The story coming out of Avinger Inc. isn’t so much that the Redwood City, Calif.-based company significantly lowered guidance for 2016 revenue, but rather it received FDA clearance for an enhanced version of its lumivascular atherectomy system.
Analysts sang tunes of praise – almost totally overlooking the firm’s ultra conservative stance on revenue. Consensus had estimates at $38 million, but Avinger gave guidance at between $25 million and $30 million.
“The approval of Pantheris is the most important milestone in the company’s [nine-year], history,” said Jason Mills, an analyst with Canaccord Genuity.
Analysts are championing Pantheris, as a product with the potential to significantly impact the way peripheral arterial disease patients are treated.
Pantheris, which already has CE mark, allows physicians to see inside the artery using optical coherence tomography (OCT). The feature offers more accurate navigation to access and treat PAD lesions, with less risk of damaging the artery walls and is radiation free.
The key to Pantheris’ success – is it’s imaging component.
“Over and over again, we’re asked what makes Pantheris that different from all the other interventional catheters? We say there are many things of course but perhaps the most important is the camera,” said John Simpson, Avingers, founder and executive chairman during a recent earnings call. “This of course leads to the next question which is how do you make a camera that small? This then of course commits us to - we have admit that this is not a traditional camera but rather a laser and fiber optic system that creates an image of the vessels what acts like a camera, but it's even better than a camera because it's not only seems from inside of the vessel, but it actually sees through the vessel wall, and this is the information that allows the physician to determine the distribution of plaque in the vessel wall with extraordinary accuracy, and target the treatment only on the disease portion of the vessel leaving the healthy portion of the vessel alone.”
There are other technologies on the market – and ironically have direct ties to Avinger’s founder. He founded and was CEO of Foxhollow Technologies Inc., which has the leading market share for catheters used in the atherectomy market. Foxhollow before it was acquired by Plymouth, Mass.-based Ev3 for $780 million in 2007. About three years later Covidien acquired Ev3 for $2.3 billion in 2010. Medtronic then made its bid to acquire Covidien for $43 billion (Medical Device Daily, June 17, 2014).
“I want to say that exhilaration is maybe an understatement for the way we feel it upon on the approval of the first ever OCT-guided directional atherectomy catheter, and we welcome Pantheris to lumivascular family at Avinger,” Simpson said. “What a great journey, along the way we met many wonderful patients, physicians, staffs, and helpers.”
It took 10 years but Boston Scientific (BSX) may have finally overcome its ill-advised 2006 Guidant acquisition. The company’s shares hit a decade high Wednesday, at one point spiking nearly 12 percent to $22.05 after knocking its first quarter sales out of the park.
Listening to the earnings call, the baseball fan in me couldn’t help but draw comparisons between the company’s better-than-expected earnings and what is already a record-setting season for the Chicago Cubs. Sure, it seemed like a stretch at first, but the more I thought about it the more the analogy made sense. After all, the Cubs have the alleged goat curse and Boston Scientific has Guidant.
But it was the Q&A exchange between J.P. Morgan’s Mike Weinstein and BSX execs that really made me think of the 2016 Cubbies.
Weinstein: So, when’s the last time Boston Scientific grew 8 percent organic? You guys know the answer?
CEO Michael Mahoney: I’ll bet you Dan knows. I don’t.
CFO Dan Brennan: I’d say 10 years, Mike.
Weinstein: 2Q 2005.
Brennan: That’s right.
Mahoney: There you go. Let’s do it again.
I had to laugh at that point because I could picture Cubs manager Joe Maddon standing in a corporate board room saying exactly that to Boston Scientific’s executive team. And then he would throw a company-wide pajama party to celebrate, because that’s how Maddon rolls.
But seriously, Boston Scientific's first quarter is worthy of flying the W flag (the victory flag flown at Wrigley Field after every Chicago Cubs home win). And given the lineup of recently-approved products, this could be a real turning point for the company. Funny, the same could be said of this year's baseball season as the Cubs just celebrated its best 20-game start since 1907.
(Note to Editor: Please forgive my excessive Cubs references. This post may be the last time I find an excuse to write about baseball for Medical Device Daily Perspectives, I had to make it count.)
[caption id="attachment_4700" align="alignleft" width="165"]The latest TAVR tempests arrive[/caption]
The Windy City really lived up to its name during the course of ACC 2016, didn't it? It was also interesting to hear the recording on the subway stating that gambling is not allowed on the trains. Who knew?
ACC 2016 provided a lot of gist for the scribbling class, including some noise about operator volume requirements for TAVR devices. There was also pressure from physicians on FDA to approve the latest generation of devices based on data from other than the classic randomized trial, which in the past may or may not have had any effect. In both cases, the question may be who is and who should be driving these decisions.
When enough is not enough
As those in the interventional cardiology business are aware, hospitals that want to practice TAVR must have an interventional cardiologist and a cardiovascular surgeon with 20 such procedures under their belts in any 12-month period if they want Medicare payment. There was some question about whether this level suffices, given that some data emerged during ACC 2016 indicating that the device performs better even after the operators have done 100 cases.
As interesting as that discussion is, I am inclined to think that CMS did not just pluck that number out of its hat. The agency had a fair amount of clinical trial data on which to base that set point, so one has to imagine there was a reason to pick 20.
On the other hand, physicians working at any institution doing a substantial amount of surgical valve replacement will probably handle a lot more than 20 such procedures annually. For a lot of centers practicing this device type, the question probably seems a bit absurd.
There are undoubtedly exceptions, however. It is probably safe to say that many hospitals that barely make it to 20 a year are located in areas where there are few hospitals to choose from. If that's the case, raising the minimum number of procedures might force some very sick people to travel a lot farther for a procedure they need just to survive to next month.
In the case of those who are at high risk from surgeries or who simply are not candidates for surgery, is it really humane to force them to drive several hundred miles farther just so everyone can feel good about raising the minimum volume to higher than 20 procedures?
I think we all know the answer, don't we?
Regulating the regulator?
During last year's ACC gathering, Jeff Popma needled FDA about approving the Sapien 3 device by Edwards Lifesciences for inoperable and high-risk patients without putting the company through a full-blown randomized, controlled trial slog. This year, the same argument was made in reference to this valve in an intermediate-risk population.
FDA approved the Sapien 3 in June, 2015, about three months after last year's ACC meeting, but that doesn't mean the agency was responding to the pressure it was feeling from doctors. Still, it will be interesting to see how the agency handles this latest predicament. After all, much of the data in support of this notion is derived from a study that used propensity matching to compare a single-arm study of the Sapien 3 to surgical valve patients who were enrolled in the Partner 2A study.
This can't sit well with a lot of people at FDA, but we all know that doctors have a lot of pull with government agencies. Still, it's tough to gamble any serious money on the outcome here. After all, someone at FDA might not like the perception that doctors are driving the FDA train.