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Summary

  • Johnson & Johnson’s subsidiary Biosense Webster has beat St. Jude Medical to the U.S. market in getting its improved SmartTouch catheter FDA approved.
  • The catheter is contact-sensing: it shows the physician the amount and direction of the force being applied during procedure.
  • Competing TactiCath from St. Jude Medical is expected to follow in 7-9 months.
  • Studies are underway to prove that catheter ablation is as effective as medication in the treatment of atrial fibrillation.

ThermoCool SmartTouch

ThermoCool SmartTouch is an improved device for cardiac ablation that was approved by the FDA in February. It is manufactured by Biosense Webster, a subsidiary of Johnson & Johnson (NYSE:JNJ) that specializes in electrophysiology.

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 percent, compared to 64 percent by ThermoCool's previous model.

The device was granted U.S. premarket approval for the treatment of drug-resistant paroxysmal atrial fibrillation, sustained monomorphic ischaemic ventricular tachycardia and type 1 atrial flutter. Paroxysmal is the milder form of AF (atrial fibrillation), persistent and permanent AF are the more advanced forms.

The big improvement is the instant feedback the device provides to the physicians telling them how hard they are pressing on the heart muscle. That is something that is difficult to do for even the skilled physician without a machine helping. The SmartTouch catheter provides a direct, real-time quantitative feedback graphically displayed on the J&J's Carto 3 System upon tissue contact.

An inconsistent tissue contact may result in incomplete scar formation that could result in the need for additional treatment, and too much contact may result in tissue injury.

Data also showed that the success rate was higher if the physicians stayed within a targeted contact force range. 88 percent was the success rate in one year when the physician stayed in a target range greater than or equal to 85 percent of the time. The trial demonstrated for the first time that the consistent and stable application of contact force on the heart wall has a positive impact on the outcome.

Catheter ablation

During catheter ablation, the doctor inserts a catheter through a small incision in the groin and it is then weaved up to the heart through a blood vessel. Once it reaches the left upper chamber of the heart, radiofrequency energy is delivered to the heart wall to create scars that block faulty electrical impulses that are the cause of heart rhythm disorders.

Cardiac ablation is currently used as second-line treatment for atrial fibrillation in patients who do not respond to drugs.

Medications are successful keeping the heart in a normal rhythm at a rate of 40-70 percent. Success rates with catheter ablation typically range from 50-80 percent, but success is highly dependent on the cumulative experience of the physician. It often takes physicians 100 procedures to become good enough to consistently deliver successful procedures while keeping complications rates low.

Some patients require more than one ablation procedure to free them from atrial fibrillation.

Drugs vs. device

Catheter ablation, if successful, is a one-time treatment. That is all it takes to cure atrial fibrillation. Compare that to the treatment with drugs that a person is required to take daily for a lifetime to keep the heart rhythm normal.

That is a huge difference in cost and convenience! Why is it that catheter ablation is not the first-line treatment for atrial fibrillation before medications?

The answer is the lack of definitive studies that doctors could refer to.

A few smaller studies have tried to prove catheter ablation should be offered at the same time or before medications but larger trials are needed for a definitive proof.

For example, a small recent study from researchers at McMaster University in Ontario found that among patients with intermittent AF treatment with catheter ablation resulted in a lower rate of abnormal heart rhythms and episodes of AF. The lead investigator, Dr. Carlos A. Morillo, concluded that ablation is better than antiarrhythmic drugs. He found that ablation was superior in increasing the time to first recurrence of any atrial tachycardia and markedly reduced the repeated episodes of atrial fibrillation.

The current clinical practice is that for patients with moderate to severe symptoms of AF, doctors will try to force the upper heart chambers to beat normally with any one of 6 different medicines called antiarrhythmic drugs. The decision which medicine to use is based upon benefits, side effects, and the presence of heart failure, high blood pressure, kidney disease, or coronary artery disease.

When medicines are not sufficient to control the heart rhythm, or they produce unwanted side effects, then catheter ablation is recommended.

A major trial is underway, collectively funded by ablation device manufacturers and by the National Institutes of Health, to find a definitive answer to the question: medications or ablation first?

The trial is called Cabana and it will compare first-line drug therapy versus catheter ablation. All forms and disease severities of atrial fibrillation will be included. The study will enroll over 2000 patients and follow them up to 5 years. The majority of patients are 65 years of age or older.

Hopefully, once trial results are available, they will assure cardiac ablation's proper position in the AF treatment priority ranking.

Competition

Cardiac ablation is a crowded field.

St. Jude Medical (NYSE:STJ), Biosense Webster, Medtronic (NYSE:MDT), Bard (NYSE:BCR) and Boston Scientific (NYSE:BSX) all have several models in the market, although the latest improvement, the contact force-sensing technology, is limited to two players, Biosense Webster (Johnson & Johnson) and St. Jude Medical.

Biosense believes that St. Jude is 7-9 months behind it in the U.S. market. Also, it claims that its device, the SmartTouch catheter has an advantage over St. Jude's technology TactiCath, in that it is integrated with its navigation system, Carto 3, whereas the rival system is not.

In order to gain access to this latest technology, St. Jude Medical in August 2013 has acquired the Swiss company Endosense for about $171 million in cash.

TactiCath also has the ability to detect the force with which its tip comes into contact with the heart muscle. The device then gives a visual indication of the pressure between the catheter tip and the heart wall to the physician throughout the procedure.

Endosense's device, TactiCath is approved in Europe for both AF and supra ventricular tachycardia. Endosense's revenues were minimal from the equipment at the time of the acquisition.

Both J&J's system and TactiCath are already on sale in Europe.

Markets

The market is underserved.

An estimated three million people in the U.S. and 20 million worldwide are affected by AF and its prevalence is projected to increase significantly in the ageing population. Only about 4-5 percent of the total AF sufferers are currently treated with ablation.

The public health implications of AF are huge because patients suffering from AF are at an increased risk of morbidity and mortality as well as their quality of life is reduced. AF is estimated to be responsible for 88,000 deaths and $26 billion in additional costs to the U.S. healthcare system on an annual basis.

Even though ablation is supposed to be the second-line treatment for AF, more often is used in third or even lower position. The doctor will try two, three, four drugs with the patient before recommending ablation. Education could be a major tool in changing this situation.

AF procedures around the world are growing somewhere around 16 percent yearly, according to Biosense's estimates.

Analysts from Bank of America Merrill Lynch say that U.S. approval of St. Jude's technology could help the company grow its current share of about 15-20 percent of the $900 million global ablation catheter market.

Reimbursement

In Europe and Japan Biosense has priced the SmartTouch catheter at a premium compared to standard ablation catheters since it produces better results.

In the US, however, it is having a hard time to get reimbursed for the premium. The procedure is reimbursed, but it is lumped together with conventional catheter procedures and so it is difficult to charge a premium for it.

The Affordable Care Act also can affect the business negatively in the future.

The next step in development is to make ablation work in the persistent form of AF, as opposed to the milder paroxysmal form, and ablation industry efforts are focused in that direction.

Investors' view

EvaluateMedTech estimates that out of Johnson & Johnson's 2013 cardiovascular sales of over $2 billion, about $1.1 billion came from Biosense Webster.

Biosense's revenues are forecast to grow at a 9 percent annual rate until 2018.

That income is not significant when you compare it to the $9.5 billion in sales that J&J's DePuy Synthes division of medical equipment brought in last year and especially dwarfed by the total company sales of $71.3 billion. But the specialty has a momentum going for it and its growth rate is one of the best in the cardiovascular business. Also, Biosense Webster is a market leader in its specialty.

At the year-end earnings conference management emphasized that Biosense Webster was achieving about 13 percent-plus growth in the past 15 quarters and electrophysiology is one of the promising fields into which Johnson & Johnson is pouring new investment dollars.

Source: Johnson & Johnson's Success In Cardiac Ablation