This year started off with a bang in the US cardiovascular device industry's bright spot, the emerging transcatheter aortic valve replacement (TAVR) market, with the earlier-than-expected January US Food and Drug Administration approval of Medtronic PLC's CoreValve system – a market monopolized by Edwards LifesciencesCorp. since November 2011 with its first-generation Sapien device. (See [A#2014700012].) While Medtronic has begun an aggressive US launch with the lower-profile (18 French [18F]) CoreValve, which leads the transfemoral TAVR segment in Europe, Edwards is anticipating US FDA approval of its next-generation, lower-profile (18F) Sapien XT device at any time.

Over the past few weeks, as Medtronic and Edwards gear up for a fight in the US market, several other key clinical and regulatory advancements have been announced by a host of additional potential competitors looking to further improve outcomes and expand the eligible patient population over first- and second-generation TAVR devices. Advanced valve features offered by these next-generation devices include enhancements for device repositionability to avoid paravalvular leakage (PVL), aortic regurgitation, and other adverse events, as well as a smaller-diameter delivery and valve system sizes.

Meanwhile, the TAVR landscape in Europe is teeming with activity. (See Exhibit 1.) TAVR systems currently available in Europe include Boston Scientific Corp.’s Lotus and St. Jude Medical Inc.’s Portico, as well as products from privately held players JenaValve Technology GMBH, Symetis SA (which is working with Australia's [Endoluminal Sciences Pty. Ltd.] to co-develop a TAVR system that will incorporate the latter's antileak system into Symetis' Acurate TA and Acurate TF product lines), German venture-backed Transcatheter Technologies GMBH, and Direct Flow Medical Inc.

Exhibit 1

Selected Second- And Third-Generation TAVR Devices

Company

Product Name

Generation

Approval Status

Tissue

Stent

Access/

French Size

Boston Scientific

Lotus

3rd

CE mark

Bovine pericardium

Nitinol mesh

TF-18F

Colibri

Colibri

2nd

CE mark expected in 2014

Dry pericardium

Cobalt chromium

TF-14F

Direct Flow Medical

Direct Flow

3rd

CE mark

Bovine pericardium

Polymer

TF-18F

Edwards Lifesciences

Centera

2nd

CE mark expected in 2015

Bovine pericardium

Self-expanding nitinol

TF-18F (14F sheath)

Sapien XT

2nd

CE mark; US FDA approval pending

Bovine pericardium

Cobalt chromium

TF-18F

TA-18F

Transaortic-18F

Sapien 3

3rd

CE mark

Bovine pericardium

Cobalt chromium

TF-14F

TA-14F

Transaortic-14F

JenaValve

JenaValve

2nd

CE mark

Porcine valve

Self-expanding nitinol

TA-30F

TF-18F

Transaortic-18F

Medtronic

CoreValve

2nd

CE mark; FDA approved

Porcine valve

Self-expanding nitinol

TF-18F, subclavian or direct aortic

Engager

2nd

CE mark

Bovine pericardium

Self-expanding nitinol

TA-29F

St. Jude Medical

Portico

2nd

CE mark

Bovine pericardium

Self-expanding nitinol

TA-24F

TF-18F

Symetis

Acurate

2nd

CE mark

Porcine valve

Self-expanding nitinol

TA-29F

TF-18F

Transcatheter Technologies

Trinity

3rd

CE mark expected in 2016

Bovine pericardium

Self-expanding nitinol

TA-30F

TF-18F (planned)

Note: F = French, TF = transfemoral, TA = transapical.

SOURCES: Medtech Insight; Transcatheter Technologies; Company reports

The market opportunity for TAVR is significant, with 2013 sales totaling $303.4 million in the US and $765 million outside the US (OUS). Those numbers are expected to grow to an estimated $1.29 billion and $1.63 billion, respectively, by 2018, according to David Roman, managing director, global investment research at Goldman Sachs, in an interview with Medtech Insight. (See Exhibit 2.)Edwards and Medtronic dominate the worldwide market at present (see Exhibit 3), but other companies are expected to make inroads outside the US in the next few years. And, overall growth is looking positive. In Europe, even nearly seven years after the technology was introduced, the market continues to grow on a unit basis at a double-digit rate, which is rare for medtech markets, says Roman. Although the US market is developing slower than analysts and participants had predicted, due to the high regulatory and complex technology burden associated with these new devices (reimbursement requires both an interventional cardiologist and a cardiac surgeon to be present during the procedure), length of stay (and thus hospital economics) is improving, positive clinical results are coming in, and there is a tremendous amount of innovation to come, Roman continues. However, it will be difficult for new entrants to gain a foothold in the US because Edwards and Medtronic are taking up a lot of the clinical trial capacity with their respective ongoing studies, he notes. Pointing to a potential growth driver for the transcatheter market, new aortic valve replacement guidelines published in March by the American Heart Association and the American College of Cardiology (ACC) include asymptomatic patients (stage C1) with severe aortic stenosis and decreased exercise tolerance or an exercise fall in blood pressure, and asymptomatic patients with severe aortic stenosis (stage C1), rapid disease progression, and low surgical risk, in addition to symptomatic patients.

Exhibit 2

Worldwide TAVR Sales Forecast, By Company And Region, 2013–2018E

($M)

2013A

2014E

2015E

2016E

2017E

2018E

CAGR (2014–2018)

Edwards

US

$303.4

$333.0

$420.6

$490.1

$653.0

$826.5

25.5%

OUS

$361.0

$436.0

$516.0

$577.0

$645.0

$687.0

12.0%

Edwards Total

$664.4

$769.0

$936.6

$1,067.1

$1,298.0

$1,513.5

18.4%

Medtronic

US

$0.0

$130.1

$208.3

$303.5

$364.2

$462.0

37.3%

OUS

$367.0

$428.0

$484.0

$536.0

$589.0

$647.0

10.9%

Medtronic Total

$367.0

$558.1

$692.3

$839.5

$953.2

$1,109.0

18.7%

Others

US

$0.0

$0.0

$0.0

$0.0

$0.0

$0.0

–

OUS

$37.0

$91.0

$126.0

$167.0

$227.0

$299.0

34.6%

Others Total

$37.0

$91.0

$126.0

$167.0

$227.0

$299.0

34.6%

Total US

$303.4

$463.1

$628.9

$793.6

$1,017.2

$1,288.5

29.2%

Total OUS

$765.0

$955.0

$1,126.0

$1,280.0

$1,461.0

$1,633.0

14.4%

Worldwide Market

$1,068.4

$1,418.1

$1,754.9

$2,073.6

$2,478.2

$2,921.5

19.8%

Note: Medtronic's CoreValve is currently FDA-approved for the transfemoral indication only. Others include St. Jude Medical and Boston Scientific.

David Roman, Managing Director, Global Investment Research, Goldman, Sachs & Co.

Exhibit 3

US And OUS TAVR Market Share, 2013A Versus 2018E

Note: Others include St. Jude Medical and Boston Scientific.

David Roman, Managing Director, Global Investment Research, Goldman, Sachs & Co.

Japan is another promising untapped frontier for TAVR, due to its aging population and its historically very hospitable attitude toward interventional procedures such as coronary stents, says Roman. In addition, Japan's severe aortic stenosis incidence rate and diagnosis rate are 1.4% and 48%, respectively, the same as in the US, and although the country has a treatment rate one-fourth as high as the US, TAVR should drive procedural rates higher, according to Goldman Sachs. Edwards has initiated sales of its low-profile Sapien XT there, and Goldman Sachs projects that Japan revenues will reach $139 million in 2018. (See Exhibit 4.) The key variable will be the rate at which the market is developed, given the need for surgeon training and the development of referral channels.

Exhibit 4

Emerging TAVR Market In Japan, 2013–2018E

2013A

2014E

2015E

2016E

2017E

2018E

CAGR (2013–2018E)

# of TAVR Procedures

105

1,200

1,800

2,430

3,208

4,170

108.8%

% Transapical

25%

25%

25%

25%

25%

25%

–

% Transfemoral

75%

75%

75%

75%

75%

75%

–

Average Selling Price

$41,827

$37,002

$37,003

$35,153

$35,153

$33,396

–4.4%

Revenue ($ millions)

$4

$44

$67

$85

$113

$139

103.3%

Edwards (%)

100%

100%

100%

85%

70%

66%

–

Medtronic (%)

0%

0%

0%

15%

30%

34%

–

SOURCES: David Roman, Managing Director, Global Investment Research, Goldman, Sachs & Co.; Medtech Insight

Busy Pipelines For The Big Two

Edwards is anticipating FDA approval in the next few months for its Sapien XT, as its larger-profile Sapien device is rapidly losing favor with the entrance of Medtronic's CoreValve. FDA approved the CoreValve with sizes of 26 mm, 29 mm, and 31 mm, along with a smaller 23-mm version of the device, the CoreValve Evolut. Edwards' Sapien is available only in 23- and 26-mm sizes. Importantly as well, the XT is expected to be approved for both extreme-risk and high-risk patients, giving it an advantage over CoreValve, which is not expected to be approved for high-risk patients (a larger market opportunity) until mid-2015. According to anecdotal comments reported by Larry Biegelsen, senior analyst, medical supplies and devices at Wells Fargo Securities, US centers with access to both the CoreValve and Sapien are transitioning all commercial cases to CoreValve because of its size advantage. In addition, Biegelsen reports that Medtronic is charging about $3,000 less per valve at a number of centers, in a strategic move to garner share.

Edwards’ XT is also making progress in Europe; in early February, the company received CE mark approval for use of the device in transcatheter mitral and aortic valve-in-valve (VIV) procedures, making it reportedly the only company to obtain a VIV indication for the mitral position, according to the firm. It is also working through a phased launch of the Sapien XT in the emerging Japanese market.

Meanwhile, Edwards is wasting no time in launching its third-generation Sapien 3 transcatheter aortic valve in Europe following CE mark approval in January. The company now offers the only commercially available TAVR system that can be delivered through a low-profile 14F expandable sheath, via a transfemoral, transapical, or transaortic approach. In the US, Sapien 3 is being tested in the pivotal, 500-patient PARTNER II Trial in both inoperable patients and patients considered high risk for conventional open heart surgery, with FDA approval anticipated by 2016. Patients in the trial whose femoral arteries are hostile to the transfemoral delivery approach will be treated with either the transapical or transaortic approach. The company completed enrollment in this study in January of this year, and in the same month, the FDA approved an Investigational Device Exemption (IDE) for a single-arm, 1,000-patient trial of Sapien 3 in intermediate-risk patients who are less acutely sick than patients in the PARTNER II Trial. This potentially could open a lucrative door for use of the technology in a much broader population in the coming years. (Also see [A#01140210018]and Also see "Transcatheter Valves At The Tipping Point" - Medtech Insight, 26 April, 2013..) Looking ahead, Edwards will soon begin enrollment in European trials for another product, its self-expanding Centera TAVR System, which features a short frame and a new motorized delivery system for stable and precise deployment, according to the company. European approval of Centera is expected by mid-2015.

One interesting trial to watch will be the ongoing head-to-head CHOICE Trial in Germany (ClinicalTrials.gov Identifier: NCT01645202), which has randomized approximately 240 high-risk patients with severe symptomatic aortic stenosis to either the Sapien XT or CoreValve. Results from CHOICE will be presented this month as a late-breaking clinical trial at the ACC’s upcoming 63rd Annual Scientific Session & Expo in Washington, DC. The primary endpoint for the study is device success immediately postprocedure, and secondary outcome measures include a Valve Academic Research Consortium (VARC)-defined combined safety endpoint at 30 days, and VARC-defined combined efficacy endpoint at one year.

The CoreValve, which was FDA-approved for implantation in extreme-risk patients via three different access routes – transfemoral, subclavian, and direct aortic – is currently the only TAVR device available in diameters of 23 mm, 26 mm, 29 mm, and 31 mm, all deliverable on an 18F delivery system. The device is also differentiated in terms of its self-expanding design, controlled delivery, hemodynamics that improve over time, and lower rates of major stroke and PVL, according to Medtronic. The company has begun a controlled commercial rollout of the CoreValve, which started with its initial 60 clinical sites and will add about 20 to 30 centers a quarter for the next two quarters and then 40 per quarter after that (with 300 to 350 US Joint Commission-certified heart valve centers in all), according to management on its fiscal third-quarter earnings call on February 18. Furthermore, the company anticipates FDA Premarket Application (PMA) approval for use of the CoreValve in high-risk patients by mid-fiscal-year 2015, including time for a panel review if it is deemed necessary. Data on this study also will be presented during a late-breaking clinical trial session at the ACC meeting.

In international markets, Medtronic is targeting the launch next spring of the 26- and 29-mm versions of CoreValve Evolut R, a next-generation recapturable TAVR system with a 14F equivalent delivery system, and the company will also start a US test of this system in fiscal year 2015, according to management on the Q3 earnings call. Medtronic anticipates growth in its international TAVR markets of 12% to 14% per year going forward, fueled by favorable reimbursement in individual countries, most recently in France. Last year, Medtronic also launched its transapical Engager Transcatheter Aortic Valve Implantation System in Europe, a device comprising bovine tissue leaflets and a self‐expanding nitinol frame designed to promote annular sealing to minimize paravalvular leak, with control arms to simplify implantation.

In terms of future expansion into the emerging Japanese market, Edwards expects $40 million to $50 million in sales of its Sapien XT there in 2014, according to Roman (regulatory approval was received last June, followed by reimbursement in August). Medtronic’s device will not be on the market in Japan until 2016, so Edwards does have a decent head start. Japan is important as the third major TAVR market as it has an aging population and the economic and hospital infrastructure to support this type of technology, in Roman's view.

Legal Battles

Edwards and Medtronic are mounting strong offensive stances to protect their TAVR intellectual property, both from each other and in preparation for new market entrants. The seven-year-old patent war between the two market leaders heated up recently when the European Patent Office (EPO) revoked an Edwards' TAVR patent that has been the center of its feud with Medtronic. The EPO decision stymies Edwards' efforts to keep Medtronic's CoreValve system off the market, but does not affect Edwards' own sales; Edwards plans to pursue an appeal. Edwards had tallied some victories against Medtronic during the last year, including a July 2013 injunction against CoreValve sales in Germany, a key TAVR market. In the US, Edwards won a $74 million court decision last April against Medtronic, which was upheld by the US Court of Appeals for the Federal Circuit. Medtronic attempted to push the case to the Supreme Court, but the justices in October refused to hear the lawsuit. In January, a Delaware jury ruled that Medtronic's CoreValve infringes a patent covering Edwards Lifesciences' Sapien device, awarding nearly $393 million in damages, which may likely be resolved with a royalty agreement.

This war has been raging since 2007, even prior to Medtronic’s acquisition of CoreValve in 2009. And, with Medtronic's current troubles in renal denervation, the company's CoreValve program is expected to be a key growth driver for its vascular business going forward. (SeeAlso see "Re-Evaluating Growth Opportunities In Vascular Interventional Device Markets" - Medtech Insight, 28 February, 2014..)

Direct Flow Medical: On The Road To The US Market

Santa Rosa, CA-based Direct Flow Medical stands out as the emerging TAVR player closest to a possible US market entry, with an IDE trial underway in the US for its Direct Flow Medical Transcatheter Aortic Valve System. (See Exhibit 5.) Founded in 2004 and backed by $125 million in private equity and debt financing, Direct Flow Medical is touting its next-generation device's ability to address the major remaining problems with TAVR: aortic regurgitation, which is associated with high patient mortality, along with vascular complications, according to Bernard Lyons, PhD, the company’s president and CEO. Direct Flow Medical's founding was inspired by the realization that start-ups can think uniquely and make positive change, much as small company Percutaneous Valve Technologies Inc. (later acquired by Edwards) did in an effort to treat patients with severe aortic disease who could not be treated with gold-standard surgical valve replacement, Lyons told Medtech Insight recently. Direct Flow Medical looked at the same problem, but attacked it in a completely different way to optimize outcomes.

Exhibit 5

Direct Flow Medical Transcatheter Aortic Valve System

Direct Flow Medical

The Direct Flow Medical device is a transfemoral valve, which was CE marked in January 2013 and launched at EuroPCR last May. The system incorporates a flexible, metal-free, polymer valve frame with bovine pericardial leaflets; a conformable ring design for a tight, durable seal; and full repositioning and retrievability. It also incorporates a flexible, low-profile (18F) delivery system. Positioning wires are used to allow for controlled, millimetric valve-positioning adjustments; minimum to no contrast is necessary, and the valve is immediately competent upon expansion, thus reducing hemodynamic stress. Full repositionability and retrievability make the system very forgiving so that clinicians can achieve the best outcome without risk, says Lyons.

As the TAVR space has become more crowded and most competitors are using self-expanding stent frames, the issue of patent litigation has become a problem, something Direct Flow Medical avoids with its expandable, conformable polymer frame, Lyons continues. In a unique feature, sealing rings incorporated into the aortic and ventricular ends of the valve are filled with saline and a small amount of contrast as the valve is moved into exact position for evaluation, and depressurized if necessary to adjust positioning. Then, once optimal positioning is reached, the saline/contrast solution is easily exchanged under a constant pressure gradient for a quick-curing polymer that solidifies and secures the valve in place. This filling process does not add significantly to the total procedure time, and the tight seal that is created is designed to help prevent aortic regurgitation (AR) and PVL, says Lyons. The company offers a 25-mm valve to treat annulus sizes 21 mm to 24 mm, a 27-mm valve for annulus sizes 24 mm to 26 mm, and most recently, in January, it received CE mark approval for a 29-mm valve, for annulus sizes 26 mm to 28 mm, with all sizes delivered through its flexible, 18F delivery system. The company sells direct in Germany and the United Kingdom, and uses distributors in Spain, Italy, and The Netherlands.

In its CE mark prospective, multicenter, nonrandomized DISCOVER Trial, with six-month results announced at last October's Transcatheter Cardiovascular Therapeutics (TCT) meeting, the Direct Flow Medical system was shown to virtually eliminate significant AR. Through six months, no patient experienced moderate or severe aortic regurgitation and there was a 96% overall survival rate, with 90% of patients in functional Class I or II. The system also demonstrated a strong safety profile, with a 97% VARC-defined combined safety rate and no incidence of strokes (major or minor) or myocardial infarction in the evaluable cohort between 30 days and six months. The DISCOVER Trial is being conducted at nine European sites in 100 patients with severe aortic valve stenosis who require replacement of their native aortic valve but are at extreme risk for open surgical repair. These patients will be followed for five years. Positive results from this study led to the company's CE mark approval last year and launch of the device in Europe.

At the upcoming 2014 EuroPCR, Direct Flow Medical will be reporting one-year data from the DISCOVER Trial. In addition, it will be presenting five-year follow-up data on the first iteration of its valve system (from 2007–2008), reporting a positive 54% survival rate in the very high-risk, nonoperative population (31 patients) included in the study. This survival rate remains the same as what was reported at the 79th Annual Meeting of the German Cardiac Society in April 2013. The device's ability to virtually eliminate AR was a big reason for the encouraging survival rate, which is higher than has been reported in other TAVR studies, says Lyons. More than 500 patients have been implanted with the Direct Flow Medical valve since its launch in mid-2013, with results in the commercial setting matching what has been seen in clinicals thus far, according to Lyons.

The company has also made meaningful progress toward being able to throw its hat into the ring in the US. In December last year, the firm completed enrollment in the initial feasibility phase of its 30-patient US IDE SALUS Trial. The SALUS Trial, taking place at six US sites, is assessing the safety of the Direct Flow Medical system to treat patients with severe aortic stenosis who are at extreme risk for surgical valve replacement. The company is working closely with the FDA to move to the pivotal phase of this trial and hopes to do so in the second quarter of this year, pending approval from the agency. Direct Flow Medical anticipates that enrollment for the high-risk patient group will be completed in 2015, and following one year of follow-up, FDA approval could be granted in the first half of 2017. Direct Flow Medical is very encouraged by Medtronic's recent FDA approval for CoreValve with no panel, which bodes well for its own device reaching the market quickly, says Lyons.

Following this study, the company will be looking to assess the use of its device in lower-risk populations in the US. It also will be working to improve and optimize its transfemoral technology in the coming years; however, a transapical approach is not in the firm's plans. In addition, Direct Flow Medical is assessing the development of a percutaneous mitral valve replacement product that incorporates many of the same features as its core TAVR technology, but it will be watching what the first-movers (such as Edwards) do in this new field, says Lyons.

Direct Flow Medical has been warmly received by the financial market, with current investors including J&J Development Corp., Abbott Ventures, Spray Venture Partners, New Leaf Ventures, EDF Venture Partners, SV LifeSciences, Foundation Medical Partners, VantagePoint Venture Partners, and ePlanet Venture Partners. Its last round in November of last year raised $50 million in debt financing from PDL BioPharma Inc., which will be used to significantly expand the company. This includes doubling its worldwide workforce to more than 300 while seeking additional space in Santa Rosa to support research and development near its current 12,000-square-foot headquarters. The company is not looking for an exit in the immediate future; it is busy executing its strategy with a technology that could support a large stand-alone company, says Lyons.

Transcatheter Technologies

Regensburg, Germany-based Transcatheter Technologies, founded in 2009, recently completed and reported the First-In-Human (FIH) implantations of its transapical Trinity TAVR System. (See Exhibit 6.)The company is positioning its device as a third-generation system, as it is truly fully repositionable, even after complete expansion and anchoring, without any foreshortening. In January, the firm also reported on the device's long-term durability, a feature that has been primarily overlooked to date, says company co-founder and cardiac surgeon Wolfgang Goetz, MD.

Exhibit 6

Trinity TAVR System

Transcatheter Technologies

Trinity, which is patent protected and completely developed in-house, is a bovine pericardium valve with a porcine pericardium sealing cuff to reduce PVL. It is mounted on a self-expanding nitinol frame premounted on a detachable catheter tip. The valve is placed in the supraannular position, thus avoiding the left ventricular outflow tract (LVOT) and helping to prevent conduction block and the need for a pacemaker – an issue that has plagued other commercially available systems such as CoreValve and Sapien, says Goetz.

Trinity's life span was shown in mechanical testing reported in January to be equivalent to 15 years of use (600 million testing cycles), which potentially broadens its applicability across a younger patient population. This durability is achieved via the company's proprietary Zero Pressure Crimping process, in which the integrity of the valve leaflet surface is protected from damage during the folding process. Via Transcatheter Technologies' proprietary process, the leaflets are stored and protected from crushing in a "garage" when the stent is folded and mounted on the delivery catheter.

The age of eligibility for a TAVR patient in Germany is now about 75 years, says Goetz, and thus the issue of durability is of increasing concern. About 20,000 people in Germany are treated with prosthetic aortic heart valves per year, according to Goetz, citing the German Aortic Valve Registry (Hamm et al., European Heart Journal, September 2013), with about 50% of cases now being implanted with TAVR devices (60% to 70% transapically and 30% to 40% transfemorally).

Positive results were announced in November from a 30-day pilot study with the Trinity valve implanted in three female patients, with the mean pressure gradient reduced from 59 mm Hg at the start of the study to 20 mm Hg at 30 days postimplantation in a 20-mm annulus. All patients had excellent valve function, no atrioventricular block or pacemaker implantation, and zero PVL, according to the company. The valve is completely expanded and anchored above the annulus, at which point the surgeon can fully evaluate the valve's function to determine if it needs to be repositioned, retrieved, or kept in the same position, which is absolutely unique to Transcatheter Technologies, says Goetz. The company anticipates presenting six-month results from its pilot study at EuroPCR in Paris this May.

The company is now finalizing the design of its catheter system and preparing to offer a variety of valve sizes in its pivotal CE mark trial, pending a Series C round of funding. The German multicenter study will include approximately 60 patients, with device sizes ranging from 19 mm to 27 mm. The firm has also developed a prototype transfemoral system, but for now its priority is commercialization of the transapical Trinity System. Transcatheter Technologies also plans to enter the US and Asian markets, in collaboration with a strategic partner.

The five-year-old company has raised approximately $7.2 million since 2009 in three rounds of funding from institutional and private investors, including High-Tech Gründerfonds GMBH, Technologie-Seed-Beteiligungsfonds Bayern GMBH & Co. KG, Clusterfonds EFRE, FVW investments for your health GMBH & Co. KG, ERP Start-up Fund, Kreditanstalt für Wiederaufbau, Tubaflex Beteiligungs GMBH, and Rolf Käse, PhD (former CEO of Berlin Heart GMBH and Impella CardioSystems GMBH), along with company founders. It is currently seeking a $16 million Series C round to support its pivotal trial in Europe for the transapical version of Trinity in late 2015.

JenaValve Technology

Another competitor to watch in the European market is Wilmington, DE- and Munich, Germany-based JenaValve Technology, which offers the only TAVR device approved for the entire range of aortic valve disease – including aortic insufficiency (AI; aka aortic regurgitation) as well as the bulk of the market to date, severe aortic stenosis. And, its device is the only one that helps to provide correct anatomical positioning for the surgeon by default, according to Trevor Dekker, JenaValve's VP of sales and marketing, who spoke recently with Medtech Insight. The venture-backed company has been marketing its patent-protected JenaValve Transapical Prosthesisin Europe and other international geographies since late 2011 and has significantly increased its sales and market position since receiving a CE mark extension for the AI indication last September. (See Exhibit 7.)

Exhibit 7

JenaValve Transapical Prosthesis

JenaValve Technology

The JenaValve Transapical System consists of an aortic porcine root valve fitted with an outer porcine pericardial patch, or skirt, sewn onto a nitinol self-expanding stent. The valve, which the company considers to be second-generation technology, is retrievable and repositionable using JenaValve's Cathlete Plus Delivery System. The valve's three unique radiopaque "feelers" allow clinicians to accurately position the prosthesis in the anatomically correct position by default, ensuring a precise alignment within the patient's native valve. The capability for the surgeon to have this level of control is a feature that competitive products cannot provide, says Dekker. The company's proprietary JenaClip anchoring and clipping mechanism is then employed, which allows the prosthesis to be clipped onto the patient's native valve leaflets, in a manner similar to a paper clip. This enables the JenaValve to be firmly anchored in the correct anatomical position and resist migration, reducing the risk of conduction disorders originating in the LVOT. And importantly, placement and fixation of the device are independent of the calcification level of the native valve. In the third and final step, the valve is released with exact position height and commissural alignment, with no rapid pacing required during the procedure. The JenaValve, which has been placed in about 900 patients to date, is available in three sizes, 23 mm, 25 mm, and 27 mm, covering aortic valve annuli from 21 mm to 27 mm.

At the 2013 EuroPCR last May, JenaValve announced the first interim results of its postmarket JUPITER Registry. JUPITER is evaluating the five-year long-term safety and effectiveness of the transapical JenaValve system in 180 elderly high-risk patients. With the 30-day results in 88 of the patients enrolled in the JUPITER registry, JenaValve demonstrated high procedural success rates and excellent clinical outcomes. With a mean logistic EuroSCORE of 24.9% (indicating mortality risk during cardiac surgery), the procedural success rate was 95.5%. Major adverse events such as major stroke or spontaneous myocardial infarction were very low, at 0.0% and 1.3%, respectively, demonstrating the device's safety profile. Excellent hemodynamics and very low PVL were also reported: 97.6% of the patients had PVL classified as mild or lower, with no instances of severe PVL. According to the company, this is one of the lowest PVL rates reported in a transcatheter valve registry.

In addition to the transapical JenaValve, the company is currently conducting a 12-patient FIH study in Germany on a porcine pericardium version of its device, which will be applicable to a transfemoral (with a true 18F delivery system), transapical (22F delivery system), or a transaortic (18F delivery system) approach. The company has reported excellent results in this study in six patients to date, and a CE mark trial is expected to begin in Q2, followed by European approval and launch at the end of this year. The ambitious company also plans to pursue clinical approval for its TAVR products in the US and is in discussions with the FDA regarding requirements and trial design. It also plans to seek approval in China.

The well-funded company, founded in 2006, is backed by approximately $100 million in financing to date, from European, US, and Chinese investors. Its latest Series C round, which closed in Q2 of last year, totaled $62.5 million, led by Belgium-based GIMV and new investors Beijing-based Legend Capital and international health care investment firm Omega Funds. Edmond de Rothschild Investment Partners of Paris led the participation by the existing investor group in the round, which also included Atlas Venture Fund, NeoMed Management, VI Partners AG, and Sunstone Capital A/S. This latest financing will be used to expand JenaValve's sales and marketing force in key geographies, as well as to move through the clinical and regulatory pathways in Europe, the US, and other markets worldwide, says Dekker. JenaValve is currently exploring several exit options, including strategic partnership and/or an initial public offering.

Boston Scientific And St. Jude Medical Take Aim At TAVR

Leading cardiovascular player Boston Scientific, with $7.1 billion in total sales in 2013, is looking to the promising TAVR market to help the company continue its growth trajectory in 2014. It is currently rolling out its second-generation Lotus Valve System in Europe following CE mark approval in late October, and is preparing to initiate the US REPRISE III pivotal IDE trial in the second half of this year, according to management on its fourth-quarter earnings call February 4. Boston Scientific of course has high expectations for this new segment of its business, as it is investing about $450 million in the technology, originally developed by Sadra Medical Inc., which it acquired in 2011.

The transfemoral Lotus consists of a preloaded, braided, nitinol stent-mounted, bovine pericardium valve prosthesis and a low-profile catheter delivery system designed to enable predictable and precise placement. St. Jude’s Medical’s Portico is the first TAVR device that can be completely resheathed, repositioned at the implant site, or retrieved before being released from the delivery system, according to the company. In addition, it is designed to mitigate heart block, with the valve situated low within the stent frame to allow for sealing without the valve extending deep into the LVOT. Large cells in the aortic section of the stent allow access to coronary ostia post-implantation, and the valve is designed for maximum durability and hemodynamic performance, with leaflet coaptation in round and elliptical annulus configurations. The device also employs a unique Adaptive Seal feature that works like plumber's tape to seal the valve and minimize paravalvular regurgitation (0% moderate or severe PVL was reported at six months in the first 60 patients enrolled in the REPRISE II Trial).

St. Jude, with the bulk of its $5.5 billion business (in 2013) comprising cardiac rhythm management device sales, is offering the transfemoral Portico TAVR device in the European market. However, at this point, the company has a relatively weak competitive position due to limited valve size offerings, as well as reported issues with PVL in its CE mark trial. The company began selling Portico in Europe early last year, starting with the 23-mm size only (approved in November 2012) and adding the 25-mm version following CE mark this past December, which together address about 20% of the market. A CE ark trial for the 27- and 29-mm valves will begin enrolling in the first half of this year, followed by commercialization in the third or fourth quarter, according to the company.

However, even with these new size options, St. Jude is having trouble gaining meaningful traction in the TAVR market. According to a February 10 research note from Jason Mills and Jeffrey Chu, analysts at Canaccord Genuity, Portico brought in less than $5 million in sales during its first full year on the European market, and the product is not a serious challenger at this point to the entrenched players (especially with the recent European approval of Edwards' Sapien 3 System) – or even the emerging TAVR players such as Boston Scientific and Direct Flow Medical.

What's more, PVL continues to be an issue for the Portico device amid otherwise very positive data from the Portico TF CE trial, using the 23- and 25-mm Portico devices, as reported at last year's TCT. Portico met its primary endpoint with 30-day all-cause mortality of 3.6%, which increased to 8.4% at one year, and the major stroke rate was 2.4% at 30 days and 3.6% at one year. PVL rates were elevated to 70%/71% in total at 30 days/six months (most of which was mild PVL). During the company's TCT presentation, a cardiologist consultant emphasized that moderate/severe aortic regurgitation was low (5% at 30 days and 3% at six months). However, data from this study may negatively impact uptake of the device in Europe.

St. Jude also has plans to enter the US market and expects to begin a pivotal US IDE trial with Portico in the first half of this year, using its 23- and 25-mm valves at 40 US sites (with 27- and 29-mm sizes to be added later in the year). Interestingly, it will be a head-to-head study with the Portico randomized against other commercially available TAVR devices, according to company management. In the study, approximately 1,610 patients will be split into high- and extreme-risk cohorts, with a primary noninferiority endpoint for all-cause mortality and disabling stroke at one year.

The company's TAVR pipeline includes a next-generation Portico valve with an "integrated solutions" design improvement to further minimize PVL, a broader range of sizes, improvements to its delivery system to allow for co-axial alignment of the valve during placement, a profile reduction to help lower vascular complications, and improved ergonomics for the user.

TAVR Market: Next-Generation Devices Seek To Optimize Outcomes

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