Expansion of the overall medical device market has slowed in recent years, but among the areas defying this trend electrophysiology stands out, with forecast growth of 10% to 2020.
This is why Abbott Laboratories, itself growing more slowly than the industry as a whole, has made a sudden move into this segment, which consists of catheter-mounted devices used to treat heart arrhythmias. With the purchase of one electrophysiology start-up, an option to buy another and a venture investment in a third, Abbott has clearly signalled its interest in staking out a share – but it will still be some way behind the leaders.
Abbott’s push into electrophysiology was spearheaded by its $250m takeover of Topera Medical, whose technology centres not on the treatment of atrial fibrillation but on its diagnosis. Its 3D Mapping System detects spiral electrical waves, one of the mechanisms through which arrhythmias are propagated.
In a physician-sponsored study, use of Topera's system to guide cardiac ablation resulted in an 87.5% success rate for a first procedure, 80.5% of patients remaining free of arrhythmia after one year. This compares with success rates of 50% to 60% for catheter ablation alone, according to the companies. The technology can also speed up ablation procedures, Topera says, as it can identify the specific areas that must be treated.
The other companies in which Abbott has taken an interest are the ablation catheter developer Advanced Cardiac Therapeutics, which it now has the right to buy for an undisclosed amount upon attainment of unnamed milestones, and VytronUS, which it has funded via its investment wing Abbott Ventures. VytronUS’s round raised $32m.
Abbott Ventures had also invested in Topera in April 2013 alongside the VC fund New Enterprise Associates; in fact, all three companies count New Enterprise as their largest institutional investor.
Topera is private and does not release data on how well its products sell or how fast they are growing. But Abbott would not be starting a new electrophysiology unit unless its growth rate, and possibly its sales too, were not competitive.
According to EvaluateMedTech’s consensus forecasts, the electrophysiology market is growing at double-digit rates, with almost every company involved in this area showing an increase. The exception is C. R. Bard, which sold almost all of its ablation assets to Boston Scientific last summer (Boston gains Bard’s rhythm in $275m deal, July 1, 2013).
|Global sales ($m)|
|AtriCure||Open heart products||38||73||+10%|
|AtriCure||Minimally invasive products||14||25||+9%|
|Boston Scientific||Rhythmia EP mapping/navigation||–||80||–|
|Boston Scientific||Other electrophysiology||155||258||+8%|
|C. R. Bard*||Electrophysiology||111||16||-24%|
|Johnson & Johnson||Biosense Webster||1,128||1,915||+8%|
|Medtronic||Other cardiac rhythm disease management||347||795||+13%|
|MicroPort Scientific||Electrophysiology devices||3||10||+20%|
|St. Jude Medical||Base EP||686||1,181||+8%|
|St. Jude Medical||Epicor/Irvine||239||410||+8%|
|St. Jude Medical||ECSI||32||58||+9%|
|St. Jude Medical||Other atrial fibrillation||–||80||–|
|*Sold most assets to Boston Scientific in July 2013.|
The market leader is Johnson & Johnson’s ablation unit Biosense Webster, the only company whose electrophysiology sales topped $1bn last year, although St. Jude Medical was close with total sales of $957m. The two are longstanding rivals, and while Biosense won a hard-fought victory over St. Jude in March, the sales gap between them will narrow to less than $200m in 2020, analysts project (EP Vantage interview – J&J’s Biosense leads growing ablation market, March 10, 2014).
The company with the fastest-growing electrophysiology sales is China’s MicroPort Scientific, at 20%, but the base here is low.
It is to be hoped that Abbott’s new electrophysiology business will do something to liven up its vascular unit; this part of the business is forecast to grow at just 3% to 2020. If Topera’s technology succeeds it will surely follow up with the purchase of Advanced Cardiac Therapeutics – and perhaps VytronUS, too.