Abbott’s acquisition of St. Jude Medical made the cardiovascular medtech insights team here at DRG come to the realization that St. Jude is the unluckiest medtech company. One of the biggest difficulties is the failure to get FDA approval for their PFO closure device, an implant that is thought to reduce the risk of stroke in people who have a PFO (patent foramen ovale), a common congenital structural heart defect.
So the more than a decade-long journey in PFO, which included the 2010 acquisition of the original PFO closure company for $1.3 billion, seems to be nearing its end: an FDA panel agreed that the device should be approved.
Clinical trial results for PFO closure consistently miss their primary effectiveness end point, leaving St. Jude to lengthen the follow-up period and perform complicated sub-group analysis to find some benefit for device closure. The Star Tribune quoted a financial analyst in a story about the positive FDA panel vote: “at an estimated cost of $5,000 per device, PFO occluders could comprise an annual market opportunity between $200 million and $350 million for St. Jude.”
Assuming the analyst was speaking about the US market, it’s hard to see how PFO closure device sales get that high. Over the next decade there will be on average 120,000 cryptogenic strokes, the type of stroke in which PFO may be causative. Only a fifth of those are recurrent strokes in a patient with a PFO, the broad target population for device PFO closure. Assuming that all of these PFOs are detected that leaves a target patient population of about 25,000. If all these patients are implanted with the device, which according to the analyst is $5,000, that’s a market of $120 million, $80 million less than the low end of the analyst’s prediction.
Of course, the implant rate into the target patient population will not be 100% any time soon. Neurologists hate prophylactic implants to prevent stroke, they much prefer to rely on anticoagulants to prevent stroke in vulnerable populations. Interventional cardiologists (ICs) are the ones who implant the device, and they will have to work with their neurologist colleagues to access patients. ICs will need to convince neurologists that implanting a bulky metallic device in the middle of the heart that failed to meet its primary end point in a clinical trial with five years follow up will prevent strokes.
Good luck with that.
That’s why a PFO market of $200 million in the US seems too optimistic: it’s larger than the target patient population allows and assumes an unreasonably enthusiastic uptake of the procedure.
Interested in learning more about the PFO closure device market? Be sure to check DRG’s Global Structural Heart Closure Devices Report.