Boston Scientific - C.R. Bard

To help it compete with the medical device industry's most prominent, well-diversified player, Bard ($BCR) recruited Boston Scientific ($BSX) as a distributor of the Lutonix drug-coated angioplasty balloon in the U.S.

For although the FDA made C.R. Bard's Lutonix the first drug-coated balloon available in the U.S. to treat peripheral artery disease in the arteries of the knee or thigh, the monopoly only lasted for a precious few months. The decision was followed shortly by the approval of Medtronic's ($MDT) IN.PACT Admiral.

Bard believes the alliance with Boston Scientific will help it keep up with the Joneses.

"When you look at the combined commercial presence between ourselves and sort of the proportion of Boston's reps' time that you could expect would be spent detailing Lutonix, we are on a pretty even playing field with the new Medtronic-Covidien commercial footprint. So from that standpoint, I think we feel like we're in good shape," Bard COO John Weiland told Wall Street during the company's most recent Q1 2015 earnings call.

Bard COO John Weiland

Meanwhile, Boston Scientific aims to synergistically pair the Lutonix with its Jetstream atherectomy device, a product it obtained from the acquisition of Bayer's interventional devices during last year's summer of med tech merger mania. "Our belief is that the combination of atherectomy plus drug-coated balloon can yield enhanced clinical outcomes," said Jeffrey Mirviss, president of Boston Scientific's peripheral interventions unit, during the company's investor day in May.

Angioplasty and atherectomy both displace the plaque that blocks arteries and restricts blood flow, but do so in different manners. Angioplasty involves the expansion of a balloon at the site of the blockage, which pushes the plaque into the vessel wall, while atherectomy involves cutting the plaque from the wall using a rotating blade.

The Lutonix adds another element to the equation. Its balloon is coated with paclitaxel, which is transferred to the vessel upon expansion. The drug helps the vessel stay open for many months, and hopefully years, following surgery.

Bard won't reveal specific numbers about the financial performance of Lutonix but said the device is exceeding expectations and helped increase sales of its peripheral percutaneous transluminal angioplasty products by 32% during the recently completed quarter.

Boston Scientific sells the Ranger drug-coated balloon internationally. Bringing it to the U.S. would be awkward given the company's alliance with Bard. And during the investor day, Boston Scientific said it hasn't yet decided whether to aim for FDA approval of that device.

The transition from bare-metal to drug-eluting stents has proven beneficial to patients, with the former version relegated to a niche position in developed markets (although they are still common in poorer countries). If drug-coated balloons travel down the same route, that would be another victory for drug delivery. This alliance should help accelerate their adoption by increasing the number of reps promoting the technology.

The lag time between the debut of drug-coated balloons for peripheral artery disease in the U.S. and Europe was roughly 5 years, making it an excellent example of the type of drug delivery (or other) device that stakeholders are clamoring for when they talk about slow approvals at the FDA. To that end, let's see if drug-coated balloons for the heart's coronary artery are accepted into the agency's new Expedited Access Pathway for critical devices. Boston Scientific already sells such a balloon in Europe.

-- Varun Saxena (email | Twitter)

For more:
Medtronic, Bard secure supplemental Medicare reimbursement for their new drug-coated balloons
Boston Scientific partners with Bard to distribute Lutonix drug-coated angioplasty balloon in the U.S.
FDA approves Medtronic's drug-coated balloon, setting up clash with Bard in new U.S. market
Bard wins first FDA approval for a drug-coated balloon
Bard's drug-coated balloon begins 'below-the-knee' PAD trial

Boston Scientific - C.R. Bard

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