Thoratec (Pleasanton, California) last month received FDA clearance to use its heart assist device as an alternative to transplant for the treatment of end-stage congestive heart failure. The FDA approved the company's HeartMate VE left ventricular assist system (LVAS) as a destination therapy for patients who suffer from end-stage heart failure but are not considered eligible for heart transplants. And the destination-therapy indication opens a potentially large market for the medical device maker and others in this sector. However, physician uptake in this particular application will probably be gradual, hinging on a timely reimbursement, the company said during a press conference to discuss the new approval.

Candidates for the device must have a life expectancy of less than two years. An estimated 100,000 Americans suffer from end-stage heart failure each year but do not qualify for transplants. The heart pump was approved in 1998 as a bridge to a heart transplant, and the company asked the FDA to approve it as a heart failure treatment in October 2001. Thoratec also noted during its conference call that it intends immediately to file a premarket approval (PMA) supplement for its next-generation device, the HeartMate XVE, for the destination therapy indication.

"Given that many patients do not qualify for transplantation and that there is a very limited supply of donor hearts, we are hopeful that this will be an increasingly adopted treatment for patients who have no other options," said Keith Grossman, Thoratec CEO. He noted that the approval was only for New York Heart Association Class IV patients.

The company noted that the FDA granted an expedited review for the device on Oct. 1 for destination therapy; however, the application was not filed pending resolution of an issue raised by the FDA respecting the data supporting the request. The new treatment approval, which was recommended for clearance by the FDA's Circulatory System Devices panel in March, came one to two months later than expected.

Several companies stand to gain from the destination therapy approval indication. In response to Thoratec's clearance, WorldHeart (Ottawa, Ontario) issued a statement saying that it welcomes the FDA approval for use of the LVAS for destination therapy since it, too, seeks an identical clearance for its Novacor device. That company submitted a PMA request on Aug. 15 for use of the Novacor LVAS by end-stage heart failure patients who are not candidates for transplantation. WorldHeart said it is now pursuing the process laid out by the FDA for resolution of that issue.

MicroMed (Houston, Texas), another company focused on this type of technology , filed an investigational device exemption for use of its DeBakey LVAD for destination therapy in May, and LoVAD Technology (Detroit, Michigan) is developing the Kantrowitz CardioVad for that indication.

Approval of its HeartMate device was based largely on Thoratec's Randomized Evaluation of Mechanical Assistance for the Treatment of Congestive Heart Failure (REMATCH) clinical trial, which showed the device nearly doubled the survival rate at one year, compared to conventional drug therapy, and tripled the survival rate at two years. The median survival rate for patients with the ventricular assist device was 408 days, compared to 150 days for patients prescribed drug therapy.

Grossman said that the 130 centers currently using the device for bridge-to-transplant can begin using the HeartMate for destination therapy. He added that, based on the company's experience with the bridge-to-transplant indication, a number of early adopters are likely to be large and more active centers, with more pervasive adoption at other centers over time. "The rate of adoption tends to accelerate as more patients are treated and positive clinical outcomes are generated," Grossman said.

He noted that an advisory group will review the HeartMate to help set reimbursement guidelines for Medicare, predicting that decision coming from the Centers for Medicare & Medicaid Services (CMS) in the second half of 2003. Questioning that reimbursement timeframe was Michael Weinstein, an analyst with J.P. Morgan (New York), who said in a research report that he did not expect CMS "to establish reimbursement for an alternative to transplant (ATT) indication until the next fiscal cycle starting October 2003." At that point, he said, "the most likely scenario would be for the FDA to expand DRG 525, which currently covers bridge-to-transplant patients, to also include an ATT indication."

REMATCH clinician O.H. Bud Frazier, MD, director of cardiovascular surgical research and the chief of cardiopulmonary transplantation at the Texas Heart Institute (Houston, Texas) predicted "some effective coverage before the finalization of the reimbursement policies," adding that the technology is finally being utilized for what it was designed to do when it was originated back in 1975 — as a destination therapy. "It's taken a while to reach that, but it's going to be very effective," he said.

ATS, Symphonix to liquidate operations

Innovative technologies are exciting to pursue but also high-risk, a principle demonstrated last month when two companies, one in the tissue engineering field, the other in advanced hearing technology, announced plans to close down operations. Advanced Tissue Sciences (ATS; La Jolla, California), approved plans for what it called an "orderly liquidation" of assets, and Symphonix Devices (San Jose, California) rolled out plans for its dissolution.

For ATS, the announcement appeared inevitable, following previously announced Chapter 11 bankruptcy reorganization in October. At the time, the company laid off 70 employees and about 115 were offered transfer positions to its joint marketing partner Smith & Nephew (S&N; London). With other layoffs, the company was left with "a handful" of employees. Among those leaving are Arthur Benvenuto, chairman, president and CEO, and Gail Naughton, PhD, vice chairman, the person who most often had bannered the strong technological possibilities for the firm is skin substitute products. Both resignations were effective immediately.

A company spokesman said that the company's assets aren't being offered via "auction" or as a package. "We are talking to different companies interested in buying different product lines, primarily because those lines represent so many different applications." They include human collagen, periodontal applications for the company's lead product, Dermagraft, and products for dental surgery and for skin care. Overall, he estimated that the company's intellectual portfolio consisted of about 130 patents or licensed products, with the company probably returning some of the licenses outright.

As recently as early October, Benvenuto and Naughton had appeared at the UBS Warburg Life Sciences Conference in New York, delivering the message that the company had moved out of the "developmental" category and was producing cash flow with four products. That presentation focused on the recent FDA approval of Dermagraft for the treatment of diabetic ulcers and a strategic alliance with cardiovascular behemoth Medtronic (Minneapolis, Minnesota) that was positioned to give it at least $20 million.

Paralleling the ATS demise, the board of Symphonix Devices approved "complete liquidation and dissolution of its business" following the pursuit of a variety of failed alternatives. These included divestiture of the company's Soundbridge technology, an implantable hearing device that was FDA-cleared in late 2000 and positioned as a market competitor to hearing aids. Besides outright sale, the board also had pursued a partnering arrangement, another effort that could not be consummated. Symphonix said it would submit the plan of liquidation and dissolution to stockholders at a future meeting.