Medtronic CEO Hawkins Says Patent Win to Boost Stent

Medtronic Inc.’s Endeavor heart stent may get a $114 million sales boost and reverse its losses to rivals if the device maker wins a patent dispute against Abbott Laboratories, said Chief Executive Officer William Hawkins.

The case centers on the rapid exchange catheter, a thin sleeve that surgeons snake through arteries to implant the mesh stents that prop open clogged heart vessels. A US District Court judge in Oakland, CA, is considering Medtronic’s request to sell its stent with the catheter doctors use in 80% of stent operations because they like how it feels.

Winning may raise Medtronic’s share of the $1.9 billion US market for drug-coated stents by almost a third and allow Endeavor to be sold with the same catheters used by rivals Abbott, Boston Scientific Corp. and Johnson & Johnson, Hawkins said in a telephone interview.

“If delivery systems weren’t an issue, it’s not unreasonable to think you’ll have that scenario,” Hawkins said over the summer. “It would clearly solidify our position.”

With Endeavor losing sales to Abbott and Boston Scientific stents, winning access to rapid exchange, known to doctors as “RX” may help Medtronic turn around, said Bruce Nudell, a UBS analyst in New York, NY.

“Unless they get RX, they won’t get a bump,” Nudell said in an  interview last month.

Abbott, of Abbott Park, IL, owner of the patent, has asked the US Patent and Trademark Office to extend its rights until May 2011. Medtronic wants to begin selling Endeavor with rapid exchange on Oct. 29 when the patent expires.

Extra $114 Million

Medtronic’s Endeavor was cleared for sale in the U.S. in February, the first new entrant since 2004 to a market once dominated by J&J and Boston Scientific. Abbott’s Xience, approved in July and also sold by Boston Scientific under a licensing agreement, quickly overtook Endeavor. Xience and the Boston version, called Promus, had 50% of the market compared with 12% to 15% for Endeavor, in an August survey of doctors by JPMorgan Chase & Co.

That’s partly because cardiologists consider Xience and Promus easier to implant with rapid exchange, Michael Weinstein, a JPMorgan analyst in New York, NY, said last month.

Stent Steering

Doctors typically insert the catheter by cutting into the femoral artery  below the patient’s groin. A surgeon steers the tube-shaped catheter through the circulatory system’s twists and branches, using X-ray and ultrasound imagery of the patient’s chest. The stent rides on a thin wire inside the catheter’s hollow tube. Once in place, the physician pushes the stent from the tube and expands it with a tiny balloon. Wire and catheter are then withdrawn.

Rapid exchange, patented in 1995, revolutionized the installation of heart stents, said Steven Bailey, a cardiologist at the University of Texas Health Sciences Center in San Antonio, TX. Before that, surgeons used a type of catheter called over-the-wire, which required a doctor and an assistant to work in tandem to guide a 10-foot wire through the circulatory system.

Rapid exchange was invented by cardiologist Paul Yock of Stanford University in California. It changed the configuration of catheter and guide wire, allowing a lone doctor to install a stent by manipulating a foot-long wire.

‘Complicated Dance’

Over-the-wire procedures take longer and are “like a complicated dance you have to master with your partner,” said Bailey, president-elect of the Society of Cardiovascular Angiography and Interventions, a cardiologists’ group. “They have to understand how you’re going to move and be trained enough to keep that wire in place.”

Medtronic was barred from using rapid exchange in 2001 after it lost another patent case that accused it of selling a knockoff. Medtronic developed its own single-operator catheter system, called multiple exchange. Doctors prefer RX, said Jeffrey Moses, director of the cardiac catheterization laboratory at New York-Presbyterian Hospital in New York,  NY.

Multiple exchange is “just not as slick,” Moses said. “It’s not a deal-breaker, but it gives you pause.”

Device makers sell stents, guide wires and catheters as a unit, said  Daniel Beach, a Medtronic spokesman. The devices usually cost about $2,000.

Expiration Looms

With the patent expiration looming, Abbott sought an extension, citing a rule that allows compensation for time lost waiting for regulatory approval. Medtronic appealed to US District Court Judge  D. Lowell Jensen in Oakland, CA, asking him to declare the patent protection over at its original deadline. The judge heard lawyers’ arguments on Oct. 3 without making a decision.

At Abbott, “we believe we’re entitled to this extension,” said company spokesman Scott Stoffel.

In the end, the patent may make no difference to the stent market, said Phil Nalbone, an RBC Capital Markets analyst, in a late summer note to clients. Abbott’s Xience is already growing at “a rapacious rate,” he said.

“Quite simply, we don’t think Endeavor will benefit all that much” from rapid exchange, Nalbone said.