovascular Research Foundation, said this study is being funded by 10 companies in the heart disease industry. The study will compare the blood clot risks of drug-coated stents from the four major players - Medtronic, J&J, Boston Scientific and Abbott. The study will also use the IVUS catheter from the medical device maker Volcano (VOLC) to try and detect impending blood clots.
"This is probably the largest prospective [stent] study ever conducted," said Dr. Stone, who expects to see a blood clot rate "somewhere between 1 to 2 percent in the first year." He said the study would take at least three years, but data would first become available in 2010.