Medtronic crashes

Medtronic has had a bad week- their stock went down on good news regarding their drug eluting stent and now today the stock plummeted on news of the withdrawal from the market of their ICD leads.

This morning Medtronic, MDT announced that they were suspending the sales of their sprint defibrillator (ICD) leads. I am not an electrophysiologist (a cardiologist who implants these devices), but I talked with a very esteemed colleague of mine today. The lead fracture rate for this lead is about 3% in 30 months or 5% in 5 years. This is about 5-fold higher than the previous generation of leads - which was much thicker. The current recommendations are to not change out old leads unless there is a problem and to go back to using the older thicker leads for now. My colleague tells me that this older lead is an excellent one, although most people prefer to use a thinner lead as it somewhat easier to manipulate.

The most likely side effect of a lead fracture is an unnecessary shock-certainly this would be painful, but is not life threatening. Much less frequently such a lead malfunction can result in a failure of a device to deliver an appropriate shock- which wouldn’t kill a patient, but could prevent the device from saving a life.

It seems to me, that any concern about litigation risk is very much overblown. This isn’t Vioxx or GDT. The company in this case didn’t hide known problems (like GDT) or try to spin data showing risk into data showing benefit for other drugs (the way Merck did with the VIGOR data). There won't be thousands of cases here. There will be a lot of patients who will need extra device check and some who will need lead replacements over time.

Certainly, this isn’t great news for MDT. They are no longer the obvious safer choice in the ICD market. This is bad press for defibrillators in general and MDT in specific. Still they have had recalls in the past, and no how to handle them well. This kind of news is likely to hurt St. Jude and BSX nearly ad much as MDT. Over the long run, the market will recover, much as it has after the rash of Guidant recalls.

MDT has also had some good news of late. The FDA panel recommended approval of their Endeavor- drug coated- stent. This should lead to approval soon and an opportunity to start to compete in the stent market. Both BSX and JNJ have FDA warning letters which have prevented them from releasing new stent designs for the past few years. Over time, MDT could come to dominate this market. Their Endeavor stent soon quickly gain about 20% market share in the US- as it has done in Europe. It has mixed safety data, but the stent is very easy to deliver to blockages.

So I am a buyer of MDT here. I suspect that the $6 billion haircut was an over reaction. I suspect we will see this stock back at $55 by the end of the month.

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Comments

  • krazmataz

    October 17, 2007

    pharmaking,

    The internet and freedom of speach are wonderful. Anyone can comment and publish data for others to view. Your comments about the issues of the fidelis lead are absurd! MDT knew well in advance of the recall. I sent an extracted lead to mdt over a year ago. The lead was extracted after 6wks. The lead was tore up.

    MDT made the same mistake that they mad 10 years ago with the 4004. They used poly 80a which contributed to MIO. The fidelis is a downsized quattro. The only difference is that they reduced the amount of backfill/insulation in the fidelis. Reps knew about this also from the inception of this lead. The fidelis was the first lead that reps were instructed to read r waves on paper at implant. All reps saw post implant rwaves of 3mv and t wave oversensing at some point.

    MDT communicated a technical paper over a year ago blaming low r waves to its sensing algorithim. In March they blamed the physicans implant technique. Monday they told the truth. You need to explain that people will die during these explants. You will need to explant many fidelis leads. If you don't that patient will have a right ventricle full of poly 80 A.

  • pharmaking

    October 17, 2007

    @kramataz,
    I appreciate your comments. I am not an EP, so I am a little out of my element here. My EP colleague, whose opinion I respect, told me that while MDT had been aware of this, they saw many more complications surrounding certain operators which made them believe that much of the problem was implant technique. It strikes me that they would have little to gain here by covering up (as opposed to GDT who was waiting for an acquisition).
    He also told me that these should be easy to explant as they are relative recent implants with screw fixation. Also, many won't be removed - just new leads placed.
    Would love to hear more of your thoughts. I didn't buy MDT today- although it was up in a very down market.

  • Handy

    October 17, 2007

    Mr Krazmataz.. you are amazing.

    What credibility do you have when your own information so wrong .. ??

    1) The lead in question does not use the same polyurethane as the 4004 lead. Strike one.
    This is not confidential data. call the company..

    2) What does R wave size have to do with this Fidelis alert/recall ? Nothing.... ( Strike 2)

    3) You say the only difference from the company's previous lead is reduced backfill and insulation.. Wrong again !! ... (Strike 3)

    4) If you over turn the screw mechanism at implant you risk having decreasing R waves post implant ...this can "un-screw" the lead just enough to get a lower value post implant.
    - High injury current that can fool the analyzer in reading high R waves. This has nothing to do with the lead Recall... ( Strike 4 or 5 ? ).


    5) Wrong again regarding low R wave algorithm it has nothing to do with fidelis.. They invented automatic R wave measurements in the first products MARQUIS - MAXIMO the sensing algorithm could read low if the patients R wave had a notched morphology. ( Strike 6 )

    6) You are a complete MALAKA regarding your last statements ..


    Lastly.. my 2 cents to you regarding current thin ICD leads

    MDT made a smaller ICD lead and they predict a higher fracture/failure rate than expected.
    They have a larger lead that is 99.1% safe.

    STJ has a smaller ICD lead with high perforation rates !! . They also have a larger one that does not.

    BSX does not make a small lead * perhaps they had lower R&D money to invest after the GDT fiasco or they are the smartest of the 3... I suspect $$ but Reliability seems good if the performance data is accurate.

  • Rizzo

    October 18, 2007

    There is no denying the Maude database being littered with fidelis related complications for over a year. In addition, the company decided to blame the implanting physicians implant technique back in march or april (nice smoke screen). Lastly, how is it responsible of MDT to know that the lead is failing, and wait until a least 5 people are dead to report?

  • Trec

    October 18, 2007

    Its amazing that just becasue you have MD behind your name that you automatically become an expert and can create articles/ blogs on the internet like your some expert in the field.

    Its would be nice if a patient that has a lead fracture
    only gets one inappropriate shock. Thats hardly the case! Some patients get 30-40 shocks before they can get to a hospital where the device can be deactivated. Some patients have VT/VF because of this inappropriate therapy and may need to be shocked. If your lead is malfuntioning in anyway then the device can not make the right decision. My guess is this is what happened in some of the patient deaths that Medtronic has reported.

    Industry people know that Medtronic has been having this lead issue for some time now. So don't make them out to be this great company that always has the patients best interest at heart.

    You need to stick to your specialty and leave EP to the EP's. This is a big deal and will probably be for years to come... Dr.

  • alice flink

    October 18, 2007

    qp down up down Medtronic one of best medical device companies in the world and devisified,pays dividend,
    and sometimes makes mistakes but I'm sure looking forward to the best stent out there being put in me let the belly achers cry but not me I'm proud to own this stock now waTch what THEY SAY BUT THOSE WHO BROUGHT AT 33 i THINK AROUND 911 AND RODE IT TO 58 AREN'T bELLY ACHING

  • uh-oh

    October 18, 2007

    what amazes me is that MDT didn't even do a complete and full study on this lead. They used a PMA and used the prior 9fr lead's test data to submit and get approval. MDT has known about this for quite some time, as did all EP's. The smart ones who were not snowed by the famous PR group of MDT bought into the fact that it was actually their fault with their implant technique(which by the way has not changed in, uh how many years...14-15 when endocardial leads were first made. Give me a break! Open your eyes, this is one of the largest cover ups of knowing they had a failing lead. It's not about $ it's about patients. The FDA should also be on the hook due to the lack of testing done on this lead. States it write in the brochure. Unbeleivable. They should and will pay dearly for this mistake.

  • Oh Brother. . .

    October 19, 2007

    Several months ago Mdt sent an army of their engineers into the field to quell physician (and competitors) suspicions that this lead was of a poor design and had serious issues.

    They went to incredible lengths to put the objections concerning this lead to rest only to find themselves 4 months later pulling this exact same lead from the shelves in all of their accounts. They went even so far as to declare that all leads have the same technology which is a flat out lie. St Jude Medical for one, has a long and distinguished history for excellance and reliability in lead technology and to compare themselves with the rest on the industry in this regard is a joke. Their lead technology has always been lacking in design and innovation and it finally caught up with them yet again.

    They knew months ago (maybe longer)that there was a problem with this lead and did nothing about it until deaths started being reported. Mdt is the master of spin but how in the world can they explain their way out this one.

  • Anonymous

    October 19, 2007

    This technical stuff is all very interesting, especially if you are waking around with one of the leads implanted. 3% gets to be a REAL BIG number. Having been shocked by my device I can tell you its no joke. One Medtronic rep told me the shock was not appropriate and caused a serious rythm problem. I asked my Dr. while in the hospital and guess what. I never saw the rep again. I think Medtronic has a real bid problem with people that just want the leads out. With the leads go the new devices. Whats Med gonna say? We know the device is defective but hey thats your problem. The lawyers are licking their lips right now.

  • Chatroom Reader

    October 23, 2007

    Check the physician's manual for the St. Jude Riata ST. No study on that lead either. Used data from larger sized lead as well.

    Is this wise?

    As far Medtronic claiming all leads are made with the same technology, not so. I have seen the Tech note distributed earlier this year with illustrations of cross sections and diagrams detailing the differences in the Fidelis and the Riata ST.

    No lead is ever perfect. Look up the Riata's perforation rate. Look up the Guidant 0125 "long pin" defib lead. None are perfect, yet all have saved exponentially more lives than they may have harmed.

    Do your own research! Only then can you make your own informed decision!

    My objective two cents, for what it's worth.

    Chat

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