Medtronic Tissue-Freezing Balloon Tops Drugs In Study

A Medtronic Inc. (MDT) catheter with a balloon that freezes heart tissue to treat a common rhythm disorder outperformed medication in a study the company is using to try and gain access to the U.S. market.

The company's tool caused some nerve impairment that isn't typical with heat-based catheters, but this rarely caused a lasting problem, according to a study investigator. The Medtronic-funded "Stop AF" study met its primary safety and effectiveness goals.

One-year results, examining Medtronic's Arctic Front device as a treatment for atrial fibrillation, or AF, were set for presentation early Monday at the American College of Cardiology's annual conference.

Medtronic aims to ramp up its presence in the small but fast-growing market for catheter-based treatment of AF, which is the most common type of arrhythmia, affecting about 2.2 million Americans. It involves quivering in the heart's upper chambers and is linked to heightened stroke risk.

The catheter-based treatment market is worth about $550 million to $600 million, Leerink Swann estimated, so this technology won't have a major impact for Medtronic, which posted revenue of $14.6 billion in its last fiscal year. Still, the market grows faster than Medtronic's core business for implantable pacemakers and defibrillators.

Wells Fargo analyst Larry Biegelsen thinks this technology could contribute about $200 million in 2012 sales for Medtronic. The company has already filed a Food and Drug Administration application and sees potential Arctic Front approval in the first half next year. The tool is on sale already in Europe.

Drugs are the first-line AF treatment, but are frequently ineffective and can have tough side effects. Another alternative is using catheters threaded through blood vessels to burn tissue and disrupt electrical signals behind the disorder. This for years was done with tools approved for other uses, since Johnson & Johnson's (JNJ) Biosense Webster became the first company to gain specific AF approval from the Food and Drug Administration just last year.

St. Jude Medical Inc. (STJ) and Boston Scientific Corp. (BSX) also compete in the market.

Medtronic's tool freezes tissue with a small balloon, rather than burning with a catheter point. The company is aiming this technology at AF that starts and stops on its own and is linked to electrical signals where pulmonary veins attach to the heart.

In Stop AF, which featured 245 patients, 70% of those treated with Medtronic's device remained free of AF at one year, compared to 7.3% on drug therapy.

Kevin Wheelan, study investigator and chief of staff at Baylor Heart and Vascular in Dallas, noted that drugs performed surprisingly poorly. He has financial ties to Medtronic and other device companies through consulting and other work.

The key question is whether Medtronic's device performed well enough, and safely enough, to carve a niche among heat-based devices. Leerink Swann analyst Rick Wise said a lack of clinical data for this market makes it tough to measure success. Balloon procedures could expand the market if they prove easier, analysts said.

The balloon system is "a simpler, less technically demanding procedure than the point-by-point catheter," Wheelan said in an interview.

On the safety front, the 11% rate of impairment to the phrenic nerve seen among Arctic Front-treated patients "is an issue one has to be aware of," Wheelan added. This issue is much less common with heat-based catheters, although the points on those devices pose a risk for perforation.

Seven of 228 patients treated with Medtronic's device had narrowing in a vein after an Arctic Front procedure, and one needed another procedure to widen the vein.

Medtronic bought this technology through a $380 million acquisition in late 2008. It also made a small deal in early 2009 for a company making a heat-based catheter system aimed at a different type of AF.

-By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com

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