Boston Scientific Corp. spent the past two days touting a trio of studies of its defibrillator and stent products, which delivered generally positive results for the Natick, Mass.-based devices giant.
But the results didn’t translate into a stock price boost; after briefly flirting with its yearlong high, BSX stock fell back to earth and was trading at $11.00 as of about 12:15 p.m. Sept. 2.
The positive trial results began trickling in last week, with the publication of a pair of studies in Cardiology Today on BoSci’s Taxus and Taxus Express drug-eluting stents.
The first compared the Taxus paclitaxel-eluting stent with Johnson & Johnson subsidiary Cordis Corp.’s Cypher sirolimus-eluting stent, indicating that, a year after implantation with either device, patients showed “similar rates of clinically important restenosis and ischemic complications.”
The second study examined the safety of implanting multiple Taxus Express stents (also paclitaxel-eluting devices). It showed that, two years after implantation with multiple stents, 90.5 percent of all patients showed complete revascularization, with about 18 percent experiencing “major adverse cardiac and cerebrovascular events” — including non-fatal heart attack, “all-cause mortality,” revascularization or some type of clinical event involving the blood vessels of the brain, such as a stroke.
But the big news started up yesterday, as the company presented results from three trials at the annual European Society of Cardiology Congress in Barcelona, Spain.
Boston Scientific shares soared to $11.75 ahead of the release of results from the high-profile MADIT-CRT study — its closest approach to the $13.65 high posted Sept. 19, 2008 — before sliding back this morning.
The study compared treatment with an implantable cardioverter–defibrillator alone against treatment with a cardiac-resynchronization therapy device. It found that CRT-Ds reduced the risk of heart failure in 41 percent of patients in the trial and significantly improved its pumping efficiency, but did not improve the risk of death.
That study was followed by long-term data from the Prevention of Sudden Cardiac Death II study showing that ICDs reduced the risk of death by 44 percent after implantation in patients who’d suffered a heart attack.
And today the company released results from the two-year SYNTAX study comparing treatment with the Taxus Express and coronary artery bypass graft surgery. The study “demonstrated no statistically significant difference between PCI and CABG in the composite safety endpoint (all-cause death, stroke and myocardial infarction),” according to the release.
Five studies with results indicating that Boston Scientific products perform as well or better than other treatments. And still the stock takes a hit. What gives?
One key reason is skepticism among defibrillator end-users — cardiologists. Their dubious views of the MADIT-CRT results was summed up in an editorial published by the New England Journal of Medicine, which also published the trial results.
Mariell Jessup, associate chief for clinical affairs at the University of Pennsylvania School of Medicine’s cardiovascular medicine division, questioned whether widespread use of the more-expensive CRT-D devices (up to $8,000 more than ICDs) is justified by the modest gains in heart failure and mortality rates.
“In MADIT-CRT, 12 patients would need to be treated to prevent a single heart-failure event. … Is this money that could be spent more wisely?” asked Jessup, who also serves on Medtronics advisory board. “If the indication for CRT is expanded … regardless of current symptoms or the duration of medical therapy, the potential ‘indication creep’ in patients who are unlikely to derive a mortality benefit will alter the benefit-to-safety ratio and tip the score on cost-effectiveness even further in the wrong direction.”
Another possible reason for the disappointing stock results was given by Leerink Swann analyst Rick Wise, who wrote in a note to investors that growth in the ICD market is likely to be modest, at least over the short term.
“After years of industry-wide negative news and recalls, these data are clearly a positive,” Wise wrote. “Clearly market-expanding, the question post-MADIT-CRT is how much of incremental growth may already be reflected in investor expectations. MADIT-CRT — coupled with recent positive data from REVERSE and MADIT-II — in our view could add about 1percent to 2 percent to what is now mid-single-digit [worldwide] ICD market growth.”
“We analyze that every 2 percent in incremental market growth adds $0.01 to $0.02 to our 2010 [estimated] EPS. Given STJ’s leverage to ICD market (about 35 percent of total sales), STJ seems best positioned to benefit financially from a potentially-expanding market,” Wise wrote. “But for BSX — the trial’s sponsor — the positive data could be a modest psychological positive as BSX continues to gradually rebound, creating a ‘halo effect’ in the physician community and boosting confidence in BSX and products following several tumultuous years of recalls and negative headlines.”