Growing interest in stroke-treatment devices highlighted by Abbott's latest deal

Abbott's Topera--Courtesy of Topera

Abbott's ($ABT) just-announced acquisition of ablation catheter player Kalila Medical reflects the growing adoption of interventional electrophysiology and other devices to treat atrial fibrillation and stroke.

The deal marks Abbott's fourth investment in the space ever since branded drug maker AbbVie ($ABBV) spun off from the company in 2013. In search of a new identity without its innovative pharma arm, the company made three simultaneous investments aimed at treating atrial fibrillation in 2014, investing in two startups and acquiring Topera, maker of the Topera 3D Physiologic Rotor Mapping Solution, which consists of a diagnostic catheter that sends information to a specialized computer, or mapping system.

Although Abbott does not provide Topera revenues, the broader strategic bet appears to be a good one, based on the numbers of other companies.

St. Jude ($STJ) CEO Michael Rousseau said during the company's January earnings call that the market for ablation to treat afib (which often precedes stroke) is growing in the low teens and is underpenetrated, "with approximately 2.5% of the diagnosed symptomatic AF patient population receiving ablation."

Sales of atrial fibrillation devices rose 4% to $276 million at the company in Q4.

"We will have the single largest launch in our history in atrial fibrillation," he said during this year's J.P. Morgan conference. "We will have new hardware. We will have new software. We will have a new advanced mapping system. We will bring the first sensor-enabled ablation catheters into the market. This will be a catalyst for the next generation of therapy in atrial fibrillation."

The company's goal is global leadership in the afib arena, but the CEO acknowledged that it's a "neck-and-neck race," referring to competitor Biosense Webster.

Johnson & Johnson ($JNJ) said the unit's electrophysiology business grew 19% worldwide year-over-year, led by sales of its ThermoCool SmartTouch catheter. J&J also bulked up in afib by acquiring Coherex Medical for an undisclosed sum.

Coherex takes a different approach to treating the condition. It makes a left atrial appendage closure (LAAC) device, or an implant that prevents blood from pooling up in that section of the heart, thereby decreasing the risk of stroke.

The device world is closely following Boston Scientific's ($BSX) leading Watchman LAAC device. Despite uncertainty over its reimbursement in the U.S., Boston Scientific believes the device represents a $500 million market opportunity, assuming a 2% penetration rate among the potential patient population. Big Pharma companies are monitoring it too, for the device competes with standard-of-care warfarin, as well as other new blood thinners.

Of course, Medtronic ($MDT) is in the stroke space too. In addition to ablation catheters to treat afib and arrhythmias, the company's Solitaire stent retriever is one of its top growth opportunities due to a series of studies that showed the device improves outcomes following stroke when used in conjunction with traditional drug therapy.

The studies also applied to Stryker's ($SYK) similar Trevo ProVue stent retriever, which CEO Kevin Lobo called one of the company's two "transformational" opportunities.

In general, given the novelty of med tech's stroke offerings, adoption will to a large extent depend on post-market studies and clinical evidence generation.