CE Mark for HeartMate 3 as MVAD Trial on Pause

While St. Jude Medical's latest left ventricular assist system, the HeartMate 3, has received CE Mark approval, competitor HeartWare is waiting to restart its CE Mark trial for the next-generation MVAD.

Fresh off closing its acquisition of left ventricular assist system (LVAS) maker Thoratec, St. Jude Medical has announced that the HeartMate 3 LVAS has received CE Mark approval for advanced heart failure patients. The news comes during a hiatus for the CE Mark trial evaluating main competitor HeartWare's next-generation MVAD.

The HeartMate 3 is smaller than the HeartMate 2 and is a fully magnetically-levitated design that includes an artificial pulse technology. These advancements are intended to reduce blood trauma and lower the risk of adverse events like clots, according to a company press release.

St. Jude Medical is starting a limited European market release of the HeartMate 3 right away and anticipates more market introductions in 2016. "The advanced heart failure medical community has eagerly anticipated the expected clinical improvements with the HeartMate 3 system and looks forward to its broad adoption throughout Europe," Professor Friedhelm Beyersdorf, medical director of the Department of Cardiovascular Surgery at Heart Center Freiburg University, said in the press release.

HeartMate 3 is being studied in the U.S. MOMENTUM 3 trial, expected to enroll more than 1000 patients. The CE Mark trial included 50 patients from 10 hospitals in six countries outside the United States. In this trial, the survival rate at six months was 92%, with adverse event rates below or inline expected rates, according to the release.

Wells Fargo senior analyst Larry Biegelsen wrote in an October 12 research note, "We expect HM3 to help STJ recapture some share in Europe lost to HTWR's HVAD and further benefit from the delay to HTWR's next generation MVAD device, which pushes out the European approval of that device until at least early 2017."

About a month ago, HeartWare, makers of the competitive commercial device HVAD, announced that the CE Mark trial for its MVAD device would temporarily stop enrollment to allow for a minor fix of a circuit board in the device's external controller. There had been 11 patients implanted in the trial at the time. CEO Doug Godshall said then that this process would take about 8-10 weeks, so enrollment in the CE Mark trial would be paused until about November.

"We are thrilled with how the device is performing," Godshall said at the Wells Fargo Healthcare Conference in early September. Godshall went on to explain, "We found that in the assembly of the controllers, on one of the circuit boards, when we shifted from engineers building the controllers to operators building the controllers, they were putting too much stress on some of the circuit boards, or one circuit board, particularly. As we investigated, we found a way to reduce the stress, but we have to add some fixtures and some other work to make sure that the yields improve and we have certainty of quality of the controller at the end of the line."

In addition to this fix, HeartWare has also been busy defending its decision to acquire Valtech Cardio, Ltd., an agreement that was announced on September 1. Valtech has developed transcatheter repair and replacement technologies for mitral and tricuspid valve regurgitation, a hot area of interest in medtech.

Engaged Capital, which recently became one of HeartWare's top shareholders, recently released a letter it sent to the company's board of directors. The activist investment firm asks the company to terminate the acquisition deal because they believe it "distracts from the core business," "dilutes shareholders and drains cash," and "adds significant and novel long-term risks." The investment firm further points to the decrease in HeartWare's stock price after the acquisition was announced and states that "HTWR is a desirable asset," as evidenced by St. Jude's recent purchase of competitor Thoratec.

HeartWare responded with a public statement, which stated in part, "We respectfully disagree with Engaged Capital, which has been a HeartWare investor for just a few weeks, and we believe their analysis is incomplete. We remain fully committed to this strategic transaction. Our position is informed by our deep experience in the advanced heart failure market, the years of diligence we conducted on the mitral and tricuspid valve regurgitation markets, and the Company's unique perspective on Valtech gained through our investment since 2013."