CoreValve May Go From “Superior” To Stalled Following Court Ruling

[Updated to incorporate comments from Edwards and Medtronic about ongoing negotiations, and more details on Medtronic’s emergency motion] A preliminary injunction ruling for Medtronic’s CoreValve device is an unexpected twist in a long-running transcatheter aortic valve patent suit between Medtronic and Edwards Lifesciences, and could give Edwards a significant edge in the market for several years to come.

Expectations for the U.S. transcatheter aortic heart valve market are about to fundamentally change – at least for the near term – unless an 11th-hour legal effort by Medtronic is successful.

A federal judge on April 11 ordered a preliminary injunction against Medtronic PLC’s CoreValve TAVR device, but provided a seven-business-day window in part to allow the company to seek an emergency stay of the injunction while it proceeds with an appeal.

The ruling is an unexpected twist in a long-running TAVR patent suit between Medtronic and Edwards Lifesciences Corp., and could give Edwards a significant edge in the market for several years to come.

Edwards’ Sapien device was the first product of its kind to be approved by FDA in 2011. Medtronic celebrated CoreValve’s go-ahead in the U.S. this past January for patients deemed too sick for open heart valve surgery.

More recently, Medtronic touted major success for its pivotal trial to support an expanded approval of CoreValve in patients who are high-risk candidates for open surgery. At the American College of Cardiology conference March 29, investigators reported that CoreValve was shown to be statistically superior to conventional valve surgery in this patient population, a measure that Edward’s Sapien has not met. (See (Also see "Medtronic Nabs First Superiority Outcome In TAVR Versus Surgery" - Medtech Insight, 31 Mar, 2014.).)

But under the April 11 ruling by Judge Gregory Sleet, in the U.S. District Court of Delaware, an injunction on CoreValve sales would take effect on April 22. In an effort to limit the safety impact on patients, the injunction would not be absolute. For one, it will not impact evaluation of CoreValve in clinical trials. Also, the judge ordered Medtronic and Edwards to come to an agreement on when CoreValve could be employed, free from limitations of the injunction, by certain physicians who work at facilities already trained on Medtronic’s device.

CoreValve U.S. market growth could be stalled into 2016 if the injunction sticks. Even if it doesn’t, analysts suggest the ruling adds to Edwards’ edge over Medtronic in any settlement of the long-running patent dispute.

Edwards formally made an offer to Medtronic on April 13 proposing a specific plan for allowing access to CoreValve under the injunction, a company spokeswoman confirmed. Edwards CEO Michael Mussallem sent a letter to physician customers on April 16 suggesting that Medtronic was not cooperating on the offer.

“We put forward multiple offers, in court and directly to Medtronic, that would allow patients to continue to be treated with CoreValve. But, unfortunately, they have refused these offers,” Mussallem wrote. “We encourage Medtronic to accept out standing offer to enable use of CoreValve at U.S. hospitals where it is commercially available today.”

But both companies confirmed on April 17 that they were in active discussions about the matter.

“Medtronic is working diligently with Edwards to reach a fair agreement so that patients’ needs may be met,” said Christopher Garland, a spokesman for Medtronic in an emailed statement.

All in all, clinical studies and the Edwards-Medtronic agreement could add up to 10-15 percent of the U.S. market in 2014 and 2015 for Medtronic, analysts estimate, down from the one-quarter or more of the market that observers had expected CoreValve to capture in its first year in the U.S. And no growth would be anticipated until Edward’s so-called Andersen patent is expected to expire in early 2016.

Edwards could “essentially own” the U.S. TAVR market for two more years, said Jefferies analyst Raj Denhoy.

In parallel, Medtronic has filed for an emergency stay of the injunction and requested that the Federal Circuit Court of Appeals expedite its formal appeal. If the stay is granted, that would remove the immediate impact on Medtronic. But the April 11 decision likely shifts leverage in Edward’s favor related to any potential resolution to the dispute, including a settlement, analysts suggest.

“Even if Medtronic wins on appeal and gets the court to stay Judge Sleet’s injunction, whatever sales it generates over the next two years will likely see the bulk or vast majority go to Edwards while it awaits Andersen’s expiration,” said J.P. Morgan analyst Michael Weinstein in an April 14 research note.

The preliminary injunction does not impact sales in Europe, where Medtronic and Edwards remain neck-and-neck as TAVR market-share leaders. The European Patent Office last month invalidated Edwards’ Spenser patent, which had been the basis of another injunction last year that prohibited Medtronic from selling CoreValve in Germany. (See (Also see "Medtronic Wins Key Transcatheter Valve Patent Ruling In Europe" - Medtech Insight, 6 Mar, 2014.).)

Medtronic: Patients May Unnecessarily Die

Particularly due to those recent results, the injunction ruling sent “shockwaves” through the interventional cardiology community, according to analyst Weinstein, who reached out to clinicians following the news.

“In nearly 20 years covering the sector, we can’t recall such a reaction from the clinical community, with cardiologists and surgeons … expressing ‘shock,’ ‘outrage’ and ‘a state of disbelief’ just two weeks after the ‘landscape-altering’ CoreValve data at the American College of Cardiology,” Weinstein wrote.

Also, at the ACC meeting, Edward’s next-generation Sapien XT device, which is not yet available in the U.S., showed statistical advantages over CoreValve in a head-to-head German-based study.

But Medtronic argues in its stay motion, as it did in district court, that CoreValve is simply the safer choice for some patients, who will be put at mortal risk by the district court’s ruling.

“If the injunction were permitted to go into effect, treatable patients may unnecessarily die in the name of already expired patent rights,” attorney’s note in Medtronic’s motion to the federal appeals court.

Edwards agrees that some patients are better served with CoreValve. In particular, CoreValve can be used for aortic annulus diameters up to 29mm, while the current Sapien can only be used for diameters up to 25mm, and Sapien XT, when approved, only up to 27mm. Also, CoreValve can be used for transfemoral access for smaller arteries compared to Sapien.

During an April 11 hearing in the Delaware federal court, Edwards took these populations into account to propose a “carveout” of 63 patients per month that could be treated with CoreValve under the injunction, and said it would be willing to expand the proposal based on clinical evidence.

But Medtronic says a predefined carveout is not an appropriate remedy. “In the situations where both devices could be used, a team of doctors should make a case-by-case judgment based on all the circumstances to determine whether [CoreValve] provides a better and safer treatment,” Medtronic’s stay motion states. “These life or death medical decisions simply are not susceptible to a priori judicial classification that can be regulated via an injunction.”

Edge To Edwards?

In 2013, the federal appeals court directed the District Court to reconsider an early ruling by the lower court rejecting Edward’s request for a preliminary injunction, which could bode well for Edwards. But it is not assured that the same individual appellate court judges that made that ruling will sit for the latest appeal.

CoreValve was initially found by a jury to infringe on Edward’s Andersen patent in 2010. Medtronic paid Edwards $84 million in February 2013 to satisfy that ruling, while deliberations on the potential for expanded damages for willful infringement and on the injunction request continued. The Andersen patent was initially scheduled to expire in May 2012, but the patent office has given a temporary extension until early 2015 and is considering Edwards’ request to extend the patent life to early 2016 based on the impact of FDA review times.

One of Medtronic’s principle legal arguments against the injunction is that the courts should not be able to block its device from the market after the original patent term expires, even if it has been extended.

Edwards is also fighting Medtronic over another patent in the U.S., the Cribier patent. Earlier this year a federal jury ruled that CoreValve willfully infringes Cribier. Edwards is seeking an injunction in that case as well, while Medtronic plans an appeal. (See (Also see "Edwards Wins Latest Round In TAVI Patent Dispute With Medtronic" - Medtech Insight, 20 Jan, 2014.).)

“The Cribier patent expires in December 2017 and it is worth noting that the district court judge who has presided over the Andersen patent case is also overseeing the Cribier case,” said Jeffries’ analyst Denhoy.