Thank you very much for attending the Boston Scientific Investor Update from the Heart Rhythm Society meeting. Really pleased to we just have a few slides for you and then get deep into Q and A and very pleased to have with us 4 members of our team. Joe Fitzgerald is Executive Vice President and President of Rhythm Management as well as responsibilities for our Rhythm and Neuro Business segment. Ken Stein, MD, is our Senior Vice President and Chief Medical Officer for Rhythm Management as well as oversees global health policy for us at Boston Scientific. And then also from the Rhythm Management team is Mark Bickel, who's our Vice President of Finance.
And then also please, given the overlap with the physician and planting community and electrophysiologist, we have a Vice President and General Manager for WATCHMAN from our Interventional Cardiology business, Nick Spadella Anello. So without further ado, we'll get right into the usual safe harbors apply as well as the risk factors that you can find in our most recent 10 ks and 10 Q filings. And with that, I will hand it over to Joe.
Thanks, Susie. I don't have a slide clicker, but if I could get that, that would be great. So thanks for joining us. Obviously, big meeting for us. It's our biggest global electrophysiology focused meeting.
Just a reminder to everyone, we're going to try to stay focused here on kind of the state of the business and things that are happening in 2019. In New York, we'll have our Investor Day in 3rd week of June. So we'll go much deeper into our pipeline, our clinical projects and sort of our global 3 year plan and our operating margin journey. That will all be updated, a much deeper dive by Ken and myself at that investor meeting. So what I wanted to start with, and then I'm going to hand it over to Mark to talk about our profit margin journey, is just to give you a detailed look of where we've been over the past 5 quarters.
I think if you look back, and I don't have well, you can see it on the far right, kind of where we've been in 'sixteen, 'seventeen and 'eighteen in our Rhythm Management business, which is our core CRM and EP businesses. And I'll just point you to the upper your upper right to the slide, and that is if you look at what has been a big driver for Boston Scientific, it's outperformance in core CRM globally. So if you look at our numbers, putting up a 3% plus 3% growth rate in 'sixteen, plus a 2% growth rate in 'seventeen. And in 'eighteen, again, clocking 2% in a market that is arguably probably 0 to minus 1 in each of those 3 years or somewhere between minus 1 to plus 1 growth in each of those 3 years. So a slight over performance against market has really been a driver of a lot of our profit margin journey.
One thing I will point out, and I've said this before in settings like this, is if you look at our worldwide EP business, the first question I would expect is, hey, your EP business is not growing at market. I would agree with that. That's very apparent looking at our 3% our 5% growth rate in 'sixteen, 14% 14% -plus growth in 'seventeen, which was probably on market. And then our 2018 performance of 2011, which is most likely below market. So the way you have to think about our EP business, very important point, is we have a business we have a legacy business.
Think of all the stuff that's not tied to our mapping and navigation platform, Rythmia. That's about 2 thirds of our business today. We have a really good sense of where those type of products, things that aren't connected to a mapping and navigation system. You have to think about that segment of the EP market being very low single digit growth at best, okay? So that's where twothree of our EP business is.
We've now grown RHYTHMIA to be about RHYTHMIA and all the associated accessories, ablation catheters, etcetera, to be about a third of our business. And think of that as growing somewhere in the neighborhood of 3, 4, 5x market, depending on the markets that you look at around the globe. So this business, the EP segment of our business, will be in transition essentially until we flip that to where twothree of our business is in the high growth area of mapping, navigation and ablation. And we're just not there yet. So you're going to I think you're going to continue to see choppy results.
You can look at our international performance, in particular, where we have as full of a bag as we have anywhere in the world. We're still missing some things in the U. S. So you can kind of see that when you look at our international numbers in EP, 14% growth rate in 2016, 24% in 2017 and then 11.5% internationally in EP. You kind of get a glimpse of what that EP portfolio can do as we round it out in all markets around the globe.
So that's the comment on kind of where we've been on operational revenue growth. And I'll transition to Mark, and he'll talk about the operating margin expansion journey.
Great. Thanks, Joe. So I mean, I think clearly everyone understands the legacy Rhythm segment or what we've described more recently as Rhythm and Neuro segment has been underway versus BSC's operating margins, not so much in operating margin growth, but in absolute margin. So what I thought we'd do here is just kind of update this group on where we've been and where we're going a bit. So the left side of this slide just represents really history.
So this is legacy Rhythm Management, CRM and EP. Lots of performance from 2013 through 'sixteen. We essentially doubled our operating margins within the legacy Rhythm Management business over that time frame. What's more useful here is really to talk about the right side of the slide, which since we've combined the Rhythm and Neuro segment, where have we been and where are we going? So on the right side of this, you can see our performance and our restated segment results back through 20 16.
We're north of the 20% operating margins today. And really no different than what Joe and I talked about, I believe it was at this meeting a year ago. Our goal is by 2020 to get Rhythm and Neuro to roughly 23% operating margins. So that's the journey we're on. We'll talk a little bit more about that at the Investor Day coming
on. Yes. I think the thing that we've talked about on our operating margin journey, you think about if you think about Rhythm, you think about a CRM business that's doing really well and is funding our journey in EP as we bought multiple companies and we've sort of put global infrastructure in place. The funding mechanism for that has been CRM. And then when you think about our neuro segment, our entire success in SCS, spinal cord stim, has funded sort of the global expansion and global market entry for DBS.
So you've kind of got the core sort of cash generator, whether it be spinal cord stim or CRM, funding the journey and taking on acquisitions while still showing operating margin growth year over year over year. So let's transition quickly, and we'll just talk about what's happening in sort of 2019. Mark, do you want to hit the key CRM product launches that we're talking about this year? And then I'll talk Ken and I will talk a little bit about EP. Okay.
Sure. So if you start
with CRM over here on the right side of the slide, you can see the CRTP platform for us, right? This is a growing fastest growing segment within core CRM today. One of the things we were knocking down in CRTP is the approval of MRI labeling on our devices. So in the back part of 2018, we received approval for our Envisionus CRTP platform and also CD mark and FDA approval for our legacy platform. Secondly, one thing you might have not seen before is our site selective pacing catheter.
So this is a delivery system that's used for site selective, sometimes called HISS bundle pacing. So that catheter will be entering limited market evaluation kind of the middle of this year and full launch in the back half of twenty nineteen. The 3rd item on here, which really is an enabler for field service and productivity, all CRM industry covers a very high covers a very high service burden to service these devices for 10, 12, 13 years. The platform that's going to enable us to go forward with a lot of our SG and A and cost synergies is this 3,300 Latitude programmer. So this is the first time we've launched a program in over 10 years in cardiac random management, and what this program allows is remote service access.
So think about the ability to actually do service checks from really anywhere in the United States remotely via what we call our consult functionality, and then we have functionality that allows our remote tech services team to dial in and do service calls. And that's a really big deal because there are millions of service calls done per year in this industry. And then on the last one that we have here is 3T labeling. So this is kind of our last, within our core CRM portfolio, our last MRI labeling that we're trying to achieve, because we have it in our Brady platform. But on our high voltage platform, not only our current generation of Resonate family of devices will have 3T labeling, but also our Dynogen platform, which is 1 generation old, will have 3T labeling.
So that's really the CRM portfolio for 2019 and the key milestones for the next 6 months.
Yes. And I think the thing that we don't have on this slide, because now we're 7 years post FDA approval, but obviously SICD is in its 7th year and still in launch mode with us gaining penetration against single chamber ICDs and very good growth rates around the world, especially in markets like Japan and Europe. We are seeing very, very strong growth, continued growth in those markets as we've introduced Emblem 3 years ago or now almost 4 years ago and 2 incision technique and intramuscular sublatissimus techniques in both Japan and Europe. Strong adoption of that, which has continued to fuel sort of our penetration and market share growth with SICD. So just a couple of things that we'll see in 2019 in most European countries and in the U.
S. In the Q1. So we went to full market release. That's a very difficult thing to explain to Ken even, so much less you guys. But it's really the first and only time that we have automated software that will sort and set and direct these massively dense 30,000 maps.
So it's probably one of the most unique things that we've ever brought forward in our mapping and navigation platform. And we're just right now starting to launch get into full launch mode. So that is really cool but extremely difficult to understand unless you've done an electrophysiology fellowship. And then the other thing that we've talked about, this is in full launch mode, has been for over 6 months, is our DirectSense package, which really combines our latest generation catheter, which is an open irrigated with MiFi mini electrodes, 1 millimeter electrodes embedded in the tip and the NAV sensor combined with a really unique software within the RHYTHMIA system that allows you to do contact sensing and local impedance monitoring during ablation. And that's really important because other than electrograms, we really don't have any signal for what is happening in the cardiac tissue while you are ablating.
So we're really proud that we're the 1st and only company to deliver a direct impedance sensing technology and software into the market. So that's a big driver behind our European momentum on our with our RHYTHMIA platform. And then the bottom 2, what we've said previously and we're going to say again here, we are completing what we call design verification and manufacturing ramp up on both criterion, which is now called Polar X. That's the brand name for our cryo balloon system. And then Luminize, which is formerly the Apama Multi Electrode RF, Both of those are finishing design verification.
We will then move to manufacturing ramp up, and we are still targeting CE Mark by the end of the year, at least get into a limited market release in Europe at that same time and then also start 3 or both 2 IDEs to support both of those single shot technologies by end of year. And then StablePoint is our 4 sensing catheter. We are in the exact same spot there. We are finishing design verification. We will submit that for CE Mark later in the summer.
And then probably looking at starting the LMR on those on that product early 2020 after we get the CE mark. And then Nick, do you want to give some comments on our sort of recent Japan approval and launch timing for WATCHMAN? Yes.
So we launched WATCHMAN Flex in Europe in Q1. We're really excited with what we see there. We're exceeding all expectations. We now have assumed market leadership in Europe. I think we told you back at Investor Day in 2017 that we were going to assume leadership by having a next generation device, and we now have that.
So really excited about what we see there, and we anticipate continued opportunity. In Japan, we got PMDA approval, working through reimbursement with MHLW. We should expect reimbursement by the Q4 of this year and go full launch mode with Japan. Okay.
Got it. And then we'll quickly go through some of the late breaking PSC clinical highlights. And I will remind my colleague, Doctor. Smith.
We're not going to violate any embargos. No embargo breaks here. Yes. Yeah, I mean obviously very, very busy meeting for us always. This year, I think particularly busy.
I'll highlight just a couple of things for you before we get to Q and A. First off, the late breaking clinical trial session tomorrow afternoon. So I can't tell you what we're going to show, but it's almost a BSC session. We've got 3 of the trials that are being presented in that session. I think the ones particularly important, we have our first results from our UNTOUCH trial and that's trial of use of the SICD specifically in the primary prevention population that is by far and away the majority of patients who get ICDs implanted in the United States and going to look at acute success, acute outcomes in that population in particular.
So again, really just helping to get the evidence base to move the SICD into just the broad population of patients who are getting defibrillators across the globe. In addition, 2 different trials from the NADE IT series. 1 that I think is going to be of some interest is actually looking at trends over time in risk of sudden death and arrhythmias across the trials. I'm going to give an answer as to whether advances in medical management over the years have materially altered the risk of sudden death for these patients. And likely to say something about continued risk stratification in these patients.
Then the other one that I can mention to you that we're really excited about is a presentation of our first human use results with our cryo balloon, the Polar X, that was the company formerly known as criterion. And these are data that get to the acute outcomes both in terms of safety, procedural efficacy and some of the advantages that this particular catheter has over the other commercially available balloon system in terms of ease of use, ability to monitor for phrenic nerve stimulation and ability to actually record good electrograms in all four of the veins. And so really quite excited about that data and that presentation.
Ken, do you want to give we don't have it here on the slide, but we also presented a late breaker at the ERA meeting, the European Heart Rhythm Association meeting, on our multi electrode luminize RF balloon. Do you just want to give a brief comment on that presentation?
Sure. So back in Lisbon, we presented our other balloon technology, right, Lumineye's, which is the RF balloon, unique in a number of important respects. Probably the thing that is the real great differentiator for it is it allows for full endoscopic visualization of the pulmonary vein and then ability to select energy at the areas where you really have the best contact. And the data there showed an excellent safety profile. There were no device related serious adverse events, Fantastic procedure times.
It's a very rapid procedure even in first human use experience and again very high degree of acute efficacy in isolating all 4 pulmonary veins.
Okay. We'll shortly turn it over to Q and A. If you have particular interest in seeing some of these technologies, we do have a technology suite within our booth. So just contact Susie. And if you want to get in there and take a look at the Apama balloon, put hands on or the PolarX or go really into a software deep dive on LumaPoint or DirectSense, yes, please join us at the booth where the software engineers are actually anxious to explain Lumaflex.
I'd like to hear
about Lumaflex. Okay. Susie, you want to start Q and A?
Yes. That's our question. Go ahead, boss.
I appreciate the clarity on the EP business in terms of how much is actually RHYTHMIA. So it's about $100,000,000 it looks like. But my question is really that market is what close to $4,000,000,000 $3,500,000,000
You
guys are growing a lot, but you're still relatively small. And so the question is here, how
do you break through? There's 2
really large incumbents that control that market. How do you convince an EP lab to swap out
one of their MAFIC systems to yours potentially?
And what are the challenges? And how do you really get that business to a bigger scale? Yes.
Could you repeat the question for the webcast? We'll get the mic next
to it.
Sure. Essentially,
how do we scale and break through that EP given the size of our business?
Yes, exactly. So I would say, really, it's no different than what we've been doing. So if you think just remember on RHYTHMIA, it's really important. We bought RHYTHMIA, the company in 2012. We did not launch the technology until the very end of 'fifteen.
So we stayed in a very focused LMR. So we launched it in 'fifteen, and we added the key really ancillary component that you need, which is a NAV enabled catheter, I believe in early 'seventeen. So we're about 2 years now into having something that looks like a full portfolio, great mapping system, great mapping catheter and an ablation catheter to go with it. So we're it feels like we're 7 years in, but we're really about, in my opinion, 2 years in. And I would say, we don't give out a lot of details, but think of our arrhythmia journey as we have been very targeted.
We've built commercial infrastructure all around the globe. And we've been successful in greater than 500 centers on every continent you can think about of going in and convincing customers to do exactly what you said, which is take somebody else's system and put it to the side or add our system and become a 3 system lab. So I don't think there's anything massively different, but we will continue to methodically expand our footprint. So we're above 500 systems Now we're at 100 publications or greater around the globe. We're so many I think our latest number is greater than 40,000 cases around the globe.
So we've got an offense that is working and now we've got a scaled commercial infrastructure. So if you think about it, it's a long answer to your question, but I just want you to think about it this way. We started with like 3 mappers back in 2014. We've scaled that now to hundreds of mappers around the globe. So what really gets us excited is when we bring things like single shot technologies into Europe or we bring a force sensing catheter into Europe, I've got a huge installed base.
We're active in greater than 2 90 centers in Europe. So the efficiency and the effectiveness of our launch now that we've made that forward investment with more than 100 people that can actually support this, I think you'll see our growth accelerate. And that's what we've seen from Europe, in particular, when you look at our international results, as we've launched each subsequent technology. So we're fairly bullish. Now it's been a long journey, right, going from 3 mappers to 100 of mappers, long journey, no placements to 500.
But now I think we get the benefit because we've made that forward investment and we have the global infrastructure. Now we just got to get the things that we have in the pipeline regulatory approved in the markets. And I think you'll see our growth accelerate.
As well as Joe entering single shot market for the first time, a whole new segment.
Yes. Single shot think of single shot as a $700 plus 1,000,000 market dominated by 1 player, right? And we really are excited about the two technologies that we'll bring to Europe later in 'nineteen.
Nick, could you talk about how many competitors there are in Europe versus the landscape emerging in the U. S. And what growth rates are? I mean, just talk a bit more about being number 1 now there and what that means.
Yes, Owen, there is a number of competitors. It's very crowded in the European marketplace. You've got about 6 different offerings, with 2 key players being the major competitors in Amulet. But as you look at the U. S.
Market, you've got a number of people that are going to want to try and enter. The next person that will enter will be Abbott, probably in 2021. So we feel that that space will be much more crowded in Europe than it will be in the U. S.
Just for the webcast, that was on WATCHMAN. We switched gears there from U. K.
Thanks. Jason Mills, Canaccord Genuity. Joe, I know you have great respect for your competitors and one of them, Bison Webster, must be a $3,000,000,000 $4,000,000,000 business growing mid teens, just an amazing profile. I'm just curious sort of building off Raj's question with respect to what they do well, what they've done well over the years and what you're trying to do to build to that? Because I would imagine you would love to have that profile of business eventually.
And it looks like you're putting the pieces together in AFib electrophysiology, specifically building a toolbox approach which we hear is what more and more physicians are doing. You guys have gone all in on that. Maybe talk about that piece as well as just a comprehensive piece of getting to that Biosense Webster like business.
Yes, I totally agree. I mean, Biosense has had an incredible run. They've set the pace from a technology and innovation. I would point out 2 things, one that we're very, very clear on. And that is when you look at this new segment called high density mapping, right, we are convinced that whereas both Biosense and one of our other competitors have tried to replicate that, that we are still significantly ahead in that space.
So that's point 1. So we've got a great software package, a great mapping catheter, which is really important. And we think we still have a lead on the 2 other major players in the mapping market. I think to just make it really simple, right, if you look around the world, somewhere in the neighborhood of greater than 80% of procedures now have switched to a 4 sensing catheter, right? And that is the major gap in our bag.
Thankfully, we finished that project here in 2019, submitted for CE Mark and then we complete the full sort of what I would say armamentarium that we need to really compete head on. If you talk and I was just in Germany at the Mannheim Cardiology Conference and every single conversation goes the same way, right? Love your mapping system. It's best in class. I use it on a daily basis when you deliver to me a 4th sensing catheter.
So that's why that's been the number one internal project in our EP group. And I would point out sort of what have we done in the past, let's call it 5 years. We have transitioned all of our other catheters to be NAV enabled. So everything from a 4 millimeter solid tip catheter to an open irrigated to a large tip. So pretty proud of our teams that they got all 7 of those catheters completed.
And then they will complete the 4 sensing catheter. And that's where I think next year when we're at this meeting, ask me some specific questions on what our growth rate in Europe looks like. Specifically, separate out single shot because that's going to be a bit of a rocket ship, right, because we have 0 share and we'll go on a share taking journey from day 1. But ask me that question next year at this time on how Force Sensing is doing as we launch it in Europe.
And maybe if I just want to come back because I what you said is very important, right? And it is the goal is having the full toolbox and having superior tools. And I don't think there is anyone out there who would argue with the proposition that RHYTHMIA is superior to any of the other high density mapping systems out there. Our criteria in the polar cryo balloon system has some significant advantages over the only other competitor in that space today. Lumineye's RF balloon with endoscopic visualization, completely unique.
And then the StablePoint is not just a force sensing catheter, but it's the only catheter out there that gives you both force and local impedance, which again we see as offering really important complementary information. So the strategy, if you look at it broadly, is full toolbox and superior tools in each category.
Joanne? Joanne Wuensch from BMO Capital Markets. Two questions. What can we expect from WATCHMAN in Japan? And how do you see that ramping up and contributing to structural heart?
And then the second question is in the past you've talked about leadless pacemakers and modular CRM systems. And can you give us an update
on that?
Thank you.
Nick, you want to take that?
Yes. So from a WATCHMAN perspective in Japan, we envision that being one of our largest markets. So as we ramp in 2020 for
the most part, that's when
we'll see a lot of the centers open. Today, China is our 2nd largest market and growing high double digits. We anticipate Japan to potentially be bigger. I think what we need to see is what the reimbursement will look like in Japan and how wide that will be, because we believe there's a lot of patients that can benefit from therapy. So we think it's a really big part of our 5 year strategy in terms of delivering strong double digit growth.
And then on lead list, two updates. And Ken's group is really the next big step in our lead list journey because of the clinical study. So where we're at on our lead list system is and this is going to sound like I'm repeating myself and now you can see why my hair is more gray this year than it was last year. So we've got these 5 major projects. The 5th one that I haven't talked about is leadless.
So our leadless pacemaker and our leadless pacemaker delivery system is still in the process of finishing design verification. So we expect to finish that sometime towards the end of 2019. And then Ken, do you want to comment on what's your latest estimate for start of the IDE studies for both of those?
Yes. And so Joanne, right, it's 2 separate trials that we'll be running. We'll be running one trial of the leadless pacemaker, which we call EMPOWUR, just as a run of the mill EVIR pacemaker, but a separate trial, that's the modular ATP trial, which is using the lead with pacemaker in concert with the subcutaneous ICD as a way to give those patients who need it backup brady pacing and antitachycardia pacing when we need that. We are already in discussions with FDA and targeting launching those trials in 2020. We had investigators meeting actually at this hotel last night and really finally sitting out talking to investigators about timelines we're going to get in through training, etcetera.
And so I'd say our view on that now is we've sort of moved out of the study design phase and started to move into actual study execution.
Joe and Ken, a question from the web, talking about the CRM market
I'm going to have Mark because we just reviewed all the details. Let's talk a little bit about what our view of the leadless pacemaker market is today. Mark, do you want to give kind of a Yes.
So I think I would chunk that into 2 categories, right? The leadless pacer market, as we have today with 1 competitor, is sitting in what we call the VDI market, right? That market is probably 15 ish percent of all de novo implants that are done globally, right? So the technology is applicable in that market, which is pretty small. We'll have to see with one of our competitors' data as that data evolves over time with their approach with what we call Micro AV.
That device, we'll have to see what that data looks like. But then that might start to encroach into the dual chamber Pacer market, which is where 85% of the de novo market sits today. So I think it'd be a little premature for us to state what we think that will do in that space because that data needs to play itself out. We do see lead lists being more of an impact in our U. S.
Brady results, which I think you guys have seen externally. So it has been hitting us a little bit more in the U. S. Yes.
And I think the thing you have to look at is what's the reimbursement profile around the globe. There are markets where there's good reimbursement. So kudos to our competitor for getting that really good reimbursement in the U. S. But Europe, you have really spotty reimbursement.
So I think I would classify leadless in any kind of forward looking 3 to 5 as still a niche of the overall Brady market, right? Your second question on CRM market, I don't think it's really any different than we've talked probably for 5 years. You've got a global CRM market with low single digit unit growth, and then you've got price as a headwind. So you're talking about a market that has vacillated for the past couple of years somewhere between plus 1 and minus 1. And you probably are going to see the same thing over the next few years.
Mark, any
Yes.
I agree with that. I mean there's been competitive replacement cycles. Our own replacement cycles have thrown a little bit of dynamics into the overall market, but I'd 100% agree with Joe. I mean, we think about the de novo market, which feeds it, is being much tied to population, So in any given market, kind of look at what its population doing, and that's driving volume.
And how about sorry, just lead us on the high voltage side of things, the outlook there?
Well, we should point out we are the global leader with 100% market share of the high voltage leadless category. But what's the specific
How much of the market does it become over time and sort of implications for growth?
Yes. I mean, I think we've talked about this before. Right now, we've gotten into, let's call it, low double digit rates of penetration into the market, depending on how the data plays out and how our continual technology journey looks. I'm not going to plant a mission accomplished flag until we're 51% of all single chamber ICDs, and we're not there yet. So I think we've got a ton of work to do and a ton of opportunity ahead of us.
And we won't even stop if we get to the 51%. But in terms of the clinical benefit, leaving the vasculature untouched for 8 years in that single chamber primary prevention marketplace. That's got a lot of, call it, a lot of good things for patients, and we're continuing on that journey.
Yes. And the one thing I would add to that is, you've heard us mention this in the past, but when you look at our SIC business, we've built a very sizable business on double digit growth, and that's been 100% initial implants, right? We are just now, as we speak, starting to see the very first change outs from the legacy camera device actually come out. So and you all know how big the replacement curve is, is a ratio of the high voltage business. So we'll have that growth plus what we can do in ongoing penetration of de novo patients.
And if I just jump in one more on and it also gets back to the important sec of the untouched data that we're going to present as a late breaker tomorrow afternoon and gets back to Joanne's question or the vision going forward of modular ATP and starting now to have add ons where you stay leaderless, but add back pacing capability, antitachycardia pacing capability. And then as you start looking right towards the future, ability to do things like CRT and stay with
us. Long term.
Jay Chadda, Morgan Stanley. Doctor. Stein, I wanted to dig a little deeper on how you think about cryo versus RF balloons and what patient populations, the difference between safety and efficacy profiles and how you would think about maybe the adoption curves of each individual device? Yes.
Sorry, maybe if you can touch
on just
from the web. Yes. So a question on our cryo versus competitors cryo essentially, but then also we got a question on how we're going to co position cryo versus RF, which is Jay's question.
Okay. So I'll hit. First off, right, what do we see as sort of the differentiated advantages for Polar versus what's out there in the market today? And then does the world really need 2 competing balloon technologies from the same company? Why do that?
So the cryo balloon has a number of, I think important evolutionary advantages visavis Arctic front. I'm not going to go through all of them. I'll go through what I think are among the most significant. I think in terms of utilization by physicians, the biggest change is the cryo balloon that's out there inflates to a certain size when you position it in the vein. But then when you go to freeze, they actually have to go to higher pressure and the balloon actually expands a bit, all right, tends to either pop back into the vein or you have to push forward and actually push it further into the vein as it blows up.
And the huge difference with Polar is the balloon stays at the exact same size and the exact same inflation pressure when you blow it up and then when you go on to freeze. So you don't have this problem of balloon pop back. Beyond that, the sheath itself has some advantages and we'll talk about some of those advantages in Antti Amich's presentation on the technology here, easier to cross the septum. People have used it, find it easier to get into the right inferior pulmonary vein. The console itself is a much more modern console, provides a better graphical user interface for physicians.
And in particular, when you think about safety actually has the ability to do monitoring for loss of diaphragmatic motion, right? The worst complication people fear when they're doing cryo is actually injury to the nerve to the diaphragm, the phrenic nerve. And we can actually monitor whether that's happening through the console. And then the last thing I'd say is, we also believe there are some advantages, the mapping catheter that comes with Polar and just getting better signals and more reliable signals in all of the veins. And again, we'll have some data on that later at this meeting.
Why both? Because physicians want both and want both in a couple of different respects.
First of
all, AFib is not a homogeneous disease and there's not a homogeneous approach to how to ablate it. And so patients with paroxysmal afib without structural heart disease very different from patients with persistent afib who may have multiple other comorbidities. Patients who are getting a de novo procedure versus patients who failed the de novo pre procedure and are getting a redo procedure, you may want to approach very differently. And so, you know, for those physicians who've adopted cryo, you know, we think our cryo is a really great alternative for them. But, you know, there are a lot of physicians out there who haven't adopted cryo yet, particularly not for the more complex patients, but for the redo patients.
And then folks are still doing point by point RF. And if you're a point by point RF ablator, the RF balloon with endoscopic visualization preserves all the advantages that you may see to doing RF, but gives you a single shot simple, reliable reproducible procedure. And so I think we see it sort of segmenting out. Folks are doing cryo, love for them to use our cryo catheter. Folks are doing Point RF and also folks who may use cryo for their de novos but use Point RF for their redos, that's where the RF balloon becomes a really attractive proposition.
Yes. And think about the mix being about 30% of de novo procedures are done using a cryo balloon system and about 70% of the first time PBIs are done using RF. So there's a sizable market that has not shifted yet into a single shot or a cryo balloon system. We think that's a great target as Ken
just said.
Okay. Doctor. Jenny?
Thanks, Susie. First question just on the subcutaneous ICD platform and the potential competitive risk from the extravascular ICD from the TRACONISSE, I think data at this conference. But maybe you could help us out about how you got how your team is thinking about that competitive risk and the different approaches between subcutaneous IC and extravascular ICD? And then just a follow-up on WATCHMAN, I know we've talked about this historically, but any updated views on WATCHMAN or LAO versus NOAC? I mean, is it that there really isn't any value to unlock or questions answered there?
And could a NOAC trial open up the European opportunity and where you could spark more growth and more reimbursement issues there? I think we have PROG 17 and closure AF coming, but they may not be definitive, but any thoughts on those two trials as well and just Boston's approach to an elect trial? Thanks.
We'll take the first one.
We'll take the second one first and then I'll comment on this. Sure.
So first of all, we think there is value. And the team, the clinical team with Doctor. Alaco, Doctor. Stein and Doctor. Meredith, they've really given us an opportunity with the option trial that I'll have Ken comment on a little bit.
There is a patient population there. When you look at these patients who get ablated today and have to stay on long lifelong blood thinners. That is a challenge that a lot of electrophysiologists have to face. And so we will have a chance in that trial to understand a little bit more about that patient population and what we can do potentially as a frontline therapy, to treat those patients to give them that option of not having to be on lifelong blood thinners when you look at the opportunity to test this against the newer agents. So we'll answer and learn a lot of things in that trial.
And we believe that's going to open up a lot of opportunities for patients today that are struggling with this. And so Ken can comment a little bit further on that. So we see that being the first thing. We also are investigating and exploring, and we'll share more with you at Investor Day, opportunities that may exist in potentially a broader patient population. And there's a number of things that we are looking at closely when you look at closure AF and PROG 17, that's looking at that.
So we believe with the next generation technology flex, which will be utilized in the option trial, that we're set up for success in evaluating that patient population and proving that those endpoints. So I think that's 1st and foremost an opportunity that we can take full advantage of and really help promote the therapy that many people want to understand more about. But Ken, I don't know if you want to comment further on option and what that means to the field.
Yes, I mean, the quick on option. So in front of the FDA right now, waiting IDE approval, needs an IDE because this would be an indication expansion trial. This would involve randomized comparison of Watchman versus oral anticoagulation. Again, our first head to head trial against NOACS in patients who are at risk for thromboembolic stroke following atrial fibrillation ablation. And so you're no longer patients who have a reason to seek an alternative.
And really hoping to get that ID approval from the FDA shortly and hoping to actually begin enrollment in that trial imminently.
Yes. In that 1600 patient trial randomized 1 to 1, 800 in the ablation plus DOAC following that and then 800 in the ablation with WATCHMAN with short term DOAC.
And we see that being one of the biggest ablation trials ever run. When you look at Cabana, that was about 2,200 patients. Half of those patients were ablated. You'll have 1600 patients in this trial that will be ablation patients. So we're going to learn a lot from this trial and we do believe it's meaningful to answer your question.
And we're anticipating enrolling a lot quicker than cabana.
In our 6th IDE that we're starting in the back half. So on SICD, there's a lot there in your question. I think the first thing I would really talk about is the beauty of the simplicity of an SICD procedure, purely subcutaneous, nothing touching the heart. And that's a fundamental big difference than something where you have to tunnel a lead in the pericard beneath the sternum, right between the sternum and the heart. So I think the thing we love about our approach, the purely subcutaneous and just the ease of use as we've launched this globally into 100, if not 1,000 of sites that has you'll see the actual peri procedural outcome data in Lucas Borsman's late breaker.
So the safety profile, the ease of use, we broadly now believe that people can do a subcu SICD implant in about the exact same time as they can do a transvenous single chamber. So we're continuing to work and we've done things like launched the 2 incision technique globally. We have some new products in the pipeline that maybe we'll talk about at Investor Day that will further reduce the implant time and speed that up and require less suturing and less just it makes it an easier implant. Do you want to comment on difference between
Yes. I mean, I'll just say quickly. Why is the SICD a great device versus a transvenous ICD? It's three reasons, right? Lower risk of major surgical complications at implant, lower risk of lead failure, lower risk of significant infection.
And any competitive technology that wants to get out there is going to have to show those same sort of things.
Yes. And our competition would have to sort of update on timing. I really don't see us facing a global competitor in some of the major markets for the next couple or few years, just based upon the publicly available data where their first in man study is, but they'd have
to comment on that.
Yes. Jason Bedford, Raymond James. Joe, I just want to get back to I appreciate the detail at the beginning on legacy and non legacy. Just for clarity, your legacy business is growing at market in the single digits. Is that what you're saying?
You said market was growing low single digits. I wasn't sure if you were capturing or losing share.
It kind of bounces around, but on market, I don't think we've seen that legacy business grow above market. And again, that segment of the market, we have great external data where we can see what the individual segments. And I would say the short answer to that is that business, as we have turned our entire focus to expanding our RHYTHMIA footprint, has lost focus and has been below market, I would say, for the past 2 or 3 years.
Okay.
And then the non legacy piece, how quickly is that market growing, do you think?
I think I won't give you the pinpoint estimate. It depends on the market that you're looking at. But think of that business as in the 3x or greater than market 2x to 3x or greater than market growth as we look at our arrhythmia franchise.
Okay. You mentioned entering the $700,000,000 single shot market. How big is that market in Europe?
That market, it's probably 1 5th of that market or maybe 1 fourth.
Yes,
onefour of the single shot market is in Europe.
Okay. And just from a procedure time seems like a big benefit for the RF balloon. Can you just walk through the difference in procedure time or the expected difference between an RF balloon and point by point?
Yes. What did we can that data was probably in the and it was interesting because when we did the first in man study, the EU supportive study for our Luminize product. We actually presented on that in Lisbon and talked about how the learning curve how quick the learning curve advanced and what the overall timing. Do you want to give some details on that, Co?
Yes. I think, again, you have to break down because that was the first in human study. And there were some iterations to the actual catheter design and technology in the course of that study. But if you look at the sort of most recent procedures in that study, you can get down to procedure times in the range of an hour. And at that point, the vast majority of the procedure time isn't your waiting time, it's your everything else, just getting in, doing the transectal, etcetera.
And I may have missed this, the timeline on the ICM?
Timeline on ICM, I think we talked about this on our on one of our recent calls. Our timeline for launch, most importantly in the U. S, has now slipped into 2020. We were originally scheduling that for later this year, and it slipped approximately 6 months. And again, I sound like a broken record, but we've got 6 IDEs that are starting.
5 of those require us to finish design verification and then begin manufacturing ramp up. So it's a pretty busy time in St. Paul.
Matt Miksic from Credit Suisse. So one follow-up on WATCHMAN. You gave the timeline of the IDE, and I don't know if you mentioned this earlier, I might have missed it, but just thoughts on completion and sort of competitive positioning with competition coming to the market presumably in 2021?
So if you look at good question. So as I think about the portfolio that Joe, Ken and Mark have built here, first of all, we're representing a global leadership position with this, and we're going to continue to have exposure as we move forward. But when you think about the people and the experience that we have, we'll have over 100,000 cases as we exit this year cumulatively. That's more than double the experience. But we feel really good about things that we're doing.
But you look at the option trial, we believe that's going to increase our exposure a little bit more.
But in particular, I mean, the thing we feel great about because we've been working on it for quite a long time is the results that we see with our Flex device. So we did a 400 plus patient IDE. We completed that last November. So we have a really good sense with that device for what procedural benefits and the feedback from if you talk to anybody who was in that study, you'll get a really good sense for how that procedural how the procedural benefits, how they play out with Flex versus current gen Watchmen. And as we see competitors coming into the U.
S, I think Nick said, potentially 2021, We're working feverishly to get that follow-up completed and to get Flex approved in this major market.
Our goal is to be ahead of the competitor in the U. S. Market with Flex, but we're working with the FDA on that. And if you look at the work we're doing with the national awareness campaign, we went national with TV about 60 days ago. In the markets that we launched an awareness campaign, we saw more than double the adoption of those centers.
So now we've gone U. S. Wide with this. So when you look at the footprint, the exposure and the 100% of the cases that we're covering and as that continues to grow, not only from a WATCHMAN perspective, but the other technologies that you see here from an EP standpoint, our presence will continue to be in the accounts that we work historically, not even in. So we think that the synergies that exist here from an EP perspective can be really, really productive.
So the right way to think about it maybe is product feature match up, improvements will be better, clinical strategy kind of extends the value of the product and then your scale maybe 3 pieces of the U. S. Response. Great.
And one I'd add to that is also expertise of our internal team, the Washington specialists in making sure these procedures are done well. The one thing I didn't tease in terms of our data releases here is we also do have an updated data release from the U. S. Fetal Managed occlusion registry. And again, that's going to show 1.5% procedural complications, 99% of patients have adequate seal with the current WATCHMAN technology at 45 days.
That's a really high bar for any competitors to match. And a lot of that success is due really to the expertise of the guys on Nick's team. And again, our belief is that's only going to get better with FLET.
That's great. And one follow-up just on persistent AF. I guess the technologies, high density mapping, contact force sensing, better maybe better single shot or cryo and I don't know if pulse ablation has any effect on this over time. I'm just wondering Doctor. Stein, if you could talk a little bit about sort of the evolution of success or understanding or maybe the size of that residual kind of persistent AF patient that's just really tough to treat and how these technologies are maybe changing that?
Gosh, that's a really tough question. Thank you for that. So from the issue, I think we all at this point have a really good handle on how to deal with paroxysmal AF, right? PVI, cornerstone for therapy and with current technologies, we get really very good results today. We all know that with persistent AF, particularly long standing persistent AF, the results are not as good.
So what's going to be the key that unlocks the secret of persistent AF? The honest answer is I don't know the to that. I think I know where the answer is going to come. And we think that the answer is going to come from really detailed analysis of well done high density, high definition, high resolution maps. We do have a number of clinical trials ongoing where we're acquiring those maps, right?
And then do the analysis to try to come up with and validate here's going to be the strategy that works. But of all the many potential solutions to that, I it'd just be a shot in the dark which one of them is going to work. But I'm confident that we're going to get an answer once we have enough of the high density maps.
Vivien?
Vivien Wahl with Federated and Kauffman. So you talked about the great success you've had with advertising on TV in select markets, and now you're running that nationally. So could we see some nice upside surprise in WATCHMAN sales from that initiative? It's not anything that we've seen Boston do typically. So I don't know what are we going to be seeing ads with the same frequency that we see the NOACs advertising on TV out there?
You could tell me if you saw the advertisement. I think we do expect to see better adoption. The journey is longer. When one sees a commercial, they need to see their primary care, their general cardiologists, and then they need to be referred to an operating center. Unlike the oral anticoagulants, when they advertise, they could see their PCP or they could see their general cardiologist and get that prescription later that day.
So the journey is a little bit longer, but we have seen results via the 18 plus months' worth of work that we have done in the past, and we've seen that growth more than double. So we anticipate that as we learn more and really take a patient on their journey of being aware of this to actually being the appropriate candidate to receive the therapy, definitely increasing adoption. We certainly think we can help more people by bringing this awareness to the forefront in this manner. And quite frankly, we see now we have over 30,000 patients this past 12 months that have voluntarily reached out to us via our digital campaign, via some of the TV work we've done in these pilot markets. These are indicated patients that voluntarily came to us wanting to understand more about this and is this an alternative for them.
And they've done this through the digital campaign and through our call center. So we see this over the course of time definitely continue to increase because there's a lot of patients that we can help.
That's great. And if I could have one question for Doctor. Stein. In the leadless pacemaker world, do you have a dual chamber product in your product roadmap? So
do we want to get into that now or do you want to hold that for Investor Day, Joe?
I think we'll hold that to Investor Day. So the short answer is yes on the road map. But right now, we're maniacally focused on completing DV on our VVIR or ATP application.
Any last questions? Okay. Just a quick one.
Sorry, I
forgot to ask about ASAP2 and just the enrollment pace there. And my understanding is that it's been a little bit slow, but it's been picking up. And does that have I mean, I don't think it does, but just when you see slow enrollment, you think about maybe the market opportunity is as big as it's potentially viewed to be. Again, I don't think that's the case, but maybe you can help us understand the dynamics of the slow enrollment and why it's picking up. Thanks.
So I'll take a shot at this, and then I'll hand it off to Ken here. So ASAP2 is a very, very important trial. And going back to part of your question originally in terms of what does that mean for markets like Europe. ASAP2 option, these trials, we believe, can move what is now in the guidelines because a year ago, we weren't even in the guidelines from a 2b recommendation in most parts of the world to moving to hopefully a one classification as experts really look at this closely. So there are 2 very important trials.
ASAP2 is a part of our clinical strategy. We see more centers now that are activated and we see that number and that adoption in those enrollments increasing. But I'll hand it off to Ken to maybe get into some of the clinical aspects of why we're so bullish on seeing improvements there.
Yes, I think I wouldn't read that into saying anything about the market size. I think actually, we're in some ways victims of our own success in that you need equipoise to enroll patients in a clinical trial. Patients have to be willing to be randomized. The doctors have to be willing to randomize the patients. And our implanters at this point really don't all have that equipoise.
They don't want to get those patients randomized to not get the device. And so it's been I think that's the primary reason that we've seen for the slow enrollment in ASAP2. If there's a silver lining to the slow enrollment, I always try to convince folks that sometimes these things have silver linings, is it's an event driven trial. And what happens is we're not enrolling at the pace we want to enroll, but we'll get longer follow-up. And so with lower number of patients, we'll still have we'll probably have more events.
So I think we're hopeful that with the trial design, we may not have to go all the way out to full enrollment to get an answer.
All right. Just one quick thing I'd like to mention, bit of an on sequitur. We did announce this morning an acquisition of Vertiflex, a part of our neuromodulation business. Really excited to see it extending our category leadership in the pain and the continuum of care for pain patients. It's an interspinous spacer device, FDA approved 5 year clinical data, complete 90% overlap in terms of the call point with interventional pain physicians.
And again between the RF acquisition we made in Cosmin, our spinal cord stim business and now adding Vertiflex to the portfolio, we think it we're excited for the outlook in Neuromodulation. So with that, appreciate your attendance and your questions and look forward to seeing you next at DDW and then at Investor Day.
Thank you. Thank you.