FDA OKs Two Firms’ Heart Devices : Health: The smaller defibrillators are expected to shift market share away from current sales leader.
Ventritex Inc. and Guidant Corp. on Tuesday received federal approval for their cardiac defibrillators, now the smallest implantable devices available for regulating a heartbeat.
The Food and Drug Administration approval was a setback for Medtronic Inc., which wanted the agency to require both companies to conduct additional studies on their products before allowing them on the market. Medtronic’s Jewel was the smallest product and the market leader before the approvals announced Tuesday.
Ventritex’s shares rose to $1.875 to $20.75 on Nasdaq. Guidant was up 87.5 cents to $37.375, while Medtronic shares fell 25 cents to $55.50, both trade on the New York Stock Exchange.
“Medtronic all of a sudden finds itself with a somewhat large and clunky device,” said Kurt Kruger, an analyst with Hambrecht & Quist in New York. “Ventritex will have taken itself off the floor.”
Medtronic’s Jewel measures 80 to 83 cubic centimeters, while the Ventritex Cadet is 73 cubic centimeters and Guidant’s Ventak Mini measures 68 cubic centimeters.
Currently, Medtronic holds about 50% of the $650-million defibrillator market, Guidant has about 35% and Ventritex 15%, Kruger said.
“The ranking will be, as we leave 1996, essentially Guidant and Medtronic tied for first place, with Ventritex a much larger third-place player,” Kruger said. Medtronic will lose market share, down to about 35%, with Ventritex climbing to about 30%, he said.
Size is essential for cardiac defibrillators, which are placed into the body and used to shock the heart into a normal rhythm when it beats too fast.
The Medtronic device is approved for placement in the chest, while the Ventritex model and Guidant models are formally approved for use only in the stomach, a less desirable location.
However, doctors will certainly implant the Guidant and Ventritex models in the chest even without FDA approval, Kruger said. The technique, called off-label use, is acceptable as long as the device is fully sanctioned by the FDA.
Medtronic, which spent the time and money on clinical trials to formally prove its defibrillator was safe for placement in the chest, wanted the FDA to require Ventritex and Guidant to conduct similar studies before it approved devices that were small enough for use in the chest.
Earlier this month, the FDA said it planned to hold an advisory committee hearing in March or April to clarify what data is needed for getting approval to sell defibrillators for implantation in the chest. Many investors and analysts took that to mean that Ventritex and Guidant’s devices wouldn’t get approved until after the meeting, and their shares fell as a result.
