Roche leaves Abbott in the dust when it comes to US approval times

The Swiss group has succeeded with its internally developed diagnostics, but buying in innovation has served Becton Dickinson well.

The medical device company with the most FDA approvals is the one that got those approvals in the shortest average time. An analysis of US registrations of innovative devices from 2013 to the present puts Roche at the top of the league table, with 22 approvals taking an average of 7.4 months.

Interestingly, one of the groups in joint second place on number of approvals had to wait the longest for the agency’s blessing. Abbott’s 19 green lights took an average of two years.

This disparity is largely due to the nature of the devices in question: all but one of Roche’s were in vitro diagnostic (IVD) tests, which tend to pass swiftly through the FDA’s channels, whereas Abbott also obtained the green light for products in the fields of cardiology, diabetes and neurology. In fact, the IVDs Abbott did submit were turned around in less time than Roche’s.

The analyses below concern the 10 medtech companies that have had at least five innovative device approvals – premarket approvals, humanitarian device exemptions and de novo 510(k) clearances – from the start of 2013 to date.

Innovative device approvals 2013-18 by company
Company Number of approvals Average approval time (months)
Roche 22 7.4
Abbott Laboratories 19 23.5
Medtronic 19 15.4
Boston Scientific 11 12.7
Becton Dickinson 9 12.9
Biomérieux 6 8.3
Johnson & Johnson 5 18.9
Stryker 5 17.3
Edwards Lifesciences 5 14.7
Qiagen 5 11.4
Average   14.3
Average of all approvals   12.3
Source: EvaluateMedTech.

Medtronic got the same number of approvals as Abbott, but in almost half the average time, despite Medtronic’s devices spanning a wider range of therapeutic areas, none of which were IVDs. Perhaps the various acquisitions Abbott is digesting at the moment have meant it has taken its eye off the regulatory ball.

Organic is not necessarily healthier

Across the board acquisitions as a strategy bring unpredictable returns, at least when judged by the speed of approvals. Cutting the FDA data by whether a device was developed in-house or came to its marketer via an acquisition shows some definite winners and losers.

Boston Scientific, for example, has been highly active in M&A over the past few years, and its purchases have been smart ones as judged by this metric. The devices it has bought in – that is to say, those whose regulatory submission was made by a company subsequently acquired by Boston – got the FDA’s blessing much more quickly, on average, than those it developed in-house.

Becton Dickinson is notable for how few of its approvals were awarded to devices it had developed organically. Seven of its nine approvals were awarded to C. R. Bard, the company BD acquired for $24bn in 2017 (The return of medtech scale-building?, April 24, 2017). The other two, both diagnostics, took an average of two months more to get their approvals – though this is only a small disparity.

This is arguably a matter of luck as much as judgement; BD bought Bard as a scale play, and would have been more interested in Bard’s many established marketed franchises than in its newer innovative devices.

Innovative device approvals 2013-18 by company strategy
Company % developed in-house Ave approval time in-house (months) Ave approval time bought in (months)
Qiagen 100% 14.5 -
Edwards Lifesciences 100% 13.0 -
Medtronic 95% 15.8 14.0
Roche 91% 7.3 5.8
Biomérieux 83% 7.2 15.0
Stryker 80% 16.2 9.8
Boston Scientific 73% 13.4 8.4
Abbott Laboratories 58% 12.9 34.2
Johnson & Johnson 40% 14.3 39.2
Becton Dickinson 22% 13.6 11.5
Average   12.8 17.2
Source: EvaluateMedTech.

Diagnostic tests, being simple products and yielding uncomplicated data that is swiftly checked, are almost always the fastest type of medical technology to gain approval. This is illustrated powerfully by the difference in approval times between all of Abbott’s products and its IVDs alone – nearly two years versus just 6.9 months. Abbott’s average has been dragged down by its non-diagnostic products.

It is notable that none of Abbott’s approved IVDs came via its acquisition of the troubled diagnostics group Alere; all were in-house. Indeed all four of the companies that have had five or more IVDs approved since 2013 developed them all organically.

Innovative IVD approvals 2013-18
Company Number of approvals Average approval time (months)
Roche 21 7.4
Abbott Laboratories 6 6.9
Biomérieux 5 9.4
Qiagen 5 14.5
Average   8.5
Average of all IVD approvals   10.0
Source: EvaluateMedTech.

Qiagen is the outlier in terms of speed of IVD approvals, taking markedly longer to shepherd its IVDs past the FDA than the other three groups. This might simply be a case of it being the smallest – it has less than 5,000 workers whereas Biomérieux has a workforce of over 10,000 and Roche and Abbott many times that, even in their diagnostics divisions alone.

The first half of this year saw a major, and unexpected, downturn in the number of devices approved by the FDA. Investors will want to see medtechs working hard to get their new devices onto the world’s largest market in the shortest time possible and making well-chosen tuck-in acquisitions to enable this. For now, Roche remains the one to beat.

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