Boston Scientific (NYSE:BSX) announced today that it has initiated a global, voluntary recall of its Lotus Edge aortic valve system — and is immediately retiring the Lotus program.
Marlborough, Mass.-based Boston Scientific said in a news release that the recall of all unused inventory of its Lotus Edge transcatheter aortic valve repair (TAVR) system is due to complexities related to the product delivery system and solely that — as the valve has achieved positive and clinically effective performance post-implant.
Patients currently implanted with Lotus Edge do not have any safety issues to be concerned about, according to the company.
Considering the additional time and investment required to develop and reintroduce an enhanced delivery system, Boston Scientific officials decided to retire the Lotus product platform immediately, ceasing all related commercial, clinical, research & development and manufacturing activities.
The move appears to cede ground to Edwards Lifesciences (NYSE:EW) and Medtronic (NYSE:MDT), which dominate the U.S. TAVR market.
Boston Scientific expects the decision to retire Lotus will result in estimated total pre-tax GAAP charges of between $225 million and $300 million, while about $100 million to $150 million will impact the company’s adjusted financial results. Most of the charges will be recorded during the fourth quarter of 2020, while it is expected to be accretive to GAAP and adjusted earnings per share in 2021 by about 1¢ or 2¢ and neutral thereafter.
“While we have been pleased with the benefits the Lotus Edge valve has provided to patients, we have been increasingly challenged by the intricacies of the delivery system required to allow physicians to fully reposition and recapture the valve,” Boston Scientific chairman & CEO Mike Mahoney said in the release. “The complexity of the delivery system, manufacturing challenges, the continued need for further technical enhancements, and current market adoption rates led us to the difficult decision to stop investing in the Lotus Edge platform. We will instead focus our resources and efforts on our Acurate neo2 aortic valve system, Sentinel cerebral embolic protection system and other high growth areas across our portfolio.”
Analysis from Jefferies found that, as Acurate won’t be in the U.S. until 2024, Edwards Lifesciences could see two-point growth in its TAVR business, while the decision to retire Lotus Edge could sap about a point for Boston Scientific in 2021.
The analysts said the Boston Scientific’s move locks the company out of the competitive U.S. TAVR market for another two to three years, setting the company back after it was expected that Lotus Edge would be a “major growth engine.”
In September, a study found that because each TAVR device on the market — there are three total between Boston Scientific, Edwards Lifesciences and Medtronic — has “fundamental differences in engineering features,” each one has its own specific strengths and limitations in the efforts to treat aortic valve stenosis through TAVR.
Last month, Medtronic announced its plan to begin a randomized, head-to-head study with Edwards Lifesciences comparing two TAVR systems in patients with severe symptomatic aortic stenosis (ssAS), primarily in women.
