Declining Atherectomy Share of PAD Market...
I was disturbed by the revelation in last week’s EV3 conference call that “the market for atherectomy is not growing as fast as the PAD market, it’s growing slower”. Admittedly, total atherectomy procedures are increasing, but a decline in the market share might be a leading indicator for upcoming pressure on SPNC’s revenue growth.
It was argued that physicians are questioning the maintenance of longterm arterial patency after debulking. I think that this argument has merit. It was raised in a recent review by Jason Rogers and John Laird (Circulation 116:2072, 2007) in their overview of technologies for lower extremity revascularization. They pointed out that primary patencies one year after eximer laser atherectomy (33%) are disappointing. Whereas, nitinol stenting patency rates were characterized as good. These authors are consultants for all of the major players in the revascularization market and probably have a good understanding of the major issues.
As background, the exchange in the EV3 conference call was as follows:
<Q – Jason Mills>: A question on the peripheral vascular market, specifically atherectomy market, clearly there was an impact in the quarter from the inventory issue and you’ve given us some good details with respect to how much that is directionally, but if we look at the market overall just with respect to what you’re reporting, what Spectranetics reported and then what we know CSI reported from their S-1. It looks like sequentially it was down around 15, $20 million in sales through those three companies in a quarter sequentially we expect fourth quarter to be better than the third. So I’m wondering can all that be explained away by the inventory issue or do we have sort of a deceleration in PAD market growth as it relates to atherectomy? And if so is that acute and sort of what drivers do you expect to see in the market that would get us back to relatively decent growth in the atherectomy market?
<A – James Corbett>: .... Secondly, if you look at the Spectranetics’ report and you look at the S-1 filed by CSI, if you look at – and we look at our analysis and fortunately for us we get to see all that data and we’re the only ones. What I can say is the market is for atherectomy is not growing as fast as the PAD market, it’s growing slower. And our research is very crystal clear about it. It’s all about the clinical data. They want long-term patency data and they want high-quality clinical trials and no company has actually run any yet. ....
<Q – Jason Mills>: Yes, that’s hopeful. So if we put some numbers to that, Jim, are we looking at a procedural growth in the PAD market? You mentioned you wanted to go referral marketing, perhaps this would be a question that you could do that within? Are we looking at a procedural market that’s still growing sort of 15 to 20% with the inventory issue and perhaps the lack of clinical data we have in atherectomy market that we should think about in terms of sort of 10% growth, something less than that 15 to 20% growth, am I hearing you right on that?
<A – James Corbett>: You really are. The PAD market broadly is in the mid-teens or up and the atherectomy market is less than that. Yes, you are hearing me correct. ....
