CDU Washington Editor
WASHINGTON As they enter the market, most new medical devices owe their possible success to a convergence of different influential factors. Researchers and developers, investors and government regulators each can make or break a novel product.
During a seminar held as part of the late-March Cardiovascular Revascularization Therapies 2005 meeting here, representatives from industry, Wall Street and the FDA discussed integration of biologics and medical devices, their roles in the process, and what to expect from the sector in the future.
Robert Falotico, PhD, senior research fellow at Cordis (Miami Lakes, Florida), a division of Johnson & Johnson (J&J; New Brunswick, New Jersey), said that device/drug combos such as drug-eluting stents (DES) would expand to include different drugs, smaller devices and a wide array of indications.
According to figures presented by Falotico, interventional cardiology was a $4.9 billion sector in 2001 that with the help of drug-eluting stents is expected to reach about $9.6 billion this year and grow to more than $11 billion by 2008. He said that in 2001, 100% of all stents were of the bare-metal variety. Today, the market is nearly 80% drug-eluting stents. By 2008, Falotico said, it'll be 100% DES. "They're deceptively simple looking, but they are extremely complex technology," he said. "But where do we go from here and how will the market grow?" He predicts a shift from medical therapy to "more precise and definitive technology."
Falotico said that new "workhorse" stents are what to expect in the near future. He said that niche stents for varied indications and uses, additional drugs and bioabsorbable stents are on the horizon.
One of the areas he mentioned that will be the next big indication for the DES market is in neurovascular therapy such as carotid stenting, calling it "a great new opportunity." He also identified new uses for the technology in the field of abdominal aortic aneurysm (AAA), and percutaneous valves.
Treatment of peripheral vascular disease is another opportunity to apply DES-type technology, Falotico said. He said the diabetic population would benefit from the promise of improved blood flow in limbs.
Before any of this happens, he cautioned device developers and manufacturers to expand their core competencies, including fostering closer relationships with the pharmaceutical industry to explore more drug-device combinations.
On the financial side, Rick Wise, a managing director and med-tech industry analyst at Bear Stearns (New York), told attendees that the sector is "fundamentally in good shape." He said an aging population, a demand for better therapies to increase quality of life and new technologies such as carotid stenting put the medical device industry in good position going forward.
He noted that medical device stocks may have been the direct beneficiaries of the slump in the pharmaceutical sector over the past four or five years because healthcare investors had to turn to other markets.
New markets India and China, for example also give device companies new room for market growth, Wise said.
"With all that said, are the good times over?" he asked. Wise cited a "more challenging regulatory and reimbursement environment" as a possible downside. "Following what's happened on the pharmaceutical side, we're seeing a tougher FDA," he said. "And this may complicate device approval time, and reimbursement is absolutely getting more challenging."
While an aging population may mean market growth, baby boomers are going to put continued pressure on Medicare and Medicaid programs, Wise said.
In addition, and half-joking, Wise said Wall Street is "sick of DES." He said investors are looking for the next breakthrough. As the current stable of companies slug it out with dueling products, the fight becomes "more about market growth and less about market share," he said. As a result, Wise predicted more merger-and-acquisition activity in the device sector, pointing to J&J's December 2004 agreement to buy Guidant (Indianapolis) for $24 billion, the largest deal in the sector's history.
Like Falotico, Wise said carotid stents and AAA would become some of the next big markets, by 2008 valued at $500 million and $400 million, respectively.
Bram Zuckerman, MD, director of the cardiovascular devices office at the FDA's Center for Devices and Radiological Health (CDRH), politely and professionally rebuffed suggestions that the agency's regulatory process will be any more stringent now than it has been in the past solely as a result of recent events in post-market review on the drug side. "The agency isn't getting tougher," Zuckerman said. "The regulations haven't changed."
He urged the industry to get more involved with the FDA at all levels of development to better ease companies though the approval process. "Everyone appreciates that we're living in a post-Vioxx world," he said, emphasizing that the FDA takes post-market surveillance very seriously, and that it is working to make the process easier.
But Zuckerman reiterated that the better prepared a company is with an understanding of what the FDA and CDRH are looking for, the easier the process will be, both pre- and post-approval. "Talk early and often with the agency, especially if you feel like you're going down the wrong road."