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Stent sales are not doing so great these days.

In the first quarter of 2013 Abbott Laboratories' (NYSE:ABT) sales of medical devices fell 4.6% to $1.33 billion, with revenue from stents and related vascular products down almost 8% to $742 million due largely to price pressures in the United States. Innovation is possibly the key way out of this predicament. One important new product in the field is the dissolvable stent.

Abbott Labs

Abbott's Absorb stent was the first dissolvable stent for the coronary artery disease that is made of plastic. It now has competition: Elixir Medical's DESolve and Boston Scientific's (NYSE:BSX) Synergy, two CE-approved implants that are gaining traction on the back of positive study data.

Absorb, the world's first drug-eluting bioresorbable vascular scaffold (BVS) has been available since September in more than 30 countries across Europe and parts of Asia-Pacific and Latin America. Absorb is not yet approved for sale in the U.S. Abbott calls Absorb a "scaffold," suggesting that it is a temporary structure -- unlike a metal stent, which is a permanent implant. The scaffold provides support to the blood vessel until the artery can stay open on its own, and then dissolves naturally.

Absorb is made of polylactide, a naturally dissolvable material that is commonly used in medical implants such as dissolving sutures. The potential benefits of a scaffold are significant. The vessel may expand and contract as needed to increase the flow of blood to the heart in response to normal activities, such as exercising. Also, treatment and diagnostic options are broadened, the need for long-term treatment with anti-clotting medications may be reduced, and future interventions would be unobstructed by a permanent implant.

Absorb has been a bit slow being accepted in Europe, but it has been a success in India. The Times of India reports that doctors have implanted more than 2,500 Absorb stents since the device's launch in late September, spread across 250 centers in 45 cities. Cardiologists told the newspaper that user demand is driving the quick adoption, as patients -- lured by Absorb's promise to dissolve in the artery after about two years -- request the latest technology in their procedures. Patients seem to like the idea that the implant leaves no metal in the body.

From the Times article:

'This device brings a tremendous relief for the heart patients with severe blockages and who are much younger in age, leaving a scope of further procedure in case there is a restenosis (recurrence of blockage) in the vessel,' said cardiologist Shirish Hiremath, director at the cath lab at Ruby Hall.

If the device's popularity in India is any indication, the company will have no trouble reaping revenue around the world. Abbott is also likely to be first in the U.S. market, since it has started an FDA-targeted trial of 2,250 patients in January. The study will compare Absorb to Abbott's well-established Xience stents, aiming to duplicate the positive safety and efficacy data of the device's five previous studies.

Elixir

While Abbott Laboratories leads the way in the dissolvable stent market, Elixir Medical is right on its heels, winning a European approval for its DESolve device. In a six-month trial of 126 patients that ended last year in October, the completely dissolving stent effectively propped open the blood vessel with a low 3.25% rate of major adverse cardiac events. The company announced the results at the recent EuroPCR conference in Paris.

This brings Elixir closer to rival stentmaker Abbott. But Elixir has its hand in a few different stent markets as it is the only company with three CE-marked drug-eluting models: the biodegradable DESyne, the durable polymer DESyne, and this one, the DESolve. Elixir believes its device, which dissolves faster than Abbott's, has a chance to carve out a share of the market. The company believes that DESolve's ability to maintain radial strength, self-appose to the nominal vessel wall, and return patients to normalcy after one year will put it at the forefront of the dissolvable stent market.

Elixir is using novolimus coating, a novel m-tor inhibitor that is an active metabolite of sirolimus, the drug that was used in Johnson & Johnson's (NYSE:JNJ) Cypher stent and that has a well-established safety profile. But novolimus has added features of being able to better penetrate the tissue and on a more consistent basis, which means the stent coating can be loaded with a lower drug dose. Elixir plans to start selling a broad range of DESolve stent sizes around the world later this year. The company hasn't said whether or when it will pursue FDA approval for the device.

Elixir Medical is a Sunnyvale, Calif.-based privately funded company. The lead investor is the Invus Group, a large New York-based equity investment firm.

Boston Scientific

Boston Scientific's Synergy, the company's first foray into the dissolvable stent market, has so far proven just as effective as the company's long-running Promus Element, showing rates of 1.1% target lesion revascularization and 0% stent thrombosis after two years. That 1.1% revascularization figure is well below Promus Element's 6.1% rate, Boston Scientific notes, suggesting that the absorbable device could provide long-term benefits over traditional polymer-coated stents. Both devices are CE marked, but are yet to be approved by the FDA.

The Synergy stent is coated with a bioabsorbable PLGA polymer and everolimus drug combination to create a low initial weight, ultra-thin, uniform coating that is applied to the outer surface of the stent. PLGA stands for copoly lactic acid/glycolic acid and it is a superior material for sustained-release formulation.

Investor Summary

In the first quarter of 2013, Abbott Lab's worldwide sales increased 3.5%. Sales were driven by 9.0% operational sales growth in Nutrition, including 14.8% international growth, and 6.4% operational sales growth in Diagnostics. Worldwide vascular sales were $742 million, down 7.7% from a year before. Within that, revenue from the drug-eluting stents and bioresorbable vascular scaffold product portfolio amounted to $387 million, down 4%.

Abbott is projecting EPS for full-year 2013 of $1.98 to $2.04. The company was first with a dissolvable stent internationally, and it is on its way to being the first in the U.S. market. Abbott's management believes Absorb is the key to growth for the whole vascular business. While the device's European adoption is taking a bit longer than the company anticipated, CEO Miles White has said he's confident Absorb will become a "workhorse" stent for the company over time.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Source: Abbott Labs' Absorb And The Dissolvable Stent Race