Irvine-based Edwards Lifesciences Corp. “ought to pull away again” from its competitors in the transcatheter heart valve market, according to a recent report published on the Seeking Alpha investor website.
The reference is to Sapien 3, Edwards’ third-generation heart valve, which received Food and Drug Administration approval this month, ahead of schedule. Regulators approved Sapien 3 for patients with severe aortic stenosis, or a narrowing of the body’s primary artery, who are at high risk of death during traditional open-heart surgery.
Sapien 3 differs from the original Sapien, in that it has an outer skirt intended to prevent leakage.
“Edwards’ dominance should continue in spite of increasing competition from Medtronic [PLC], which has been gaining ground with its CoreValve device,” analyst Madeleine Armstrong wrote.
Medtronic, which is based in Ireland for tax purposes and operates from Minnesota, got CoreValve through its $700 million buy of Irvine-based CoreValve Inc. in 2009.
Figures from London-based industry tracker EvaluateMedtech show Edwards is expected to bring in $1.95 billion in sales from transcatheter heart valves by 2020, “well ahead” of Medtronic’s forecasted $1.38 billion.
“More approvals seem sure to follow, as Edwards has made no secret of plans to expand the market,” Armstrong said. She mentioned that Edwards is already testing Sapien 3 in intermediate-risk patients and presented positive clinical results for that group during last month’s EuroPCR meeting in Paris.
“No [transcatheter] valves are approved in the U.S. for intermediate-risk patients, and if Edwards does want to get a foothold in this market, Sapien 3 will need to show comparable—or better—results versus the current gold standard, open surgery,” Armstrong wrote.
The report indicated that Sapien 3 was expected to get FDA approval for intermediate-risk patients in late 2016—but there’s an even bigger group for Edwards and Medtronic to go after.
“The low-risk group remains the biggest prize,” Armstrong said. “This population makes up at least half of those undergoing surgical aortic valve procedures, with intermediate-risk ones accounting for 30% to 40% and high-risk ones around 10%.
“Edwards will undoubtedly focus on the low-risk group next as it seeks total [transcatheter aortic valve replacement] domination,” Armstrong added.
Drugmaker in Shareholder Battle
Spectrum Pharmaceuticals Inc., a cancer drugmaker founded in Irvine that still employs almost 90 here, is the target of a proxy fight launched by an activist shareholder.
New York-based hedge fund Armistice Capital, which owns about 7% of Henderson, Nev.-based Spectrum, launched its campaign against the company in May, shortly before it revealed its ownership position.
Armistice and its managing member, Steven Boyd, are pushing for Spectrum Chief Executive Rajesh Shrotriya to step down or significantly slash his compensation, consolidate offices into its Irvine location, and cut unpromising research while also pushing for an ultimate sale of the drugmaker after the changes.
Spectrum moved its headquarters from OC to Henderson in 2011. At the time, management said it was influenced by a shift to emphasize marketing over research and development, which put a priority on lower-cost housing for workers.
“Once we started growing out of R&D into marketing and sales, why would we need support offices in Irvine?” Shrotriya told the Business Journal at the time.
Armistice in its letters to Spectrum cited several factors that it deems should change, including $2 million in bonuses and salary increments to Shrotriya and three other top Spectrum executives after a court ruled in February that the patent on cancer drug Fusilev was invalid, a decision that opened it to generic competition.
Spectrum and Shrotriya responded to Armistice’s first letter in a statement saying that the company “welcomes the views and input of all of its shareholders and will carefully consider” the hedge fund’s suggestions.
Boyd wasn’t satisfied and said, “… saying that the [Spectrum board] takes its fiduciary responsibility ‘seriously’ and that [Spectrum] will evaluate ‘any serious offer it receives’ is not good enough,” in a letter he wrote to Shrotriya this month.
Bits and Pieces
Mirth LLC, a wholly-owned subsidiary of Irvine-based healthcare technology company Quality Systems Inc., said Philadelphia-based HealthShare Exchange of Southern Pennsylvania Inc. is using its software to enable the secure exchange of patient health records and claims data. … Kaiser Permanente’s Anaheim and Irvine hospitals received an A grade in a safety survey sponsored by San Francisco-based Leapfrog Group, an industry watchdog made up of large healthcare purchasers … Rancho Santa Margarita-based Willowglade Technologies Corp. said its software program that helps patients manage their breast cancer diagnoses is now available on Microsoft Azure … Laguna Beach-based startup Dermatology Industry Inc. recently introduced the Uvo sun protection supplement in drinkable form. The company says the drink has more than 30 vitamins, phytonutrients and antioxidants that can protect skin from sun damage.
