a bunch of purple, orange, green, and blue balloons in the sky

It’s the law of the medtech jungle: big companies buy small companies. Big companies need new technology to out compete other big companies. Small companies have their dream realized of paying off their investors and seeing their device going big. An excellent example is the storm of acquisitions last summer of tiny companies developing minimally invasive mitral valve devices. It began with Edwards LifeSciences buying CardiAQ, and soon swept Abbott, Medtronic, HeartWare, and Boston Scientific (sort of) into an acquisition frenzy.

So this leaves me to wonder who will buy an interesting new cardiac ablation catheter: CardioFocus’s endoscopic laser balloon.

Laser Balloon copy

It’s a ripe acquisition target: last year it presented favourable pivotal trial data and it should be getting FDA approval any week now. The device makes complex atrial fibrillation ablation procedures easier, precise, and likely more effective. The built in camera allows physicians to see the burned tissue they are creating in the heart instead of relying on electrical maps generated on a computer screen. And it uses a zazzy green laser!

So where is Biosense Webster and St Jude Medical? Where is Medtronic and Boston Scientific? Why are they leaving CardioFocus in the rain and dateless on prom night?

For all I know one of these medtech jocks did ask CardioFocus out, and maybe the advance was spurned. But I think CardioFocus is left going solo because its device does not fit in the product portfolios of the big guys.

Since the camera in the laser balloon provides confirmation of a job well done, that means there is less need for 3D mapping systems that provide colourful maps of the electrical activity heart. All the big ablation players have their own 3D mapping system or, in the case of Medtronic, are developing their own. These systems generate a lot of revenue in software updates, hardware replacement, and in peripheral devices like diagnostic catheters and navigational patches. All that revenue would be replaced by a tiny camera in a balloon. That’s a level of self-cannibalization that no firm wants to undergo.

A 3D electrical map of the heart (left) and a live video feed of from the laser balloon (right).

A 3D electrical map of the heart (left) and a live video feed of from the laser balloon (right).

Which means the laser balloon can be a route of entry for a new player in the cardiac ablation space. Spectranetics is a medium sized firm and sells a unique laser device to remove leads from the heart in pacemaker patients. Stryker is having great success with its neurovascular device, maybe it wants to get involved in the heart?

Or maybe no one will buy the laser balloon because it is just too different, marginalizing its use to a small number of hospitals. Saddest prom ever.

Interested in learning more about the cardiac ablation market? See DRG’s Electrophysiology Mapping and Ablation Devices Reports for more information.

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