Stents need to work better and work longer, principally by avoiding restenosis. Thus far in 2001, the treatment of restenosed stents with radiation has taken the lion's share of headlines, via approvals late last year of systems from Novoste (Norcross, Georgia) and Cordis (Miami Lakes, Florida). But waiting in the wings are drug-coated stents, a market clearly poised for strong growth in this particular sector, according to analysts. Among these is David Gruber, MD, medical device analyst for Lehman Brothers (New York), who shared his thoughts on this emerging market in an August conference call on "Implications of Coated Stents." The session focused on how coated stents might soon become a catalyst for overall market growth, beginning in early 2003, in what Gruber said currently is "the stagnant and undifferentiated coronary stent market."

Gruber's discussion came on the heels of an announcement by Guidant (Indianapolis, Indiana) and Cook (Bloomington, Indiana), detailing a cooperative agreement likely to push both of their coated stent products to market and perhaps cut into the early lead which Johnson and Johnson (J&J; New Brunswick, New Jersey) is seen as having in this field. While J&J/Cordis is expected to bring its product to market in early 2003, it may have only six months' lead time given the speeded timeline resulting from the Cook/Guidant pact. In that deal, Cook will gain access to Guidant's stent technologies and will contribute to Guidant its polymer-free paclitaxel coating, which Cook has licensed from Angiotech Pharmaceuticals (Vancouver, British Columbia).

For J&J/Cordis, Guidant, Cook and the other companies working to achieve product clearances in this new device/drug technology, the goal is to gain a major share of an market for stents which Gruber puts at roughly $1.5 billion in the U.S., and projected to grow about 4% this year. Beyond that is the European stent market, a tougher nut to crack, put by Gruber at roughly 25% to 30% the size of the U.S. market.

Gruber said that the most important thing for investors to focus on at this relatively early stage of the game is clinical trial data. "I think it's exceedingly important for investors to focus not only on the trial results, but also on the clinical trial design." Investors, he said, should pay particular attention to specific patients and what types of lesions are being treated. Important near-term data to look for will be Johnson & Johnson's RAVEL Trial, a 237-patient study for which results were due early this month at the European Society of Cardiology meeting in Stockholm Sweden, with the expectation of strong positive results. That trial is expected to show a distinct advantage for coated stents (nil to 2% with J&J's drug-coated stent, compared with rates of 15% to 25% in patients treated with uncoated stents). Another study to look for this month is the Boston Scientific (Natick, Massachusetts) data for its 60-patient TAXIS-1 Trial. And come November, the Cook ELUDES trial data on 180 patients. Gruber stressed that the most important data still has yet to be released on coated stents. "Until J&J reports its randomized trial for the U.S., an 1,100 patient-trial on various lesions, we really don't know what we have."

Gruber recommended focus on the various lesion types when researching the various studies. "The rate of restenosis varies by lesion type," he said. "Simple lesions have a far different rate of restenosis than do complex lesions." He particularly stressed the need to differentiate between clinical and angiographic restenosis. With angiographic restenosis, a patient must have a 50% or greater obstruction. The clinical definition, which Gruber said he favored, typically implies a 75% to 80% occlusion of the blood vessel "and that the patients' functional status is being affected." The angiographic restenosis numbers, he said, "are numbers that you see in clinical trials and clinical restenosis numbers are what you see in real life." Of particular importance, Gruber noted, are the many developmental challenges in the coated stent market. "I'm not sure everyone appreciates the fact that these are drugs, and drugs have a far different risk profile than devices, and that has to be considered." Timelines, he added, are subject to a lot of change.

The true developmental challenges are best appreciated when the coated stent is broken down into its three essential parts, Gruber said, "the drug, the carrier and the stent." For the drug, he said, "dose matters," and too much or too little of a drug can make a huge difference and that different lesions may need different doses. The drug is placed into a carrier which is then placed on a stent. Gruber noted that Cook doesn't use a carrier, and is the only coated stent company that does not employ one. "Cook claims that their drug gets released for one to two weeks, but we need data to substantiate that." He also noted that Cook could be a major competitor in the coated stent sector through the deal with Guidant.

In terms of pricing, Gruber noted several factors. The first is the restenosis rate: "If you have a zero restenosis rate, you can charge more than if you have a 5% restenosis rate." The penetration rate also will affect pricing. "The higher the price, the lower the penetration, and the converse is also true." He added: "Reimbursement is a big deal as well." In Europe, Gruber said that coated stents "will not have a significant impact." The key thing to look for in Europe, he said, was a price point and how non-coated stent sales are impacted. "These may be good indicators for the U.S. market," where the real action will come, he said. As to the market opportunity, he said that coated stents could price up to $2,200 in the U.S., and he called an average price of $2,100 "very doable." He said that by 2003, the revenue could be as high as $2.1 billion, and by 2005, close to $3 billion.

Gruber's U.S. timeline shows J&J getting its stents to market first, by about 1Q03, followed in about six to nine months by Cook, Boston Scientific, Guidant, and further out, Medtronic (Minneapolis, Minnesota). The average time for coated stent approvals, he said, will be about two years. Gruber also expressed concern that the potential existed for an undifferentiated market, since three of the companies – Boston Scientific, Cook and Guidant – all are pursuing paclitaxel as their drug coating. And while Medtronic is behind in its coated stent development, "its stent market only represents about 10% of its total revenue."

Acknowledging the rivalry between Cook and Guidant "in many areas," Cook President and CEO John DeFord, PhD, said that the companies' new agreement "blends the leading-edge technologies of two of the world's great innovators in interventional medicine."

In particular, he noted that the technology agreement will serve to sidestep any costly legal battles over intellectual property that so often crop up in the med-tech sector and were apparently threatening product development in this case. DeFord fended off suggestions that the agreement with Guidant was a preliminary to possible acquisition discussions. And while he said there were no other discussions concerning additional agreements with Guidant or other companies, he did not rule these out. "Certainly, we're always looking to improve our position," he said. "My desire always is to try to augment our position with intellectual property. But we want to be careful that we don't hem ourselves in our limit to what Cook can do. That's one of the nice sides of this agreement. It doesn't limit either party."

Ancure AAA device returned to market

The FDA last month cleared return to market of the Ancure Endograft System for treating abdominal aortic aneurysm (AAA), produced by Guidant (Indianapolis, Indiana), via premarket approval supplement approval. The Ancure was originally cleared for sale by the FDA for minimally invasive repair of AAA in September 1999, at the same time as the AneuRX stent graft system from Medtronic (Minneapolis, Minnesota). However, this past April, both companies' products were the subject of "Dear Colleague" letters from the FDA to physicians, listing "serious" issues with their respective products. Guidant had suspended production and issued a voluntary recall of the system the previous month, noting a variety of reasons for the recall, including failure to report malfunctions, adverse events, manufacturing changes and internal audits that showed problems with the complaint-handling procedures.

Beverly Huss, president of Guidant's Endovascular Solutions division, said last month that the company was "prepared to return the Ancure system to market this quarter." She added, "We also appreciate the FDA's cooperation in working with us to return this important therapy to physicians and patients."

The Ancure system is a woven polyester implant that is delivered though the vasculature. Two small incisions are made in two arteries in the groin, with a catheter then used to take the implant to the aneurysm site. Small metal hooks are then deployed to attach the implant to the vessel wall, thus enabling it to change and adapt to the natural changes of the aorta itself.

Colleen Sweeney, a Guidant spokesperson, stressed that the problems were not associated with the implant itself. "We made changes to the delivery system, but didn't submit those changes to the FDA." She added that the company also didn't initially report some field observations about deployment issues.

Corgentech sets Phase III E2F Decoy trial

One way to keep a low profile is to keep silent, and Corgentech (Palo Alto, California) has been doing just that. But the privately held company now has its shoulder against the Phase III door with an unpartnered product – which is just the way it wants things. Corgentech received approval last month to initiate Phase III trials with its lead product, the E2F Decoy, for the treatment of peripheral bypass graft surgery. The trial is scheduled to begin this month, a step bringing Corgentech closer to putting what it believes is a potential blockbuster product on the market. "Nobody has really heard of us and we are on the verge of Phase III with very nice data," said John McLaughlin, Corgentech's CEO and president. "We've been very quiet, but we are starting to get some visibility now."

The first of 1,400 Phase III patients is expected to be enrolled by mid-September, McLaughlin said, and patients will be examined after one, three, six and nine months before the trial ends at one year. The E2F Decoy, which has been granted fast-track status, works to prevent occlusion in grafted veins – in the case of this trial, leg veins.

"It's a short strip of DNA that binds to a consensus region of a transcription factor," McLaughlin said. "What we are doing is shutting down the proliferation of smooth muscle cells by binding E2F and preventing the activation of its target genes which cause those cells to proliferate."

In the procedure, the vein is removed from the patient's leg, then soaked in the compound and put under extremely low, non-distending pressure in a device that is part of the E2F Decoy treatment. Once that is complete, the vein is ready for grafting. The primary endpoint in the trial will be a comparison between the treatment and placebo groups regarding the need for surgical revision of the graft, or amputation. The secondary endpoint will compare incidences of graft occlusion.

McLaughlin said that when a leg vein is occluded – whether through cardiovascular disease, diabetes or some other cause – and a bypass vein is implanted, 30% to 50% of grafted veins fail over a 10-year cycle. In a Corgentech Phase I/II trial with the E2F Decoy, that failure rate was reduced by 58% over a 12-month period. The Phase III trial will look for a 30% difference between the placebo group and the E2F Decoy-treated group.

A second Phase III trial, scheduled to begin in the fourth quarter, will examine the product in coronary bypass graft failure. When data from both trials are gathered and analyzed, Corgentech will be ready to file. McLaughlin said that as the trials progress, Corgentech will get a clearer picture of a filing timeline.

Corgentech is "in the midst" of a Series C private financing, McLaughlin said. It raised $13 million in its Series B, closed in May, and has raised $15.5 million to date. In a slumping market, and with Corgentech having plenty on its plate, McLaughlin said the company would not worry about an initial public offering this year.

With a late-stage product and still privately held, Corgentech has not partnered the E2F Decoy. That doesn't mean it won't, but it will do so only on its terms. "We've been approached by several partners for worldwide deals, [but] we are not interested in worldwide deals," McLaughlin said. "We will look at deals in Asia and the [European Union], but in the United States we would like to hold onto the product ourselves and market it ourselves."

"We see an area where we can build a franchise," McLaughlin added. "There aren't a lot of companies working on this." Those that are, McLaughlin said, are using different methods, such as conduits and pumps, which leaves an area Corgentech would love to dominate. McLaughlin estimated that the E2F Decoy could generate as much as $650 million in worldwide sales merely a couple of years following launch. "We also have four research-stage programs and one should get into the clinic next year," McLaughlin said. "This is a technology with the ability to very rapidly generate clinical candidates – we aren't talking about years; we are talking in terms of months."