Event – Bayer must assure on Essure
Having spent $1.1bn buying Conceptus in 2013, the suggestion that its sterilisation technology might be dangerous and the subsequent calls for it to be pulled from sale must have been somewhat unwelcome to Bayer.
Crunch time is approaching. The FDA is to convene a panel meeting on September 24 to assess whether reports of adverse events, including deaths, among patients who have received the Essure permanent contraceptive system mean that its use ought to be restricted. The tech is currently forecast to generate more than half a billion dollars – a quarter of Bayer's projected medtech revenue – by 2020, so Bayer needs good news from the agency.
Essure was approved in the US in 2002 and is the only non-surgical permanent contraceptive available in the US. It consists of two tiny metal and plastic plugs which are placed in the fallopian tubes via the vagina. Over the next several weeks the patient’s tissue grows around the inserts, blocking the tubes; a confirmatory test is mandated at the three month point to confirm Essure’s effectiveness.
At least, that is how it is supposed to work. Since Essure has been on sale in the US the FDA says it has received 5,093 medical device reports, largely submitted by women implanted with the device, including complaints of pregnancies and pain.
Four patient deaths have been reported. One was due to an infection after the implant procedure, one resulted from uterine perforation, one was linked to surgery to remove the device and one was suicide. There have also been five reports of foetal deaths where the women became pregnant despite Essure.
A groundswell of opposition has built over the last few years with protesters agitating for the FDA to pull the product from the market. In February a citizens’ petition was lodged with the agency by the consumer activist Erin Brockovich asking for Essure to be withdrawn and alleging that Conceptus had fudged data and concealed adverse events.
The FDA's Obstetrics and Gynecology Devices Panel will meet in late September to review Essure. The committee might recommend changes to Essure’s label or require additional postmarket clinical studies.
The FDA is unlikely to withdraw the system from sale in the US as protesters are demanding, though, largely because there is no other device like Essure on the market, and its implantation is less traumatic than the only real alternative, tubal ligation, which involves surgery.
But its market could be restricted. As the table below shows, Essure supplies almost the only medtech revenues Bayer will have left after it completes the sale of its diabetes devices to Panasonic Healthcare ($1bn Bayer-Panasonic deal suggests unit buys are the way to go, June 10, 2015). It is also the company's fastest-growing medtech segment, with an annual growth rate of 33% from 2013 to 2020. Currently, EvaluateMedTech's consensus forecasts put 2020 Essure sales at $677m.
|Bayer's forecast medtech revenues|
|WW annual sales ($m)|
|Segment||EvaluateMedTech device classification - L3||2013||2014||2016||2018||2020||CAGR|
|Essure||Contraceptive tubal occlusion devices||92||139||338||497||677||+33%|
|Diabetes care||Glucose monitoring devices||1,293||1,208||1,206||1,243||1,286||-0%|
|Interventional cardiology||Interventional cardiology||120||80||-||-||-||N/A|
|Interventional radiology||Diagnostic imaging||501||501||420||420||420||-2%|
|Total medtech revenues||2,006||1,928||1,965||2,160||2,383||+2%|
|Total company revenues||53,345||56,115||55,448||60,249||64,806||+3%|
If Bayer were to exit medtech entirely – far from an impossible scenario – the price it could expect to get for Essure would be limited by the suggestion that the technology might be dangerous, let alone a reduced market or the necessity of conducting further expensive trials.
The price Bayer paid to acquire Conceptus looked high at the time (Bayer sees fertile ground behind struggling Conceptus sales, April 30, 2013). If the panel’s verdict goes the wrong way Bayer could find that it has paid heavily over the odds.