Symplicity-3 was widely expected to be a slam dunk, vaulting Medtronic into 1st place in the U.S. renal denervation space. But the trial, more rigorously designed than previous trials with a sham control arm, failed to meet its primary efficacy endpoint.
The news ultimately prompted Medtronic to suspend further trials of the RDN technique, which uses an ablation catheter to interrupt the sympathetic nervous response that plays a role in high blood pressure. Medtronic also halted enrollment in several other trials of the Symplicity device, which the company acquired for $800 million when it bought Ardian in 2010.
In its most recent quarterly filing with the SEC, Medtronic said it took a $236 million writedown on the Ardian acquisition, including a $192 million charge for in-process R&D and another $44 million writedown of other Ardian assets.
"The Ardian impairment resulted from the company’s January 2014 announcement that the U.S. pivotal trial in renal denervation for treatment-resistant hypertension, Symplicity HTN-3, failed to meet its primary efficacy endpoint. Based on the results of the trial, we have suspended enrollment of our renal denervation hypertension trials that are being conducted in the U.S., Japan, and India," Medtronic said.
The Symplicity-3 failure pushed Covidien (NYSE:COV), which acquired Maya Medical’s OneShot RDN platform in 2012 in a deal worth up to $230 million, to abandon its OneShot program entirely. That resulted in total charges of $35 million, partially offset by the reversal of $26 million in milestones due on the Maya acquisition (Covidien paid $60 million up-front in cash and with another $170 million on the line in milestones). Covidien said the net charge for scuttling the OneShot program was $22 million during the 1st 6 months of its fiscal 2014 year.
For Boston Scientific (NYSE:BSX), which paid $130 million for Vessix and its RDN system in 2012, the decision to delay its RDN program indefinitely resulted in a pre-tax impairment charge of $55 million during the 1st quarter this year. The Vessix deal also carried milestone provisions, in this case worth another $300 million.
The 4th major player in the RDN stakes, St. Jude Medical (NYSE:STJ), developed its EnligHTN platform internally and hasn’t announced any writedown of those assets. But St. Jude did say that it expects lower sales for EnligHTN this year "driven by expected overall market declines in the treatment of drug-resistant, uncontrolled hypertension," according to its own most recent quarterly filing. St. Jude halted its Enlightn IV trial of the next generation of its renal denervation technology in December 2013, just a few months after it began.