St. Jude CEO: CardioMEMS Is Platform Tech For Next Heart Failure Devices
By Jof Enriquez,
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Daniel J. Starks, the chairman, president, and CEO of St. Jude Medical, believes that the company's CardioMEMS sensor will soon become standard of care in heart failure management, and should become a platform technology for future cardiac resynchronization therapy (CRT) and ventricular assist device (VAD) products.
CardioMEMS is a tiny wireless monitoring sensor that is implanted directly into the pulmonary artery (PA) and has the capability to transmit real-time PA pressure readings to clinicians. The FDA approved the device based on results of the CHAMPION (CardioMEMS Heart Sensor Allows Monitoring of Pressure to Improve Outcomes in NYHA Class III Patients) trial, which showed up to 28 percent reduction in heart failure hospitalizations at six months.
In an earnings call, Starks described the CardioMEMS Heart Failure (HF) System as "the cornerstone of our heart failure program," saying that it has proven both clinically effective and cost-effective. Starks touted results presented at the 2015 HRS Scientific Sessions stating that the device was cost-effective for Class III heart failure patients, as well as peer-reviewed data that showed Medicare patients had up to 78 percent reduction in readmission rates using the technology. The Centers for Medicare and Medicaid Services (CMS) has granted CardioMEMS both the new technology add-on payment and a Transitional Ambulatory Payment Classification (APC) pass-through status.
"We expect our CardioMEMS product line eventually to become standard of care and be capable of generating more than $1 billion in revenue once the market is fully developed on a total global basis," Starks said during the call, according to a Seeking Alpha transcript. He added that even though CardioMEMS is very much a stand-alone product, the company will "leverage CardioMEMS as a platform technology that can help generate new competitive advantage in our cardiac resynchronization therapy, or CRT, and our ventricular assist device, or VAD, heart failure product lines."
St. Jude is hoping that CardioMEMS will prove to be a game-changer in the treatment of heart failure, which is expected to affect 8 million patients in the United States by 2030. The company plans to integrate the technology in a future "smart pump" product.
"We also think that with appropriate time and investment we have a good opportunity to apply our CardioMEMS sensor technology to our future VAD product lines to create a smart pump for heart failure patients who have St. Jude Medical VAD systems," Starks told analysts.
Reorder rates for CardioMEMS devices were up to 25 percent for the third quarter, according to Starks. However, this was offset by an equal slide in stocking orders due to a slowdown in procedures, as well as the lack of clarity from customers regarding the reimbursement options for the device.
"There's a lot of resistance to uptake of new technology in the payer environment," Starks said during the call. "Our challenge is to fight through just a natural inertia and resistance to pay for new technology and to educate people fully that this technology is one of the good guys. It's … not something that adds to the cost of healthcare. It's something that really reduces the cost of healthcare."
Starks underscored how the acquisition of Thoratec gave St. Jude a leading position in the VAD market, and how existing St. Jude device technologies in CRM, CRT, and CardioMEMS could create "synergies" with Thoratec technologies, such as the HeartMate left ventricular assist device (LVAD) heart pump, to further solidify market share.
"St. Jude Medical is expert in miniaturization of active implantable devices as well as programming and remote follow-up of these devices. The Merlin, Merlin.net, Merlin@home direct interface with electronic health records and surrounding IT capability and infrastructure we already have in place for CRM and CardioMEMS can be leveraged to improve our HeartMate product portfolio significantly faster and with less additional investment than Thoratec was capable of doing on its own."
"Third quarter results confirm that our innovation based growth program continues to gain traction. Now we are focused on efficiently integrating our acquisition of Thoratec and strengthening our entire portfolio of growth drivers for 2016,” Starks said in the press release. He added that guidance is tempered for the fourth quarter, specifically on projected reduction in CardioMEMS revenue. Likewise, Thoratec's transition into St. Jude is expected to have an "opportunity cost." However, Starks said these are short-term issues, and St. Jude is poised for a strong 2016.
"Our priority is to make sure that we integrate, take advantage of, capture the synergies, get everything on track, sort through any transitions that need to be sorted through," in the last few months of 2015, said Starks, according to the call transcript.