Boston Scientific Corp. is again recalling one of its most commercially promising medical devices, the Lotus transcatheter aortic heart valve replacement system, because of a problem with how the device is deployed in the heart.
Boston Scientific recalls Lotus heart valve replacement system
The Lotus valve replacement system is for sale in Europe and under clinical testing in the U.S.
February 24, 2017 at 1:38AM
One patient died following an attempt to implant a second valve, after the first attempt failed, a company spokeswoman said.
In an announcement to investors Thursday, Boston Scientific said it was asking hospitals worldwide to return their unimplanted Lotus valve systems following reports that a pin in the deployment tool may become disconnected before the doctor is ready to release the device.
"All affected patients were successfully treated with another valve, except for one reported case where implantation of the second valve was associated with aortic dissection and subsequent death," company spokeswoman Trish Backes said via e-mail. "There was one other adverse event reported; during that case, the valve could not be removed, it embolized, and was secured in the descending aorta with no additional complications."
The Lotus, which is approved for sale in Europe and is still under clinical testing in the U.S., is managed by the company's structural heart division in Maple Grove. The company said it still intends to apply for commercial approval of the device from the U.S. Food and Drug Administration before the end of the year, with a planned U.S. launch in mid-2018.
Boston Scientific stock initially tumbled nearly 10 percent in premarket trading Thursday on the recall news, but quickly recovered, ending the day down nearly 3 percent at $24.48 per share.
Transcatheter aortic valves like the Lotus can be placed in the heart without open-chest surgery, shortening recovery times and avoiding surgical trauma. Analysts with Leerink Partners estimate the annual market for these minimally invasive heart valves will exceed $5 billion by 2021, though right now they are only proved safe for high-risk and intermediate-risk patient populations with aortic stenosis.
In November, Boston Scientific voluntarily recalled a subset of its Lotus valves in Europe, triggering an inventory charge that shaved half a percent off the company's gross margin for the quarter.
"We believe we've identified both the issue and the solution to fix the deployment pin, which is a combination of minor process and specification changes," Chief Financial Officer Dan Brennan told investors Feb. 2. On the same quarterly earnings call, CEO Mike Mahoney noted that "Lotus offers physicians unparalleled control during implantation."
On Thursday, Boston Scientific announced a voluntary removal of all Lotus valve devices, including a new model with the "Depth Guard" feature. The securities filing about the recall said that, as with the prior action, the latest issue is caused by "excess tension" in the release pin mechanism created during the manufacturing process.
Since the mechanical issue only involves the deployment device, the recall does not affect devices that have already been implanted in patients.
"We have observed an increasing trend of cases during which the Lotus valves could not be successfully implanted due to a partial early release of the pin mechanism that connects the valve to the delivery system," Backes wrote Thursday. "When this occurs, the valve must be re-sheathed and removed from the patient."
Analysts with Leerink said the initial drop in Boston Scientific stock seemed "overdone," given the modest financial impact that analysts predict from the news.
According to Leerink's financial modeling, the latest recall is likely to cost Boston Scientific $50 million in lost revenue in 2017, and perhaps $60 million the year after, which equates to less than one cent of full-year earnings per share in those years.
"The company is taking a conservative approach to solve the issue," Leerink Partners analysts wrote Thursday, "including design validation, exhaustive testing, tightening manufacturing tolerances around the pin and adding a new final inspection step. We believe this course of action will help the company rebuild their credibility, as we believe physicians will respect this prudent approach to solving the issue."
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