JPM: Boston Sci updates on Watchman reimbursement, Synergy launch

LithoVue system--Courtesy of Boston Scientific

At the J.P. Morgan Healthcare conference in San Francisco, Boston Scientific ($BSX) officials said they are shifting the balance of the company into faster-growth markets like electrophysiology and neuromodulation, as opposed to mature ones like drug-eluting stents and pacemakers.

Specific new developments mentioned were the launch of the LithoVue single-use digital flexible endoscope for examination of the kidney, ureter and bladder, as well as approval for premium reimbursement of the S-ICD pacemaker in Japan and the closure of the $70 million deal to acquire CeloNova, a maker of microspheres to treat liver cancer.

There were several other interesting bits of information.

  • All med tech leaders are being asked what they will do with the windfall from the two-year suspension of the 2.3% medical device tax. "We anticipate investing a significant portion of that dollars back into the business through whether it be innovation in R&D in structural heart, venture investments, collaboration with universities, really just to continue to invest and grow our pipeline to advance science for life as a company," CEO Michael Mahoney said, citing the corporate motto at the end.
  • Another issue that's been getting a lot of attention is federal reimbursement of the Watchman left appendage atrial closure device to prevent stroke. The Centers for Medicare & Medicaid Services surprisingly contraindicated patients on the blood thinner warfarin in its draft reimbursement ruling. It is unclear whether the contraindication applies to patients who are noncompliant with the medication. "We'll anticipate some clarification around the contraindicated word from CMS on February 8," chief medical officer Dr. Keith Dawkins said. Regardless of the outcome, Boston Scientific is sticking to its previous statement that the device represents a $500 million market opportunity, assuming a 2% penetration rate among the potential patient population.
  • Boston Scientific last year earned the first FDA approval for a (partially) bioresorbable stent, dubbed Synergy. The company is aiming for a 50-50 mix in the U.S. between the Synergy and the traditional drug-eluting Promus Premier. Chief Medical Officer Dr. Keith Dawkins said the company is commanding a significant price premium for the Synergy, as it has done in Europe.
  • Referring to last year's run on early-stage transcatheter mitral valve replacement companies, Dawkins said bluntly, "there's been really a few months ago $1.5 billion roughly spent on about 80 patients, 40 of whom are dead." He continued, "We think the opportunity is large, but we think the challenges will also be large. It won't be so clean a disease as treating aortic stenosis because many of these (mitral valve disease) patients live quite a long time. They just don't die suddenly like (those who have) aortic stenosis." Boston Scientific's has had an option to acquire transcatheter mitral valve replacement company MValve since 2014. But the company thinks a "toolkit" is needed to address the entire spectrum of mitral valve regurgitation. So, don't be surprised if there's a run on mitral valve repair companies following Edwards Lifesciences' ($EW) option to acquire Harpoon Medical. Many believe repair (not replacement) is the better treatment strategy for the degenerative form of the disease.
  • Although endoscopes are less prominent and flashy than cardiology implants, Boston Scientific is a big and growing player in endoscopy, a "high performing" category that earns it more than $1 billion in annual revenues. "We continue to innovate in endoscopic ultrasound, and other new therapeutic categories, including pulmonary cancer, to strengthen our global leadership capabilities in this business," Mahoney said.

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