Tuesday, July 29, 2008

eV3/FoxHollow: Why does old wine in a new bottle not taste like new wine?

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Okay, it may not be so bad you say. But this was predicted a long time ago. The entire product line of eV3 that also swallowed the erstwhile FoxHollow last year is all old wine.

Artherectomy has now been around for what, a couple of decades? From the rotablade to now, how much has changed really? This is why, last year when I looked at this industry, I saw no stand-alone breakthroughs.

There's stents, balloons and the rake (or Hawk or whatever). If you think about it (or look at the statistics instead), you will find that the three types of intervention to treat atherosclerosis have nearly the same efficacies.

Granted, in some fields you will see the "n'th" in class device (now becoming a cliched excuse for why your device doesn't work as effectively as expected) suddenly blaze past the rest in the market.

However, I always doubted this would happen here. When I asked certain sagely leaders about this, I was brushed off as an intemperate "nin" whose "com" was quite "poop" (nincompoop for easy reading).

Oh well!

As of now, eV3, the unlikely suitor for FoxHollow has lost a patent battle to Boston Scientific and is closing down the Redwood City plant.

It has also terminated its research agreement with Papa Merck (which is actually good news given the latter's "reputation", read Vytorin). This wasn't exactly a cash-cow, but of course, they must have thought it was innovative at the time.

To assess atherosclerosis, one probably didn't need tons of tissue worked out with bad science. One probably needed fewer samples with good scientific principles implemented to study the issue.

Of course, understandably, if studies didn't go Merck's way, they would just cook it up. You think not? If they just put in physicians' names as placeholders (and nobody is talking about the geniuses that acquiesced to this), why wouldn't they fake data as the next incarnation?

Well, we will discuss Papa Merck in other blogs.

For now, I wonder what holds in eV3's future. I still see it as a major acquisition target (No Boston Scientific, first sell of all your assets and hopefully you will remember not to be naughty enough to bite off more than you can chew, especially with a whole lot of teeth missing).

Who will take a stab? Medtronic? Edwards? Our friendly, neighborhood J&J ?

Independently, eV3 stands no chance for growth. Embolic Protection is more a ruse than a market, as Boston has learned painfully. Atherectomy is a crowded market with no foreseeable clear winner. Its not like eV3 is breaking new ground with other endovascular products either.

Yes, sales are increasing, but at what cost?

It is to be seen where this goes. Of course, some other options include the possibility of eV3 acquiring a smaller player, combining the "Hawks" with a stenting solution, or something of that effect, which can at least improve success rates.
Will the Jedi defeat the Sith? Will there be peace and quiet in the republic? Wait for the next edition. Meanwhile, read my blog from July 2007 on FoxHollow before you leave:

FoxHollow: Now unveiling, new tricks to please a stock market near you...
[ http://www.wkbt.com/Global/story.asp?S=6823871 ]

After sales languished for quite a while once it reached a peak of $200mn., this Redwood City company was dangerously close to being a sweet acquisition. In an attempt to stave this off, it went off on its own to try and appear larger than itself. This obviously hadn't paid off - if you observe their stagnant sales and stock.

So now, they seem to have finally given up the hopes of going it alone. They already have a partnership with ev3, so this marriage should not be so unfamiliar.

But will it pay off?

There have been quite a few ups and downs - the previous CEO left all too suddenly and quietly one day, the VP of sales left unable to push sales upwards, the strategy for NightHawk, one of their next generation products changed all of a sudden. Their other R&D efforts are yet to pay off..And then there is the somewhat questionable acquisition of Kerberos.... this is definitely one medical device company to watch and see if it can pick itself up...!

1 comment:

Z-Money said...

what about laser ablation as a form of atherectomy. i know some companies doing this under venture funding. risks are obvious but benefits are disruptive compared to the roto-cutter or balloon angioplasty.