A stent is a wire mesh tube, made of a material exhibiting super-elasticity or shape memory properties, such as nickel-titanium, used to prop open an artery that's recently been cleared using angioplasty, the operation to clear blocked arteries in the heart using a balloon to open the artery.

According to the American Heart Association, vascular stenting is a fairly common procedure and now represents 70-90 percent of procedures, depending on certain features of the artery blockage, the size of the artery and blockage location. 

Each year, 800,000 angioplasty procedures are performed in the United States to open clogged coronary arteries. Wall Street analysts forecast that the worldwide market of this medical device could grow at an exceptional annualized rate of over 35 percent and exceed $8 billion by 2008.

Vascular Stenting - The procedure involves an introduction of a stent which is collapsed to a small diameter, into the blood vessel on a balloon catheter. The catheter is then maneuvered into the blocked area of the artery. When deployed, the balloon is inflated and the stent expands to the appropriate diameter. The balloon is deflated and withdrawn, the stent locks in place and forms a scaffold to open the vessel lumen and reinstate blood flow.

With most patients, the bare-metal stents produce no long-term complications and little or no side effects but in approximately 15%-30% of patients, the artery becomes clogged again (a condition called restenosis) within a year, and it must be treated again. When a bare-metal stent is implanted in an artery, the body reacts naturally to heal itself by producing a layer of new cells which will eventually cover the stent. While this covering of the stent is a natural healing response, the layer can become too thick, leading to a narrowing of the vessel and reduced blood flow.

In recent years, doctors have used new types of stents called drug-eluting stents. These are coated with antithrombotic, anti-inflammatory or antiproliferative drugs that are slowly released and help keep the blood vessel from reclosing. Clinical trials have shown that after one year, patients with uncoated stents, restenosis occurs in 14.7% of patients while the restenosis rate in patients who receive a drug-eluting stent is about 4.2%. These patients require fewer repeat procedures (e.g., additional angioplasty, bypass surgery) and have a lower risk for heart attack. 

A drug-eluting stent has all the structural features of a bare-metal stent. The major difference between the two is that a drug-eluting stent has a coating of a polymer which releases a restenosis-fighting drug. The special polymer coating on the stent provides for consistent and even distribution of the drug from the stent. The average cost for a drug-eluting stent, about $3,000 per unit, is three times higher than that of a bare-metal stent.

Major Players - Newton, MA-based Boston Scientific Corp (NYSE: BSX), which received the U.S. Food and Drug Administration (FDA) approval to sell a coated stent in March, said in July it had taken a 70 percent share of the U.S. market for drug-eluting stents with its TAXUS™ Express²™ Paclitaxel-Eluting Coronary Stent System. 

TAXUS which is one of two approved drug-coated stents by the FDA, uses a cytostatic drug known as paclitaxel, developed by British Columbia-based Angiotech Pharmaceuticals Inc. (NASDAQ:ANPI; TSX:ANP). Paclitaxel, which is extensively used in cancer therapy, interferes with the ability of the vessel cells to divide and multiply, therefore reducing restenosis and reduces rejection of the stent by slowing cell division around the stent. The TAXUS stent uses Translute™ Polymer, a proprietary polymer carrier technology, to control drug release.

In May 2004, Mr. Jim Tobin, President and Chief Executive Officer of Boston Scientific announced that the TAXUS launch continued to go extremely well, with sales growing and execution remaining strong.  "More broadly, April was the first full month of TAXUS sales, which helped drive us to nearly $500 million in total sales for the month, an annualized run rate of approximately $6 billion...", added Mr. Tobin. 

The three recalls of Boston Scientific Corp. cardiac stents since July 2 affected as many as 165,000 stent systems and had a financial impact in a sales reversal of $35 million and an inventory write-off of $43 million in the second quarter 2004. Based upon our estimation, Angiotech Pharmaceuticals, who is in a co-exclusive license agreement with Boston Scientific, could receive as much as $150 million in royalties this year, based upon the TAXUS current forecasted sales.

Miami Lakes, Fla.–based Cordis Corporation, a unit of New Brunswick, NJ-based Johnson & Johnson (NYSE: JNJ), the world's largest maker of medical devices, develops and manufactures the sirolimus-eluting CYPHER stent. Sirolimus is an immunosuppressive drug that lowers the body's natural immunity in patients and has been shown to prevent cellular proliferation and reduce restenosis.  Sirolimus, marketed as Rapamune® by Wyeth Pharmaceuticals, a division of Wyeth (NYSE: WYE), is exclusively licensed worldwide by Cordis for the localized delivery of sirolimus in certain fields of use, including delivery via vascular stenting. 

Although Cordis was the first medical device company that received FDA approval to sell drug-eluting stents in April 2003, Johnson & Johnson's CYPHER market share has been rapidly overtaken by Boston Scientific 's TAXUS. According to Mr. Tobin in an interview with Boston Globe, many physicians favor Taxus because they find it conforms better to the shape of some arteries and thus is easier to implant than CYPHER.

Earlier this year, Indianapolis, Ind.-based Guidant Corporation (NYSE: GDT) entered into the U.S. drug eluting stent market by announcing that it had entered into an agreement with Cordis Corporation to co-promote Cordis’ CYPHER™ Sirolimus-eluting Coronary Stent. Guidant will also assist Cordis in the development of a CYPHER stent that utilizes Guidant’s MULTI-LINK VISION® Stent Delivery System. The latest Guidant's MULTI-LINK VISION Coronary Stent System includes the next generation cobalt chromium stent technology for treatment of coronary artery disease in patients with small vessels at risk of sudden closure. Small vessels are defined as those with diameters of 2.5 mm or less; approximately 20 percent of atherosclerotic lesions occur in such vessels.

Analysts believe that Guidant’s own drug eluting stent program, which utilizes the immunosuppressant drug Everolimus, is not expected to be impacted by the agreement with Cordis. The company expects to launch its CHAMPION™ Everolimus Eluting Stent System in Europe in the first quarter of 2005 and in the U.S. in the first quarter of 2006, pending regulatory approvals.

New Entries - In the last two months, two major medical device manufacturers, Abbott Vascular Devices, a division of Abbott Park, IL-based Abbott Laboratories (NYSE: ABT) and Medtronic Vascular, a division of Minneapolis, MN-based Medtronic, Inc. (NYSE: MDT) announced the clinical trials to evaluate the safety and efficiency of their drug-eluting stents.

Abbott's drug-eluting stent, ZoMaxx™, employs a proprietary phosphorylcholine polymer (PC) coating, Pharmacoat™, licensed from Surrey, UK-based Biocompatibles Ltd. (LSE:BII), to control the drug release. The immunosuppressant ABT-578 drug which is developed by Abbott Laboratories, is an investigational drug and is not yet approved by the FDA. The goal of this trial is to compare its stent to Boston Scientific's Taxus™ Express2™ drug-eluting stent with a primary endpoint of 9-month in-segment late loss (a measurement of the re-narrowing of the vessel). Enrollment is expected to continue through the first quarter of 2005. 

Similar to ZoMaxx™ stents, Medtronic's cobalt chromium ENDEAVOR IV stent utilizes Abbott's ABT-578 drug, and proprietary Pharmacoat™ coating from Biocompatibles Ltd. Medtronic is planning to conduct the ENDEAVOR IV trial at approximately 70 sites throughout the U.S., beginning with patient enrollment in October this year. The goal of this trial is to compare its stent to Boston Scientific's Taxus™ Express2™ drug-eluting stent with the primary endpoint of the trial to be Target Vessel Failure (TVF) at nine months with a secondary endpoint of Major Adverse Cardiac Events (MACE) at 30-days. 

According the Dow Jones NewsWire, Medtronic's management has said it expects to have a 20% market share worldwide in drug-eluting stents during fiscal 2008. We believe that both ZoMaxx™ and ENDEAVOR IV stents will have no immediate material impact on sales of Boston Scientific's Taxus™ Express2™ drug-eluting stent.