San Clemente-based Cameron Health Inc. last week cleared a regulatory hurdle on the way to its sale to Boston Scientific Corp. that could be worth as much as $1.35 billion.
A Food and Drug Administration advisory panel voted 7-1 last week in finding that the benefits of Cameron’s S-ICD implantable defibrillator, which shocks irregular heartbeats to return them to normal rhythm, outweighed its risks. The panel also voted 7-1 on the larger finding that S-ICD worked, and gave it a unanimous safety nod.
Natick, Mass.-based Boston Scientific is expected to complete its deal for Cameron within the next few months. The purchase price is based on reaching certain regulatory milestones, including FDA approval for the S-ICD.
FDA’s panelists signed off on the device even though agency reviewers said studies showed S-ICD was tied to inappropriate shock episodes and had higher rates of infection compared with traditional implantable defibrillators, which have lead wires inserted through a vein.
Potential Game Changer
The S-ICD is used to prevent sudden cardiac arrest and could be a game-changer for heart rhythm management because of its design, which the FDA advisory panel cited as a key reason for approval.
The FDA usually follows its outside panels’ recommendations, though it’s not required to do so, and a final decision from the regulator will come later.
Cameron is “pleased with the panel’s strong recommendation” for approving S-ICD, Chief Executive Kevin Hykes said in a statement.
He called the panel’s action “another important step toward FDA approval” of the defibrillator and its availability to doctors and their patients who are at risk of sudden cardiac arrest.
Hykes told Dow Jones Newswires last week that “defibrillator therapy has saved millions of lives” and that his company believes “we have a solution to the Achilles’ heel of this therapy” via its lead wire-less design in the wake of the FDA reviewers’ reports.
Cameron, whose annual sales total $14 million, has sold S-ICD in Europe since 2009.
Boston Scientific, which first invested in Cameron nine years ago, had an option to buy the company that was set to expire in March. Boston Scientific, which has annual sales of more than $7 billion and a recent market value of $8.9 billion, has been wrestling with weak procedure growth and pricing pressures on certain devices.
It has been trying to cut costs and expand its product lines as it struggles with weak sales of its traditional defibrillators.
“We anticipated the potential for a Cameron acquisition or renegotiation, given the option expiration in March, and think S-ICDs should see increased adoption in the hands of a much larger sales force,” Adam Feinstein, an analyst with Barclays Capital in New York, said in a research report.
“However, in its current form [large size and stronger shocks], we think the S-ICD will struggle to gain significant penetration in the market and we continue to view [Boston Scientific] as a turnaround story given the pressures in its core [cardiac rhythm management] and stent markets,” Feinstein said.
Battery Problems
Meantime, reports surfaced last week that Cameron had discovered problems with the batteries in some of the S-ICD devices after a battery was depleted less than six months after implant. Batteries and devices are meant to last five years.
FDA officials said that there have been three additional reports of premature battery depletion and that it “would not consider … approval of the device until this issue is resolved.”
Regulators said they expect the battery issue to be resolved. Cameron said in documents posted to the FDA’s website that it has addressed the battery depletion issues.
Boston Scientific competes against Medtronic Inc. and St. Jude Medical Inc., a pair of Minnesota device makers with Orange County operations. Its market has seen sales slow in the wake of quality concerns and some regulatory probes.
St. Jude recently started a public relations campaign to protect its Riata line of implantable defibrillators—which it stopped selling in 2010—by claiming more patient deaths are associated with competing products from Medtronic. The campaign reportedly came in the wake of a late March article in the online edition of Heart Rhythm Journal linking the Riata line to patients’ deaths.
