Boston Scientific (NYSE:BSX) might lack a truly leadless pacemaker, unlike rivals Medtronic (NYSE:MDT) and St. Jude Medical (NYSE:STJ), but it still might be in the best position to gain share in the cardiac rhythm management market, according to Leerink Swann analyst Danielle Antalffy.
Traditional pacemakers are inserted adjacent to the heart and use "leads" to deliver impulses to maintain regular heartbeat. St. Jude acquired a "leadless" pacemaker when it acquired Nanostim in October 2013, with Medtronic seeking approval for its own Micra version of the the technology.
Leadless pacers could eventually make up anywhere from 30% to 50% of the $3.5 billion global pacemaker market, Antalffy wrote in a note to investors this morning. Although Boston Scientific has yet to reveal its own plans for a leadless pacer, it acquired the S-ICD subcutaneous implantable defibrillator along with Cameron Health in 2012 in a deal worth up to $1.35 billion. The S-ICD device is implanted under the arm and uses leads that are implanted in a surgically created channel along the patient’s chest. The regulating shock is delivered to the heart through the breastbone.
To date, 6 of 200 patients (3.0%) implanted with St. Jude’s Nanostim device have suffered perforations of tissue and 2 died (1.0%). However, those events "seem more closely tied to operator error" than with any faults in the device itself, Antalffy wrote, citing a "mid- to high-volume" U.K. electrophysiologist who participates in Leerink’s MEDACorp network.
"While BSX is currently the only major player without a leadless pacer, both physicians called the company out as best positioned to gain market share in CRM," Antalffy wrote. "One physician sees the S-ICD as at least on par with leadless pacing from a disruptive technology perspective. And the other physician noted the battery longevity as appealing."
In July, Boston Scientific said sales of cardiac rhythm management devices were up 2% from 12 months earlier, and said it expected S-ICD sales to exceed $75 million this year.
"A lot of uptake by physicians and patients with that product," CEO Michael Mahoney said in a July conference call. "It represents a significant part of our mix."