Abbott, Medtronic Fortunes to Rise on Heart Stents

Abbott Laboratories and Medtronic Inc. are poised to seize a third of the $5 billion in annual heart-stent sales with new versions of the drug-coated devices. Studies suggest the Abbott and Medtronic stents are more effective than artery-opening products sold by market leaders Johnson & Johnson and Boston Scientific Corp. Abbott’s new Xience stent may become the top seller because of superior technology, according to Samin Sharma, director of interventional cardiology at Mount Sinai Medical Center, who implants more stents than any other New York doctor. By 2009, Abbott and Medtronic, the world’s largest maker of heart devices, will each be selling about $1 billion a year of drug-coated stents, preferred by doctors because they keep arteries open longer. Investors may benefit next month when new study results are released. The Xience is forecast to account for 8 percent of Abbott’s operating profit, Lehman Brothers analyst Robert Hopkins said yesterday in an investment note. “It’s going to be quite a land grab,” said Phil Nalbone, a medical device analyst at RBC Capital Markets in San Francisco, in an interview. “We have a new generation of stents that are easier to use and may have significant advantages in effectiveness and safety.” Abbott, based in Abbott Park, Illinois, introduced the Xience device last year in Europe as its first entry in the drug- coated stent market. Abbott rose $1.18, or 2.3 percent, to $52.90 at 4 p.m. in New York Stock Exchange Composite trading and has risen 10 percent in the past 12 months. J&J, Boston Scientific Medtronic, based in Minneapolis, rose 41 cents to $54.06 in New York and has increased 16 percent in the past year. The Endeavor stent, available in Europe, is its first drug-coated version. Last year, Medtronic generated $276 million from Endeavor and $249 million from bare-metal devices costing about $300, a 10th as much as drug-coated stents. Boston Scientific has plummeted 23 percent in trading since studies linked its Taxus stents to blood clots at a cardiology meeting a year ago in Europe. The Natick, Massachusetts-based company rose 13 cents to $13.23. Boston Scientific plans to introduce its next-generation Taxus Liberte stent next year in the U.S. Johnson & Johnson, based in New Brunswick, New Jersey, gets less than 5 percent of its sales from stents. The company rose 1 cent, to $61.66, and have lost 3.5 percent in the past year. Boston Scientific and Johnson & Johnson say they have long- term data that will help them compete with Abbott and Medtronic. New studies show their stents are particularly effective for high-risk patients, such as those with diabetes. $3,000 Devices Endeavor, Xience and a copy of the Xience that Boston Scientific will sell under the name Promus will probably take more than half the $5 billion in annual drug-coated stent revenue now split between the Taxus and the Cypher, analysts say. Stents are tiny metal mesh tubes that keep arteries open after doctors clear clogged vessels with inflatable balloons. The devices are coated with a chemical polymer and drugs to prevent tissue from growing inside the device and re-blocking the artery, the main complication of older, bare-metal models. The $3,000 drug-coated stents almost completely displaced bare-metal versions in the U.S. in 2005. Boston Scientific’s Taxus and J&J’s Cypher devices were used in almost 9 out of every 10 U.S. procedures in the first quarter of 2006. Now they are given to about 65 percent of patients, after studies showed they may trigger deadly blood clots years after being implanted. Abbott Data Abbott’s Xience was safer after one year than Boston Scientific’s Taxus, which was linked to blood clots in 1.3 percent of patients, researchers said. People with the Xience had fewer cardiac deaths, heart attacks and repeat procedures, according to a study earlier this year. Abbott will present additional data at a conference next month in Washington showing whether the benefits persist. The company will also report on the number of patients who develop clots, the risk that hurt sales of Taxus and Cypher devices. Studies so far show they amount to less than half a percent. The Xience stent is especially thin and flexible, making it safer and easier to implant, and it effectively prevents tissue from re-clogging arteries, Mount Sinai’s Dr. Sharma says. “It is just very easy to deliver, you don’t have to struggle,” said Sharma, who is paid by all the major stent makers to give talks on the devices, in an interview. He uses Xience regularly when working in India, he said. “Overnight, it will become 20 to 30 percent of the market.” Blood Clots Medtronic’s Endeavor may have an advantage in causing fewer blood clots. In studies of the device involving more than 4,000 people and lasting as long as four years, there weren’t any case of what is known as late stent thrombosis, said Scott Ward, president of Medtronic’s cardiovascular unit. Using a broader definition, there were two cases, he said in an interview. The most recent, longest examination of patients with drug- coated stents in Sweden showed no increased risk of death over four years, based on results reported at the European Society of Cardiology meeting this week in Vienna. An earlier study turned up an 18 percent increase in risk of death over three years. SOURCE: Bloomberg.com