SAN FRANCISCO – The JP Morgan Healthcare Conference has something for everyone, with companies representing varying sub-sectors within the field and representing all different levels of capitalization from large-cap well-established companies to much smaller private companies still trying to make a name for themselves.
Definitely falling into the large-cap camp is Medtronic (Minneapolis), one of the largest medical technology companies in the world. Company Chairman/CEO Bill Hawkins said during his presentation that with healthcare reform on the horizon, he believes his company is poised "to be part of the solution, not the problem."
Unquestionably, the big news for the company this week was the announcement of its pending acquisition of Ablation Frontiers (AB; Carlsbad, California) for an initial payment of $225 million plus potential milestone payments (Medical Device Daily, Jan. 13, 2009).
Medtronic said the goal of its newly formed AF Solutions franchise, led by VP and general manager Reggie Groves, is to be the physician partner of choice for atrial fibrillation (AF) ablation by bringing breakthrough AF therapies to the patients and physicians that are simpler, safer, effective, and offer more predictable procedure times than current treatment methods.
Following Medtronic's recent acquisition of CryoCath Technologies (Montreal), the addition of Ablation Frontiers' anatomically designed, catheter-based ablation technologies and its unique radiofrequency (RF) energy system will allow Medtronic to deliver the industry's broadest range of therapies, the company said. Medtronic reported its intention to buy CryoCath in September for $380 million in cash (MDD, Sept. 26, 2008).
In 2006, Ablation Frontiers received the CE mark to begin marketing its system of catheters and the RF generator in the European Union. Ablation Frontiers is conducting a clinical trial under a FDA investigational device exemption to gain approval for permanent, or chronic, AF in the U.S.
Hawkins said this latest acquisition will allow the company "to democratize the whole AF procedure." He added that the AB technology "basically obviates the need to do extensive mapping and make this procedure easier to be done by a variety of different [emergency technicians]."
Hawkins said he sees the neuromodulation space as one area that has potential for great growth in the near term, particularly with the aging population and with that increasing numbers of people with neurodegenerative diseases. Areas that the company is working in include epilepsy, Parkinson's disease, and obsessive compulsive disorder.
Hawkins also said he sees the diabetes market as another potentially large market opportunity which is "particularly underpenetrated outside the U.S." He said the company is very excited about opportunities it sees in the area of glucose monitoring. "We really are transforming this ... from being kind of a pump business to really a business of monitoring and managing the people with overall diabetes." He said the ultimate goal in this space is to "close the loop" and develop an artificial pancreas.
Representing the up-and-coming public companies was Kinetic Concepts (KCI; San Antonio), whose president/CEO, Catherine Burzik, provided a compelling argument for why investors should be excited about KCI.
KCI develops wound care and therapeutic products. Its wound care systems and therapeutic support systems address four principal clinical applications: advanced wound healing and tissue repair, pulmonary complications in the intensive care unit, bariatric care, and wound treatment.
Burzik said she sees the company's vacuum-assisted closure (V.A.C.) technology as a $6 billion market opportunity based on a current market penetration rate of about 25% of all potentially V.A.C.-able wounds. She said this number could soar to nearly $12 billion, "as we expand geographically and introduce new products."
The company plans on soon releasing a new product via its diabetic foot ulcer dressing, called the DFU Bridge Dressing. Burzik said that new dressing will be able to be used for more than just foot ulcers. She said the company plans to release new dressings annually as well as releasing a new version of the V.A.C. technology in 2010 with yet another update to the V.A.C. in the 2010 timeframe.
KCI also plans on bringing its negative wound pressure system into the surgical suite in 2009 via the SWMS product. "This is a very large opportunity aimed to both reduce the chance of infection and improve the overall cosmetic outcome from surgical wounds," said Burzik.
Moving into the future, she said the company is working on delivering the negative wound pressure subcutaneously in concert with its LifeCell (Branchburg, New Jersey) products. "This is a combination of tissue repair and tissue regeneration aimed at both soft tissue repair and hard tissue repair," that the company is calling TE Wound and TE Ortho.
On the private front, Evalve (Menlo Park, California), the promising developer of devices to enable percutaneous repair of cardiac valves made its pitch for investor attention.
Ferolyn Powell, president/CEO of the company, said that Evalve's focus is to transform an existing surgical technique into a much less-invasive percutaneous procedure, with the focus being on mitral valve regurgitation, also known as MR.
MR is the most common type of heart valve disease in the U.S. and the second most common in Europe. Since the surgical approach involves the use of a heart-lung bypass machine, a vast majority of patients elect not to undergo the procedure, which leads their hearts susceptible to chronic volume overload, and ultimately in many cases, to heart failure.
The company's MitralClip is the first commercially available system that allows for a non-surgical option for patients suffering from MR. Repair with the device is performed by physicians in the cath lab, and the heart beats normally during the procedure. Use of the device may help patients delay or avoid surgery, having also preserved the surgical options of valve repair or replacement.
Using a tiny barbed, wishbone-shaped device, the heart is fixed non-surgically from the inside out. A catheter is carefully guided through the femoral vein in the groin, up to the heart's mitral valves. The clip on the tip of a catheter is then clamped on the center of the valve leaflets, which holds them together and quickly helps restore normal blood flow out through the leaflets.
Percutaneous mitral valve regurgitation repair was cited as the fifth most important new advance in the most recent Cleveland Clinic Top list of medical innovations that was unveiled in November (MDD, Nov. 14, 2008).
Powell characterized the MR market as being over $4 billion in the U.S. alone, a figure which she said could be doubled when incorporating a worldwide market.
Powell noted that the device, which is currently approved for use in Europe, is on its way to earning a U.S. approval as well, with its recent completion of a U.S. pivotal study in 2008. She said the company expects to file its PMA submission for the MitraClip in the first half of 2010 with expected U.S. launch by the first half of 2011.