When Medtronic discontinued its HeartWare Heart Ventricular Assist Device pump system last week, the medtech giant effectively closed the door on its $1.1 billion acquisition of HeartWare International with little to show for it.
Medtronic pulled the system from the market Thursday amid a series of recent Class I recalls and numerous reports of patient injuries and deaths associated with the device. The move cedes the market to rival Abbott Laboratories and ends a product that has a troubled history from the start.
CEO Geoff Martha said Thursday during a virtual conference that a new analysis showing HeartWare HVAD had higher rates of stroke and mortality compared to Abbott's comparable device was a major influence in the decision.
"The Abbott device is better for patients," the CEO said. "It's a challenging decision to make given the blood, sweat and tears we've invested in this therapy over the last six years, but this is clearly the right decision for patients."
According to the FDA, the company "received over 100 complaints involving delay or failure to restart of the HVAD pump, including reports of 14 patient deaths and 13 cases where an explant was necessary."
SVB Leerink analyst Danielle Antalffy said that along with the product's safety issues and available alternatives, the lack of a related product likely contributed to discontinuing the system.
Antalffy added that considering the HeartWare HVAD system was the primary product of the deal, the billion-dollar buyout "wasn't a great acquisition."
"I would say at the time that they made this acquisition [the market] was probably growing double digits. I think that in that regard, it was smart," Antalffy said. "I think the problem was that the pipeline just wasn't there. They needed to advance the pipeline in a way that didn’t transpire."
When the HeartWare deal was announced in 2016, Medtronic projected the ventricular assist device market at about $800 million, with high-single-digit to low-double-digit growth after 2017. The product brought in $141 million of revenue during Medtronic's fiscal year 2021. However, according to J.P. Morgan, the product also cost the company about $80 million.
Now, Medtronic cedes the market to Abbott, which "should capture almost all of the lost HVAD sales as the only competitor on the market," the analysts wrote.
Medtronic is coordinating with Abbott to ensure patients who require the device have an option, such as Abbott’s HeartMate 3 Left Ventricular Assist System.
Abbott released a statement shortly after Medtronic on Thursday, assuring that it has sufficient supply to meet the increased demand for the product with HeartWare’s exit.
The company did not respond to a request for comment by the time of publication.
Antalffy added that Medtronic might have accelerated the inevitable.
"I actually looked at this as a business that was likely to be in perpetual decline for [Medtronic,] if I had to guess," Antalffy said. "HeartMate 3 was taking over this market anyway."
Continual product issues
Since 2013, the FDA has issued 13 Class I recalls for the device, nine of which have come since Medtronic’s acquisition.
The rate of recalls has recently picked up, with three Class I recalls coming in 2021 alone.
Madris Kinard, CEO of Device Events, a company that compiles and interprets FDA medical device reports and recalls, said the product should have been pulled from the market sooner given the available FDA data and series of recalls across multiple components of the HeartWare system.
"The reports that are coming in are quite serious," Kinard said. "So I would say, yes, I think they waited too long on this one. But the fact is, at least they're finally addressing it and getting the patients onto another device."
While there are limitations to the FDA's Manufacturer and User Facility Device Experience (MAUDE) database, including duplicative reports and underreporting of events like deaths and injuries, the data show HeartWare has a higher rate of malfunctions compared to comparable Abbott products.
Device malfunctions made up about 44% of total medical device reports in MAUDE between the device’s premarket approval in November 2012 and April, according to an analysis by watchdog group ECRI. Meanwhile, Abbott’s HeartMate II Left Ventricular Assist System had a malfunction report rate of 15% since its 2008 PMA and Abbott’s HeartMate 3 had a malfunction report rate of 4% since the system’s 2017 PMA.
The HeartWare saga is not over. According to Medtronic, about 4,000 patients worldwide currently have the device implanted.
The company is setting up a support program for patients that have the device implanted, which includes financial support. The company advised against elective explant due to health risks.
Kinard said the coordination between Medtronic and Abbott was rare compared to other recalls and shows "the seriousness of the issue if they're willing to give up their customers, essentially."
While the two rivals are coordinating, transitioning to a new product is not simple.
Mike Argentieri, ECRI's vice president of technology and safety, said physicians will require training on new devices and hospitals may need to build up an inventory of the new product.
"Step one, don't implant. But that's not trivial — and I don't want to minimize it — because what are your other choices?" Argentieri said. "Physicians are going to have to deal with the fact that they have to learn a whole new system in order to be able to do it. And this is a surgical implant, so there is technique involved."
Argentieri added that physicians and hospitals will also have to manage patient anxieties for those who have a device already implanted.
Both Kinard and Argentieri said that the coordination between Medtronic, Abbott and the FDA was good because of the critical nature of the discontinuation, especially considering the FDA's advisory to stop all new implants of the device.
ECRI sent an alert to approximately 1,000 hospitals to help ensure that the correct processes are followed.
"We consider this alert to be critical,’" Argentieri said. "This is a life support, life-sustaining product. It's implanted. It's a very invasive procedure. So, our major concern was to let people know about this as soon as possible."
The effect on patients may not yet be fully known until more is understood about how patients have been impacted over the last few months while the decision to pull the product was made.
"They've got this one covered from what I can see. My concern ... is whether they've done enough and done it soon enough," Kinard said. "How many people were implanted between the time that these discussions began and now? And how many people got this device and even potentially died while the FDA was coordinating this?