Drug-eluting Stents Part One Triple Storm Catching Industry Attention
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Thinking about Life Sciences: Drug-Eluting Stents, Part One: Triple Stor...
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Thinking about Life Sciences http://blog.aesisgroup.com Monday, November 27, 2006 Drug-Eluting Stents, Part One: Triple Storm Catching Industry Attention
In June 2006 in a column headlined “The Future of Drug-Coated Stents: A Big Issue or a Non-Issue?,” I wrote: "For something (the drug-eluting stent market) that grew from zero to $5.3 billion in three years flat, equally dramatic changes are certainly not out of the question. I’ll be sure to keep you posted.” In the reader poll accompanying that article, about 52 percent of you believed that “safety with drug-eluting stents will become big in the next few months”. For those of you among the 52 percent, you are indeed right. True to my word, I am here to update you with new developments and make some additional prognoses on the drug-eluting stent (DES) market. The DES Problem To summarize, the “DES problem” has three parts: 1. In comparison to bare-metal stents, drug-eluting stents are fundamentally a quality-of-life measure rather than explicitly life-saving treatment. In other words, there is no incremental mortality improvement attributable to DES but rather a reduction in second surgeries for restenosis. 2. Drug-eluting stents have a very small but definitely serious (e.g. fatal) risk of adverse effects (namely long-term, in-stent thrombosis). 3. Mitigating this risk requires anti-thrombotic therapy, which actually masks the real rate of life-threatening, in-stent thrombosis and also compromises some of the quality-of-life improvement afforded by these stents. This is a serious constellation of problems - metaphorically a “triple storm” - that has clearly caught the eye of the industry and the FDA. Since the June article, three important developments have taken place along the lines of increasing regulatory oversight, incrementally improving the current generation of DES and leapfrogging the current generation with new technologies. Increasing Regulatory Oversight On Sept. 14, the FDA issued a statement that it would be convening a special meeting of its device advisory committee. The committee was to assess the increasingly troubling reports of increases in rates of death and cardiac events among patients with drug-eluting stents. The panel has been eliciting input from the two primary manufacturers (Johnson & Johnson and Boston Scientific) and the plan is for definitive recommendations to be issued by the end of 2006. As this is a nearly $6 billion market, there is obviously a lot at stake. More important, an estimated 1 million DES have been implanted in patients in the U.S. That’s potentially many lives at stake as well. On the other hand, as the FDA concluded: The FDA believes that coronary drug-eluting stents remain safe and effective when used for the FDA-approved indications. These devices have significantly reduced the need for a second surgery to treat restenosis for thousands of
11/17/2008 12:51 AM
Thinking about Life Sciences: Drug-Eluting Stents, Part One: Triple Stor...
2 of 2
http://blog.aesisgroup.com//2006/11/27/drugeluting-stents-part-one-triple-...
patients each year. It’s a tough call. A likely scenario is that the FDA will continue to maintain approval for the current indications but layer upon stricter device reporting and patient-monitoring requirements. Clopidogrel or Plavix (a drug that has recently been beleaguered by legal issues) will get an additional boost as strict adherence with anti-thrombotic regimens will be mandated for those patients with drug-eluting stents. Ironically, the market may make the final call as these additional requirements – while warranted – will likely obviate the quality-of-life improvement provided by drug-eluting stents. Basically patients with DES have a much lower chance of requiring a second operation than patients with bare-metal stents. However, presently (and increasingly if the FDA enforces even stricter requirements) patients need to take daily doses of Plavix (or another anti-thrombotic) and subject themselves to frequent – perhaps monthly or even more often – follow-up visits for at least a year if not more. Coupled with the much higher costs of DES, which significantly impact hospital and cardiologist incomes, it is no wonder that hospitals, interventional cardiologists and their patients are beginning to balk. Incremental Improvement Another important development just this past week was the announcement on Nov. 16 by Johnson & Johnson of a definitive arrangement to acquire Conor Medsystems, which produces a controlled drug-delivery platform utilizing paclitaxel as the active agent. The problem is that paclitaxel is the agent used in Boston Scientific’s TAXUS stent, which means the acquisition of Conor comes with a whole host of legal baggage and liability. Deals are generally done because it makes both parties happy. I suspect that Conor is happy because Johnson & Johnson has some deep pockets to help with its legal challenges. Johnson & Johnson is happy because it can foist additional headache and diversion onto Boston Scientific while also developing a technology that it claims will “solve” the long-term, in-stent thrombosis problem. The former may be true as Boston Scientific is certainly not going to benefit (no one does) from fighting such battles. However, the latter hope may very well fall flat. The Conor stent is certainly a technical tour de force allowing device manufacturers to “shape” the delivery kinetics of the powerful, anti-proliferative agents such as paclitaxel and sirolimus. However fancy the technology, the truth is there’s no way to get around the fact that the very strength of these agents in inhibiting the healing (scarring) process responsible for restenosis also results in their Achilles heel. For any incomplete healing process, an open wound is effectively left within the coronary artery. It is this fact that makes it susceptible down the line to thrombosis. Indications are, therefore, that Johnson & Johnson is betting that a strategy of product differentiation (e.g. the advanced Conor system) rather than lower cost will win market share. As outlined in my July 24 column headlined “Drug-Eluting Stent Market: $5 Billion Turning on a Dime” history indicates otherwise. A huge market shift occurred in 2004 in favor of Boston Scientific when it introduced its new TAXUS stent at a substantially lower cost than the first-in-market Johnson & Johnson CYPHER stent. Given these thoughts, it would seem that despite the $1.4 billion cost, the Conor acquisition may not offer any significant advantages to Johnson & Johnson. Because of the multiple issues involved, I will be following up on Tuesday with part two of this column to highlight some of the strategies behind Abbott and Boston Scientific in this evolving area. Ogan Gurel, MD MPhil [email protected] http://blog.aesisgroup.com/ Drug-eluting stents Johnson and Johnson device safety Aesis Research Group Ogan Gurel MD
11/17/2008 12:51 AM
1 of 2
http://blog.aesisgroup.com//2006/11/27/drugeluting-stents-part-one-triple-...
Thinking about Life Sciences http://blog.aesisgroup.com Monday, November 27, 2006 Drug-Eluting Stents, Part One: Triple Storm Catching Industry Attention
In June 2006 in a column headlined “The Future of Drug-Coated Stents: A Big Issue or a Non-Issue?,” I wrote: "For something (the drug-eluting stent market) that grew from zero to $5.3 billion in three years flat, equally dramatic changes are certainly not out of the question. I’ll be sure to keep you posted.” In the reader poll accompanying that article, about 52 percent of you believed that “safety with drug-eluting stents will become big in the next few months”. For those of you among the 52 percent, you are indeed right. True to my word, I am here to update you with new developments and make some additional prognoses on the drug-eluting stent (DES) market. The DES Problem To summarize, the “DES problem” has three parts: 1. In comparison to bare-metal stents, drug-eluting stents are fundamentally a quality-of-life measure rather than explicitly life-saving treatment. In other words, there is no incremental mortality improvement attributable to DES but rather a reduction in second surgeries for restenosis. 2. Drug-eluting stents have a very small but definitely serious (e.g. fatal) risk of adverse effects (namely long-term, in-stent thrombosis). 3. Mitigating this risk requires anti-thrombotic therapy, which actually masks the real rate of life-threatening, in-stent thrombosis and also compromises some of the quality-of-life improvement afforded by these stents. This is a serious constellation of problems - metaphorically a “triple storm” - that has clearly caught the eye of the industry and the FDA. Since the June article, three important developments have taken place along the lines of increasing regulatory oversight, incrementally improving the current generation of DES and leapfrogging the current generation with new technologies. Increasing Regulatory Oversight On Sept. 14, the FDA issued a statement that it would be convening a special meeting of its device advisory committee. The committee was to assess the increasingly troubling reports of increases in rates of death and cardiac events among patients with drug-eluting stents. The panel has been eliciting input from the two primary manufacturers (Johnson & Johnson and Boston Scientific) and the plan is for definitive recommendations to be issued by the end of 2006. As this is a nearly $6 billion market, there is obviously a lot at stake. More important, an estimated 1 million DES have been implanted in patients in the U.S. That’s potentially many lives at stake as well. On the other hand, as the FDA concluded: The FDA believes that coronary drug-eluting stents remain safe and effective when used for the FDA-approved indications. These devices have significantly reduced the need for a second surgery to treat restenosis for thousands of
11/17/2008 12:51 AM
Thinking about Life Sciences: Drug-Eluting Stents, Part One: Triple Stor...
2 of 2
http://blog.aesisgroup.com//2006/11/27/drugeluting-stents-part-one-triple-...
patients each year. It’s a tough call. A likely scenario is that the FDA will continue to maintain approval for the current indications but layer upon stricter device reporting and patient-monitoring requirements. Clopidogrel or Plavix (a drug that has recently been beleaguered by legal issues) will get an additional boost as strict adherence with anti-thrombotic regimens will be mandated for those patients with drug-eluting stents. Ironically, the market may make the final call as these additional requirements – while warranted – will likely obviate the quality-of-life improvement provided by drug-eluting stents. Basically patients with DES have a much lower chance of requiring a second operation than patients with bare-metal stents. However, presently (and increasingly if the FDA enforces even stricter requirements) patients need to take daily doses of Plavix (or another anti-thrombotic) and subject themselves to frequent – perhaps monthly or even more often – follow-up visits for at least a year if not more. Coupled with the much higher costs of DES, which significantly impact hospital and cardiologist incomes, it is no wonder that hospitals, interventional cardiologists and their patients are beginning to balk. Incremental Improvement Another important development just this past week was the announcement on Nov. 16 by Johnson & Johnson of a definitive arrangement to acquire Conor Medsystems, which produces a controlled drug-delivery platform utilizing paclitaxel as the active agent. The problem is that paclitaxel is the agent used in Boston Scientific’s TAXUS stent, which means the acquisition of Conor comes with a whole host of legal baggage and liability. Deals are generally done because it makes both parties happy. I suspect that Conor is happy because Johnson & Johnson has some deep pockets to help with its legal challenges. Johnson & Johnson is happy because it can foist additional headache and diversion onto Boston Scientific while also developing a technology that it claims will “solve” the long-term, in-stent thrombosis problem. The former may be true as Boston Scientific is certainly not going to benefit (no one does) from fighting such battles. However, the latter hope may very well fall flat. The Conor stent is certainly a technical tour de force allowing device manufacturers to “shape” the delivery kinetics of the powerful, anti-proliferative agents such as paclitaxel and sirolimus. However fancy the technology, the truth is there’s no way to get around the fact that the very strength of these agents in inhibiting the healing (scarring) process responsible for restenosis also results in their Achilles heel. For any incomplete healing process, an open wound is effectively left within the coronary artery. It is this fact that makes it susceptible down the line to thrombosis. Indications are, therefore, that Johnson & Johnson is betting that a strategy of product differentiation (e.g. the advanced Conor system) rather than lower cost will win market share. As outlined in my July 24 column headlined “Drug-Eluting Stent Market: $5 Billion Turning on a Dime” history indicates otherwise. A huge market shift occurred in 2004 in favor of Boston Scientific when it introduced its new TAXUS stent at a substantially lower cost than the first-in-market Johnson & Johnson CYPHER stent. Given these thoughts, it would seem that despite the $1.4 billion cost, the Conor acquisition may not offer any significant advantages to Johnson & Johnson. Because of the multiple issues involved, I will be following up on Tuesday with part two of this column to highlight some of the strategies behind Abbott and Boston Scientific in this evolving area. Ogan Gurel, MD MPhil [email protected] http://blog.aesisgroup.com/ Drug-eluting stents Johnson and Johnson device safety Aesis Research Group Ogan Gurel MD
11/17/2008 12:51 AM
