CDU Senior

As expected, the Cypher drug-eluting coronary stent from Johnson & Johnson (New Brunswick, New Jersey) subsidiary Cordis (Miami Lakes, Florida) is the first to market in the U.S. after receiving FDA approval late last month. While Cordis was taking a victory lap, the would-be second-place finisher was still well back in a pack that includes Boston Scientific (Natick, Massachusetts), Guidant (Indianapolis, Indiana) and Medtronic (Minneapolis, Minnesota). The anticipated No. 2 finisher is Boston Scientific, which has submitted the second module of its premarket approval (PMA) application for the Taxus paclitaxel-eluting coronary stent system to the FDA and said it expects to get approval for commercialization of the device in the U.S. later this year, probably by the end of the year.

Drug-eluting stents are expected to transform both the treatment and the market for heart disease, and J&J said they will supplant bare-metal stents, which it said would be phased out "fairly quickly." In fact, the first U.S. implant of a Cypher stent came within hours of the FDA approval, with four stents put into a 65-year-old Brooklyn man during a procedure at Lenox Hill Hospital (New York) the afternoon of April 24.

"[This] approval represents a significant step forward in the treatment of heart disease," said Tommy Thompson, Secretary of Health and Human Services in a statement posted on the FDA web site. "Patients who receive this device will need fewer repeat operations to unclog arteries, which can make a real difference in the quality of their lives."

Cordis immediately began shipping the device to U.S. hospitals in the wake of the long-anticipated approval, with cardiologists expected to quickly adopt it for a majority of the approximately 1 million patients who undergo artery-clearing coronary angioplasty procedures each year. However, it also could put significant financial pressure on hospitals, since reimbursement for the device isn't expected to cover its full cost. J&J says the list price will be $3,195 apiece for all lengths and diameters, with discounts based on volume. Conventional stents, on the market since the mid-1990s, currently cost about $1,000. The federal Medicare program already has said it will increase its reimbursement for angioplasty procedures in an amount that will cover a significant portion of the cost. And the company said in a conference call that other insurers are expected to cover the device as well.

"We believe that a lot has been done to prepare the market for introduction of this new technology," said Samuel Liang, worldwide vice president of the Cypher program for Cordis, during the conference call. "The Cypher technology is appropriately priced and provides significant value in terms of sparing tens of thousands of patients the need for repeat angioplasties or costly traumatic bypass surgeries as well as enabling government and private payers the ability to recover virtually all their costs associated with the Cypher stent by one year."

Asked about the problem of having to use multiple stents at the higher price and its possible effect on physician uptake, Liang said that such multiple stent cases were extreme. He said that as a whole, he believes that the utilization rates would stay about the same as current levels in terms of percutaneous interventions, "about 1.5 stents per procedure."

The new device has been shown in clinical trials to reduce restenosis by more than 70%, and to reduce the need for repeat procedures to less than 5%. "Clinical evidence and experience with more than 50,000 patients treated to date in nearly 60 countries, suggests the Cypher stent represents the beginning of a new era in interventional cardiology an era in which the combination of drugs and devices substantially improves patient outcomes," said J&J Company Group Chairman Robert Croce, who has worldwide management responsibility for Cordis, during the conference call. He said that while the company hit its 18-month goal of approval and launch of the device in the U.S. by April 2003, one question had repeatedly surfaced about the new device in recent months: "Why has the FDA been holding up this approval?"

Croce said the FDA "has really worked very well with us throughout the whole process." He added that critics need to realize that this is a new technology, coupled with the pharmaceutical aspect of the product, "which hasn't been normal for medical devices." He said that while the clinical results were fantastic, "the FDA needed to satisfy themselves from a scientific standpoint that everything was in order before we would release a product that would get such widespread use."

"The FDA is working to make sure its regulatory procedures encourage the quick and efficient approval of such safe and effective combination products," said Commissioner Mark McClellan in a press release. The agency expressed excitement about the device, although it did attach several conditions to the approval. It is requiring Cordis to conduct a 2,000-patient post-approval study and continue to evaluate patients from ongoing clinical trials to assess the long-term safety and effectiveness of the Cypher stent and to look for adverse events that may result from the use of the product.

Croce said that the FDA approved the Cypher under an expedited review for use in native coronary arteries with reference diameters of 2.5 mm to 3.5 mm and lengths in 8 mm, 13 mm, 18 mm, 23 mm, 28 mm and 33 mm. This, he said, covers the majority of stent cases performed today. "Our main objective is to make the Cypher stent available to all patients in need of this medical technology as quickly as possible," he said.

Combining a drug and a device reflects an emerging new approach to treating cardiovascular disease. J&J already markets a stent coated with the blood thinner heparin (called the Hepacoat stent), but it is expected that such devices increasingly will be used to deliver medicines to the site of blockages or injury. The company said that it would continue to sell the Hepacoat stent, which currently sells at a 20% premium to bare metal stents, and may be used as a less-costly alternative to the Cypher as the company phases out its bare-metal lines.

For now, J&J/Cordis will enjoy a monopoly in the U.S. market until its competitors get their own versions approved. Boston Scientific, the closest pursuer, took the step of filing a patent infringement lawsuit against Cordis in early April in hopes of blocking, or at least delaying, sales of its rival's device.

Apparently that ploy didn't work, as Liang announced the rollout strategy for the Cypher. He said that current inventory levels would allow the company to ship the device to customers who represent more than 70% of U.S. volume within the first 20 days, with the remaining customers receiving inventory in the following 40 days. The company will initially ship its 2.5 mm to 3.0 mm diameter stents and add the 3.5 mm devices by the third quarter. Larger-diameter sizes are expected to follow.

The sirolimus drug coating on the Cypher is licensed from Wyeth (Madison, New Jersey). Sirolimus inhibits the body's natural process of producing scar tissue around the device.

In addition to proceeding with the modular filing of its PMA application, Boston Scientific also has started the TAXUS V clinical trial, with plans to evaluate more than 1,100 patients at up to 70 sites in the U.S. The first patients were enrolled in March in the de novo lesion portion of the trial. The TAXUS V trial is an extension of the TAXUS IV study designed to assess the safety and efficacy of a slow-release formulation of paclitaxel to support regulatory filings for U.S. product commercialization. TAXUS V is studying a higher-risk patient population than TAXUS IV, including patients with smaller vessels as well as those with longer lesions requiring overlapping stents.

In a bid to cut as large a slice of the coated-stent pie for itself as possible, J&J last month said it would initiate a head-to-head trial with Boston Scientific. The REALITY trial will be a 1,000-patient study to demonstrate what J&J maintains is the superiority of the Cypher over the Taxus system. The trial, scheduled to begin this month, will involve 1,000 patients at centers in Europe, Asia and Latin America. Half of the patients will receive the Taxus stent made by Boston Scientific and the other half a Cypher stent. The primary goal of the study will be to assess restenosis rates for each group after six months. Complete results should be available in about a year. The study will focus on the more difficult patients those who receive stents in narrow vessels for relatively long lesions. Dr. Dennis Donohoe, vice president of therapeutic and clinical research at Cordis, said he expects the trial to show that J&J's stent delivers a 43% to 45% improvement in restenosis after six months compared with Boston Scientific's product.

For its part, Boston Scientific said it welcomes the J&J trial. Company spokesman Paul Donovan said at the time J&J announced its plans for the REALITY trial: "We have a better stent, a better drug and dose combination, a better polymer and a better delivery system."

Dan Lemaitre, a medical technology analyst for Merrill Lynch (New York), said that while much will depend on Boston Scientific's TAXUS IV trial and head-to-head studies such as REALITY, his firm expects Boston Scientific's data to be "close enough, but probably not better than J&J's." However, he noted that in the real world, subtle differences in outcomes would be almost impossible to ferret out, since clinical restenosis rates (patients that actually need re-intervention) will tend to be in the very low single digits. "As such, we expect BSX to capture 40% of the market exiting 2004, while J&J retains a 60% share," LeMaitre said.

Looking for whatever crumbs fall from the pie as J&J and Boston Sci jostle over it is Guidant, which has suffered a number of setbacks in its coated-stent efforts. Currently the largest player in the bare stent market, the company is taking many approaches to having a product of its own to offset the expected hit it will take in one its most profitable sectors. In November, a court denied Guidant and its partner, Cook (Bloomington, Indiana), their request for a stay of injunction on data they collected in a paclitaxel-coated stent trial. A U.S. District Court judge had ruled earlier that the partnership between the two companies was unlawful and that they couldn't use the trial data in their filing to the FDA. The suit was originally brought against the companies by Boston Scientific, which along with Cook has a license to paclitaxel, manufactured by Angiotech Pharmaceuticals (Vancouver, British Columbia). Guidant finally canceled its proposed $3 billion acquisition of Cook in January, after early results from the DELIVER paclitaxel-coated stent trial failed to meet performance targets.

Looking to quickly revive its stagnating program, Guidant agreed in March to buy certain assets of Biosensors International's (Singapore) Everolimus coated-stent program, including the Challenge stent, for $20 million in cash, plus potential milestone payments and royalties. Guidant said the agreement provides intellectual property and valuable preclinical and clinical data that would complement its existing Everolimus program. The company had previously acquired an exclusive worldwide license for evirolimus from Novartis Pharma AG (Basel, Switzerland) for use in drug-coated stents, and now it will have a second platform technology to back up its internal program.

Results of the 36-patient FUTURE I trial, presented at the American College of Cardiology (ACC; Bethesda, Maryland) annual scientific sessions in early April, provided the first glimpse of the effectiveness of drug-eluting stent technology that was acquired from Biosensors. According to Eberhard Grube, MD, lead investigator of the initial trial of the Biosensors device at Siegburg Heart Center (Siegburg, Germany), the Challenge showed a statistically significant improvement over conventional stents. "These data almost mirror the data from the sirolimus-eluting stent [trial]," Grube said.

Guidant said the Biosensors acquisition might allow it to accelerate its timetable for bringing a drug-eluting stent to the U.S. market, possibly in 2005, though many analysts are still projecting a 2006 FDA approval. The company has completed enrollment in the 90-patient Future II trial. Six-month results from that trial should be available in the fall.

Bruce Jacobs of Deutsche Bank Securities (New York) wrote in a research report that while J&J's initial advantage will hurt all the other stent players, some companies will feel the pinch much more than others. Jacobs said that while Boston Scientific's performance will be hurt in 2003, "it sets the stage for a breakout year in 2004 when we expect it to launch its own drug-eluting stent, Taxus, into a U.S. market which by that time will likely view drug-eluting stents as standard of care." More likely to suffer, he said, is Guidant, "whose vascular division comprises roughly 42% of sales, and we do not project that company to launch a drug-eluting stent until the end of 2005/2006 timeframe."

Jacobs said that, while his firm does not expect any further declines in Medtronic's vascular division, which comprises only 14% of the company, he does not expect a U.S. drug-eluting stent from that company until at least 2006.