Sigh of relief as Boston Scientific gets first-in-class FDA go-ahead

LONDON – On September 28, 2012, the US Food and Drug Administration granted the Boston Scientific Corporation (BSX) regulatory approval for its first-in-class subcutaneous implantable defibrillator (S-ICD) system. This S-ICD system establishes the first new category of cardiac rhythm management devices since the introduction of cardiac resynchronization therapy. The device is manufactured by Cameron Health, Inc. (San Clemente, CA), which was acquired by BSX (Natick, MA) this June for $150m upfront, with additional payments of $150m for device approval and $1.05 billion for sales targets as they’re reached. 

BSX believes it will have market exclusivity for the next several years as competitors work to get other S-ICD devices approved. While this announcement is promising, BSX’s gross margins have been consistently lower than that of its peers in recent years (including a $3.04 billion loss in Q2) and it could be some time before S-ICD use is widespread. It is not easy to turn around a struggling medical technology business, and while others such as Covidien and Johnson & Johnson have had some difficulties, nothing compares to the challenges at BSX. The company’s two most significant businesses have led the decline, with revenue in cardiac rhythm management down almost 10% and drug-eluting stent sales down about 20%. BSX will have to battle and win back accounts from competitors Medtronic and St. Jude in order to shift the ICD treatment paradigm towards widespread use of S-ICD. Additionally, BSX expects the company’s innovation will expand the market by attracting new customers who were scared away from ICDs because of worries about lead-related problems. This first-in-class approval is a step in the right direction for BSX, and the S-ICD device has potential for significant sales in coming years if BSX is able to expand to under-penetrated markets.

As with S-ICD systems, conventional ICD systems are also implanted subcutaneously, but they have an electrode lead that runs transvenously to the heart. With the S-ICD system, both the pulse generator and the electrode are implanted subcutaneously on the chest, eliminating part of the complexity and many of the complications associated with traditional implant procedures. S-ICDs are designed to provide the same protection from sudden cardiac arrest as traditional, transvenous ICDs; however, unlike transvenous ICDs, the heart and blood vessels remain untouched. The S-ICD implantation procedure is straightforward, using anatomical landmarks without the need for fluoroscopy.

Although ICDs are designed for permanent implantation, occasionally they become infected and must be extracted. This can be difficult due to strong scar tissue attachments that form between the device and the patient’s blood vessel wall. A number of techniques and technologies have been developed to aid in lead extraction, but none have proven 100% effective and they all still have many associated risks. As the recently approved S-ICD device does not require the same invasive implantation, issues concerning scar tissue attachment within the vasculature are eliminated. 

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