CDU Contributing Editor
NEWPORT BEACH, California – Every medical specialty has periods of great prosperity and progress and other times when the specialty is in the midst of challenges and/or crisis. For example, prior to the advent of percutaneous coronary angioplasty in the early 1980s, the field of interventional cardiology (IC) was in the doldrums, with a relatively small number of cardiologists mainly performing diagnostic angiographies. With the explosion in angioplasty over the past two decades, IC has flourished beyond all expectations and transformed this group of physicians into the “superstar” category in medicine.
Cardiac surgery has certainly had its halcyon days, beginning in the late 1960s with the debut of coronary artery bypass grafting (CABG) and then, later, with the successful launch of heart valves. From these two key procedures, cardiovascular surgeons enjoyed a growing and lucrative practice from the late 1960s through mid-1990s. Reimbursement from Medicare and private payors was excellent, case loads were growing and CV physicians were thriving.
However, in the past decade, the landscape has dramatically shifted. Initially, the introduction of coronary stents had an impact, although CABG procedures remained steady as high restenosis rates hampered percutaneous interventions. More recently, however, with the overwhelming clinical and commercial of success of drug-eluting stents (DES), the income of cardiac surgeons has been under pressure, with CABG procedures declining and valve procedures growing at a very modest rate. Meanwhile, the fortunes of interventional cardiologists have soared, as percutaneous coronary interventions (PCI) have mushroomed in the past 10 years.
Cardiac surgery meetings in the past couple of years have been partially devoted to discussions of the competitive onslaught from new interventional technology and the need for the cardiovascular community to “re-invent” itself. The New Era Cardiac Care 2006 conference, held here in early January, certainly did address that issue and the need for CV surgeons to adopt new technology. The meeting, sponsored by Aligned Management Associates (San Luis Obispo, California), afforded the attendees the opportunity to hear from some of the leaders in the world of cardiac surgery and cardiology.
Perhaps the most interesting talk during the three-day meeting involved well-known interventional cardiologist Martin Leon, MD, associate director of the Center for Interventional Vascular Therapy at Columbia University Medical Center (New York), who energetically addressed “The Impact of PCI on Cardiac Surgery: Current and Future Projections.”
Leon, founder of the annual Transcatheter Cardiovascular Therapeutics (TCT) conference, which draws thousands of participants to Washington each fall, told the CV surgeons in attendance in Newport Beach in a tongue-in-cheek manner, “I am here to explain the demise of cardiac surgery.” He said that in the early days of PCI the technology was “simply not good enough,” plagued with restenosis rates in the 40% or higher area. However, the introduction of DES in the past three years, which he described as having a “staggering penetration rate,” has transformed the world of coronary interventions.
“Approximately 4.5 million DES have been implanted worldwide in the past two years,” Leon said, and “we have seen a 90% penetration rate in the U.S. since the first DES was FDA-approved and a 72% penetration rate outside the U.S.”
He also said that PCI and CABG are now equal in safety and that the minimally invasive nature of PCI gives it a huge advantage over CABG. He said that for the vast majority of patients, “the best incision is no incision.”
Despite all of its success. Leon ticked off several “little dirty secrets” about PCI that gives the cardiovascular community cause for hope. These include the safety of DES, specifically late thrombosis, which is very “troublesome” and occurs in about 0.5% of cases, the long-term durability of PCI and its relative lack of efficacy in chronic total occlusions and diffuse distal disease.
He also pointed out that because of the remarkable decline in restenosis rates following PCI, the number of PCI procedures actually declined slightly in the U.S. in 2005. Although a very modest decrease from previous levels, this is the first time that annual PCI procedures ever have declined in the U.S. on a year-to-year basis. Clearly stirring the audience with his talk, Leon emphatically noted that PCI would never totally replace CABG but that it will continue to eat away at its already reduced market.
Following Leon, Bruce Lytle, MD, chairman of the department of thoracic and cardiovascular surgery at the Cleveland Clinic Foundation (Cleveland), spoke on the topic of “Cardiac Surgery: Past, Present and Future.”
He lamented that “if a percutaneous procedure is safe and effective in the short term, most patients will typically prefer it over CABG and accept the known, long-term inferior outcome of PCI.” He insisted that CABG was a better, more durable procedure and said that it would survive the DES era, just as it has fought off other challenges in the past. Niche and less-invasive opportunities such as off-pump CABG, now 25% of total CABG procedures, and smaller-incision CABG will likely enable CV surgeons to at least hold their own until other opportunities unfold, Lytle said.
Surgical ablation of AF
In regard to new opportunities for CV surgeons, one market that appears to have excellent potential is the surgical ablation of atrial fibrillation (AF). As is widely appreciated, AF is an enormous clinical problem around the world, afflicting about 6 million people, including about 2.5 million in the U.S. An additional 200,000 cases of AF are added to the domestic pool every year.
AF is a condition where abnormal electrical impulses cause the atria, or upper chambers of the heart, to fibrillate, or quiver, at rapid rates of 400 to 600 times per minute. As a result of this quivering, blood in the atria becomes static, creating an increased risk that a blood clot will form and cause a stroke or other serious complications. AF is for the most part a “silent” and therefore an under-diagnosed condition, due in large part to the fact that patients with AF often have mild or no symptoms. It was recently estimated that only 12% of all AF is symptomatic. Thus, AF is typically only diagnosed when patients seek treatment for an associated condition, such as a stroke or heart disease.
According to the American Heart Association (AHA; Dallas), those with AF are about five times more likely to have a stroke. It is believed to be responsible for 15% of the estimated 700,000 strokes that occur annually in the U.S. According to the National Center for Health Statistics (Hyattsville, Maryland), AF accounts for some 1.4 million outpatient visits and more than 227,000 hospitalizations annually in the U.S.
From a commercial perspective, the AF market is certainly very large and under-penetrated. At the recent St. Jude Medical (St. Paul, Minnesota) analyst meeting held in New York, management sized the domestic AF market opportunity as being well over $4 billion (see related story, p. 6). This assumption was based on 2.6 million patients with AF, excluded 35% who are asymptomatic and then further excluded from the symptomatic group the 40% who can tolerate drug therapy.
Variety of therapeutic options
There are several different therapeutic options to treat AF. These include:
Drugs. Medical management is first-line therapy for virtually all AF patients. The goal is to prevent blood clots, control heart rate or restore the heart to normal rhythm. Currently available drugs are often ineffective, not well tolerated and may be associated with severe side effects. As a result, it is estimated that drug therapy for AF fails for as many as 60% of patients within two years. Worse yet, for those who initially respond to drug therapy, only approximately 25% of patients can continue to be managed with drugs after five years.
Implantable devices. Implantable devices, such as defibrillators and pacemakers, can be effective in alleviating the symptoms and number of AF episodes. But neither device can foster a cure. Patients may continue to experience the adverse effects of AF as well as some of the symptoms, including dizziness and fatigue, because the AF continues.
Open surgery. Many years ago, a procedure called Cox-Maze was developed for AF. Surgeons make a precise pattern of incisions inside the right and left atria and then they suture those incisions back together. This creates lesions of scar tissue that interrupt the conduction of abnormal electrical activity and allows sinus impulses to travel to the atrioventricular node, as they normally should.
This procedure is highly effective at treating AF, with reported success rates of 98% to 99%. However, the procedure involves a sternotomy and patients must be placed on cardiopulmonary bypass throughout the procedure. The Cox-Maze procedure is rarely performed today because it requires a very invasive surgery, is technically challenging and typically associated with long recovery times.
Catheter-based treatment. Percutaneous catheter-based AF ablation therapy was developed several years ago and it is a very appealing option, because it is minimally invasive and promises a cure. The initial foray into catheter ablation was essentially an attempt to duplicate the Maze procedure by creating linear lesions on the atrium with an energy source such as radio frequency (RF), cryothermia, microwave or focused ultrasound. This approach is technically very challenging, can be very time-consuming with several hours in the cath lab and occasionally has been associated with serious complications.
In the late 1990s, Michel Haisseguerre, MD, of Hopital Cardiologique du Haut-Leveque (Pessac Cedex, France), and his colleagues discovered that recurrent AF (either paroxysmal and persistent) is triggered by rapidly firing tissue that is located in one or more of the four pulmonary veins (PVs), which attach to the rear of the left atrium.
Since that seminal finding, which fueled an upsurge in interest in device-oriented treatment, catheter ablation techniques have been targeted toward isolating the pulmonary veins from the left atrium, a procedure known as pulmonary vein isolation. Cardiovascular Device Update estimates that some 15,000 to 20,000 PV ablations were performed in the U.S. in 2005, all on an “off-label” basis.
Publicly traded Cryocor (San Diego) was the first company to achieve FDA approval to begin a multi-center, catheter-based AF pulmonary vein ablation trial. This study, which began in late 2004, is randomizing catheter cryo-ablation to conventional drug therapy and is directed toward paroxysmal AF, an intermittent episode that tends to terminate on its own. The company has enrolled a little over 100 of the 160 required to complete enrollment, which it hopes to complete by mid-2006, with filing of a PMA anticipated by mid-2007.
Another public company, Cardima (Fremont, California), has twice attempted to obtain FDA approval for an RF catheter-based linear ablation system for AF, and both times has been rejected due to lack of efficacy relative to FDA guidelines. Other players in this market include St. Jude Medical, with an RF system, privately owned ProRhythm (Setauket, New York) with high-intensity focused ultrasound (HIFU) technology, and publicly traded CryoCath Technologies (Montreal) with cryo energy.
The latter has a particularly active program in atrial fibrillation. In January, encouraging U.S. pilot clinical data was presented at the 11th annual Boston Atrial Fibrillation Symposium, which is sponsored by Massachusetts General Hospital (Boston). Douglas Packer, MD, a highly respected electrophysiologist (EP) from the Mayo Clinic (Rochester, Minnesota), principal investigator of the System Trial Of Paroxysmal Atrial Fibrillation (STOP AF) trial, presented three-month follow-up data on the first 15 patients treated in the U.S. An impressive 13 of these patients (87%) were reported to be free of their AF, while another one of the two patients, who was not AF-free after the first treatment, has been re-treated and now appears to be AF-free. There were no significant safety issues.
Packer also reported that the results from the 12-month data from the original 20-patient European clinical study have shown that 84% of patients are free of AF. In addition, two more patients had significant reductions in their AF burden and have conditions that do not warrant re-treatment and are considered clinically successful.
During his presentation, Packer remarked that a successful AF ablation technology would require an 80%-or-higher success rate with no major complications.
The STOP AF trial is expected to begin domestic enrollment of its pivotal phase shortly, while a full-scale commercial launch throughout Europe is also expected very soon. The trial and European launch both use CryoCath’s Arctic Front cryoablation catheter, which appears to have an excellent safety profile, avoiding the serious adverse events such as stenosis (narrowing of the pulmonary vein), thrombosis (clot formation), and esophageal perforation that have plagued heat-based RF ablation systems.
CryoCath already is reaping the benefits of its extensive AF programs. Its recently reported Dec. 31, 2005, quarter showed that its sales surged 48% above the year-earlier quarter, reaching $8.9 million and beating analysts’ projections by more than $1 million.
Surgical ablation. The clinical success of the classic Maze procedure. albeit with a high degree of invasiveness and post-operative morbidity, has spurred interest in less invasive surgical approaches to treating AF. The greatest progress has been experienced in so-called “concomitant” procedures, where the patients are treated for their pre-existing atrial fibrillation at the same time as they are undergoing an elective open-heart procedure such as a CABG or a valve replacement.
In a concomitant procedure, an energy source such as RF, microwave, cryothermia, diode laser or high intensity focused ultrasound (HIFU) is used to destroy abnormal heart tissue, thereby eliminating the arrhythmia and restoring normal heart rhythm. The procedure is a variation on the Maze procedure, whereby lesions instead of scalpel incisions are strategically placed on the left and right atria to interrupt the circular electrical impulses that cause the AF. Several studies reported in the CV literature indicate that the success of RF ablation, which is the most widely used energy source, is in the 90% range. Success is typically defined as freedom from AF at a six-month follow-up.
Publicly traded AtriCure (West Chester, Ohio) currently commands about a 50% share of the concomitant AF surgical ablation market. CDU estimates that more than 19,000 AtriCure procedures have been performed since its debut in the U.S., with roughly 8,500 occurring in calendar 2005.
AtriCure was a latecomer to this market, following on the heels of industry giants Medtronic (Minneapolis) and Guidant (Indianapolis). Its success in garnering market share has been fostered by advantages over other ablation technologies including its ease of use, efficacy, overall safety and a shorter procedure time.
The surgical ablation market offers two distinct opportunities, concomitant and standalone. Various investment banking house reports in the past several months have provided an analysis of each of these markets and it is clear from their analysis that the standalone opportunity dwarfs the concomitant one. For example, in a Sept. 15, 2005, report authored by Lynn Pieper of Thomas Weisel Partners (San Francisco), the total domestic surgical AF ablation market opportunity was estimated at about 380,000 procedures or about $2.3 billion. However, the stand-alone market opportunity accounted for nearly 80% of the potential procedures and, due to higher selling prices, would account for more than 90% of the dollar market opportunity.
The stand-alone market potential not only is dramatically larger than the concomitant one, but it also offers far better reimbursement for both the hospital and CV surgeon. When an ablation is performed concomitant to a CABG or valve surgery, no extra reimbursement is given to the hospital for performing that procedure. Thus, the incremental cost of disposable supplies and the extra time required for the ablation significantly reduces the hospital’s profitability. In contrast to concomitant ablations, stand-alone procedures are highly profitable cases for hospitals.
According to a recent report titled “AF Surgical Ablation,” written by the Innovations Center of the Health Care Advisory Board (Washington), there is an approximate $2,000 to $3,000 reduction in the profit from CABG or valve procedure when AF surgical ablation is added. Conversely, the reimbursement for a stand-alone procedure is covered under a separate diagnosis-related group and provides a hospital with a highly lucrative profit contribution due to its lower procedural cost and relatively high reimbursement of about $30,000 (see Table 1).
Similarly, physician reimbursement for AF ablation is excellent, with an average payment of roughly $1,800 for this relatively short procedure, vs. about $2,000 for a very demanding, longer CABG procedure. Clearly, there are large financial incentives in place to support the growth of stand-alone AF ablation.
AF market opportunities abound
Several speakers at the New Era Cardiac Care 2006 conference addressed the AF opportunity in general and the stand-alone opportunity in particular. For example, Gregory Fontana, MD, vice chairman of surgery at Cedars-Sinai Medical Center (CSMC; Los Angeles), in a talk titled “Minimally Invasive Maze Surgery,” discussed the huge potential opportunity of stand-alone surgical ablation. However, he also pointed out several issues and challenges to its success. These included:
- Identification of clear criteria for what constitutes a “cure” for AF.
- Understanding the AF “burden,” i.e., how much time the patient is in AF.
- Identifying the most reliable energy source and devices to create the best lesions.
- Developing a totally thorascopic technique and user-friendly instrumentation with minimal morbidity and high efficacy.
- Development of a new evidence-based algorithm for the treatment of paroxysmal and permanent AF.
Fontana noted that the highly invasive open surgical Maze procedure, which he said “is very technical demanding but very efficacious,” is not widely used today. Regarding percutaneous catheter ablation, Fontana stated that not only is it a long procedure, often at least three hours in length, but its results vary from “very successful to unbelievably bad.” In addition, it can have “devastating complications.”
He reviewed the various energy sources and noted that no one energy today has emerged as the clear-cut winner, with each having advantages and drawbacks. The various approaches that some CV surgeons are using to surgically treat AF were also discussed. For example, Randy Wolf, MD, director of the Center of Surgical Innovation at the University of Cincinnati Surgeons Hospital (Cincinnati) and a leader in this embryonic field, has performed about 150 “mini-maze” procedures, using the Atricure RF system and a bi-lateral thoracotomy to access the atrium. His success rate is impressive, with a 92% cure rate at six months. Fontana indicated that the results at CSMC with a smaller number of patients are equally stellar.
Several large medical device companies are hotly pursuing this potentially huge market. St. Jude clearly is the most active on AF, as indicated earlier. Also, as shown in Table 2, St. Jude has been the most aggressive AF acquirer in recent years. As noted, both Medtronic and Guidant are active in ablation, the former with the Cardioblate RF system, the latter with its Flex microwave ablation system. Boston Scientific (Natick, Massachusetts) invested in Endoscopic Technologies (Estech; Danville California) in February 2004, with an option to purchase Estech, which has developed an RF-based system. Edwards Lifesciences (Irvine, California) is a player through its alliance with CardioFocus (Norton, Massachusetts), which has developed a 980 nm solid-state diode laser for use in an endoscopic, minimally invasive stand-alone procedure.
At the Society of Thoracic Surgeons (STS; Chicago) meeting in late January, St. Jude showcased its Epicor Cardiac Ablation System, featuring a high-intensity focused ultrasound energy source enabling physicians to create continuous transmural lesions safely and reproducibly, without the need to put patients on a heart-lung bypass machine. Results of a prospective multi-center study using the Epicor Cardiac Ablation System, published in the September 2005 issue of the Journal of Thoracic and Cardiovascular Surgery, showed that at six-month follow-up, 85% of patients in the study group remained free from atrial fibrillation.
At the same meeting, Edwards highlighted its launch of the Optiwave 980 nm system. The system’s fiber optic and diffuser technology enables the creation of lesions either on the surface (epicardial) or inside (endocardial) of the heart’s tissue, a technique designed to block the conduction of errant electrical signals that can cause cardiac arrhythmia.
Li Poa, MD, chief of cardiac surgery at Enloe Medical Center (Chico, California), who has pioneered a minimally-invasive surgical technique using the Optiwave 980 system, discussed that technique during a breakfast symposium at the Hyatt Regency McCormick Place Convention Center.
A small public company, MedicalCV (Inver Grove Heights, Minneapolis), also is developing a laser-based approach to AF ablation, with an 810 nm solid-state diode laser. The company recently began marketing two different devices to address the domestic market for concomitant procedures. However, its major focus is to launch a device later this year that will provide CV surgeons with a truly minimally invasive, laparoscopic approach to stand-alone AF ablation.
Based on conversations with CV surgeons at the New Era meeting, if this procedure can provide an 80% cure rate, along with its minimal morbidity and a very short overnight hospital stay, it could become a significant contender in the AF ablation market. Moreover, given the rewarding reimbursement in place today for standalone procedures, it would also represent a very attractive financial opportunity for surgeons and hospitals alike.
Whichever company succeeds in developing a truly minimally invasive, efficacious AF procedure, market development will become a critical component of success. Cardiovascular surgeons typically are not the first line of defense in treating AF so extensive referral networks and collaborative efforts will be required for CV surgeons to financially benefit. If a strong marketing program is not developed, CV surgeons could find themselves in the same predicament as has happened in the revascularization market, where the interventionalist has increasingly grabbed control of the patient and procedures.