Medical Device Daily Executive Editor

SAN FRANCISCO - Two cardiovascular product companies with current dominant market positions in their respective spaces were among a flurry of med-tech firms that took to the podiums as the 24th annual JPMorgan Healthcare Conference sped through its final-day schedule at the Westin St. Francis Hotel on Thursday.

Neither NMT Medical (Boston) nor Thoratec (Pleasanton, California) is among the device sector's bigger players, but the fact that each has a substantial lead over existing or emerging competitors in their sectors is testimony to the nature of med-tech, where small, innovative firms are in the forefront of innovation.

NMT is a pioneer in the PFO closure field. PFO, or patent foramen ovale, is a septal heart defect in which a flap-like opening remains between the right and left atriums. The opening can allow a right-to-left shunt of venous blood flow between the two chambers when triggered by a cough, for example.

As company president and CEO John Ahern noted, PFOs have been linked to "brain attacks," such as that suffered by Israeli Prime Minister Ariel Sharon. Despite the "divine punishment" bleatings of deranged evangelist Pat Robertson, Sharon's condition started with a PFO-related embolic stroke that was followed by hemorrhagic stroke.

The stroke indication was NMT's initial focus for its StarFlex PFO closure device, and continues to represent what Ahern characterized as a "very large market opportunity" valued at perhaps $4 billion worldwide, including an estimated potential patient population of 250,000 annually in the U.S., 780,000 worldwide.

But the stroke indication pales in comparison with the other major market NMT is seeking to address – migraine headaches. He said research has shown that migraine with aura patients are seen as having twice the incidence of PFO as the non-migraine population.

Armed with a growing body of research that PFO closure effectively eliminates migraine symptoms, NMT is moving to address what Ahern said is a vast market with "staggering" economic impact. He said migraine is estimated to have an estimated impact of $10 billion to $15 billion in the U.S. alone.

NMT's migraine model sees potential for treating between 1.5 million and 3 million patients in the U.S. and some 4.8 million worldwide. In dollar figures, that's $24 billion - yes, billion – which even if it were cut in half for a more conservative estimate, would total more than the estimated drug-eluting stent market, Ahern said.

Migraine sufferers, whose standard treatment is drugs, drugs and more drugs, are anxious for a non-pharmacological alternative. When investigators in the UK sought volunteers for NMT's MIST (Migraine Intervention with STARflex Technology) clinical trial, 14,000 persons applied for 500 study spots.

Given what Ahern referred to as "a huge, underserved need," a description that could fit both the migraine and stroke applications, it should be no surprise that the market has attracted a slew of competitors, including such device sector "big guys" as Johnson & Johnson (New Brunswick, New Jersey), Boston Scientific (Natick, Massachusetts) and St. Jude Medical (St. Paul, Minnesota).

But despite the pessimism of those telling Ahern his company, with its estimated $23 million in 2005 revenues, will get steamrolled by the deep-pocketed newcomers, he said: "Quite frankly, I like where we're at."

He pointed to the fact that NMT has both mechanical (CardioSEAL and STARflex) and biological (the in-development BioSTAR) closure devices, five approved clinical trials under way – and another awaiting approval – and broad intellectual property coverage with 20 issued patents and 50 applications.

"Because PFO closure is our sole focus," Ahern said, "we will continue to lead in this very large opportunity."

In a presentation that followed NMT's, but took place in the top-shelf setting of the hotel's Grand Ballroom, Thoratec CEO Keith Grossman cited that firm's dominant position in the ventricular-assist device (VAD) sector.

He noted that Thoratec's current-generation VAD, the HeartMate XVE, is the only device with FDA approval for both bridge-to-transplant (BTT) and destination therapy (DT) use.

Grossman said the company has about a 90% to 95% share of the BTT market in the U.S.

With only about 2,000 human hearts made available for transplant in the U.S. each year, the BTT application obviously is a much more limited market. However, with an estimated 5 million heart failure patients in the U.S. alone, 10% of whom reach Class IV, or end-stage status, each year, the permanent implantation segment is the central focus for the company.

It has received boosts in the past year from dramatic improvements in Medicare and private-payer reimbursement rates, and from the adoption of new American Heart Association/American College of Cardiology guidelines recommending the use of VADs for end-stage heart failure patients.

Grossman noted that the company has begun to record revenues from sales of its next-generation HeartMate II device following CE mark approval in November and sale of the device for clinical-trial use.

The HeartMate II is an implantable unit powered by an axial rotary-flow pump with only one moving part. It is designed to be very durable, Grossman said, with a projected five- to 10-year life span. It is one-fifth the size of the HeartMate XVE and one-third the weight.

In the wings is the HeartMate III, which Grossman said would feature a centrifugal-flow pump with no bearings and even longer life, anticipated to be more than 10 years.

Grossman also touched on the company's International Technidyne (ITC; Edison, New Jersey) subsidiary, which operates in the point-of-care diagnostics space. He said that unit, which accounts for about 38% of total Thoratec revenues, "is really a terrific performer for us."

ITC produces hand-held devices used primarily in blood coagulation testing in hospital, physician office and home settings.

Grossman pitched Thoratec to the investor audience on the basis of the large and growing heart failure market, which he characterized as "a very good place to be."

He cited the company's "unusually large" market share in the VAD sector, the increasing acceptance of VADs in the clinical community, the acceleration of introduction of the HeartMate II and the fact that the company, holding the only approved destination therapy approval in the U.S., has "no near-term competition."