Article preview reprinted from Medtech Insight - October/November 2009
The patent foramen ovale closure market has continued to mature in 2009, with the latest round of developments reported at the 2009 Transcatheter Cardiovascular Therapeutics meeting, recently held in San Francisco. Over 60 presentations related to PFO closure or atrial septal defect closure were presented at TCT this year, more than double the amount of PFO-related talks presented in 2008. Read more...
Recent Developments in PFO Closure
Article preview reprinted from Medtech Insight - October/November 2009
The PFO (patent foramen ovale) closure market has continued to mature in 2009, with the latest round of developments reported at the 2009 Transcatheter Cardiovascular Therapeutics (TCT) meeting, recently held in San Francisco. Over 60 presentations related to PFO closure or atrial septal defect (ASD) closure were presented at TCT this year, more than double the amount of PFO-related talks presented in 2008.
Although the link between PFO and serious conditions, such as transient ischemic attack (TIA) and stroke has only been demonstrated in retrospective data, many believe PFOs may increase the risk of stroke and could also trigger other adverse brain events, such as migraine episodes. (See Exhibit 1.) Despite the lack of randomized clinical data supporting the closure of PFO for any indication, there is a narrowing timeline for the highly anticipated first randomized data for stroke/TIA, which appears to be fueling the increased interest in PFO closure over the past six months.
High-Stakes Market
Financial interest in the PFO space remains high, with estimates that the potential stroke/TIA PFO closure market alone exceeds $2 billion annually and the migraine PFO closure total market could exceed $24 billion. One PFO closure company benefiting from this interest, and from the slowly thawing Initial Public Offering (IPO) market, is AGA Medical Holdings Inc. of Golden Valley, MN. AGA, which first filed registration to go public in June 2008, finally priced an IPO on October 20, 2009. The company sold 6.5 million shares in its IPO, netting $88.2 million; however, the share price of $14.50 was well below the $19 to $21 that the company had originally anticipated. AGA, which trades on the NASDAQ exchange, will have about 50.2 million shares of common stock outstanding, giving the firm a market capitalization of about $728 million.
As is expected in a device space that may generate billions of dollars annually, litigation also has continued at a high level within the PFO closure space. Medtronic Inc. announced in August that a district court jury in San Francisco found the AGA Medical Amplatzer Occluder and vascular plug products infringed two of Medtronic's US patents that are scheduled to expire in 2018. The jury awarded Medtronic $57 million in past damages and an 11% royalty on future sales of the AGA products. However, AGA reported in a recently filed S-1 that these damages hinge on the outcome of a nonjury trial set to commence in December 2009, which will deal with the invalidity and unenforceability of the Medtronic patents in question. AGA also intends to establish manufacturing operations in Europe within 12 to 18 months, according to the firm's recently filed S-1, which AGA believes would exclude international sales from any royalties potentially imposed by the courts in the future. Medtronic also sued WL Gore & Associates Inc. regarding the same patents, but in September, the two companies resolved the matter, resulting in a one-time, undisclosed payment to Medtronic from WL Gore. Meanwhile, AGA Medical has continued its patent infringement suits against Occlutech GMBH, of Jena, Germany, in courts across Europe. To date, Occlutech has reported noninfringement judgments by courts in The Netherlands, UK and Spain, which AGA intends to appeal. Occlutech also reported a reversal of an AGA initiated preliminary injunction in Germany for Occlutech's new Figulla Flex device, which is replacing the older Figulla N devices that are subject to AGA's patent suits.
Eric Eggers
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