Atrial fibrillation device market sets pace for CA conference presenters

By Larry Haimovitch

Medical Device Daily Contributing Writer

November 13, 2009

SAN FRANCISCO — The annual Canaccord Adams Cardiovascular Conference, held here earlier this week, featured a diverse and interesting group of public and private companies primarily addressing the cardiovascular device markets.

Atrial fibrillation (AF) was a prominent topic, with virtually every speaker commenting on the "epidemic" of AF with myriad statistics and developments indicating that this is a massive public health care problem.

AF's rising awareness was vividly depicted by the congressional initiative that made September 2009 "National Atrial Fibrillation Awareness Month." In strongly supporting this initiative, Mark Estes III, MD, president of the Heart Rhythm Society (Washington) said that "currently less than 30% of AF patients receive the recommended treatment. Therefore, an AF Awareness Month will play an important role in not only raising awareness but also improving patient care and ultimately saving lives."

The AF presenting companies included the private, venture-backed firms CardioFocus (Marlborough, Massachusetts), EndoSense (Geneva, Switzerland), Estech (San Ramon, California), Atritech (Plymouth, Minnesota) and two public companies Atricure (Cincinnati) and ATS Medical (Minneapolis).

CardioFocus CEO Steve Sagon, a veteran of the electrophysiology (EP) space, provided a detailed description of its technology, which addresses paroxysmal (intermittent, early stage) AF with a unique and proprietary set of tools. These includes a compliant balloon that can be maneuvered easily into the pulmonary veins, direct endoscopic visualization and ablative laser energy that appear to be overcome some of the shortcomings of today's "gold standard" ablative approach, which includes fluoroscopic or intracardiac echocardiography and radio-frequency (RF) ablation catheters. He provided a paradigm of the "ideal" paroxysmal ablation procedure in Table 1.

The Ideal Paroxysmal AF Ablation Technology

•High efficacy with a single procedure (i.e., greater than 75%)

•Strong safety profile

•Short learning curve

•No need for multiple catheters or supportive technologies

•Short procedure time (less than 2.5 hours)

Source: CardioFocus

Sagon noted that the efficacy of RF ablation technology is "quite low," with an estimated 30% to 55% success rate with a single procedure and a 65% to 85% with multiple procedures. Moreover, because of highly complex anatomy and technical challenges "only a minority of EPs perform the procedure ..."

Conversely, the CardioFocus system, whose moniker is "See what you ablate, ablate what you see," is far simpler and thus should significantly broaden the number EP doctors who perform AF ablation procedures.

The company, which attained CE mark approval in June 2009, has now treated a total of 53 patients, including three in its U.S. feasibility trial. The early data, three months post-treatment, is very promising with 90% of the pulmonary veins chronically isolated with a single procedure.

In the U.S., a ten-center feasibility trial is now underway, with a total of 100 patients to be enrolled. The company could launch its pivotal trial in late-2010.

Endosense CEO Eric Le Royer described his company's TactiCath RF ablation catheter as the "first force sensing ablation catheter," noting that today's catheters lack force control, often resulting in insufficient or excessive tissue contact.

He said that the former issue is the culprit in a high re-do procedure rate of about 30% and also is a major contributor to very lengthy procedures. The latter contributes to a greater than 1% risk of tamponade (fluid accumulation in the sac of the heart) and esophageal perforation, a potentially disastrous event.

The TactiCath addresses these drawbacks, providing a highly sensitive sensor to evaluate in real-time the force of the catheter against the heart's tissue.

The company has already gained CE mark approval, based on the solid results of its TOCCATA (TOuCh+ for CATheter Ablation) trial and plans to begin commercial activities in Europe in 2010.

In the U.S., Endosense plans to initiate an AF trial in 2010, hoping to achieve full domestic marketing approval about two years later. Now that the Biosense Webster (Diamond Bar, California) division of Johnson & Johnson (New Brunswick, New Jersey) has full FDA approval for Its Navistar Thermocool catheter, it is reasonable to assume that the trial will be randomized 1:1 between TactiCath and Thermocool.

Endosense has been very successful in its fund raising activities, with a total of $56 million to date. Its most recent round was closed in August 2009, with $36 million invested by several prominent European private equity and venture funds.

Estech CEO John Pavlidis noted that his company participates in three key segments of the cardiac surgery market (CABG, heart valves and AF), indicating that its Cobra AF surgical ablation platform is its leading "growth engine."

Pavlidis noted that the company is pursuing an AF indication from the FDA and that its products are FDA cleared for cardiac or soft-tissue ablation in the U.S. He emphasized that the Cobra product line has several competitive advantages which is fueling its above average market growth.

These include temperature and time control, which enhances lesion quality, suction, which allows for lesion continuity even on beating heart, internal cooling, enabling lesion penetration and transmurality and finally, the ability to perform complete lesion sets, both epicardial and endocardial.

The net result, according to Pavlidis, is that Estech's AF cure rates based on a meta-analysis of over 50 peer-reviewed journals is higher in achieving normal sinus rhythm than the competition and with lower pacemaker implantation rates.

The company is placing emphasis on the persistent and long-standing persistent AF market and is seeing strong growth from its Cobra Adhere XL minimally invasive surgical catheter that it believes is far less invasive than competitive offerings on the market. EPs are cooperating with surgeons in hybrid settings utilizing this technology and the first peer-reviewed publications with this new technology are now starting to appear.

With three strong product lines, new management in several key areas and a successful financing in 2009, Pavlidis predicted that Estech will be a profitable $40+ million sales company by 2011. This would represent a 35% annual growth rate from the current revenue level.

In the rapidly evolving field of percutaneous heart valves, two private, venture-backed companies, Direct Flow Medical (Santa Rosa, California) and Sadra Medical (Los Gatos, California) appeared at the conference.

The presentations and profiles of both companies are remarkably similar. Both CEOs, Bernie Lyons from Direct Flow and Ken Martin from Sadra, estimated that despite the absence of an approved product in the U.S., the OUS market in 2009 will exceed $200 million, about double the 2008 level. Both described the market opportunity to be well in excess of $1 billion annually within a few years.

Both companies indicated that they have developed "second generation" valves that will overcome some of the limitations of the first generation products. Key attributes of a better device are its ability to be repositioned and/or retrieved prior to final implantation.

Both Sadra and Direct Flow have been able to reduce the profile of their devices to 18 Fr, which Direct's CEO Bernard Lyons said is "enormously important" for long term success in this market.

On the regulatory front, Direct appears to be a bit ahead of Sadra, it plans to submit for its CE Mark approval in 3Q-2010, whereas Sadra hopes to start its CE mark trial in mid-2010 and gain that clearance about a year later. Each company looks to be at least three years away or more from U.S. marketing approval.

Each company has been very successful in fundraising, Direct Flow recently closed on a $40 million venture round, bringing total funds raised to date to $75 million. Meanwhile Sadra raised $30 million in May 2009, bringing the total amount invested to $58 million.


2009 Canaccord Adams Cardiovascular Conference

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