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Thinking about Life Sciences


http://blog.aesisgroup.com

Monday, November 27, 2006

Drug-Eluting Stents, Part One: Triple Storm Catching Industry


Attention

In June 2006 in a column headlined “The Future of Drug-Coated Stents: A Big Issue or a Non-Issue?,” I
wrote:
"For something (the drug-eluting stent market) that grew from zero to $5.3 billion in three years flat, equally
dramatic changes are certainly not out of the question. I’ll be sure to keep you posted.”
In the reader poll accompanying that article, about 52 percent of you believed that “safety with drug-eluting
stents will become big in the next few months”. For those of you among the 52 percent, you are indeed right.
True to my word, I am here to update you with new developments and make some additional prognoses on
the drug-eluting stent (DES) market.
The DES Problem
To summarize, the “DES problem” has three parts:
1. In comparison to bare-metal stents, drug-eluting stents are fundamentally a quality-of-life
measure rather than explicitly life-saving treatment. In other words, there is no incremental
mortality improvement attributable to DES but rather a reduction in second surgeries for
restenosis.
2. Drug-eluting stents have a very small but definitely serious (e.g. fatal) risk of adverse effects
(namely long-term, in-stent thrombosis).
3. Mitigating this risk requires anti-thrombotic therapy, which actually masks the real rate of
life-threatening, in-stent thrombosis and also compromises some of the quality-of-life
improvement afforded by these stents.
This is a serious constellation of problems - metaphorically a “triple storm” - that has clearly caught the
eye of the industry and the FDA. Since the June article, three important developments have taken place
along the lines of increasing regulatory oversight, incrementally improving the current generation of DES
and leapfrogging the current generation with new technologies.
Increasing Regulatory Oversight
On Sept. 14, the FDA issued a statement that it would be convening a special meeting of its device
advisory committee. The committee was to assess the increasingly troubling reports of increases in rates of
death and cardiac events among patients with drug-eluting stents. The panel has been eliciting input from
the two primary manufacturers (Johnson & Johnson and Boston Scientific) and the plan is for definitive
recommendations to be issued by the end of 2006. As this is a nearly $6 billion market, there is obviously a
lot at stake. More important, an estimated 1 million DES have been implanted in patients in the U.S.
That’s potentially many lives at stake as well. On the other hand, as the FDA concluded:
The FDA believes that coronary drug-eluting stents remain safe and effective when used for the FDA-approved
indications. These devices have significantly reduced the need for a second surgery to treat restenosis for thousands of

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Thinking about Life Sciences: Drug-Eluting Stents, Part One: Triple Stor... http://blog.aesisgroup.com//2006/11/27/drugeluting-stents-part-one-triple-...

patients each year.


It’s a tough call.
A likely scenario is that the FDA will continue to maintain approval for the current indications but layer
upon stricter device reporting and patient-monitoring requirements. Clopidogrel or Plavix (a drug that has
recently been beleaguered by legal issues) will get an additional boost as strict adherence with
anti-thrombotic regimens will be mandated for those patients with drug-eluting stents. Ironically, the
market may make the final call as these additional requirements – while warranted – will likely obviate the
quality-of-life improvement provided by drug-eluting stents.
Basically patients with DES have a much lower chance of requiring a second operation than patients with
bare-metal stents. However, presently (and increasingly if the FDA enforces even stricter requirements)
patients need to take daily doses of Plavix (or another anti-thrombotic) and subject themselves to frequent
– perhaps monthly or even more often – follow-up visits for at least a year if not more. Coupled with the
much higher costs of DES, which significantly impact hospital and cardiologist incomes, it is no wonder
that hospitals, interventional cardiologists and their patients are beginning to balk.
Incremental Improvement
Another important development just this past week was the announcement on Nov. 16 by Johnson &
Johnson of a definitive arrangement to acquire Conor Medsystems, which produces a controlled
drug-delivery platform utilizing paclitaxel as the active agent. The problem is that paclitaxel is the agent
used in Boston Scientific’s TAXUS stent, which means the acquisition of Conor comes with a whole host
of legal baggage and liability.
Deals are generally done because it makes both parties happy. I suspect that Conor is happy because
Johnson & Johnson has some deep pockets to help with its legal challenges. Johnson & Johnson is happy
because it can foist additional headache and diversion onto Boston Scientific while also developing a
technology that it claims will “solve” the long-term, in-stent thrombosis problem.
The former may be true as Boston Scientific is certainly not going to benefit (no one does) from fighting
such battles. However, the latter hope may very well fall flat. The Conor stent is certainly a technical tour
de force allowing device manufacturers to “shape” the delivery kinetics of the powerful, anti-proliferative
agents such as paclitaxel and sirolimus.
However fancy the technology, the truth is there’s no way to get around the fact that the very strength of
these agents in inhibiting the healing (scarring) process responsible for restenosis also results in their
Achilles heel. For any incomplete healing process, an open wound is effectively left within the coronary
artery. It is this fact that makes it susceptible down the line to thrombosis.
Indications are, therefore, that Johnson & Johnson is betting that a strategy of product differentiation (e.g.
the advanced Conor system) rather than lower cost will win market share. As outlined in my July 24
column headlined “Drug-Eluting Stent Market: $5 Billion Turning on a Dime” history indicates
otherwise. A huge market shift occurred in 2004 in favor of Boston Scientific when it introduced its new
TAXUS stent at a substantially lower cost than the first-in-market Johnson & Johnson CYPHER stent.
Given these thoughts, it would seem that despite the $1.4 billion cost, the Conor acquisition may not offer
any significant advantages to Johnson & Johnson.
Because of the multiple issues involved, I will be following up on Tuesday with part two of this column to
highlight some of the strategies behind Abbott and Boston Scientific in this evolving area.
Ogan Gurel, MD MPhil
gurel@aesisgroup.com
http://blog.aesisgroup.com/

Drug-eluting stents Johnson and Johnson device safety Aesis Research Group Ogan Gurel MD

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