Medtronic gets CE mark for the Corve Valve technology they acquired in 2008- 2009

MINNEAPOLIS, Sept. 26 -- Medtronic, Inc. (NYSE: MDT) announced it has received CE (Conformite Europeenne) Mark for its Medtronic CoreValve(R) Evolut(TM) 23mm valve, its latest self-expanding transcatheter aortic valve implantation (TAVI) system. The new valve incorporates technology that optimizes fit, thereby promoting sealing between the prosthetic valve and the native valve (TruFit Technology). The Medtronic CoreValve System is currently limited to investigational use in the United States. They just started clinical trial activities in the US.

Medtronic had acquired CoreValve for about $700 Million. CoreValve set the precedent that OUS clinical study is really valuable. CoreValve's technology was in the aortic valve market which is approx a $4 B market worldwide.

With the introduction of the CoreValve Evolut valve, Medtronic can now treat the broadest range of TAVI patient valve sizes (annulus diameters from 18mm to 29mm).

The Medtronic CoreValve System received CE (Conformite Europeenne) Mark in 2007. Medtronic now offers TAVI in four valve sizes (23mm, 26mm, 29mm and 31mm), each deliverable via transfemoral, subclavian and direct aortic access through a low-profile, 18Fr delivery catheter.

There are a few new start ups in the cardiac valves space, Micardia, spunoff a percutaneous  approach and ORbimed invested in the company. Its wierd, Edwards is heavy in the space, market size is $4 B.

Medtronic's Ex CEO, Mr Bill Hawkins mentioned at the Cleveland Clinic Innovation Summit focused on Obesity. He mentioned that Medtronic's will be focusing on obesity and related problems. Since his retirement, Medtronic does not have huge presence in the obesity but certainly has presence in the CV space.
Obesity is going to be the biggest market in the health care space according to Hank Plain from Morganthiler Ventures addressing the panel at OneMed Forum. He was talking for Satiety, Inc, rumors are the technology was acquired for$300 Million, which is 5x lower than the expected return for the VCs.
Today, after the reform of the FDA, Reshape Medical, Onciomed, Inc are at the forefront of the obesity technology. Both companies are located in OC, Ca

In collaboration with leading clinicians, researchers and scientists worldwide, Medtronic offers the broadest range of innovative medical technology for the interventional and surgical treatment of cardiovascular disease and cardiac arrhythmias.

Medical Device Industry has a great untapped potential in emerging markets

The healthcare industry and life sciences has recognized for a number of years that there is a great untapped potential in emerging markets. The medical device market in developed territories such as the US, Europe and Japan is beginning to show saturation and the repercussion of economic recession has restricted growth in recent years. But the size of the Americans is growing, as USA focuses on the Obesity epidemic which is a $110 B market.
 This, coupled with considerable growth in the medical device market in emerging countries, has made medical device companies look to these markets to grow their business.
The global CAGR from 2009 to 2012 was expected to be at 5.8%¹, whereas in China the compound annual growth rate of the market in the period 2002–2006 was 14.9%².
These regions are important not only for the growth in sales related to increased adoption of medical devices owing to increased health awareness, but also as a desirable location to build capabilities. As a result there have been a number of acquisitions and partnerships; as an illustration of this, in May, Johnson & Johnson (China) Investment Ltd announced the acquisition of Guangzhou Bioseal Biotech Company Ltd thus opening the way for Ethicon to immediately enter China.

“The healthcare industry has recognised for a number of years that there is a great untapped potential in emerging markets.”

Increasing expenditures on healthcare in the developing markets, for example construction of hospitals and clinics, and establishment of public / private health insurance, are driving growth in these sectors. For instance the five year plan (2011–15) in China has allocated US$41 billion to develop and equip new hospitals and refurbish the grassroots health service system and in its latest five year plan (12th such plan), India has committed to increasing the government share of healthcare expenditure to 2.5% before the end of the plan in 2017^{3 4}. The trend for expenditure on health to increase, along with improvements to the regulatory and market access environment in many emerging markets has also made this an interesting opportunity for medical device companies.

Figure 1: Total health expenditure (THE) % Gross Domestic Product (GDP) for selected countries⁵

The medical device market is challenging but potentially significant in China
It is expected that the device market in China will reach sales of US$42.8 billion by 2019⁶. Growth is fuelled by a favourable demographic – the aging population increases demand on the healthcare system – and economic environment, where growth continues to be steady with a GDP growth target of 7.5%.

New healthcare reform that began in 2009 and continued through 2011, led to major upgrades of the healthcare system; however, the market remains challenging as healthcare provision is very uneven across the country, favouring urban populations. Of the US$173 billion that was provided by the recent healthcare reform programme, more than US$10 billion was allocated solely for medical device and diagnostic purchases by hospitals and clinics.
Public healthcare remains the mainstay of healthcare provision, with the aim being for 100% government insurance by 2020, and despite personal wealth increasing, the level of private insurance remains very low⁷. It should also be noted that the Chinese market is characterized by a large number of domestic manufacturers that are able to dramatically undercut prices of foreign manufacturers and despite economic growth, price still remains a key factor especially in rural hospitals.

Figure 2: Healthcare spend and GDP in China⁸

The regulatory authority that oversees the medical devices in China is the State Food and Drug Administration (SFDA). The majority of the administrative powers of the SFDA are in practice delegated to its local branches. The food and drug administrations of the provinces, autonomous regions and municipalities directly under the central government (Local FDAs) are authorised to issue specific licences and product registration certificates to medical device companies.

“It is expected that the device market in China will reach sales of US$42.8 billion by 2019.”

Medical devices are divided into three categories: Class I, II and III relating to their properties, uses and potential risk to the user. In broad terms Class I devices (those under routine administration for their safety and efficacy) are subject to record-filing procedures approved by an authorised Local FDA; Class II devices (those that must be controlled for their safety and efficacy, such as weak laser in-vitro treatment instruments) are registered at the provincial level FDA, and Class III devices (those implanted into the human body and which pose potential risk to human life) are subjected to a more stringent approach that includes going through a prior examination process and then approval from the central SFDA.
As many expected, the regulatory approval procedures for Class II and Class III medical devices are more onerous. In fact, new medical devices falling within Class II and III require clinical trials before the submission of a product registration to SFDA or Local FDAs. The results of the clinical trials must demonstrate the safety and efficacy of the medical device. An additional complication for medical device manufacturers is that different local FDAs may have their own specific examination and approval requirements that go beyond national requirements.

India has a growing medical device market: Diabetes capital of the world

Increased health awareness, a growing middle class and government health initiatives have significantly grown the market in India. The medical device market is expected to reach US$10.7 billion by 2019⁹. More than 60% of the population pays out-of-pocket for health expenses; however, most of the employed are covered for medical expenses by employer-sponsored health insurance. Additionally, unlike China, more and more people are subscribing to private health insurance outside employer schemes.

“Increased health awareness, a growing middle class and government health initiatives have significantly grown the market in India.”

Through RSBY (the National Health Insurance Plan) the government has taken steps to collaborate with the private sector to offer quality services at a subsidised cost. This is considered the main avenue for increasing access to healthcare. This unique partnership framework between the government and public / private providers of healthcare has been remarkably successful in covering 56 million people.
For medical devices, the Indian government is currently working towards establishing a medical regulatory agency, in addition to new legislation around medical devices, in order to create a fair and legitimate marketplace. This has been a slow process, but the aim is to move towards a market authorisation process that is more transparent and straightforward and based on the European CE mark system.
In lifting their citizens out of poverty and providing better healthcare, China and India are inspiring success stories. However, this is a two-way street and within these markets local companies have been able to position themselves to play major roles in the global medical device market.
References

1. Frost & Sullivan: APAC’s Medical Devices Market ready to skyrocket. Date Published: 17 Jun 2010

2. The Chinese medical device market: Facts and figures. http://www.tmta.ca/attachments/Medical%20Devices%20in%20China.pdf

3. China’s 12th Five-Year Plan. www.uscc.gov/researchpapers/2011/12th-FiveYearPlan_062811.pdf

4. http://planningcommission.gov.in/aboutus/committee/index.php?about=12strindx.htm

5. WHO Data. http://apps.who.int/nha/database/DataExplorerRegime.aspx Accessed May 2012

6. PharmaLive: New Medical Device Review and Outlook 2011. Published March 2011

7. Estimates based on WHO – National Health Accounts

8. ChinaBio LLC. China Pharmaceutical Industry Report. Current Status and Future Growth. November 2010; http://export.business.vic.gov.au/__data/assets/pdf_file/0006/334662/China-Pharmaceutical-Industry-Report.pdf; Bridgehead internal estimates

Vinod Khosla says technology will replace 80 percent of doctors

Accomplished Silicon Valley investor Vinod Khosla likens modern healthcare to witchcraft, and says technology will replace 80 percent of doctors.
His views, offered up in a talk last week in San Francisco, sparked outrage from doctors.
Khosla is a co-founder of Sun Microsystems, and made his mark as one of the most successful investors during the Internet boom of the late 1990s with his backing of networking equipment companies.
He made the healthcare comments during the Health Innovation Summit, hosted by Rock Health, a seed accelerator company focused on health care. Khosla’s keynote talk is nicely summarized by Davis Liu, a doctor who attended the event.

Vinod Khosla talked with Wired’s Thomas Goetz

In his comments, Khosla said that medical tradition has mired doctors in voodoo-like practices.
Khosla said that machines, driven by large data sets and computations power, not only would be cheaper, more accurate and objective, but better than the average doctor. To get there, the level of machine expertise would need to be in the 80th percentile of doctors’ expertise, he said.
And then Khosla slipped in some hyperbole: “Eventually, we won’t need the doctor,” he said, according to another report of the talk.
The audience reportedly went silent when Khosla challenged anyone to disagree with him. However, after the talk, critics reading about his talk took to comments at the bottom of Liu’s piece, and elsewhere, including Twitter. Columbia University-trained doctor Bijan Salehizadeh said he was “nauseated” by Khosla’s remarks.
Khosla also upset some doctors by saying that disruption in healthcare is likely to be driven by entrepreneurs outside of the industry, rather than by specialists within.


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