Boston Scientific CEO Photo: FierceMedicalDevices
Boston Scientific ($BSX) finally won FDA approval for its stroke-fighting Watchman device after setbacks and rejections in 2010 and 2014.
The device was approved for patients with an appropriate rationale to seek a nonpharmacologic alternative to the blood thinner warfarin. The FDA's blessing follows a multiyear clinical trial of 2,400 patients.
Wells Fargo projects Watchman sales of $41 million in 2015, rising to $170 million in 2018 due to the U.S. approval, according to The Wall Street Journal. Watchman is already approved in Europe and 75 countries around the world. Boston Scientific says 10,000 patients have received the device so far.
"We're going to have a very slow, very controlled rollout of this device," Boston Scientific Senior Vice President Kenneth Stein told The Wall Street Journal, noting the Watchman's "rigorous" training program. Concerns about procedural complications and overuse of the device caused the previous regulatory snafus.
Approval was not assured this time around either, for the latest advisory panel said that the Watchman isn't as effective as warfarin, but ultimately voted to recommend the device, saying its risks outweigh its benefits, at least among the subset of patients who are not suited for the blood thinner, marketed as Coumadin by Bristol-Myers Squibb ($BMY).
"We know that up to 40 percent of patients who are eligible for oral anticoagulation do not take it for numerous reasons, highlighting the need for additional treatment options. The Watchman device is a breakthrough treatment providing those patients who are suitable for warfarin with an implant-based alternative to long-term warfarin therapy while still reducing the risk of stroke," said the device's co-principal investigator, Dr. Vivek Reddy, in a statement.
However, new pharmaceutical alternatives to warfarin have emerged--such as Eliquis, co-marketed by Pfizer ($PFE) and Bristol-Myers Squibb, as well as Boehringer Ingelheim's Pradaxa--that could limit use of Watchman among those not suited for warfarin.
During Boston Scientific's third quarter earnings call in October, CEO Mike Mahoney indicated that the regulatory scrutiny would lead to the device being targeted at a narrow subset of patients. He pegged the Watchman as having a potential market worth $500 million, of 3% to 5% of those patients who are eligible for warfarin because they have a high risk for stroke, but unsuited for it due to side effects such as an increased likelihood of bleeding.
But Leerink Swann analysts Danielle Antalffy and Puneet Souda said the FDA's indication was broader than expected, though they noted the risk of inadequate CMS reimbursement from the federal Centers for Medicare & Medicare Services.
"Watchman was approved with a relatively broad label, with the FDA essentially leaving it to the physician and patient to decide whether the device is appropriate. Ultimately, though, adoption will be dictated by CMS and reimbursement. While the FDA label is relatively broad, CMS could limit adoption by restricting reimbursement. Assuming, however, that CMS reimburses per the FDA-labeled indication, Watchman could ultimately address a significantly larger patient population than the ~50,000 cited by BSX," they wrote.
CMS has a penchant for reimbursing devices more strictly than the FDA-approved labeling to the annoyance of devicemakers. But Boston Scientific is applying for supplemental reimbursement for new medical devices (known as new-technology add-on payments), and expects to hear word from CMS in Q3 of this year, the analysts said. So, Watchman's reimbursement status remains a toss-up at the moment.
The device works by combating the effects of atrial fibrillation, a common warning sign of stroke. It blocks the heart's left atrial appendage to prevent blood from building up in that section of the heart. Blood clots can escape from the left atrial appendage into the arteries and then the brain, causing an ischemic stroke, The Wall Street Journal explains.
Although the second FDA advisory panel recommended the Watchman in 2013, concerns about potential overuse of the device led to the need for a third panel. And in 2010 the FDA rejected the device to due to concerns about procedural complications.