Medtronic Inc. (NYSE:MDT) launched what’s expected to be a 1,000-patient study of a catheter-based system it hopes will become a less-invasive — and highly lucrative — alternative to open-heart surgery for valve replacement.
Medtronic’s CoreValve system allows a replacement heart valve to be placed in a patient’s body via a catheter inserted in the femoral artery, near the groin. A catheter is a thin, flexible tube that can be inserted into a body cavity to open a passageway or to allow fluids to pass through.
It’s significant news for Medtronic, which made a big bet that the use of so-called transcatheter systems will grow more widespread as a less-invasive means of implanting replacement heart valves. Valve replacements done with a catheter could be a better alternative for patients, because such procedures don’t require surgeons to crack open a patient’s chest to replace a diseased heart valve.
Last year, Medtronic spent more than $1 billion buying a pair of companies developing transcatheter valve replacement systems — CoreValve Inc. of Irvine, Calif., and Israeli firm Ventor Technologies. Medtronic estimates that the market size for the procedure could grow as large as $3.5 billion annually.
Medtronic expects to enroll as many as 1,000 patients suffering from aortic stenosis, a condition in which the valve doesn’t open completely and obstructs blood flow. The study will take place at 90 clinical sites, mostly in Europe, and will follow patients for at least five years. The CoreValve system received regulatory clearance for sale in Europe in 2007, but is not cleared for use in the U.S., according to Medtronic.
It’s also run afoul of federal investigators in Massachusetts, who are probing CoreValve’s relationship with the Burlington, Mass.-based Lahey Clinic, “specifically relating to cardiologists at the clinic, CoreValve Inc. … and the Lahey Clinic, and certain employees of both [Medtronic] and the clinic, among other topics,” according to a March 10 filing with the Securities & Exchange Commission. The U.S. Attorney for Massachusetts issued a “civil investigative demand” Feb. 22 for documents pertaining to the probe.
And earlier today the company registered with the SEC for a $3 billion offering of senior debt notes in a bid to raise funds to cover its working capital needs and, perhaps, to pay down some of its debt. The Fridley, Minn.-based medical device monolith announced the offering of $1.25 billion worth of its 3 percent senior notes, due in 2015; $1.25 billion of its 4.45 percent senior notes due in 2020; and $500 million of its 5.55 percent senior notes due in 2040.