EP Vantage interview – J&J’s Biosense leads growing ablation market

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Biosense Webster, the subsidiary of Johnson & Johnson that specialises in electrophysiology, last month beat rival St. Jude Medical to get the first force-sensing cardiac ablation catheter on the US market, reinforcing its position as market leader in ablation.

“We’ve substantially increased the success rate,” David Shepherd, the division’s worldwide president, tells EP Vantage, "and our hope is that as referring physicians start to understand that the outcomes are getting better, more patients will come through.”

7-9 months of exclusivity

Cardiac ablation is used to treat arrhythmias, principally atrial fibrillation (AF), that do not respond to drugs. During the procedure a catheter is threaded though the veins to the heart, where radiofrequency energy is used to scar the heart muscle to block the electrical impulses that cause the arrhythmia.

Biosense’s new device, the ThermoCool SmartTouch, differs from previous devices as it provides instant feedback to the physician to tell them how hard they are pressing on the heart muscle. “It’s very difficult for a physician to be able to tell with pure feel the quality of contact they’re getting for a lesion,” Mr Shepherd says. “The physicians are skilled but the SmartTouch catheter gives them that extra data.”

It gained US premarket approval (PMA) for the treatment of drug-resistant paroxysmal atrial fibrillation, sustained monomorphic ischaemic ventricular tachycardia and type 1 atrial flutter.

The device’s US pivotal trial, Smart-AF, tested it against a previous ThermoCool device that did not have force-sensing capability. At one year, the overall success rate with the ThermoCool SmartTouch was 74%, compared with 64% with a previous ThermoCool catheter.

But even better results were obtained when the doctors stayed within a targeted contact force range. “If they maintained contact force within a range that they set for themselves, and they stayed within that range more than 85% of the time, they got an 88% success rate,” Mr Shepherd says.

Biosense can congratulate itself for getting this new advance to the US first, but it will not have the market to itself for long. “We believe St. Jude will be 7-9 months behind us in the US,” says Mr Shepherd. He adds that the SmartTouch has an advantage over St. Jude’s technology, TactiCath, in that it is integrated with a navigation system, Carto 3, whereas its rival is not.

St. Jude acquired TactiCath in August, when it bought its developer, Endosense, for $171m (Ablation wars heat up as St. Jude buys Endosense, August 23, 2013).

Reimbursement

Because the SmartTouch technology permits better outcomes Biosense has priced the device at a premium to standard ablation catheters in Europe. In the US, though, reimbursement is tricky.

“The pricing is based on the current market and the value of the catheter but we charge a premium in Europe and Japan. The cost varies, not substantially, but a little, region by region. And reimbursement is significantly different as well in each of the different countries. [In the US] AF is reimbursed, but this catheter will fall into existing categories so it doesn’t command a premium on the reimbursement side in the US.”

Ablation is generally a profitable procedure for most hospitals, Mr Shepherd says, and in most places reimbursement is done by procedure. He adds that Biosense will also have to assess how the Affordable Care Act will affect the business in the future.

Ablation technologies, and Biosense, are subject to the same harsh conditions that have come to characterise the medtech sector in the last year or two, with customers balking at prices they were previously happy to pay. Fortunately demand for ablation remains high. “Every medical field is coming under pressure and every business needs to think about the challenges and needs to adapt and deal with them.

“Electrophysiology and particularly ablation is different to some other fields in that our procedures are still growing so that allows us to be a growing company even though there is more pressure. We predict that AF procedures around the world are growing somewhere in the region of 16% per annum,” Mr Shepherd says.

Growing fast

Partly this is because the market is underpenetrated. Biosense estimates that there are 19 million patients worldwide who are potential targets for AF ablation, but only 4-5% are actually treated with ablation.

“Ablation should be second-line treatment for AF. Unfortunately that’s not the case in most places; a patient will try two, three, four drugs before they get an ablation. One of the major opportunities for all the companies in this field is increasing that education,” Mr Shepherd says.

The next frontier in ablation will be treating the persistent form of AF, Mr Shepherd says, rather than the milder paroxysmal form. “The future for all companies is, can we improve results in persistent AF? That’s where results are not as good as they could be, and that’s where a lot of people are focusing their efforts.”

J&J’s cardiovascular care franchise brought in just over $2bn in 2013, $1.1bn of which came from Biosense Webster, according to EvaluateMedTech’s consensus data; the other $940m came from J&J’s interventional cardiology subsidiary, Cordis. Biosense’s revenues are predicted to grow at a CAGR of 9% until 2018.

The business is not on the same scale as J&J’s biggest medtech subsidiary – DePuy Synthes turned over $9.5bn in 2013 – but it is expanding much more quickly. “[Ablation] is one of the fastest-growing segments in cardiovascular today,” Mr Shepherd says. Unless St. Jude manages to position its TactiCath device more advantageously for reimbursement, and it is difficult to see how it could achieve this, Biosense will lead this segment for some time to come.

To contact the writer of this story email Elizabeth Cairns in London at elizabethc@epvantage.com or follow @LizEPVantage on Twitter

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