By Omar Ford, Staff Writer
Boston Scientific Corp. said it was recalling its previous generation Lotus heart valve replacement devices following reports of problems with the products’ locking mechanisms. The Marlborough, Mass.-based company said the issue stems from excess tension in the pin mechanism that was introduced during the manufacturing process.
News of the recall caused the devicemaker’s (NYSE:BSX) shares to temporarily plummet by 8 percent on Thursday morning. By closing the shares were down about 2.68 percent, closing at $24.48. Boston Scientific spokeswoman, Timette Nevala, told Medical Device Daily, that Thursday’s recall was a “result of a number of reports of Lotus valves that could not be implanted due to the premature release of a pin connecting the device to the delivery system” and that this action “does not impact patients who have already been implanted with the valve.”
The first generation of Lotus, which is the subject of Thursday’s recall, has CE mark approval. Boston Scientific is vying for FDA approval of the Lotus Edge, the next generation of the device. The company also has CE mark for Lotus Edge.
“We expect to bring the Lotus valve platform back to Europe and other relevant international markets by 4Q17,” Nevala told MDD. “PMA submission for [the next generation] Lotus Edge and ultimate commercialization in the U.S. may be impacted by up to six months. This would result in a PMA submission in 4Q17 and U.S. launch by mid-2018, depending on regulatory review cycle times.”
Previously, analysts had forecast $100 million to $125 million in global sales for Boston Scientific’s Lotus devices in 2017.
This marks the second time Boston Scientific has had issues with its Lotus valves. Last October, the company suspended implants of the Lotus Edge in Europe, citing similar concerns. Boston Scientific executives said the company found a fix for the October issue. (See Medical Device Daily, Jan. 11, 2017.)
During Boston Scientific’s most recent earnings call, the company went into more specifics of its solution for the Lotus Edge devices.
“We believe we’ve identified both the issue and the solution to fix the deployment pin, which is a combination of minor process and specification changes,” said Daniel Brennan, executive vice president and chief financial officer of Boston Scientific.
If Lotus Edge gains FDA approval it could end the TAVR “duopoly” held by Dublin-based Medtronic plc and Irvine, Calif.-based Edwards Lifesciences Corp. Edwards is the noted pioneer in the space, having secured FDA approval for its Sapien valve back in 2011. (See Medical Device Daily, Nov. 4, 2011.) Medtronic picked up FDA approval for Corevalve about three years after Edwards TAVR entry into the U.S. (See Medical Device Daily, Jan. 21, 2014.)
“While this news is clearly negative for Boston Scientific and positive for its competitors, Edwards and Medtronic, our conversations with physicians and industry experts suggest it is a fixable problem and should not taint the perception of the Lotus valve because the issue is unrelated to the valve function,” said Larry Biegelsen, an analyst with Wells Fargo.
Shares of Edwards (NYSE:EW) benefited from Boston Scientific’s Lotus misfortunes and shot up about 4 percent during Thursday trade closing at $95.70.
Rick Wise, an analyst with Stifel said that Lotus still has the opportunity to be a relevant device in the TAVR market and that the firm’s presentation of data from the RESPOND Extension trial last weekend at CRT 2017 helped reinforce support.
Data from the trial showed that Lotus, when used with the company’s Depth Guard technology, demonstrated a 17.8 percent pacemaker rate. Wise said he was optimistic about the data because it shows the Lotus Edge can generate a competitive pacemaker rate and compete more effectively in younger lower risk TAVR patient populations.
“Still, we recognize that the interventional cardiology market can be unforgiving for multiple product missteps and this is perhaps Boston Scientific’s “last chance” to maintain brand equity and clinician interest,” Wise said.
SHIFTS IN TAVR LANDSCAPE
Missteps in TAVR can be detrimental to a company seeking approval.
In 2014, St. Jude Medical Inc.’s Portico had valve leaflet issues, which lead to a halt in implants of the device in Europe and caused the firm’s pivotal trial in the U.S. to be paused. It wasn’t until 2015 that the company was able to restart the sale of the device in Europe and its pivotal trial in the U.S.
There have also been shifts in the TAVR landscape. One of the smaller TAVR players – Santa Rosa, Calif.-based Direct Flow Medical Inc. – shut its doors and all 250 employees were laid off when its lender Pdl Biopharma Inc. refused to extend a $65 million funding arrangement. (See Medical Device Daily, Dec. 27, 2016.) The 13-year-old company had received the CE mark for its device in 2013. (See Medical Device Daily, Jan. 29, 2013.)
Other competitors include Munich, Germany-based, Jenavalve Technology AG and Ecublens, Switzerland-based Symetis SA.
Another smaller player in the TAVR market, Claret Medical Inc., came up short on the primary effectiveness endpoint for prevention of stroke in patients undergoing percutaneous placement of aortic valves, with its Sentinel device. (See Medical Device Daily, Feb. 23, 2017.) The Santa Rosa, Calif.-based company’s Sentinel is not a valve, but rather a cerebral protection device used during TAVR implantation procedures.
TAVR LEGAL WOES STILL ON HORIZON
If Boston Scientific is able to get Lotus back on the market, the company still has to contend with its ongoing TAVR patent fight with Edwards.
Boston Scientific filed suit against Edwards alleging that the next-generation Sapien 3 valve infringes a patent it acquired along with Sadra Medical Inc. for $450 million in 2010. (See Medical Device Daily, Nov. 22, 2010.) Edwards then countersued, claiming the Lotus valve violates its patent for a “Prosthetic heart valve and method.”
About three years ago, Medtronic ended its six-year patent war with Edwards over its TAVR valves. (See Medical Device Daily, May 21, 2014.) The Dublin-based company agreed to pay out $750 million with at least $40 million a year in royalties until 2022 to Edwards, to settle the case.
Last month, Boston Scientific executives remained tight-lipped about the case only noting that the company would vigorously defend its intellectual property.