Early CoreValve approval presages market and courtroom showdown

The pivotal trial of Medtronic’s transcatheter aortic valve CoreValve had yielded an overwhelmingly positive result, but even so the markets had not expected the product’s US approval to come as quickly as it did.

The most noticeable effect of Friday’s green light was seen on Medtronic’s rival Edwards Lifesciences, which fell 6%. As well as what will now be a US market duopoly, investors will have to contend with a courtroom battle between the two companies, with Edwards set to seek triple damages and a permanent injunction against Medtronic, which was recently found to infringe its patents.

CoreValve’s success in the Extreme Risk trial had prompted analysts to bring forward US approval by six months to April or May of this year. Still, Edwards’ share price fall on Friday might have less to do with CoreValve approval coming earlier even than this, and more with the fact that this shows beyond doubt that the FDA sees the data as strongly compelling.

In light of this, any injunction Edwards might seek against Medtronic must now stand even less chance of succeeding.

The threat of an injunction came when Edwards was awarded $394m in damages last October after a federal jury found that Medtronic had infringed patents covering Sapien, and was accompanied by the possibility of triple damages. Most analysts simply expect this to be resolved through a royalty payable on CoreValve sales, and Friday’s approval could strengthen Medtronic’s hand.

In the Extreme Risk cohort of patients unable to undergo heart surgery, CoreValve gave 76% 12-month overall survival, versus the 69% seen in a separate study of Edwards’ Sapien valve (CoreValve data cause FDA to waive panel requirement, October 30, 2013).

While in Europe several aortic valve devices available, including Medtronic’s and Edwards’, on the other side of the Atlantic Edwards had until now enjoyed a monopoly. Litigation aside, the market battle was set to hot up too, with Edwards expecting a next-generation device, Sapien XT, to be approved in the US this year.

Upping the ante

Medtronic also is looking to up the ante with one-year data from the High Risk cohort of CoreValve’s pivotal trial, expected in spring. This cohort comprises patients who, while not unable to undergo heart surgery, are at high risk of complications from it – a larger market for the device.

The High Risk study compares CoreValve against traditional open heart surgery, and data from it will be subject to a separate FDA review, along with a possible advisory panel.

Sapien is expected to have sold $359m in the US last year, according to EvaluateMedTech consensus data, and revenue from the franchise is set to reach $774m in 2018. At that point Medtronic is seen generating $489m in sales of CoreValve, in current and follow-on indications.

CoreValve is one of several key near-term drivers for Medtronic, but the group’s plan has had setbacks, including failure of the pivotal trial of the renal denervation device Simplicity. Assuming that more clarity on the legal threat from Edwards emerges sooner rather than later, the CoreValve approval should come as a welcome relief.

Pivotal study of Medtronic's CoreValve
Trial ID NCT01240902
Cohort Extreme Risk High Risk
Number of patients 634 790
Primary endpoint All-cause death and major stroke All-cause mortality vs surgery

To contact the writer of this story email Jacob Plieth in London at jacobp@epvantage.com or follow @JacobEPVantage on Twitter

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