Change of Heart
Edwards Readies for New Era of Heart Valves, Less Major Surgery
By VITA REED
Heart valve maker Edwards Lifesciences Corp. of Irvine is readying for a world where heart surgery isn’t what it used to be.
Edwards, with the largest share of the tissue heart valve market at about a third, is staring down technological advances that stand to impact its businesses.
New drug-coated stents that prop open heart arteries could cut the need for major surgeries by a quarter early on and by even more down the road, analysts say.
Moreover, the heart surgery world’s buzzing about a new type of valve that doesn’t require major surgery and instead is inserted with a catheter.
“The $900 million worldwide heart valve industry is comprised entirely of heart valves that do require surgery,” wrote Alexander Arrow, an analyst with Lazard Fr & #269;res & Co., in a recent research note. “All of this revenue could be at risk. The new valves have the potential to shake up the industry, with Edwards and St. Jude having the most to lose.”
St. Paul, Minn.-based St. Jude Medical Inc. is the next largest heart valve maker after Edwards.
Edwards is ready, according to Stuart Foster (photo), the company’s corporate vice president of technology and discovery.
“This is not a threat to our business,” he said. “It’s a huge opportunity because we see non-surgical heart valves as something that would expand the market way beyond people who get heart valves today.”
Edwards, St. Jude and at least six others are developing heart valves that can be implanted in a patient without invasive surgery, according to Arrow. Some of those valves could be on the market by 2005, he wrote.
In an interview, Arrow said Edwards was “sitting pretty” because it has three non-invasive products in development. And catheter-implanted valves aren’t likely to take “a material number of patients” away because of potential questions about their durability early on, he said.
Edwards’ Foster said he disputes the notion new valves could wipe out sales of older products.
“I think the report that you have has it completely backwards,” Foster said. “What will happen is that the disease will be treated earlier in its life cycle,that’s why we see this as a great opportunity and not at all a threat.”
The expanded market, according to Foster, could include patients too ill to have open-heart surgery and younger patients with early signs of heart disease but who aren’t sick enough to warrant a major operation.
“We see it as a way to expand the market to a huge group of patients who don’t get treated today,” said Foster, who heads up Edwards’ team seeking new products for heart disease.
Since Edwards became a public company three years ago, it’s looked to expand beyond its core heart valve business. Analysts have said that the company needs to diversify because new medical advances could eat away at the need for heart valves.
Edwards, OC’s largest device maker with 2002 sales of $704 million and a recent market value of $1.7 billion, has three non-surgical heart products in development:
n LifeStitch, a catheter-based device that uses a needle and suture to create a single stitch to attach the two leaflets, or halves, of a patient’s existing mitral heart valve together. When the leaflets are stitched together, blood regurgitation is reduced.
“Real simple to say and real hard to do,” Foster said of LifeStitch. “You have to get (the catheter) in the right place and it has to be positioned perfectly, and the heart’s beating at the time you’re doing it.”
n The second project involves annuloplasty,bringing the mitral valve leaflets together. But instead of surgery, a catheter-based clamp’s attached to a vein that’s close to the mitral valve, cinching the valve opening and allowing it to stay together.
Edwards acquired that technology earlier this year for about $20 million from Jomed NV, a now-defunct European device maker.
n A percutaneous replacement aortic valve that’s inserted into the heart’s left ventricle via a catheter. That valve, which will last some five years after implantation, is targeted for patients who wouldn’t otherwise be able to have major surgery.
“Again, conceptually easy but technically quite difficult,” Foster said.
Edwards isn’t revealing how much money is going into its non-invasive efforts.
“But we’re spending a significant portion of our total R & D; on these programs,” Foster said.
Edwards spent $18 million on research and development in the second quarter, up 8.4% from a year earlier.
The device maker’s been working on non-invasive heart valves for the past three years, Foster said. Edwards’ products, as well as those of rivals, probably wouldn’t be ready until at least 2007, he said.
“All three will require extensive human testing before the products are available on the market, so we’re looking at approximately three to four years down the road,” Foster said.
While Edwards is talking, St. Jude Medical is keeping a tight lid on its non-invasive heart valve plans. In his report, analyst Arrow wrote St. Jude “would only acknowledge the existence of non-specific ‘advanced research projects investigating new procedures for implanting heart valves.'”
Arrow said a St. Jude official told him the company wasn’t able to comment further on the status of the projects.
Besides St. Jude Medical and Edwards, other companies cited in the Lazard report included:
n Percutaneous Valve Technologies of Fort Lee, N.J. Percutaneous is developing a collapsible heart valve that expands with a balloon pushing it open once it’s in the heart.
Medtronic Inc., Johnson & Johnson and Boston Scientific Corp., three device heavyweights, have stakes in Percutaneous.
n Evalve Inc. of Redwood City, which also is working on a catheter-based clip for the mitral valve. Evalve’s U.S. clinical trial is starting now, and its clip could be on the market as early as the 2005, according to the report.
n Europe’s CoreValve SA, which is developing a collapsible heart valve that expands by itself. CoreValve is targeting patients who otherwise would have open-heart surgery and “believes 10% of surgeries can be avoided (a direct attack on Edwards and St. Jude),” Arrow wrote.
“Our competition is all very small, startup companies that are trying to break into the scene,” Foster said. “We think our history and our knowledge base in heart valves give us a big edge.”
