Irvine-based Edwards Lifesciences Corp. and Medtronic Inc., which employs 700 people in Orange County, have some new competition in the overseas market for less-invasive heart valves.
European regulators last week approved St. Jude Medical Inc.’s Portico, a less-invasive valve for a small patient population that is too sick to have open-heart surgery.
St. Paul, Minn.-based St. Jude has an estimated 425 workers in Irvine but doesn’t make its less-invasive heart valves here. Its OC operation makes catheters for diagnosing and treating atrial fibrillation, a common type of irregular heartbeat.
Transcatheter heart valves are inserted via a catheter inserted either through the femoral artery or a rib incision. Such valves are considered one of the biggest advances in the industry in years and could eventually grow into a $3 billion-a-year market.
Edwards Sapien, Medtronic CoreValve and Portico all are used for treating some patients who have severe aortic stenosis, or a narrowing of the body’s main artery that causes blood delivery to be blocked. Patients who are eligible for transcatheter valves are usually not able to tolerate open-heart surgeries.
St. Jude said Portico differs from other approved transcatheter heart valves because it can be completely re-sheathed or returned to the delivery catheter and repositioned or retrieved before release from the catheter.
Portico’s approval “represents a key milestone for St. Jude Medical’s transcatheter heart valve program and exemplifies our focus on developing technologies that advance the practice of medicine,” Frank Callaghan, president of St. Jude’s cardiovascular and ablation technologies division, said in a release.
Edwards has been in Europe since late 2007 with its Edwards Sapien valve. Edwards got Food and Drug Administration approval for Edwards Sapien a year ago and had $123.8 million in global sales of the valve during the third quarter.
Minneapolis-based Medtronic—whose CoreValve was developed in Irvine—competes closely with Edwards overseas and expects its valve to gain U.S. approval in 2014.
Medtronic “continuously monitors the competitive landscape” for transcatheter valves, spokesperson Kathleen Janasz said when queried about the Portico.
“While Edwards has worked diligently to establish a leadership position in the transcatheter valve market, which has resulted in the opportunity to be the first company to bring this therapy to patients in the U.S., we will not be complacent,” Chief Executive Michael Mussallem said.
He said Edwards plans to introduce new transcatheter technologies in the next several years, including Edwards Sapien 3 and Centera.
Edwards also continues to “invest significant resources in researching new applications for our transcatheter technology, so that we can help even more patients in the future,” Mussallem said.
Medtronic CoreValve has been implanted in more than 30,000 patients in more than 60 countries outside of the U.S., Janasz said.
St. Jude didn’t say when it expects the FDA to clear Portico, but analysts have said the valve likely won’t hit the domestic market for at least three years.
Certain analysts have been concerned about the pace of how St. Jude, which has annual sales of more than $5 billion and a recent market value of about $9.5 billion, has developed its transcatheter valve program.
Morgan Stanley & Co. analyst David Lewis downgraded St. Jude in a research report at the end of October and mentioned the slow progress of the device maker’s program as a reason.
“Portico launch will ramp slowly next year due to a limited range of initial sizes and may stall as Medtronic launches its [second-generation] device,” Lewis said.
Edwards and Medtronic may not have much to worry about, at least in the near term, Wells Fargo analyst Larry Biegelsen said.
Biegelsen wrote in a research note that Portico’s smaller 23 millimeter size doesn’t serve a large patient population yet. St. Jude has said it expects to receive regulatory clearance for additional valve sizes in coming years and plans to start a European trial of a 25-millimeter valve before the end of 2012.
Rajeev Jashnani of UBS Securities said in a note he expects “measured uptake” of Portico.
St. Jude eventually could make its presence known in the less-invasive heart valve market, said analyst Thomas Gunderson of Minneapolis-based investment bank Piper Jaffray & Co.
“St. Jude knows all the top valve centers,” Gunderson told Dow Jones News Service. “They know all the surgeons. They’ll get a bit more of a running start.”
He said a “three-way split” of the market could develop among Edwards, St. Jude and Medtronic.
