By HOLLAND JOHNSON,
DON LONG and JIM STOMMEN
CDU Staff

The largest cardiovascular companies had plenty of news to crow about in the latter part of February and early March as they jockeyed for position in various key sectors of the cardiovascular device market. Boston Scientific (Natick, Massachusetts) made the biggest news, reporting on March 4 that it had received its much-anticipated FDA approval to market the Taxus Express2 paclitaxel-eluting coronary stent system. Coming on the eve of one of the year's major cardiovascular medical meetings, the annual scientific sessions of the American College of Cardiology (Bethesda, Maryland), which started two days later in New Orleans, Louisiana, that announcement was a public relations coup of the first magnitude.

The clearance made the company the second to garner a U.S. approval for a drug-eluting stent (DES), behind Johnson & Johnson (J&J; New Brunswick, New Jersey) subsidiary Cordis' (Miami Lakes, Florida) Cypher sirolimus-eluting stent, which earned first-to-market honors in April 2003.

Boston Scientific said it planned to launch the product in the U.S. immediately, and, unlike Cordis at the time of its Cypher rollout, said it had ample inventory in all sizes. The company said it had about 225,000 units of the stent immediately available for sale. The Taxus product, which incorporates the Express2 coronary stent on the Maverick balloon catheter as its platform, has an approved shelf-life of six months not that it will stay on the shelf for nearly that long at most hospitals and all seven stent lengths were approved: 8 mm, 12 mm, 16 mm, 20 mm, 24 mm and 28 mm. Also, as expected, diameters between 2.5 mm and 3.5 mm were approved, and the 3.5 mm version is authorized for treatment of vessels up to 3.75 mm in diameter.

Boston Sci launched the Taxus system in Europe and other international markets in February of last year and, in just a little over a year, has achieved commanding leadership of between 60% and 70% and beyond in many of these markets. Many analysts see the same type of market domination for the product in the U.S. as well. RBC Capital Markets analyst Phil Nalbone wrote in a research report that he expects the Taxus to capture 15% of the U.S. DES market by the end of 1Q04, 55% by the end of 2Q04 and more than 60% of an estimated $3.8 billion market by the end of the year.

"This approval is a breakthrough event for the treatment of cardiovascular disease in the U.S.," said Jim Tobin, president and chief executive officer of Boston Scientific. "Broad, consistent clinical data and extensive real-world experience have clearly demonstrated that polymer-based delivery of paclitaxel is a safe and effective therapy that dramatically reduces restenosis."

At a meeting with analysts in New York on Feb. 23, company officials expressed great confidence in their ability to get the Express2 to market quickly. Paul LaViolette, senior vice president and group president of Boston Sci's cardiovascular business, said the company would move into commercial launch "within a very few days of approval." And, according to LaViolette, "we have a powerful inventory position" of the product, which he said "will be a welcome relief for physicians" who have encountered shortages of the Cypher stent since its initial approval last spring.

LaViolette added: "We have prepared better for this launch than any other in our history . . . our operational people have put us in a superb position to launch this product." Once launched, he said he sees the Express2 as keying a broad assault that Boston Scientific predicts will leave it with a 49% share of the total U.S. stent market (drug-eluting and bare-metal stents combined) by year-end vs. a forecast 43% share for J&J.

With a cadre of 135 dedicated coronary sales representatives, which LaViolette said is "the largest number we have ever had," Boston Sci will focus on in-service and on-site support. "Frankly," he added, "that was not done in the first drug-eluting stent launch in the U.S." With an average time of three to four days spent with each account by sales reps and specialists who will help train interventionalists in the applications for the Express2, the company said it will take about eight weeks to achieve what it termed "full launch" of the product. LaViolette said that over those two months, "we'll have accounted for about 85% of all cath labs in the country."

Angiotech Pharmaceuticals (Vancouver, British Columbia), from which Boston Scientific licenses its paclitaxel coating, was quick to offer its own accolades for the approval. "We congratulate Boston Scientific for the scientific and clinical rigor, thoroughness, and execution of the TAXUS program," said William Hunter, MD, president and chief executive officer of Angiotech. "It is gratifying to see discovery work pioneered by Angiotech and our academic collaborators culminate in the launch of a breakthrough therapy that will significantly impact the lives of thousands of patients."

Many have given Boston Sci the edge in the DES wars because of what they see as better ease of use in terms of deliverability. But just a couple of days prior to the Taxus approval, Cordis said that preliminary results from its REALITY trial, a head-to-head comparison between the Cypher and Taxus devices, showed "equivalent deliverability" between the two systems both stents had 98% to 99% procedural success rates. In other words, doctors were able to get an equal number of both stents into the treatment site.

The REALITY trial is a prospective, randomized study involving 1,386 patients at 90 centers in Europe, Asia and Latin America. Inclusion criteria for the trial included a primary lesion of at least 15 mm in length in vessels of 2.25 mm to 3 mm in diameter, with a maximum of two treated lesions per patient. The trial endpoint is eight-month angiographic assessment of binary restenosis.

Nalbone wrote in his research report that J&J's claim was confusing to investors. "That's not what we mean by 'deliverablity' doctors define this as overall ease of use." He said the J&J statement did not address physician preference or such elements of deliverability as the time it took to place the stent or the ease of use. On those critical parameters, he said, Taxus clearly has the ease-of-use advantage "and we believe this key element of physician preference will drive the Taxus to U.S. market dominance, just as we have seen in Europe and other overseas markets over the past year." He also noted that virtually all of the stents in the market today, whether bare-metal or drug-coated, have 98% to 99% procedural success, or placement, rates.

Cordis-Guidant agreement a big step

In what is an obvious bid to play catch-up in the drug-eluting stent (DES) sector, Guidant (Indianapolis, Indiana) has gotten a rocket fuel-type boost via a new agreement with Cordis. The companies reported in late February that they had entered an alliance for the co-promotion of DES technology on the one hand and new technology in coronary stent delivery systems on the other. Additionally, Cordis said that the agreement gives it a chance to participate with Guidant in the future platform of bioabsorbable vascular stents.

The agreement which Guidant said gives it "immediate access" to the DES market was termed a "blockbuster" by Larry Haimovitch, president of Haimovitch Medical Technology Consultants (Mill Valley, California), who follows the cardiovascular sector for Cardiovascular Device Update. "This is a big deal I don't think anyone had an inkling of it," he said. Haimovitch especially praised Ron Dollens, president and chief executive officer of Guidant, for pushing forward with the agreement. "I think from the minute that [Dollens] saw that Guidant was falling behind in the drug-eluting stent sector, he has spared no energy and effort to get the company back in the game," he said, referring to Guidant's difficulties in keeping up with Cordis/J&J and Boston Scientific in DES development. "I really admire his boldness and his aggressiveness."

While the benefits of the agreement are obvious for Guidant, Haimovitch didn't downplay what it brings to Cordis, which he said "gets a potent marketing partner" in Guidant. "And it gives Cordis a huge ally to beat back Boston Scientific. In the ring with Boston Sci, now it's two on one," he said. As an example, he cited the quality of Guidant's delivery system for its stents and that the Cordis/ Guidant hookup now gives Cordis an improved delivery system to compete with Boston Scientific's system.

Rick Anderson, president of the Cardiology Division of Cordis, told CDU that "the genesis of our thinking around this alliance with Guidant is that we're passionate about the [Cypher stent] product" and the need for providing the technology to the many patients that can be helped by it. Besides the alliance being good for patients, he added two other points: "It's also good for physicians [since] the arrangement makes Cypher a transformation technology with a world-class delivery system. And it's good for J&J because we have the opportunity to participate in another transformational technology in the future with bioresorbable stent technology."

For bioabsorbable vascular products, Cordis acquires an option to co-promote with Guidant subsequent to approval and launch. Bioabsorbable stents show promise in dramatically changing the treatment of coronary artery disease, potentially complementing or replacing metallic drug-eluting stents.

Anderson noted that the agreement does not foreclose R&D options for either company. Thus, Guidant can continue with its own DES development efforts and Cordis can continue its work in bioresorbable stents. Anderson also emphasized the agreement as bolstering the competitive positions of the partners to the agreement. "When you combine two world-class organizations, one-plus-one is clearly greater than two," he said. Noting Boston Sci's pending entry to the DES sector, he said, "We're prepared to compete head-to-head in the marketplace, and we're not willing to give an inch."

Dollens said that the partnership "leverages Cordis' and Guidant's broad capabilities and innovative positions in this important market. We believe this strategic alliance will provide significant benefits to both organizations through the collaboration of our sales, marketing and product development resources." Sales and marketing resources of both Cordis and Guidant will join to focus on promoting the Cypher sirolimus-eluting coronary stent in the U.S., with an option to pursue a future parallel arrangement in Japan, the companies said in a statement.

Cordis said it will obtain access to Guidant's current and next-generation technologies for delivery of coronary stents, and the companies will initiate development and regulatory plans for a Cypher Stent that utilizes Guidant's Multi-Link Vision Stent Delivery System.

Additionally, the agreement provides for the immediate settlement of all outstanding patent disputes between the companies. That initiative followed closely upon the dismissal of patent infringement lawsuits between Guidant and Boston Scientific (see below).

Guy Lebeau, MD, J&J group chairman with responsibility for Cordis's worldwide operations, said each company brings important strengths and expertise to a collaboration that will provide immediate and long-term benefits to doctors and patients. "This agreement places the Cypher stent into the hands of what together is the largest and best-trained interventional cardiology sales force in the U.S.," Lebeau said. "Incorporating Guidant's latest delivery technology promises to improve our current product line and give us entry into the next generation of drug-eluting coronary stent systems earlier than originally anticipated. Resolution of the patent disputes allows each company to focus on what it does best bringing innovative, life-saving technology to patients."

"We are enthusiastic about expanding our portfolio with a drug-eluting stent that has demonstrated outstanding clinical results," said Dana Mead, president of Guidant Vascular Intervention, adding, "In four years of clinical use in over half a million patients, the Cypher stent has proven safe and effective. Through the companies' continuing technology development, meaningful medical innovations will be brought to physicians and patients in the future." Under the agreements, Cordis retains clinical, manufacturing and order fulfillment responsibilities for the Cypher stent in the U.S. Cordis will continue to report all Cypher stent sales as revenue. Guidant will report commission revenue, although commission terms were not disclosed. The co-promotion agreement took immediate effect and may remain in force for up to eight years.

Boston Sci, Guidant drop suits

Just a few days before the Cordis-Guidant agreement was announced, Guidant and Boston Scientific reported that they had agreed to settle all outstanding patent infringement lawsuits between them, with the agreement providing for cross-licensing of the disputed patents. The companies disclosed no financial terms covering the settlement or cross-licensing arrangements.

Over the past five years, Guidant and Boston Scientific have filed a number of lawsuits against one another, each charging the other with patent infringement concerning coronary stents, coronary stent delivery systems and dilatation catheters. All pending disputes between the companies will be immediately dismissed, they reported in separate releases. In addition, the companies said they have agreed to cross-license patents in a number of specified technology areas. Those areas were not detailed. The news came about 10 days before Boston Scientific received FDA clearance for the Taxus stent.

"Guidant is pleased to reach this agreement with Boston Scientific," said Dollens. "By eliminating the expense and uncertainty that is associated with litigation, and by reaching an agreement on cross-licenses, both companies will benefit as will the physicians and patients who depend on our life-saving technologies."

Echoing those words, Boston Sci's Tobin hailed the licensing agreements and avoidance of continued expensive litigation. "This is very welcome news which we believe will benefit both companies and offer physicians and patients continued access to a broad range of treatment alternatives."

Equivalent deliverability shown

While acknowledging that the results are still very preliminary, Cordis couldn't resist disclosing the data it said evidence a trend toward equivalency of deliverability between the Cypher and the Taxus Express2 stent. The initial findings from the REALITY trial could help to negate the belief promulgated by Boston Sci and espoused by some analysts that its stent holds an edge in the important area of deliverability and stent placement. REALITY is a prospective, randomized study involving 1,386 patients at 90 centers in Europe, Asia and Latin America.

Investigators describe the REALITY trial as expressly designed to compare performance differences between the two products, particularly in high-risk patient group subsets, such as diabetics and patients with long lesions and small-diameter vessels. Diabetics represent 32% of the study's population. Inclusion criteria for the trial included a primary lesion of at least 15 mm in length in vessels of 2.25 mm to 3 mm in diameter, with a maximum of two treated lesions per patient. The trial endpoint is an eight-month angiographic assessment of binary restenosis.

"Although the two arms of the investigation remain blinded at this point, we know the rate of successful stent delivery for the two arms 98% and 99% which are virtually equivalent," said principal investigator Marie-Claude Morice, MD, head of interventional cardiology at Institut Hospitalier Jaques Cartier (Massy, France) in a press release. She explained that deliverability is measured immediately, since it relates to the ability to cross the lesion with the stent within the targeted vessel. Stent lengths up to 33 mm were used in the trial.

"What we are seeing is that both stents are highly deliverable in a very challenging patient population," Morice said. "The trial includes patients with small vessel diameters of 2.25 mm [to] 3 mm, no upper lesion length and multiple vessel stenting. Thirty-two percent of the enrolled patients have diabetes." She also noted that the REALITY trial is the first drug-eluting stent trial to complete enrollment and have a high percentage of diabetic patients, "whose generally narrow vessels increase the difficulty of stent delivery."

"Although stent deliverability has been cited as a potential point of distinction between the Cypher stent and Taxus stent in the U.S. market, deliverability is clearly not the distinguishing factor between these two stents," Dennis Donohoe, MD, worldwide vice president of regulatory and clinical affairs for Cordis, told CDU. Speaking to the value of the REALITY trial, he said that Cordis has had physicians tell it that if one looks at deliverability over the full length of the stent that is, up to 32 mm or 33 mm for Taxus and Cypher, respectively there really isn't much of a difference. "It was being highlighted as more of a difference than probably really is true once physicians start using the same general range of stent lengths in the same types of vessels in patients," Donohoe said.

"What distinguishes the Cypher stent from the Taxus stent is more than four years of clinical follow-up, as well as use in over half a million patients confirming the safety, efficacy and deliverability of the Cypher stent in a wide range of patients," he said, adding, "There is no comparable body of long-term data available on the Taxus stent."

Ultimately, Donohoe said, "the only way to know the answer to these types of claims is to generate data. Other than impressions, where's the data that says that impression is true?"

Other growth opportunities for Boston Sci

While much of the focus of those who follow Boston Scientific has been on the much-anticipated U.S. approval of its Taxus Express2 drug-eluting stent, there's much more to the company's story, top executives emphasized during the Feb. 23 meeting with analysts. Tobin said that with what the company is doing internally and what it has constructed in the way of alliances, "It's not that much of a stretch to think that we're going to be able to do some pretty good things in terms of creating new markets, leading markets and creating new therapies as we move forward." That, he said, "is what this company was built on. This is what we do. This is what we can continue to do as we are solidly funded on the back of some of the cash that our Taxus success will generate."

LaViolette outlined a number of opportunities during a lengthy look at new technologies and therapies being pursued by the company, many of them through partnerships with smaller firms in which it has invested and which may eventually be acquired. One example he cited is Therus (Seattle, Washington), which is working toward plugging a hole in Boston Scientific's product lineup. "One of the most exciting markets in the cath lab and one that we don't participate in today is vascular sealing," LaViolette said. "This is one of the largest markets in all of interventional cardiology" at some $400 million, he noted, adding that it also is among the fastest-growing.

"Other than stents, this [sector] is adding more incremental dollars to interventional cardiology purchasing than any other market," LaViolette said. Yet it is still very under-penetrated, he added, with only one out of every four interventional cardiology patients today being the recipient of vascular closing technology. "We feel there's an opportunity for us to take advantage of our strong presence in the cath lab" by getting involved in the vascular sealing market, he said.

Dave Perozek, founder and chief executive officer of Therus, outlined his company's development efforts involving the SoundSeal System, a non-invasive hemostasis system that uses ultrasound to control blood flow at a puncture site. He noted that the U.S. military "made a significant investment in research in this area," recognizing the importance of better methods to stop blood flow on a battlefield site. Therus has an exclusive license to the resulting intellectual property.

Ultrasound "delivers a precise thermal dose non-invasively," Perozek said, utilizing the body's own native tissues, which are collagen-rich. The resulting coagulum seals an arteriotomy, he said, with what essentially is a mechanical seal. "Because the body's own collagen is used, reaccess and resealing are possible." A disposable "interface" is applied to the access site, maintaining the sterility of the site. A 20-second exposure via ultrasound seals the site. "Nothing is left behind," Perozek said, "so there is a low infection risk." Complete healing occurs within 30 days. In two human feasibility studies, complete hemostasis was accomplished in 94% of patients involved, with zero complications. "Our system is versatile," Perozek said. "It can seal wounds in virtually any size artery."

A European clinical trial would begin in March, LaViolette said, with completion set for July. A U.S. trial to be conducted under an investigational device exemption (IDE) is expected to begin in August, with premarket approval submission planned for December. He said Boston Scientific anticipates an international launch of the SoundSeal System by September, with U.S. commercialization in June of next year. Saying that Boston Sci's market presence in the cath lab "influences support product sales," LaViolette predicted rapid growth once the product hits the market. "We think we can build a business that does $360 million in revenues in 2006," he said. With what he termed "an elegant solution" and "sales synergy" provided by Boston Sci, LaViolette said the Therus product "is a major growth driver" for his company.

Another partnership highlighted during the meeting was in the aortic repair area, which LaViolette characterized as "a very large and very complex surgical market" that is "looking for a new solution." The solution Boston Scientific is backing is TriVascular's (Santa Rosa, California) device, which is being directed initially toward abdominal aortic aneurysm (AAA) repair, but which the company hopes also will have an impact on thoracic aneurysms. Michael Chobotov, PhD, TriVascular founder and chief executive officer, whose background as a mechanical engineer included work on commercial satellites and other aerospace products, said his firm "brings a different approach to the development of medical devices." Noting that "simply following the path of current products was not good enough," he said TriVascular "sought to redefine the problem" and, in doing so, determined the need to "drive down the profile but enhance the durability" of an aortic repair device. "We have tried to ensure market comfort [with the company's device] by the use of established materials," he said.

TriVascular's AAA Stent Graft utilizes inflatable cuffs and a network of support rings to provide uniform pressure around the sealing cuff. "We also don't deliver the device all at one time," Chobotov said. "We're sort of forming the device within the native artery." That approach allows the TriVascular stent graft to be delivered through what he termed "a very small catheter," featuring a 12 Fr to 14 Fr introducer, compared to current products on the market, which are 21 Fr to 22 Fr and 18 Fr, respectively. The technique is done percutaneously, which Chobotov said "is the new next-generation therapy for AAA," following the traditional full-blown surgical intervention and the minimally invasive approach taken by existing device solutions on the market. "Our device conforms to the anatomy rather than requiring the anatomy to conform to the device," he said.

LaViolette said Boston Scientific anticipates receipt of the CE mark for the product "shortly," with international commercialization during the remainder of the year. An IDE Phase II trial will be initiated in the U.S. this year, with PMA approval expected by the end of 2006, he said. With lower-profile technology on the horizon that could expand the product platform into use in women and patients with smaller vessels, broader adoption by the interventional cardiologists that Boston Sci serves and the possibility of applications in the thoracic aneurysm sector, he predicted a market that could grow "to as large as $1.28 billion by 2008." Calling TriVascular's solution "hands-down superior to anything offered by any other company," LaViolette said the market "has pent-up demand [and] it's ripe for a better solution."

His "new technologies" overview also included Boston Scientific's efforts in embolic protection and the peripheral vascular area, some via partnerships and others through bringing new resources to bear in existing internal programs. Taken together, LaViolette said Boston Scientific "has unmatched depth in our technology offerings to the cath lab," with 20% compounded annual growth in the cardiovascular sector as the company "layers on these new markets" over the next several years.

In a deal announced just one business day prior to its meeting with analysts, Boston Scientific reported that it had both invested in and acquired an exclusive option to purchase privately held Cameron Health (San Clemente, California), which is developing a next-generation ICD for the fastest-growing segment of the cardiac rhythm management market. Neither the amount of Boston Scientific's investment nor other terms of the agreement were disclosed.

Tobin said, "Next to the market for drug-eluting stents, the ICD market represents the largest opportunity in medical devices. The Cameron team is developing an innovative, less-invasive alternative for treating cardiac rhythm abnormalities." Cameron's product is a leadless ICD intended to be implanted in subcutaneous tissue. Incorporating technology that receives electrical impulses from the heart to diagnose rhythm abnormalities and providing an electrical shock to restore normal cardiac rhythm, the ICD thus eliminates the need for leads to be implanted in the heart. Since it is not surgically attached to the heart, unlike current ICDs, the Cameron device allows for a simplified implant procedure and potentially reduces long-term complications related to leads. The company has initiated clinical testing and has used the technology in about 90 patients outside the U.S. Boston Scientific said Cameron is in discussions with the FDA about U.S. clinical trials, and it expects to begin an IDE trial in 2005.

"Our technology is designed to provide cardiologists with an ICD that is easier to implant and program than existing implantable defibrillators," said Jay Warren, president of Cameron Health. "We have put together an outstanding technical team, and I am very pleased with the significant progress they have made toward starting our pivotal clinical study."

Tobin said the Cameron technology "may expand the number of cardiologists willing to implant ICDs, thus reaching a broader patient population." Gust Bardy, MD, a clinical professor of medicine at the University of Washington School of Medicine (Seattle, Washington) and co-inventor of the Cameron ICD, said, "Many physicians find today's ICDs overly complex and difficult to implant and program. Cameron's technology is designed to address this issue."

'Quiet' Medtronic makes some noise

Medtronic (Minneapolis, Minnesota), which isn't currently a player in the drug-eluting stent arena, hosted a Cardiac Rhythm Management (CRM) business unit strategy update for analysts and the media in a February conference call, laying out what it said was a "road map of what you can expect to see from us over the next 18 to 24 months." Its vocal forecast marked a dramatic departure from a company known for its traditionally quiet approach to doing business.

According to Steve Mahle, senior vice president and president of the CRM business, the quiet company will be quiet no more. "In the traditional Medtronic Scandinavian/Midwestern style," he said, "we have been very busy executing our strategy and not saying much about it. That is going to change starting today." Mahle noted that while his company has been working, "others have been doing a lot of talking." He added that Medtronic and CRM believe that a comparison of both "words and works will be helpful."

In his 32-year career in CRM, Mahle said he has witnessed "a number of dramatic technological customer and economic changes that have shaped today's market, but I've never seen a change as fundamental as the one beginning to play out in the marketplace today." He said that he believes the CRM market is at a tipping point. "We are at the end of one era and the beginning of a new era, one where the rules for success will be defined differently." And, he said, "we plan to define those rules."

Mahle said that in the past the company's products have provided an array of "exceptional" therapies, but they have not played a central role in managing a patient's chronic disease. "This is about to change," he said, noting that to be successful in the changing healthcare environment, Medtronic's CRM business is expanding its traditional partnerships with electrophysiologists and implanting cardiologists to include all healthcare professionals caring for patients with cardiac disease. "Instead of just selling an implantable device," he said, "we will help physicians implement a system to actively manage patients with heart failure and cardiac arrhythmias."

In the early 1990s, Medtronic developed the technology that would become cardiac resynchronization therapy, an industry product segment that Mahle noted has already grown to more than $1 billion in just three years.

Mahle also noted that the company would unblind the results of its SCDHeFT Sudden Cardiac Death in Heart Failure Trial study at the American College of Cardiology scientific sessions. SCD-HeFT is the largest implantable defibrillator study (ICD) ever, and is evaluating the use of ICDs and amiodarone hydrochloride for the prevention of sudden death in 2,521 heart failure patients. The study was sponsored by the National Heart, Lung and Blood Institute of the National Institutes of Health (both Bethesda, Maryland). SCD-HeFT is a placebo-controlled, three-arm trial examining the use of implantable cardioverter defibrillator therapy and/or anti-arrhythmic drug therapy in patients who have mild or moderate congestive heart failure (New York Heart Association Class II or III) and impaired pumping function of the left ventricle. Such individuals are at risk of developing dangerously fast heart rhythms, such as ventricular fibrillation or ventricular tachycardia, which can lead to sudden cardiac arrest and death. The primary endpoint of the trial is all cause mortality.

Beyond therapies, Mahle noted that Medtronic has been pioneering the field of chronic implantable diagnostic devices, including the Reveal and Chronicle diagnostic devices.

Perhaps the most critical investment for the company in changing the playing field is the area of patient management. "This infrastructure will enable all of the capabilities we are building into our implantable devices to be realized," he said. According to Mahle, the backbone of this enhanced patient management strategy is the CareLink system, an Internet-based monitoring system that enables patients to transmit data directly from their implanted devices, using a portable monitor connected to a standard telephone line. The data are available to healthcare professionals within minutes over a secure Internet web site. The information obtained using the system is comparable to that provided during an office visit, and allows the physician to determine how an implantable device, such as an ICD, is functioning and if any changes should be made to the patient's treatment plan.

As proof of the utility of the CareLink system, Medtronic also said that the FDA had approved three more implantable heart devices that can be used with the system. The new approvals mean that cardiologists can now monitor patients with ICDs over the Internet without having them come in for an office visit. The FDA approved for use with remote monitoring the company's single-chamber Maximo ICD and its dual-chamber Maximo ICD. Also cleared was the InSync II Marquis CRT-ICD device, the latest Medtronic CRT device that also incorporates a defibrillator.

According to Chris O'Connell, vice president, U.S. sales and global marketing for the CRM business, sustainable market growth in the industry is not the issue that many believe. "This past quarter, the industry grew more than 15% on a worldwide basis . . . all on top of 27% overall CRM growth a year ago." He said that FY05 is setting up to be another very strong year for market expansion, "driven by primary prevention and CRT." Looking forward to 4Q04 and FY05, O'Connell said he has never been more confident in the company's ability to gain share in both defibrillation and pacing "as the traditional drivers of market share that is, sales force and new products now swing heavily in our favor." Additionally, he said that CareLink already is proving to be a "market share magnet." He said recent pricing pressure in CRM products likely will stabilize as the focus turns to value and features offered in new products. "I believe competition will be increasingly based upon the clinical and economic value that our therapies create for the healthcare system rather than simply on price."

O'Connell also alluded to the tipping point mentioned earlier by Mahle, saying that both the ICD and CRT markets are "still relatively under-penetrated." He said that ICDs are only 20% penetrated in the market and CRT is only about 5% penetrated. He also noted the potential importance of the SCD-HeFT results to the ICD market, adding that it "clearly could present evidence that establishes ICDs as a standard of care in heart failure patients with LV dysfunction much like ACE inhibitors and beta blocker therapy obtained at this point."

Another direction that O'Connell said he believes separates Medtronic from competitors is its shift from launching products in a linear fashion, in which each successive device made its predecessor obsolete, to a portfolio approach that provides choice at the premium level, "so that devices can be targeted at specific customer segments."

Marshall Stanton, MD, vice president and medical director for the CRM business, also described coming innovations for the company, including an ICD called the InSync Century that can detect edema, as well as developing the first magnetic resonance imaging (MRI)-safe pacing system. The MRI-safe pacing system, in particular, would be a gold standard for such a device, Stanton said. "An estimated 50% to 75% of patients with implantable devices will need an MRI over the course of their lifetimes but currently cannot receive an MRI," he said, adding that once such a system is developed, "all future pacemaker and defibrillator leads and device platforms developed after this date are expected to be MRI-safe."

Stanton said he has never been more excited about Medtronic's product portfolio. "We're moving from devices that treat arrhythmias into true patient cardiac disease management."