Analyst: Boston Scientific up, Medtronic down after HRS
Boston Scientific (NYSE:BSX) is in the best position to grab market share in the cardiac rhythm management space, with Medtronic (NYSE:MDT) poised to cede share, according to a conference wrap-up note from analysts at Leerink Partners.
Although there were no “truly market-moving clinical data” or major new product launches at HRS 2017, the meeting and interviews with 5 high-volume electrophysiologists confirmed that overall cardiac rhythm management market growth is steady in the low single digits, analysts Danielle Antalffy and Rebecca Wong wrote today.
Atrial fibrillation procedure volumes are up more than 10%, they noted, “with seemingly no end in sight given the prevalence of AF with market leaders Johnson & Johnson (NYSE:JNJ) [outperform] and Abbott (NYSE:ABT)/St. Jude Medical [market perform] seemingly best positioned to benefit on the radiofrequency (RF) ablation side of things, and MDT [market perform] seemingly best-positioned to benefit as the only player with a cryoablation product.”
A number of factors come into play for their view that Boston Scientific “seems best-positioned in the near-to-medium term, with MDT likely to give back the majority – if not all – share gained over the last 18-24 months as the only MRI-safe device offering on the market as other players also launch,” Antalffy and Wong wrote. “STJ should also benefit, but commentary was more muted due to recent quality issues including premature battery depletion and cybersecurity concerns.”
Boston’s S-ICD subcutaneous-lead pacer and its Watchman anti-stroke device generated “significant discussion,” along with Medtronic’s Micra and St. Jude’s Nanostim leadless pacers, the analysts wrote.
Procedure volumes for the S-ICD are growing slowly but steadily due to device cost, bulkiness, a shorter battery life than conventional pacemakers and limited application. There were some data on Micra and Nanostim at HRS 2017, but “commentary on leadless pacers was a bit muted, as it seems still too early to assess the true potential of the technology in its current form with MDT the only player in the U.S. market and ABT/STJ still working to resolve battery issues to bring its device to the U.S. market,” they wrote.
Volumes are “ramping well” for Boston’s Watchman device, an implant designed to close off the left atrial appendage, “supporting recent bullish commentary from BSX and potential to do even more. One physician noted his center is booking patients for WATCHMAN 2 months in advance,” Antalffy and Wong wrote.
“[W]e believe the meeting was most positive for BSX’s near-to-medium term growth trajectory – our top large-cap pick currently – given a solid share gain position in CRM and bullish Watchman adoption commentary, further supplemented by steady, albeit slow, S-ICD adoption,” they wrote.
Next: No can do: First-in-human study evaluates ‘implantable string’ S-ICD