The Coronary Stent Business is Big Business…And It’s About To Get Bigger
The coronary stent approach to treat artherosclerotic heart
disease is on the verge of exploding with the next generation of stents looming
on the horizon. The current $2
billion-plus market is about to double, and companies like
Johnson & Johnson
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SurModics
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Boston Scientific [BSX|(BSX], Angiotech
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Medtronics
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The coronary stent, a medical advancement that has changed the way
cardiologists practice, is a small metallic spring-like device used to keep the
arteries of the heart open. Angioplasty,
a common procedure cardiologists have performed for years to balloon open
blockages in the coronary arteries, experienced significant advancement with the
addition of the first-generation stent devices several years ago.
Despite being effective in treating artherosclerotic heart
disease, angioplasty did have one main drawback. At this
point, if reballooning did not work, major heart bypass surgery would be the
only other option. However, this
problem was significantly improved upon with the invention of the coronary stent.
Now cardiologists are able to balloon open a blockage and insert a tiny
metallic stent immediately after the balloon angioplasty to keep the coronary
artery open. The insertion of a
stent vastly lowered the restenosis rate after balloon angioplasty, prolonged
lives, and prolonged the time to major heart bypass surgery.
Despite a marked improvement in the restenosis rate, it still remained
somewhat of a problem even with the addition of stents.
It was a problem because the stent itself, once in place, irritated the
inside lining of the coronary artery causing a smoldering inflammatory reaction
that lead to the formation of scar tissue.
Over time, this scar tissue formation would clog up the stent, causing
occlusion of the artery and a trip back to the cardiologist.
However, this is about to change very soon.
“This next generation of drug-eluting stents will have an
immediate impact and change the way cardiologists practice,†according to
cardiologist Dr. Peter Mandelson. A
drug-eluting stent is a coronary stent impregnated with a drug that inhibits the
inflammatory/scar reaction observed with the placement of a regular metallic
stent. Once the drug-eluting stent
is placed after a coronary artery is ballooned open, the specific drug
impregnated in the stent releases over time, preventing the scar reaction that
often causes occlusion. “The data
is overwhelming in lowering the restenosis rates in the short-term when compared
to regular stents,†according to Dr. Mandelson.
Overwhelming indeed, and in one study the restenosis rate was zero.
The use of drug-eluting stents will not only have an immediate impact on
prolonging life, it will also immediately impact the bottom line of the
companies involved.
Companies Poised to Ride the Drug-Eluting Stent Wave?
Cordis Corporation’s (a Johnson
& Johnson (JNJ) company) Cypher drug-eluting stent system has the lead in
becoming the first on the scene. The
drug used to coat its stent and prevent coronary arteries from occluding is
sirolimus. The Cypher stent
technology was first approved by an FDA Advisory Committee in April 2002 and
should be granted full FDA approval by March of this year.
It has already been approved in Europe and last year generated over $700
million in revenue.
Once this positive FDA decision comes down for Johnson
&
Johnson, another company will also be greatly impacted.
SurModics (SRDX), a leading provider of the technology used to drug coat
stents — and JNJ’s partner — will also be affected by the immediate growth in
this industry. SurModics recently
saw its fiscal first quarter net income rise 54% on a 33% rise in revenue mainly
due to the sales of JNJ’s drug-eluting stent globally.
This increase was much higher than expected and the company looks forward
to further piggyback growth once the stent system is approved.
The company is holding a conference call on Monday, Jan. 27, to discuss
its future growth potential. Keep
an eye on SurModics as the Ides of March approach.
Despite Johnson & Johnson’s
head start in this multibillion-growth industry, Boston Scientific (BSX) is
closing fast and actually may have an edge in the long term.
Boston Scientific’s Taxus drug-eluting stent system recently received
approval in Europe and should get full FDA approval in this country later in the
year. The company’s drug-eluting
stent is coated with paclitaxel, a drug similar to one of the most widely used
cancer drugs today. Boston
Scientific predicts global sales of its drug-eluting stent system next year will
be close to $2 billion. Whispering
in the cardiology circles hints at Boston Scientific having a favorable user
edge over JNJ’s stent technology, an edge that may cause Boston Scientific to
overtake JNJ in the long term. However,
the shorter favors the Johnson & Johnson/SurModics team as March approaches.
In addition to Boston Scientific,
a company called
Angiotech Pharmaceuticals
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once the Taxus drug-eluting stent system is approved.
Angiotech is to Boston Scientific as SurModics is to Johnson & Johnson.
Angiotech will also experience piggyback growth from BSX’s drug-eluting
stent system because the company supplies the technology to drug-coat the stents.
At present, the losers in the
drug-eluting stent war are Guidant (GDT) and Medtronics (MDT).
Guidant, once the leader, has fallen from the coronary stent grace and is
behind JNJ and BSX in getting to the next level. In
addition, Medtronics (MDT) is just beginning to place its foot in the
drug-eluting stent pool by initiating its first clinical trial looking at its
own stent system. Both are far
behind the leaders JNJ and BSX in this immensely growing market.
On a final note, the human
benefits of using drug-eluting stents in the treatment of coronary artery
disease should be enormous. However,
these stents are much more expensive than the current stent technology and
initially hospitals may balk at their price, possibly suppressing their use.
Initially, cardiologists plan to use the new drug-eluding stents in
patients who have already undergone angioplasty/stent placement and need to have
the procedure repeated. Over time,
I suspect the demand by cardiologists to use drug-eluting stents will be so
strong that hospitals will have no choice but to succumb to the price in order
to compete.
Biotechnology FDA Watch List
1)
Trimeris
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expects FDA Advisory Committee approval of its new drug Fuzeon to treat
HIV/AIDS by mid-March ’03.
2)
Biogen
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expects full FDA approval of its new drug Amevive to treat psoriasis by
the first quarter ’03.
Biotechnology Clinical Data
Release Watch List
1)
Regeneron Pharmaceuticals
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expects to release phase III clinical data on new drug Axokine to treat
obesity by the end of the first quarter ’03.
2)
VaxGen
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expects to release clinical data on vaccine to prevent spread of the HIV
virus in the first quarter ’03.
3)
Cell Therapeutics
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will present late stage clinical trial data on new drug Xyotax to treat
recurrent ovarian cancer at the 34th Annual Meeting of the Society of
Gynecologic Oncologists, Jan. 31 – Feb. 4.
4)
Hemispherx BioPharma
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will present late stage clinical data on its drug (Ampligen) to treat
Chronic Fatigue Syndrome (CFS) at the 6th International Research
Conference of the American Association for CFS, Jan. 31.
Good luck.
Paul Ruggieri
MD, FACS