The Coronary Stent Revolution

A MT 5007 Project
SNAPS Group Members
 Chan Kah Inn, Darryl

 Choo Jun Quan, Stefan
 Bjorn Mattias Lindfors

 Phua Geok Bee (PanYumei)
...
Presentation Outline
 Introduction to Coronary Artery Disease
 Evolution of Technologies for disease treatment
 PTCA as...
What is Coronary Artery
Disease?
 A type of heart disease which
occurs when the coronary
arteries become narrow due to
th...
Disease Prevalence
Grim Statistics
 Leading cause of death
globally

 Estimated 17.3 million died in
2008

 By 2030, al...
Distribution of Economic Wealth
Blue Circled Areas on World Map Denote
where current healthcare interventions are
focused
...
Drivers for Coronary Revascularization
Technologies Evolution
 Demographics
 Ageing Population
 Increase of cardiovascu...
Evolution of Coronary
Revascularization Technologies
1960s
1977s
1987
Today

Coronary Artery
Bypass Grafting
(CABG)

• Inv...
Evolution of Coronary
Revascularization Technologies
1960s
Percutaneous
Transluminal Coronary
Angioplasty (PTCA)

1977s
19...
Performance
- Lower restenosis rate

Procedure rates
/1,000 population, age 45+

S – Curves for CABG and PTCA
•
PTCA

At t...
How does PTCA affect
conventional medical practice?
 Disruptive in job scope of cardiologists
 Need to learn new skills ...
Evolution of Coronary
Revascularization Technologies
1960s
1977s
1987

•
Coronary Stents
•

Today

Stents are tiny mesh tu...
Evolution of Coronary
Revascularization Technologies
• The success of Stents has
subsequently bolstered it to
become the d...
Stent Design
Race to develop the Ideal
Stent:
• flexible
• trackable
• low unconstrained profile;
• radio-opaque;
• thromb...
Evolution of Stents Design
Stent Prototype
(1985)

Establishment of
Stent’s Radical
Design (Early 1990s)

• Created from c...
Evolution of Stents Design
• Flexibility = Deliverability or Contourability
• New Fabricating Technologies
• Photochemical...
• Breakthrough appearance of stents eluting antiproliferative drugs
• Overall reduction in restenosis rate of between 70% ...
Image obtained via World Wide Web at
http://www.art-stent.com/Images/Img-003-Big.jpg on 20 Oct 2011

Bioasorbable
stent

•...
S-Curves - Stents

Performance

2006: reported that DES
pose an increased risk of
late stent thrombosis

Bioabsorbable Ste...
Stent Industry
Overview
Quick Industry Facts
 The stent industry is highly competitive, due to
historical average 85% gross margins (2005)

 Com...
Quick Industry Facts (cont.)
 High learning curves: FDA-approved
manufacturing process hard to surmount

 No Network Ext...
Acquisitions show that…
 The stent market is maturing
 The decline in the number of operating
companies and the price dr...
Acquisitions 1995
Meadox
Medicals
SciMed Life
Sys.

Heart
Technology

Boston
Scientific
Acquisitions 1996
MediSense

Cordis

Abbott

J&J
Acquisitions 1997
Target
Therapuetics

Boston
Scientific
[3]
Acquisitions 1998
Schneider
World.

Boston
Scientific
[4]

Depuy

J&J
[1]
Acquisitions 1999

Xomed
Surgical
Prod.

Sofamor
Danek
Grp

Medtronic

Arterial
Vascular
Eng.

Sulzer
MedElectro

Guidant
Acquisitions 2000
Knoll
AG

Abbott
[1]
Acquisitions 2001
MiniMed

Inverness
Med Diab.

Medtronic
[3]

J&J
[2]
J&J[3]

Acquisitions 2002
TibtecVirco

Hokuriku
Seiyaku

VidaMed

Abbott
[2]

Spinal
Dynamics

Medtronic
[4]
Acquisitions 2006

Guidant
The 2nd worst deal in US history according to
Fortune Magazine, claiming that Boston Scientific...
Stent Industry Overview
Drivers and Industry Learning
Technology and Industry Drivers
Newer Drug
Delivery
Mechanisms

Newer
imaging
Modalities for
better
Visualization

Demogra...
Technology: To contract or integrate?
 Dominant Design Paradigm: Paradigmatic Phase
 Stents are hollow, mesh-like, elong...
Network of Learning & Innovation
• Locus of innovation of

stents -- found in networks
of learning
• Large-scale reliance ...
Abbott Vascular
Division of Abbott (nutritional & pharmaceutical

products)
Global Leader: Cardiac & Vascular Care produ...
Abbott Vascular’s Success
 Acquired Guidant’s vascular device division in 2006 with the
Xience V DES technologies, patent...
SWOT Analysis
Industry Leader
Global Presence
Heavy investment in R&D for product
innovation

Investment in Training &...
SWOT Analysis
Product Recalls: Powersail
Recent negative limelight
for incentivising a cardiologist,
Dr Mark Midei to im...
SWOT Analysis

S

W

O

T

Emerging Economies
Exit of J&J from stent market
Bioabsorbable Stent Pipeline
SWOT Analysis

W

O

Tight Regulatory Approvals

S

T

Late stage Thrombosis
and Major Adverse
Cardiac Events (MACE)

Medi...
How can Abbott capture a larger market ?
• Cost of Bare Metal Stent: ~$800
• Cost of Xience V Drug Eluting Stent:
~$1500-$...
Shifting the Battlefield: From Upper Class to Middle Class

Per Capital Income

Population
296 million
Disrupting
the Top:...
Disruptive Innovations as a Strategy- Abbott
Performance

Middle
of
Pyramid

Bottom of
Pyramid

Top of Pyramid

CABG

Redu...
R&D, Networks and Alliances
When Resources are
Abundant
Systemic Innovation

R&D

Joint- Collaboration with distribution
c...
Integrating complementary assets of stents
manufacturing, faster workaround of CE Mark and FDA
approvals

To remain as #1 ...
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MT5007: The coronary stent revolution (A group project for the Management of Technology Innovation module)

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This project tracks the development of coronary artery disease interventions, ranging from early method of cardiac bypass to balloon angioplasty to the development of biomedical stents. Analyses of the competitive climate in the biomedical stents industry is discussed. New market and technology strategies are proposed for a regional MNC to leverage domestic industry infrastructure within emerging economies accompanied by a projected 30% growth in CAD due to increased consumption trends and lifestyle factors, e.g. smoking.

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  • involves only a small incision through which a balloon-tipped catheter
  • Coronary stents, eventually disrupt the CABG Market to become the dominant mode of treatment in the market.Procedure rates for CABG and PTCA in New York State, 1982–2000. Source: SPARCS database, 1982–2000
  • Internalization = Learn by doing
  • 2002: The reduction in the need for new revascularisation procedures has been the main clinical benefit of DES over BMS2006:reports began to hit the U.S. market that (DESs) might pose an increased risk of late stent thrombosis for some patients.
  • Bare Metal Stents -> Drug-Eluting Stents -> Polymer Coated DES
  • Bare Metal Stents -> Drug-Eluting Stents -> Polymer Coated DES
  • Source:  MedMarket Diligence, LLC; Report #C245, "Worldwide Drug-Eluting, Bare Metal and Other Coronary Stents, 2008-2017."Drug Eluting Stents Segment Largest and Fastest Growing Segment in the Coronary Stents Market. Continues to lead the global coronary stent market, with a contribution of 83% towards it in 2009. The global segment is expected to reach $5.6 billion in 2016 after growing at a CAGR of 3% from 2009-2016.Source: Source: Report #C245, "Worldwide Coronary Stents Market, 2008-2017," published May 2009 by MedMarket Diligence.http://mediligence.com/blog/2009/05/05/drug-eluting-bare-metal-and-absorbable-stents-segment-growth-2009-and-2017/
  • 1.000,00
  • Interventional cardiology medical device industry is similar to pharmaceutical or biotech industry, it is governed by regulatory approval such as U.S Food and Drug Administration (FDA).
  • the technological breakthroughs that level the playing field on the exploration front also create new opportunities for established firms in exploitationSmall firms require large firms’ financial support and regulatory savvy, while larger corporations desire access to the research prowess of smaller companies.
  • MT5007: The coronary stent revolution (A group project for the Management of Technology Innovation module)

    1. 1. The Coronary Stent Revolution A MT 5007 Project
    2. 2. SNAPS Group Members  Chan Kah Inn, Darryl  Choo Jun Quan, Stefan  Bjorn Mattias Lindfors  Phua Geok Bee (PanYumei)  Tan Chye Huat  Tang Shu Ling  Soon Yew Boon
    3. 3. Presentation Outline  Introduction to Coronary Artery Disease  Evolution of Technologies for disease treatment  PTCA as Disruptive Technology to CABG  Coronary Stents: BMS, DES, Bioabsorbable stents  Evolution of Stent Design  Stent Industry Overview & Market Analysis  Introduction to Abbott Vascular & SWOT analysis  Challenges & Managing the Innovation
    4. 4. What is Coronary Artery Disease?  A type of heart disease which occurs when the coronary arteries become narrow due to the build-up of fatty deposits called plaques  Coronary arteries supply the heart with oxygen and nourishment
    5. 5. Disease Prevalence Grim Statistics  Leading cause of death globally  Estimated 17.3 million died in 2008  By 2030, almost 23.6 million will die yearly  80% of deaths occur in low and middle-income countries Source: WHO report Global Atlas on Cardiovascular Disease Prevention and Control, 2011
    6. 6. Distribution of Economic Wealth Blue Circled Areas on World Map Denote where current healthcare interventions are focused Strong Co-relation between Cardiovascular Diseases and Low per capita GDP
    7. 7. Drivers for Coronary Revascularization Technologies Evolution  Demographics  Ageing Population  Increase of cardiovascular patients (Lifestyle changes)  Demand for Technology  Enhance Lifestyle  Save life, Decrease pain, Improve health  Lower morbidity and mortality rates
    8. 8. Evolution of Coronary Revascularization Technologies 1960s 1977s 1987 Today Coronary Artery Bypass Grafting (CABG) • Invasive surgical procedure • Arteries or veins from elsewhere in the patient's body are grafted to the coronary arteries • Surgery is usually performed with the heart stopped, necessitating the usage of cardiopulmonary bypass
    9. 9. Evolution of Coronary Revascularization Technologies 1960s Percutaneous Transluminal Coronary Angioplasty (PTCA) 1977s 1987 Today • Minimally Invasive procedure • PTCA involves only a small incision through which a balloon-tipped catheter is threaded • Upon reaching the point of blockage, the balloon is inflated to restore blood flow • However, less effective compared to CABG • Higher revascularization rate of 21% (CAGB – 6%)
    10. 10. Performance - Lower restenosis rate Procedure rates /1,000 population, age 45+ S – Curves for CABG and PTCA • PTCA At the start, PTCA’ s efficacy is below that of CABG BUT CABG • PTCA Market demand • CABG • Time PTCA has important key attractions • Minimally invasive • Fast recovery from procedure, short hospital stay • Costs less PTCA was welcome by patients & adopted rapidly by cardiologists as gold standard for CAD treatment Incremental improvements eventually rendered PTCA’s performance acceptable by main market
    11. 11. How does PTCA affect conventional medical practice?  Disruptive in job scope of cardiologists  Need to learn new skills and techniques  Steep Learning Curve: Cardiologists specialized in coronary intervention  Knowledge conversion  Internalization: From Explicit to Tacit knowledge  Learning & acquiring new tacit knowledge in practice
    12. 12. Evolution of Coronary Revascularization Technologies 1960s 1977s 1987 • Coronary Stents • Today Stents are tiny mesh tubes that are left in coronary arteries to keep blockages from recurring. Stents significantly reduced post-BA complications of restenosis
    13. 13. Evolution of Coronary Revascularization Technologies • The success of Stents has subsequently bolstered it to become the dominant design in the coronary revascularization industry • Battle for the stent market shares 1960s 1977s 1987 Stents WARS!! Today
    14. 14. Stent Design Race to develop the Ideal Stent: • flexible • trackable • low unconstrained profile; • radio-opaque; • thromboresistant; • biocompatible; • reliably expandable; • high radial strength; • circumferential coverage; • low surface area; • hydrodynamic compatible.
    15. 15. Evolution of Stents Design Stent Prototype (1985) Establishment of Stent’s Radical Design (Early 1990s) • Created from copper wire and solder by Dr Julio Palmaz [Innovator] • J & J [First Mover] – No Experience • 1st COMMERCIALIZED Design • Numerous Stent Designs • Palmaz-Schatz Stent’s Construction • Slotted Tube • [Dominant Design] Wallstent Wiktor GR Flex-Stent Palmaz/Palmaz- Schatz elgiloy tantalum stainless steel stainless steel Form wire wire wire tube Fabrication braid bend bend EDM Geometry braid helical rings clamshell slotted tube Material
    16. 16. Evolution of Stents Design • Flexibility = Deliverability or Contourability • New Fabricating Technologies • Photochemical (PC) etching --Addition of flexible connector [Incremental Innovation] Improvement– Flexibility (1995) • Laser micromachining – Now preferred fabricating technique Improvement– Geometry (1997) • Open Cell / Closed Cell Stent Design • Palmaz-Schatz stent and its successor, the “Crown” by J & J (A) • Closed Cell = Inflexible = Not Good • MultiLink stent by Guidant (E) • Open Cell, Flexible = Good , Leading the Market for 5 years
    17. 17. • Breakthrough appearance of stents eluting antiproliferative drugs • Overall reduction in restenosis rate of between 70% to 85% Addition – Drug Eluting Coating • Modular Innovation
    18. 18. Image obtained via World Wide Web at http://www.art-stent.com/Images/Img-003-Big.jpg on 20 Oct 2011 Bioasorbable stent • Stent support vessel with minimum local tissue aggravation • Stent serves as scaffold construct that facilitates dynamic reconstruction of vessel tissue lining- “Laws of Tissue Engineering” (SH Teoh) • Stent dissolves when tissue healing is almost complete • Architectural Innovation
    19. 19. S-Curves - Stents Performance 2006: reported that DES pose an increased risk of late stent thrombosis Bioabsorbable Stent 2009: Abbott 2nd phase clinical trial Drug-Eluting Stent (DES) 2006: 1st phase clinical trial Bare Metal Stent (BMS) 2002: reduction of revascularisation, benefit of DES over BMS Effort / Time 1986 1994 2006
    20. 20. Stent Industry Overview
    21. 21. Quick Industry Facts  The stent industry is highly competitive, due to historical average 85% gross margins (2005)  Competition between firms mainly on basis of customer relationships and product quality  High barrier to entry, requirements:  Manufacturing capability,  Relationships with physicians and FDA,  large sales force and brand
    22. 22. Quick Industry Facts (cont.)  High learning curves: FDA-approved manufacturing process hard to surmount  No Network Externalities: Only externality being brand reputation  Commoditization, mature market: DES stent price drop from 2003 price of $3000 to 2011 price of $1400
    23. 23. Acquisitions show that…  The stent market is maturing  The decline in the number of operating companies and the price drops indicates a transition into a process innovation phase  Merger and Acquisition is the only viable option for most small start-ups
    24. 24. Acquisitions 1995 Meadox Medicals SciMed Life Sys. Heart Technology Boston Scientific
    25. 25. Acquisitions 1996 MediSense Cordis Abbott J&J
    26. 26. Acquisitions 1997 Target Therapuetics Boston Scientific [3]
    27. 27. Acquisitions 1998 Schneider World. Boston Scientific [4] Depuy J&J [1]
    28. 28. Acquisitions 1999 Xomed Surgical Prod. Sofamor Danek Grp Medtronic Arterial Vascular Eng. Sulzer MedElectro Guidant
    29. 29. Acquisitions 2000 Knoll AG Abbott [1]
    30. 30. Acquisitions 2001 MiniMed Inverness Med Diab. Medtronic [3] J&J [2]
    31. 31. J&J[3] Acquisitions 2002 TibtecVirco Hokuriku Seiyaku VidaMed Abbott [2] Spinal Dynamics Medtronic [4]
    32. 32. Acquisitions 2006 Guidant The 2nd worst deal in US history according to Fortune Magazine, claiming that Boston Scientific paid too much for Guidant Boston Scientific [5]
    33. 33. Stent Industry Overview Drivers and Industry Learning
    34. 34. Technology and Industry Drivers Newer Drug Delivery Mechanisms Newer imaging Modalities for better Visualization Demographics Increased Efficiency and Efficacy Potential for Cheaper Stent Platforms? Introduction of New Drug Device Combinations
    35. 35. Technology: To contract or integrate?  Dominant Design Paradigm: Paradigmatic Phase  Stents are hollow, mesh-like, elongated structure, biocompatible, crimped on Strong Appropriability a stent delivery system  Regimes of Appropriability  Usually Strong Appropriability  Efficacy of legal mechanisms of protection  Complementary Assets: usually Specialized/Cospecialized assets  Vertical (Dis)integration  Channel Strategy  Factors include time-to-market, price of stent (buy or make), controlling the quality of stent, incentives and options, etc. Complementary Assets Generic Specialized Innovator captures most of the value. Innovator & owners of specialized assets share value. Contract/ Outsource Integrate
    36. 36. Network of Learning & Innovation • Locus of innovation of stents -- found in networks of learning • Large-scale reliance on inter organizational collaborations Dedicated • Invest / work closely with universities • Keen eye on potential technology development • Clinical Trials / Evaluation with research hospitals • Purchase Rights to Universities’ ideas Research Institutes & Universities • Exploration • New radical developments • Knowledge • Innovation Vascular Firms Established Pharmaceutical Firms • $$$ • Regulatory Savvy • Inadequate facilities for Basic R &D • Manufacturing • Marketing / Licensing • Supply / Distribution • Mergers & Acquisition • Exploitation
    37. 37. Abbott Vascular Division of Abbott (nutritional & pharmaceutical products) Global Leader: Cardiac & Vascular Care products HQ at Northern California Acquired Guidant vascular device division in 2006 Flagship product: XIENCE V (DES)
    38. 38. Abbott Vascular’s Success  Acquired Guidant’s vascular device division in 2006 with the Xience V DES technologies, patent assigned to Abbott  Strategic move to gain entry into the coronary stent market  Pursued R&D (clinical trials) on Xience V and Ziomaxx DES.  Plans were to launch both stents & grab market share in the rapidly growing DES market  In 2006, clinical trial showed Xience V as superior to Taxus DES by Boston Scientific  Abbott withdrew Ziomaxx DES development program, focused efforts for immediate launch of Xience in European countries, followed by launch in the US. Time-to-market urgency crucial to stay ahead of competitors
    39. 39. SWOT Analysis Industry Leader Global Presence Heavy investment in R&D for product innovation Investment in Training & Education Leverage via relationship with Industry Professionals Excellent clinical trial results for Xience V (DES), shown to be superior to Taxus DES by Boston Scientific S W O T
    40. 40. SWOT Analysis Product Recalls: Powersail Recent negative limelight for incentivising a cardiologist, Dr Mark Midei to implant its stents S W O T
    41. 41. SWOT Analysis S W O T Emerging Economies Exit of J&J from stent market Bioabsorbable Stent Pipeline
    42. 42. SWOT Analysis W O Tight Regulatory Approvals S T Late stage Thrombosis and Major Adverse Cardiac Events (MACE) Mediated with Surgical Imaging Technologies such as Portable Ultrasound devices Image obtained from http://www.sciencephoto.com/image/2704 83/530wm/M3900535Angioplasty_techniques-SPL.jpg
    43. 43. How can Abbott capture a larger market ? • Cost of Bare Metal Stent: ~$800 • Cost of Xience V Drug Eluting Stent: ~$1500-$2000 • Cost of Abbott’s Bioabsorbable Stent: >> Xience V Image obtained from “Controversies in Cardiovascular Medicine” http://circ.ahajournals.org/content/114/16/1736.full http://online.wsj.com/article/SB10001424052748704471904576230671702390088.html
    44. 44. Shifting the Battlefield: From Upper Class to Middle Class Per Capital Income Population 296 million Disrupting the Top: 1 billion in headroom Measured Leap Downward- 2011: 2.4 billion in Headroom The Bulgeoning Middle Class” $30,000 723 million $10,000 The “bottom of the top” 2,397 million $4,000 2,692 million : • Middle Class experiences major burdens with CABG Procedures. In developing countries, surgeons may be ill-equipped to perform these procedures. : , ; •Middle Class is expected to boom from 2 billion population to 5 billion in 2030. • Tremendous upside potential once the firm finds a disruptive foothold at the bottom.
    45. 45. Disruptive Innovations as a Strategy- Abbott Performance Middle of Pyramid Bottom of Pyramid Top of Pyramid CABG Reduced surgical complexities Increased Cost Accessibility Angioplasty DES BMS Purples (XIECE V) and Orange (BVS) by solid arrows- currently adopted by Abbott Second growth wave: Reduction in Surgical Complexities Purples and Orange dotted arrowsstrategies that Abbott can adopt Effort- Time Third growth wave: Accessible Treatments to Emergent Economies
    46. 46. R&D, Networks and Alliances When Resources are Abundant Systemic Innovation R&D Joint- Collaboration with distribution companies to maximize market penetration (With Caution)  Reduced time to market  Reduced costs to market Interconnected framework for success Modular Innovation Drugs and Drug Release Technologies Research and Operations Base Leverage- Singapore a biotechnology and Trade Hub. Partnerships with Universities and RIs • Make larger R&D of bioabsorbable stents scaled in dimensions for other biological applications • Centralize Research Facilities in --- Drug & Device Coupling • --- Device Compatibilities with Imaging Specialized Complement ary Assets • Freedom to Operate & Protection • IP Filing for new drug- device couplings Where to File? • Systemic Innovation+ Control Is Important • Acquire & Integrate complementary assets operations •Integrate with Contract Manufacturing Organizations Alliances •Get governments to endorse large scale clinical trials Overcoming Regulations •Work with Group of Doctors in Hospitals--> Establish De- Facto
    47. 47. Integrating complementary assets of stents manufacturing, faster workaround of CE Mark and FDA approvals To remain as #1 leader in Cardiac Interventions.  Target new, emerging geographical markets  Reduce complexity of techniques and use of stents  Catch disruptive waves for medical innovations in minimally invasive surgeries  Establish de facto standards of new biodegradable stents. Conclusions There is at least 1 CAD is going to rise intervention afforded from 47 million DALYS by low- income to 82 million DALYS in countries. (WHO) 2020. Where should Abbott Aim? Will Abbott’s stents be made available and affordable?

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