The Edwards Sapien heart valve isn’t the only regulatory news coming out of Irvine-based Edwards Lifesciences Corp. (see story, page 10).
The Food and Drug Administration recently cleared Edwards’ EV1000 device for sale.
Devices such as EV1000 are used to measure patients’ heart function in surgical and intensive care settings.
Critical care monitoring is done before, during and after open-heart, major vascular, abdominal, neurological and orthopedic surgeries.
EV1000 is compatible with several of Edwards’ other devices, according to the company.
Critical-care products account for some 31% of Edwards’ annual sales of $1.4 billion. The company has said it expects revenue from that segment to come in at $470 million to $500 million this year, fueled by growth of advanced monitors and the launch of EV1000 and VolumeView, a sensor-catheter set.
Edwards first introduced EV1000 and VolumeView in Europe and Australia late last year.
Zacks Investor Service weighed in on EV1000’s domestic approval in an article shortly after the company’s announcement.
Zacks praised the EV1000, saying it is “meant to help physicians make prompt and judicious decisions in the operating room.”
“With these products fetching positive clinician feedback, they could drive market share going ahead,” Zacks said.
Edwards also is making progress on a second-generation device in its glucose monitoring segment and expects to receive European regulatory approval by the end of this year, according to Zacks.
Zacks circled back to heart valves as Edwards’ primary business.
“While it is encouraging to note that the critical-care segment is on a growth path, Edwards records the majority of its revenues from the heart valve therapy segment,” Zacks said.
Caution on Costs
A recent article on the Motley Fool website suggested that investors in medical device companies should “watch (their) back.”
Device makers now have targets “painted on their backs” thanks to several recent studies that question whether the advantages of some devices justify their costs, Motley Fool’s Brian Orelli wrote.
Orelli mentioned a study published in the June edition of scientific journal Archives of Internal Medicine about patients who have a minor increase in their spikes during every heartbeat on an electrocardiogram. The study contended that such patients don’t necessarily benefit from cardiac resynchronization therapy devices.
Cardiac resynchronization therapy devices cost about $25,000 each. Makers include Boston Scientific Corp. of Natick, Mass.; Minneapolis-based Medtronic Inc. and St. Jude Medical Inc. of Little Canada, Minn. Medtronic and St. Jude have Orange County operations.
Orelli said that doctors will continue to perform cardiac resynchronization therapy because “the simple, cynical answer is that doctors get paid to do something.”
“Doctors will tell you that the procedure helps with chest pain quicker—and they’re right,” he wrote. “But if most people were footing the bill directly, they’d try a few months of $10 co-pays before moving on to a $15,000 procedure.”
Orelli predicted a change eventually will come: “As premiums reach levels that are intolerable and/or unaffordable, (patients will) start really demanding lower costs rather than grinning and bearing it like they do now.”
For now, patients seem to be looking for every available option no matter the cost, and insurers don’t have incentives to impose restrictions on device use because they tack profits on top of medical costs.
“If patients are willing to pay for the lobster buffet, insurers are happy to provide,” Orelli wrote.
More Medicare Concerns
Irvine-based Sun Healthcare Group Inc., Skilled Healthcare Group Inc. of Foothill Ranch and Ensign Group Inc. in Mission Viejo saw their shares slip earlier this month after an analyst downgrade that spread over the nursing-home sector.
Analyst Peter Martin of San Francisco-based JMP Securities cut his estimates for Sun and Skilled for this year and next, citing an expected reduction in Medicare payments. Sun and Skilled were downgraded to “market perform” from “market outperform.”
In his client note, Martin said he believed that Sun and Skilled were well-positioned in the long term but nursing home and healthcare facility stocks have been under pressure because of concerns about Medicare rates.
Such concerns are compounded by talks about the federal deficit ceiling, which could result in cuts to entitlements such as Medicare, Martin said.
Bits and Pieces
St. Jude Medical Center in Fullerton now offers nicview, a Web camera that allows parents to check on their babies who are in the hospital’s neonatal intensive care unit via a computer or mobile device. Nicview is made by Louisville, Ky.-based Healthcare Observation Systems LLC and provides a continuous stream of live video … Tustin drug maker Radient Pharmaceuticals Corp. said it hired Regulatory and Clinical Research Inc. of Minneapolis as its specialist consultant for reimbursement and healthcare economics. Radient is working on getting broader reimbursement from public and private insurers for its Onko-Sure cancer detection test.
