Cover Your Graft
This article was originally published in Start Up
Several relatively new companies are making inroads into a new market for bypass assurance with devices that help cardiovascular surgeons intra-operatively assess the patency of each anastomosis. Cardiovascular surgeons historically have been resistant to adjunctive surgical innovations designed to help them do their jobs better. These companies, however, are betting that the difficulty posed by new beating heart coronary artery bypass graft (CABG) procedures will motivate surgeons to slowly but steadily adopt their minimally invasive tools.
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In the early 1990s, St. Jude Medical was the market leader in its sole product area: mechanical heart valves, which placed it among the most profitable of device companies. Demographics, however, limited heart valves' future growth opportunities and St. Jude needed to diversify, moving into cardiac rhythm management (CRM), cardiology catheters, and vascular access devices, while also expanding in cardiac surgery. The diversification process went anything but smoothly, the company missed its numbers, and investors were quick to punish St. Jude for its integration missteps. In the past year, however, the company has become one of Wall Street's few device darlings, ranking number one in 2000 for returns among device stocks. The company's growth is largely the result of sticking to a strategy that has St. Jude well-positioned in CRM's traditional markets, while also poised to pursue huge new opportunities in atrial fibrillation and, to a lesser degree, congestive heart failure. And St. Jude has not forgotten its base: cardiac surgery, where the company has introduced new sutureless anastomotic technology for minimally invasive coronary bypass surgery.
The announcement this month that HeartPort Inc. will be acquired by Ethicon Inc., a Johnson & Johnson operating company, turns a kind of final page on what was, to anyone living through the crazy world of medical device start-ups over the past several years, one of the industry's most interesting stories. In the end, what has become clear, is that HeartPort simply made the wrong bet. The cardiac surgery revolution, if you can call it that, has been a shift from CPB to off-pump procedures; about minimally invasive techniques per se, surgeons are still very ambivalent.
In the sometimes bi-polar world of surgical robotics, visions of a radically transformed battle with entrenched resistance to the new technology. And for now, the conservative forces have been winning. But officials at Intuitive Surgical Inc., which went public last June, argue that the tide is turning. And even some skeptics concede that Intuitive has done better than anyone thought they would just a few years ago.