J.P. Morgan Highlights: Medtech Company Updates For 2022
CEOs Present At J.P. Morgan's Annual Healthcare Conference
Executive Summary
The annual J.P. Morgan Healthcare Conference saw major medtech companies describe their experiences in 2021 and expectations for 2022 as they continue to cope with COVID-19.
DexCom, Inc. CEO Kevin Sayer told investors during his presentation at the 2022 J.P. Morgan Healthcare Conference that clinical data from the company’s G7 continuous glucose monitoring system had exceeded all expectations. “The performance of this product is something I really never thought I would see in nearly 30 years in this business,” Sayer said.
The G7 CMG is 60% smaller than the G6, has less than a 30-minute “warm-up” period to acclimatize before getting sensor readings compared to about 2 hours for the G6, and provides more information in the app. But what sets it apart from competitors, is performance, Sayer highlighted.
The G7 outperformed integrated continuous glucose monitor (iCGM) standards established by the US FDA across the board in time-n-range performance, including overall time-in-range with a tally of 93.3% compared to the FDA standard of 87%. Time-in-range is the amount of time spent in the target blood sugar range, between 70 and 180 mg/dL for most people.
The G7 achieved a mean absolute relative difference (MARD), a common metric used to assess CGM systems, of 8.2% for adults and 8.1% for pediatric patients. Lower MARD values indicate greater device accuracy.
“You see that G7 very comfortably meets iCGM standards. This data set is three times larger than the G6 data set and much larger than any data set anybody else has ever produced in in the industry,” Sayer said.
He noted that this was the data the company had submitted to the FDA in the fourth quarter of 2021 and in Europe is going through the MDR process. He hopes to launch the product “all over the world this year.”
Sayer touts the G7 as the most accurate CGM to date. Asked about the competition, he noted that Dexcom does not have the budgets of larger competitors as far as going to markets, nor the infrastructure – “So we hang our hat on performance.”
Omicron Has Not Derailed Edwards’ Progress
The recent surge in COVID-19, driven by the Omicron variant, will not prevent Edwards Lifesciences Corp. from reaching about $5.3bn in sales in 2021, driven by continued double-digit growth in sales of its market-leading Sapien transcatheter aortic valve replacement (TAVR) devices.
Over the last two years, COVID-19 has hindered Edwards’ efforts to help hospitals create TAVR programs and complete TAVR procedures.
Omicron is forcing many hospitals – once again – to divert resources from interventions and surgeries to treat COVID-19 patients. A new report from Credit Suisse shows that US hospitals’ non-COVID inpatient utilization rate is 61%, its lowest level since March 2021, and overall US surgical capacity has dropped from 98% in July to around 85% at the start of January. (Also see "Edwards Stays On Track For ‘Mid-Teens’ TAVR Growth In 2021" - Medtech Insight, 27 Apr, 2021.)
Despite this growing pressure on cardiovascular procedure volumes, Edwards does not expect to return of the struggles it faced earlier in the pandemic. “We said [in December] that we were expecting a gradual COVID recovery and no significant impact from new variants. Since that time, Omicron has obviously spiked and impacted the health care system and procedures negatively, but considering the range of our sales guidance, we are not updating our sales guidance,” Edwards CEO Michael Mussallem said during the J.P. Morgan meeting.
He affirmed the guidance that the company offered in its 8 December investor conference. At that time, the company projected its overall revenue would grow from $4.4bn in 2020 to between $5.2bn and $5.4bn for all of 2021 while earnings per share would be up 21%-23% to $2.07 to $2.27.
“I'm very proud of our global supply chain and of the investments that we made in 2021 that will pay off into the future,” Mussallem said.
Mussallem also highlighted the company’s spending on research and development, equivalent to nearly 18% of its revenue. Edwards is sponsoring the PROGRESS study of Sapien 3 and the new Sapien 3 Ultra in moderate aortic stenosis patients and the EARLY TAVR trial of Sapien 3 and Sapien 3 Ultra in asymptomatic patients with severe aortic stenosis. Also, the ALLIANCE pivotal trial of Edward’s Sapien X4 next-generation TAVR system recently began enrolling patients.
“We expect [2022] to be a year of significant milestone achievements and a lot of investments in our future,” Mussallem said.
J&J Signs Digital Surgery Pact With Microsoft
Johnson & Johnson’s medical device business announced a new strategic partnership with Microsoft to become its preferred cloud provider for J&J’s digital surgery solutions and to help J&J build out its digital surgery platform and internet of things (IoT) device connectivity.
“Through this partnership, we have the opportunity to transform how decisions are made in the most critical of circumstances – surgery,” said Tom McGuinness, corporate vice president for Microsoft’s global health care and life sciences business.
During the company’s JPM presentation, J&J's CEO Joaquin Duato outlined three priorities: creating the new consumer health company, announced last year, which we will become a separate entity in the next 18 to 24 months; focusing on the new J&J by generating “long-term, above-market growth rates” for the pharmaceuticals division and “improve performance” of medtech. (Also see "J&J CEO Gorsky Handing Over Reins To Vice Chairman Duato" - Medtech Insight, 20 Aug, 2021.)
Duato said the ongoing separation of J&J’s consumer division from its other businesses should not slow down existing businesses over the next 12 to 18 months.
“There’s not going to be any slowdown of priorities,” Duato said. “The new Johnson & Johnson, the one focused around pharmaceutical and medical devices, will still remain the largest and more diversified health care company, which sells around $80bn [and] we will retain the benefits of scale, but also the ability to streamline our operations, consumer added complexity to Johnson & Johnson, and now being focused only in medical device and pharmaceuticals businesses that share many things as far as the focus on science and technology and similar regulatory environments. It’s going to enable us to streamline operations.”
The company expects to deliver compounded average annual growth of 5% and reach $60bn in revenue by 2025, Duato said.
Medtronic Adds Cardiac Mapping Tech With Affera
Coinciding with its presentation at the J.P. Morgan Healthcare Conference on 10 January, Medtronic plc announced the acquisition of Affera, a Boston-based developer of cardiac mapping and navigation systems and cardiac ablation technologies.
The acquisition is worth $925m, including $250m in contingency payments, according to Medtronic. Medtronic already owns 3% of Affera.
Affera is developing a complete system of cardiac ablation technologies, including the Sphere-9 high-definition mapping and focal ablation catheter, the integrated Prism-1 mapping and navigation system, the Arc-10 linear coronary sinus catheter, and the HexaGEN ablation generator system, that can deliver either pulsed field or radiofrequency energy to ablate cardiac tissue.
Affera recently announced the start of SPHERE PerAF, a US FDA-approved pivotal randomized trial, comparing Affera system to Biosense Webster’s ThermoCool SmartTouch radiofrequency ablation system for the treatment of persistent atrial fibrillation.
“Affera has a number of cardiac ablation technologies in its pipeline that, when combined with our technologies, position us for significant growth in the $8bn cardiac ablation market,” Medtronic CEO Geoff Martha said during the J.P. Morgan conference. “Now, with Affera, we'll be entering advanced cardiac mapping and navigation for the first time, giving us a much more complete [electrophysiology] ablation portfolio and enhancing our ability to compete head on in this important high-growth market.”
The deal will be less than 1% dilutive to Medtronic’s earnings per share in the first three years before turning neutral to accretive thereafter,” Martha said. “We were able to get this asset at a very attractive valuation, especially when you look at other deals in the space.”
Abbott Expects COVID-19 Testing Demand To Stay High
Abbott expects demand for its rapid COVID-19 tests to remain high through at least 2022, even if the current Omicron surge recedes.
During a fireside chat at the conference, Abbott CEO Robert Ford recalled that, early in the pandemic, Abbott correctly forecasted that demand for rapid tests would be enormous and might not disappear once vaccines were made available.
“Going into the ‘vaccination phase’ [of the pandemic], we always believed testing was going to play an important role,” he said.
“[In] 2020, people really wanted to believe in ‘the silver bullet’ – that the vaccine would clear it all up,” he recalled. “It really took [the Delta variant surge] for us to ultimately realize that there is no silver bullet and that you have to have vaccines, therapeutics and testing.”
Abbott sells SARS-CoV-2 lab-based serology tests for its automated lab systems, the ID NOW rapid isothermal molecular test, the Panbio rapid antigen test, and the BinaxNOW line of at-home antigen tests. Abbott is already producing more than 100 million tests a month – including 70 million BinaxNOW tests – and is continuing to grow its capacity to meet the growing demand for COVID-19 tests internationally.
“Abbott's really the only company that's looked at all the technologies in [COVID-19] testing and diagnostics [to provide] a comprehensive suite of solutions,” he said.
If demand for COVID-19 testing declines in 2022, the demand for the molecular tests will decline first while demand for rapid tests will be “sustained,” Ford predicted.
“The value proposition [of the rapid tests] – the availability, cost and turnaround time – [is] super important,” he said.
“We've got plenty of [manufacturing] capacity to support US demand and international demand and I think you're seeing also even more companies ramp up their [test] manufacturing,” Ford said, adding that “The challenge here is going to be [projecting] how this [will] play out over time throughout the year.”
Boston Scientific Builds Momentum In Electrophysiology
Boston Scientific Corporation believes its electrophysiology (EP) pipeline will be “transformative” for the business and help the company make up ground on established players in the cardiac arrythmia ablation space.
According to a recent report from Meddevicetracker, Boston Scientific is the fourth biggest player in electrophysiology with just 7.7% of the worldwide cardiac catheter ablation market, but CEO Michael Mahoney believes the company is now poised to take market share from the bigger rivals in the space, including Biosense Webster Inc, Abbott and Medtronic plc.
At the JPM conference, Mahoney said he was “most bullish” about the “opportunity – assuming that we execute well – for us to really disrupt and be a much stronger, significant player in the high-growth EP business.”
Mahoney acknowledged that Boston Scientific was still a relatively small player in electrophysiology, “but we continue [to invest] significantly in this business [and] the portfolio that we've assembled, moving forward, [is] the most comprehensive portfolio and innovative portfolio in EP. Now we have to prove it and demonstrate it.”
He emphasized the importance of two of Boston Scientific’s 2021 acquisitions, Farapulse Inc. and Baylis Medical Co., Inc. In June 2021, Boston Scientific agreed to pay $387m for the 73% of FaraPulse that it did not already own. Boston Scientific first invested in the University of Iowa spin-off in 2014.
Farapulse became the first company to commercialize a pulsed field ablation (PFA) system anywhere after its PFA system received a CE mark in January 2021. The company expects to begin a full European commercial launch of the system in 2022.
In October 2021, Boston Scientific agreed to acquire Baylis, a privately held Canadian company, for $1.75bn. Once the deal is completed in 2022, Baylis’ cardiac catheter access devices will complement Boston Scientific’s cardiac ablation systems as well as its Watchman FLX left-atrial appendage closure system and Millipede mitral valve repair device.
Mahoney called Baylis the “standard of care for a left heart access” used predominantly in catheter interventions that require left-heart access.
COVID Continues To Be Thermo Fisher’s Major Diagnostics Play
In 2016, diagnostics made up just under a quarter of Thermo Fisher Scientific’s $18.3bn of revenue. Now, it makes up 14% of 2021’s $36.7bn.
This represents a slow trend of Thermo moving away from the diagnostics market and an increase in its exposure to the pharma and biotechnology sectors. But Thermo retains a firm grip on a significant diagnostics market share.
Thermo Fisher CEO Marc Casper pointed out that the company had been one of the lead responders to the need for COVID-19 diagnostics. The company’s PCR testing tool – the TaqPath COVID-19 kit – was involved in “the range of 20% to 25% of all PCR tests around the world.”
The company is planning to develop its PCR platforms further, explained Casper. "What we would expect is that middle of this decade, you'll see an impressive menu that will allow the pharmacy market to offer rapid PCR tests where you can get your result while you're shopping in the store, which for certain molecular diagnostic applications could be quite interesting.”
Reporting by the Pharma Intelligence Editorial Team.