Medical Device Daily Contributing Writer

NEW YORK— The 20th Annual Health Care Conference, sponsored by Bear Stearns (New York), held here earlier this week, enjoyed its usual strong, post-Labor Day turnout among Wall Street analysts, money managers and attending companies.

Nearly 200 companies from a variety of healthcare sectors made 25-minute presentations during the two full days of the conference, giving attendees a glimpse at their business strategies, their past results and future outlook. Medical device companies, especially the larger and more prominent ones, were well represented. One of the first medical device companies to kick off the conference was ev3 (Plymouth, Minnesota), which has generated torrid sales growth since its founding in 2002. In that brief span, the company’s annual revenues have surged at a 50%pplus compounded annual rate to $202 million, which was reported for its fiscal year ending Dec. 31, 2006.CEO Jim Corbett, who has deftly guided ev3 since its inception, told the audience that “innovation is a key component of our strategy, and we believe that our markets are still ripe for more innovation.”

In that regard, Corbett noted that in the past few years, the company has introduced more new products in its Cardio-Peripheral (CP) division than all of its competitors combined. In this year’s second quarter, the CP division generated about 63% of its global sales, while the Neuro division contributed the remaining 37%.

Competition in the peripheral and cardio market is formidable, with several companies keenly vying for market share. These include publicly-owned industry heavyweights Medtronic (Minneapolis); Edwards Lifesciences (Irvine, California); Boston Scientific (Natick, Massachusetts); Abbott Vascular (Santa Clara, California), a division of Abbott Laboratories (Abbott Park, Illinois); and the Cordis Endovascular (Miami Lakes, Florida) division of Johnson & Johnson (JNJ; New Brunswick, New Jersey) all keenly vying for market share. Additionally, there are several smaller public companies (e.g., Spectranetics, Colorado Springs, Colorado) and a handful of private companies sharply focused on this space.

Corbett cited its Everflex nitinol self-expanding peripheral vascular stent as an example of its prowess in innovation. Introduced about 18 months ago, the EverFlex has a unique design featuring spiral cell interconnections that enhance flexibility and longer lengths of up to 150 mm, which minimize the need for overlapping stents when treating long lesions that are typical in the superficial femoral artery (SFA).

In a bold vote of confidence, ev3 last fall reported that it would provide a worldwide fracture-free guarantee in support of its new EverFlex stent family. In the event that an EverFlex stent fractures within two years of implantation, ev3 will provide a free replacement product to the medical facility, subject to the terms and conditions of the program.

Corbett said that this fracture-free guarantee “has been a big success, as less than 1/10th of 1% of the implanted stents have fractured.”

This rate is paltry compared to earlier-generation SFA stents, sold by several other companies, which notoriously have suffered from this shortcoming. An aggressive program to clinically validate the Everflex platform, which he described as a “strategic commitment” is underway worldwide.

The most important trial appears to be DURABILITY II, which is designed to secure a specific SFA labeling for Everflex. Currently, this stent is approved by the FDA for several other indications and is used off-label to treat occlusions in the SFA. The trial, which is just beginning to enroll, will take place at 30 sites and will eventually treat 287 patients.

The primary endpoints are vessel patency and fracture rate at one year. Corbett said that it could take up to five years to complete this pivotal trial.

Regarding ev3’s impending merger with FoxHollow Technologies (Redwood City, California) (Medical Device Daily, July 24, 2007), Corbett said that it should close in early October, a bit ahead of schedule. More importantly, he enthusiastically endorsed the deal, saying that it will have “an incredibly synergistic effect” on the company’s Cardio-Peripheral franchise.

“We can now offer all three technologies that are used to treat peripheral vascular disease—angioplasty, stenting and atherectomy, which gives us widest range of solutions for our physicians and their patients.”

Corbett said that the domestic PV market can claim a patient pool estimated at 8 million needing treatment but only 25% receiving therapy. The estimated U.S. market size is about $1.1 billion, made up as follows: angioplasty, $235 million; atherectomy, $200 million; stenting $635 million.

The company’s Neurovascular division, headquartered in southern California, has been a strong performer in recent years. Its growth in the past several quarters has been spearheaded by its Onyx liquid embolic agent which has quickly garnered about half the market for treating arterio-venous malformations. Onyx’s share gains have come at the expense of Cordis Neurovascular (Miami Lakes, Florida), a division of J&J.

The division, which is now running at about a $100 million annual run rate, is expecting a big boost from its new embolic coil Axium.

This device enters a U.S. market for treating intracranial aneurysms estimated at over $100 million and growing at about 20% per year. Worldwide, the aneurysm coil market is estimated at over $250 million annually. Whereas ev3’s previous offerings in the aneurysm coil market have not been best-in-class, this product looks like a solid contender. Its attributes include a design optimized for softness, conformability and packability. A key advantage is that it has a simple, elegant and instantaneous detachment system that is actuated with a single hand.

Corbett also highlighted its new Solo self-expanding, retrievable neurovascular stent, targeting a relatively small $25 million worldwide market that addresses the bridging of wide neck aneurysm. But this small market is forecast to grow rapidly to $65 million in the next few years.

More importantly, this device may ultimately become an important player in the treatment of ischemic stroke, which accounts for 80% to 85% of the total stroke opportunity. It has applications in treating stenotic neurovascular disease, retrieving clots and restoring blood flow to the brain.

A humanitarian device exemption feasibility study for aneurysm bridging will begin in the U.S. shortly, and a filing of an IDE is planned for ischemic stroke in 2008.Although it is in an early stage of its life cycle, this device “could be the next generation in the neurovascular market,” Corbett said.