Shiley Stops Selling Heart Valves in Wake of Lawsuits Over Malfunctions : Irvine Company Seeks FDA Approval to Begin Marketing New Valve
Shiley Inc., beset by lawsuits stemming from deaths blamed on its mechanical heart valves, has stopped selling the valves in the lucrative American market that it dominated less than a decade ago.
Although the company is seeking government approval to begin selling a new mechanical valve in the United States, some analysts predicted that Shiley will find it difficult to recapture its lost market share.
Shiley, which was founded as a heart valve manufacturing firm in 1966 and is now an Irvine subsidiary of Pfizer Inc., discontinued the manufacture of its spherical disk model heart valve--the last model it sold in America--in December.
The company said the profits it was realizing from the spherical disk valve, one of its oldest models, did not justify the cost of obtaining Food and Drug Administration approval to continue marketing the product in this country.
A month earlier, the company stopped manufacturing and distributing its tissue heart valve both in the United States and abroad.
Some medical industry observers note that even before Shiley stopped manufacturing the valves, it had lost its industry dominance because of deaths linked to the malfunction of its Bjork-Shiley 60-degree Convexo-Concave heart valve, which was introduced in 1979.
After years of discussion with the FDA, Shiley voluntarily removed larger sizes of the valve from the market in November, 1985. By then, the valve had been implanted in 84,000 patients worldwide. The company had recalled some of the valves in 1980, 1982 and 1983, although sales continued.
Ultimately, Shiley stopped manufacturing all convexo-concave valves in October, 1986. The FDA said it has received reports of 147 deaths to date caused by the valve’s malfunctioning.
Numerous lawsuits involving heart valves have been lodged against the company, including 18 filed last month in Orange County Superior Court. Sixteen of the latest suits were filed by people with implanted valves who claim that they live in fear that the valves will malfunction.
So far, Shiley has entered into an estimated 30 to 40 out-of-court settlements, according to the Public Citizens Health Research Group, a Washington organization that is assisting lawyers who file cases against Shiley.
Shiley officials minimize the importance of the company’s disappearance from the U.S. heart valve market. Larry Wettlaufer, vice president of sales and marketing at Shiley, said the firm’s revenue from heart valve sales has not declined over the last 5 years because of an increase in overseas sales.
At the same time, the company has been diversifying into the manufacture of various other cardiopulmonary products such as heart-lung and blood oxygenators, Wettlaufer said. Valve sales in 1987 accounted for only 18% of Shiley’s $200 million in revenues, contrasted with 46% of the company’s revenues in 1982, Shiley’s best year for domestic heart valve sales.
He declined to say the amount of revenue or profit that Shiley stands to lose by forfeiting domestic sales.
Wettlaufer said that Shiley plans to re-enter the U.S. cardiac market with a new heart valve called the “Monostrut.” Shiley claims that the new valve already has won 40% of the overseas market for mechanical heart valves. The company is seeking FDA approval to sell the Monostrut in America.
Even if the Monostrut valve receives FDA approval, it may have difficulty winning the confidence of American cardiac surgeons. Shiley also will face the challenge of trying to edge out St. Jude Medical, a St. Paul, Minn., firm that in recent years has become the market leader in mechanical heart valves with its bi-leaflet valve. “They have an uphill battle with cardiovascular surgeons, given their history of failures in the past,” said Ed Mutch, a health care industry analyst for Piper Jaffay & Hopwood Inc., a Minneapolis-based securities investment firm.
“It is going to be very tough (for Shiley) to come back, without any doubt. It is very difficult to recapture market share,” said Peter Halter, former president and founder of Biomedical Business International, a health care industry information company in Tustin, and currently a general partner with a venture capital fund.
Halter, who once was a director of international sales and marketing for Edwards, a competing heart valve manufacturing company, estimates that the United States constitutes about half of a $150-million worldwide heart valve market. And as recently as 1980, he said, Shiley cornered two-thirds of the U.S. market for mechanical valves.
Halter said Shiley’s exodus from the U.S. market may also harm its foreign sales “because many European surgeons still look to the U.S. for their data.”
Dr. William Angel, director of cardiac research at Scripps Clinic and Research Foundation in San Diego, also is skeptical about Shiley’s ability to make a comeback with its valves in the United States.
“I think the competition from the (St. Jude) bi-leaflet valve is too stiff, and I don’t think they will make it back,” he said. “People are going to be leery of anything that comes out of there (Shiley) in the future.”
The convexo-concave valve was thought to be a significant advance on an earlier Bjork-Shiley design called the spherical valve. It was engineered to offer less resistance to blood flow, and Shiley was able to convince the FDA and many surgeons that it was less likely than the spherical valve to cause life-threatening blood clots.
Until the convexo-concave valve came to market Shiley’s track record with heart valves was enviable. Its spherical valve, according to one surgeon, was considered “the gold standard” among all mechanical valves available in the 1970s.
The problem with the convexo-concave valve is that the small metal strut that holds the valve together sometimes fractures at a weld, causing the valve to stop working and impairing the flow of blood from the heart. Unless immediate surgery is performed to replace the valve, the patient is unlikely to survive more than a few hours. Shiley lost its credibility among many surgeons, Angel said, because of how it handled the problem. Although Shiley originally said only valves of certain sizes and manufactured under certain conditions were faulty, “it became obvious that wasn’t true,” Angel said.
At the same time that surgeons in the United States began shying away from Bjork-Shiley heart valves, Halter said, St. Jude entered the market with a newly designed mechanical valve and quickly elbowed Shiley out of first place.
“The timing was excellent for them,” Shiley’s Wettlaufer said.
Wettlaufer said Shiley will not comment on the scores of lawsuits that have been filed against it.
He said he does not believe that most cardiac surgeons have lost confidence in the company. And he said he believes that the good performance of the Monostrut valve--which so far has been implanted in 30,000 people abroad “with no recorded mechanical failures"--will persuade American surgeons to use it.
Robert Curtis, Shiley’s president and chief executive officer, has said that the major difference between the Monostrut valve and the convexo-concave valve is that the Monostrut is stronger and less likely to break.
Securities analysts generally believe that Shiley will survive as a company with or without a viable domestic or foreign heart valve business. They point out that heart valves now represent a small part of Shiley’s revenues and an infinitesimal part of Pfizer’s, a pharmaceutical giant with sales estimated at just under $5 billion in 1987.
“To Shiley it (the heart valve business) is a small and insignificant piece. To Pfizer, it is a pimple,” said Barbara Ryan, a pharmaceutical industry analyst with the New York securities investment firm of Bear Stearns & Co.