Ever since we started our coverage of small cap stock pick MIV Therapeutics (MIVT), I’ve been following the heart stent industry rather closely…it’s a fascinating arena. Why? Despite the fact that the drug-eluting stent business was practically shut down in 2006 due to health concerns (they could have been making things worse strather than better), there’s still between $4 billion and $6 billion up for grabs in the drug-eluting stent business each year. And, if safety concernes are alleviuted there could be even more money for this market. Yet, there are very few coated stent manufacturers.
MIV Therapeutics is working on a promising one, while Abbott’s (ABT) Xience stent and Boston Scientific’s (BSX) Taxus stent are already on the market. Johnson & Johnson’s (JNJ) drug-eluting Cypher stent is also in use, though it’s a bit of an antique by biotech standards.
Anyway, all the major coated heart stent manufacturers came out with news yesterday about their latest R&D efforts. (They were all in attendance at the EuroPCR conference, where they each presented an update.) Here’s the thumbnail sketch top get you caught up….
Abbott said their next-generation Xience stent - the Xience V - has clinically tested to be safer than the nearest competition…Boston Scientific’s Taxus stent. And by ’safer’, they meant using the Xience stent rather than alternatives led to less thrombosis (arterial scarring) and fewer stent-caused heart attacks.
Boston Scientific didn’t respond to the Abbott claim, instead focusing their attention on their current coated stent called Promus. However, it’s not likely that Boston Scientific is going to publicly disagree with Abbott’s research. After all, PROMUS AND XIENCE V ARE THE SAME STENT!
That’s right - the only difference between Abbott’s new stent and Boston Scientific’s new stent is the name. Abbott has licensed Boston Scientific to sell the device under a different moniker. It/they are currently approved for use in many overseas markets, and may win the FDA’s approval for the United States (which is half the market) within a few weeks.
Side note: If you’re Boston Scientific, standing in Abbott’s stent shadow has got to be a little frustrating, considering Boston Scientific was forced to sell their Promus/Xience technology to Abbott (remember the Guidant spin-off?) a couple of years ago. It’s not a parent/child kind of partnership, but Abbott looks like the hero here….and stands to gain more than Boston Scientific does.
What about Johnson and Johnson’s Cypher stent? J&J didn’t present anything at the conference, nor have they done any meaningful R&D on any new stents. Perhaps they gracefully bowed out of the competition, yielding to the heir-apparent Abbott/Boston Scientific stent. Like we said above, Cypher’s days are probably numbered.
Medtronic (MDT), on the other hand, is still swinging away. They also used the EuroPCR conference as a platform to highlight their Endeavor stent’s long-term success. The first-generation Endeavor is already selling in the U.S. as well as abroad, and so far looks as promising as the Promus and Xience V stents could be.
In other words, a three way competition could be heating up, even if Medtronic is a distant third.
What’s any of this got to do with a small cap company like MIV Therapeutics? Though still several months (and perhaps more than a year) way from winning approval anywhere, MIVT’s stent may actually be superior to any of the stents we mentioned above.
In a nutshell, the coating on MIV’s stents is the same stuff your bones and teeth are made of…which means the odds of thrombosis or related problems are slim. How slim when compared to Promus/Xience V? That’s the question the company is trying to answer.
The first MIV stents were implanted about a year ago, so it’s too soon to say whether or not they’ll be effective or safe. However, I don’t mind saying I think they’ll be at least as safe as Promus.
The FDA requires two years of data - at a minimum - before approving any medical device like a drug-eluting stent. Overseas, the wait wasn’t as long, which is why MIV Therapeutics is focusing on locales other than the United States, at least to start.
And how will a small company like MIV compete against giants like Abbott, Boston Scientific, or Medtronic? Good question. I see two ways. The first way is, their stents have to be almost perfect…much better than the others. Second, they have to be able to get that message across to the doctor’s who see other sales reps all day long.
If they can do those two things, I think they can carve out a very nice piece of the coated heart stent pie. I don’t think they’ll be able to dethrone the big guys, but they have a shot at making a dent. Or, I wouldn’t be a bit surprised to see one of the majors acquire MIV to get ahold of their technology.
In the meantime, I don’t see how Abbott can avoid being the future dominator here. Even if doctors and patients chooses Promus over Xience, Abbott still gets a cut from the licensing agreement.
Regardless, I think all these latest developments in technology are setting up a revival in the drug-eluting stent market. That’s good for all these stocks.
By the way, if you want more background on MIV’s technology, the industry’s past problems, and the industry-wide opportunities, revisit our first look at MIV Therapeutics’ place within the heart stent world.
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