(In Jan. 21 story, corrects name of Medtronic hypertension
product to Symplicity, not Ardian, paragraphs 9, 12)
By Susan Kelly
Jan 21 Covidien Plc said it would stop
making a device for treating high blood pressure due to weak
demand for the product, raising more doubts about the future of
the novel technology.
The decision comes less than two weeks after Medtronic Inc
said it was halting clinical trials for its high blood
pressure device after the treatment, known as renal denervation,
failed to prove effective in a key U.S. study.
Medtronic's move surprised many observers.
The devices, which are not available in the United States,
take a new approach to treating hypertension and are aimed at
patients resistant to traditional drug-based therapies. Some
analysts had predicted the technology, which works by deadening
nerves in the kidneys, could evolve into a $2 billion market by
providing an alternative to drug therapy.
Covidien said the decision to exit the business was a result
of its regular review of strategic programs.
"The company took a close look at the renal denervation
market and realized it really is growing much slower than
expected," said Covidien spokesman Peter Lucht. He declined to
comment on whether Medtronic's study outcome played a role in
his company's decision.
S&P Capital analyst Phillip Seligman said the failed
clinical trial of Medtronic's product likely influenced
Covidien's decision but noted sales of the device were modest.
He maintained a "strong buy" rating on Covidien shares.
Covidien's device, called OneShot, was sold in Europe and
the Middle East. In Europe, where the product was approved in
February 2012, adoption of such devices has run into
reimbursement hurdles as governments have been reluctant to pay
for the new technology.
The devices work by creating tiny scars along nerves in
the kidneys - organs that play a pivotal role in regulating
blood pressure by sending signals to the brain that can cause
blood vessels to constrict.
Following its decision to halt clinical studies of its renal
denervation system, Medtronic said it would form an independent
panel of experts to make recommendations on the future of the
product, called Symplicity.
Medtronic continues to sell the product in 85 countries. It
has been approved in Europe since April 2010.
St Jude Medical Inc and Boston Scientific Corp
also sell renal denervation products in Europe and other
markets. Boston Scientific acquired its system through the
purchase of Vessix Vascular Inc in November 2012.
A Medtronic spokeswoman said it was too soon to determine
the next steps for Symplicity. "We don't know if we would
consider another clinical trial. We don't know anything yet,"
said spokeswoman Wendy Dougherty.
Covidien said it expects to record after-tax charges of
$20-$25 million as a result of exiting the program.
The company's shares fell 1 cent to $68.19 on Tuesday.
(Additional reporting by Esha Dey in Bangalore; editing by