Hi. Good afternoon, everyone. Thank you very much for joining Boston Scientific for this update on our rhythm management portfolio lead our Investor Relations effort. I'm very pleased to have joined with us this morning, Joe Fitzgerald, who runs our Rhythm and Neuro business. We're focusing on Rhythm Management here today as well as Ken Stein, who is our Chief Medical Officer for Rhythm and Neuro as well as the Global Health Policy.
And then Mark Bickel is our Vice President and Global Controller for the Rhythm and Neuro segment. So we'll get right into it. The usual risk statements and forward the usual risk excuse me, safe harbors and risk statements apply. And we'll spend some time giving you an overview of the portfolio and then leave a lot of time for your questions. So Joe?
Perfect.
Okay. So Joe Fitzgerald, President of the Vendor Management and Real Segments. We've shown you this slide before. The reason we're proud of this slide is over the past 6 or 7 years, we think we've built a highly innovative, disruptive and competitive portfolio stemming from our earning roots in just a basic EP company and a CRM company now to include things like left atrial appendage closure, complex mapping and navigation, a global leadership in the leadless or modular segment with SICD and a lot of exciting stuff that we're going to spend some time on this today in our diagnostics and migraine and more specifically focus on our LuxDx implantable cardiac monitor. As Ken always reminds me, we also have a rich history of supporting these innovative technologies that we bring to market with sort of best in class clinical evidence to support that and kind of highlight that throughout our presentation.
Very similar to what I showed you at our Analyst Day in New York back in 2017, we have 4 key objectives specific to our Ribbon Management position. What you heard Mike say on the call, on the Q1 call is through our Transvenous offense, through our SICD offense, we have clearly reestablished Boston Scientific as the number 2 high voltage player around the globe. That is a significant move that has been orchestrated over the last six and a half years. And our main objective is to expand that serial meter ship position that we're back into now. Secondly, we've been on quite a journey in our electrophysiology business and product segments.
We went from basically just an ablation and diagnostic catheter business now to a full portfolio of mapping, navigation across with the navigable catheters and we're starting that business and we're pretty proud of our success there. And we have a lot in the portfolio and we'll talk about that on several sides. And then there are new segments, the one that we will talk about, we'll focus on today, 2 new segments, our entry next year into the both the diagnostic and front of the cardiac monitoring segment and where we're going into the world of leadless pacers and modular therapies in CRM. And then I've invited Mark, who's really been the key architect of our profitability journey since 2012. And I brought him on board today.
And I think he'll give us some good insight and show you our confidence in hitting that about 400 basis points of improvement from today through 2020 across the WID and Management segments. You've seen this slide before, Slide 5, the items highlighted in blue. We obviously don't have the time to go through everything. So we're going to focus and try to give you some inspection on the key items here across our core CRM portfolio, our diagnostics and our piece of things noted in blue are things we're going to highlight today. So still a lot to go through, so I'm going to quickly jump ahead.
So as you saw in our Q1 results, globally, we grew our high voltage business in the double digits. And the bottom line answer to that is the global launch of our Resonate family of high voltage devices. They, of course, as I've talked about in numerous times, include our Enjoy Life battery technology, which has proven to become to be the world's long lasting long lasting high voltage batteries. We are now into things in our smart CRT segment, things like multi site pacing, new trials and studies in smart delay, can we go through some of that? We have checked the box on 15 Tesla MRI labeling virtually all around the globe and we're very close to checking the box on 3T labeling on MRI.
And obviously, the thing that we think is the absolute most differentiated algorithm that we brought forth on Resonate is our heart logic suite of physiological sensors to predict impending exacerbation or hospitalization of heart failure patients. Driving real differentiation across our high voltage portfolio, I would remind everybody that this family essentially got approved at the end of September, and we have been consistently ramping sort of the offense with the Resident 8 family all around the globe. And with that, Ken, I want you to talk just for a moment at the appropriate level. What is heart logic? Why is it important?
Why do we get the only FDA approval for a predictive heart failure in there? And then what are we building on the clinical evidence around it in the years to come?
Sure. And I know it's important
to say about HeartLogic is
that it's multiple unique. The first thing that is unique about it is it's the only diagnostic algorithm for heart failure, impending heart failure compensations with a sensitivity of 70%. There's 2, 3 quarters of these events can be predicted. And they're predicted with a median alert time of over a month, 34 days. So physicians clearly have the time to intervene if what's going wrong is reversible.
And as we've seen it roll out both commercial and clinical trials, and we'll get to the trials in a second, we see many, many episodes where it's actually really simple changes that need to be made for a patient that can get them back out of the alert status. But it's also unique in a second important respect. It is the only FDA approved alert as a diagnostic implantable for heart failure. And that's really important when we think of the impact that it has on workflow for busy clinicians. And it really changes the paradigm.
Instead of just every day or every week having a lab on to an web server and go through a whole list of patients, really what clinicians can do at this point is and they're hitting for using the word, but they can ignore it until and when the word gets transmitted to them. And the alert frequency with this is low enough that we actually see an opportunity here for physicians to decrease workload while getting this benefit for patients. We are, as Joe said, testing is in a series of clinical trials. There is a randomized clinical trial, manage HF. That's a 2 phase trial.
It's in its 1st non randomized phase right now, But that is a trial designed to quantify the benefit in terms of mortality and heart failure hospitalizations for clinics who use heart logic versus those who don't. And that's being supplemented by a very large real world registry that's called PREEMPTH HF and enable us to see how well those benefits translate outside of the randomized trial setting into more of a real world setting. And then finally, with commercialization, we're on clinical trial work. We're also engaging a series of economic value pilots with various healthcare systems, both in the U. S.
And abroad.
And Mark was one of the key architects of our risk year program. Mark, if you want to make a couple of comments on where we are with that? Yes. So as part
of the commercialization of the Resonate family, in the U. S, we've offered a broad based risk share on the Resonate platform for eligible customers.
And it really stands behind if
a patient has a decompensating heart failure event that's not detected by the hard rhythm algorithms, we pay for performance. And I think we've seen a ton of physician excitement in the U. S. Market at this point with this algorithm.
So that kind of wraps up the core CRM portfolio, kind of explains how and why we grew double digits in Q1. So we are very excited on the Resolute family. I'll switch now to the SICD. As we said on the Q1 call, we are 6 years nearly 6 years into the global launch of this technology. And we're really proud that we still have double digit growth in the SICD product category.
So why is SICD product category. So why is that occurring? Number 1, it's the clinical benefits and Kevin is going to talk to some
of the clinical outcomes and
the breakers that we have. But we've also, as you know, a couple of years ago, delivered Emblem MRI for MRI compatibility. We have recently implemented an automatic screening tool on our programmer. We have a new electrode insertion that facilitates the preferred 2 incision technique on there. And we also introduced the SmartPass algorithm, which again helps us to bring appropriate shock rates down to or below what it historically been seen in TransUnion Systems.
So a lot of momentum. Ken will talk on the next slide about what we've seen on the guidelines and on the payer side. So a lot happening in the core SICD with the implant, the algorithm performance of Smart Pass on the procedural enhancement techniques driving that 10% growth. We will look futuristically. We would now switch to a modular CRM approach.
We've talked to you about that before. What does modular mean? Modular means incrementally adding to a defibrillator as the patient develops the need for bradycardia pacing and or ATP. So the value proposition to clinicians is we have a indicated patient for an ICD who as you've seen in our untouched retrofitting, we think very few of them over the course of their tender with their SICD will develop a pacing indication. But we're going to test that hypothesis by saying we will make available a rigorous cardiac pacemaker called EMPOWUR that will be entered into 2 studies in 2019.
1 will be your standard single chamber VBIR pacemaker, very similar to what MicroLane in the United States. And then we will run a study where we incrementally add the EMPOWUR pacing scene to the SICD system to provide ATP burst pacing. And that is in a kind of a master slam arrangement for both of those. The product will finish development at the end of this year. It will go into clinical trials in 2019.
And then Ken, do you want to make some I know we've got a late breaker to hear the
I can also speak, we have a late breaker that's going to be presented later on today. The results are embargoed and I can't even hint to you what it's going to show, but it does look at the effect of the Smart Pass algorithm with the SICD and provides very good quantification of just how effective that is in reducing inappropriate shocks. And we're actually very pleased to present those data. Joe mentioned IN TOUCH, so just to get you up to date on some of the other trials, that is our primary prevention registry. Again, we won't have results on that until 2020.
Likewise, I think everyone here is aware we've spoken about a randomized head to head SICD versus transvenous trial for trial. And that is done with enrollment. And again, we're expecting to see the outcome results on that in 2020. But I think for the first time here, we can talk to you about the next Frutarion trial, which is a trial called Frutarion DFT, which is a randomized trial looking at whether we can avoid the need for defibrillation testing in patients who are undergoing de novo SICD implant. I can tell you that we did have our first patients involved in that trial earlier this month.
And then, as John mentioned, in the time lines for the EMPOWUR and MONTOR trials. And I'm glad that we're happy with this job. One of the things that maybe we haven't done a sufficient job of highlighting that you all yet has been the recent update to the ICD guidelines. And so the latest iteration 2017 guidelines for the first time formally represented BS ICD, as class 1 indication for patients with limited vascular access, etcetera, sort of the mean to use population, But to include it as a 2A recommendation for that broad middle ground of patients who are getting predominantly primary prevention ICDs, but who don't have an established need for pacing or for CR2. And that's been very impactful.
One of the impacts that it had is it helped our Health Economics market access team through a lot of effort to get broadened coverage of the device from private payers. We've always had broad coverage from Medicare under the NCD. At this point, all major U. S. Private payers went from some degree of positive coverage of the SICD.
It does cover basically 90 2% of commercial covered lives. But what we can tell you today is that both Cigna and United recently updated their policies to broaden them and to be consistent with our labeling and with the guidelines, which are broadened coverage for 41,000,000 lives in the U. S.
Okay. We're going to talk about next we're going to move from transvenous serum and modular serum with RSOCV. I'll give a couple of comments about our Luxe DX insertable cardiac monitor. So we intend to complete development, verification, validation, etcetera later in 2018. And we're looking at a market launch in both Europe and United States in 2019.
Couple of things about the system. We think it's going to be a highly competitive form factor, use factor and implant technique. And we have great visibility. We see 2 of our competitors with similar devices in that sub 2cc range to be able to state that. I would also point out that we feel really good.
Some of this is tied to the atrial diagnostics that we enjoy with the SICD, but our algorithm performance to detect atrial arrhythmias, pause, bradycardia, tachycardia, we're really confident that at launch, we're going to have a high performing detection suite of detection algorithms to do that. We will also offer a mobile solution either via a dedicated phone or a patient's smartphone to enable easy transmission to the cloud for monitoring with their patients. And obviously, this is highly synergistic with our core CRM sales forces around the globe and other call points within the broader cardiology community. So again, work on this gets done later this year. We will submit to the 2, the C Mark and FDA, and then we will be launching in 2019.
Ken, anything I forgot about that?
No. I
think you got that all right, Tom. Okay. Thank you. Thank you. Okay.
So let's switch to Bakshin. Ken and I will share this. So our latest count is we have greater than 50,000 implants worldwide. China is already poised to become our number 2 global market behind the United States. In Japan, we finished a clinical study, Ken, I want to comment on that.
We finished enrollment in the Japan study and we're targeting a 2019 launch, a very, very key market. We Doug, when we update you, this says at the end of 'eighteen, we think we'll be 500 of the largest cardiovascular centers in the United States. As you've seen in many of the publications dating all the way back to TCT a year ago, one of the things we're most proud of is that the safety profile in our broad launch at minimum matches what we showed in prevailing CAP and actually trends favorable to that acute complication rate that we saw in those pre market studies. Ken, do you want to comment on FLEX and the NEST advantage? Yes.
Let me
do that. So we presented the first results of our FDA mandated post approval study nested at ACC earlier this year. So there's acute implant data in 1,000 patients. And again, there's a comprehensive registry under the CMS NCD. Every patient gets entered into it.
And we were really pleased at this point from the 1.5% major adverse event rate at implant. And again, I'd rather it be 0 than 1.5%. But 1.5% is actually lower than it was in our clinical trials. And it was far lower than any other procedure that we know of that's performed in the left atrium. I think it's just really a testament to the way we rolled this therapy out and to the diligent training and diligence of the implanters.
And I think that's quite a big role in the overall success of WATCHMAN. Really exciting news to share with you. We've talked to you previously about the next generation WATCHMAN device. That's the in flex. It's different from the previous device in that it's got a closed distal end in that it's got more struts, so it's more conformable to the ostine of the left atrial appendage.
Also, it is shallower and comes in a wider range of sizes, so that
it can be used for
a wider range of appendage geometries. And it can inform everyone today that we have had our first implants in our U. S. ID trial, which is called Pinnacle Flex. And we had 3 enrollments that went in on this Monday.
And all 3 were quite successful. So we're pleased with that. I do want to to correct one statement that was made at our last earnings call, which is that the FLX trial is a U. S. Trial and we are not enrolling patients in the FLLEX IDA in Europe.
The last, I think, just want to make mention of the weight breaking trial that was presented today on device associated thrombus with Watchmen. What was important data to get out there? First off, it confirmed the rates of device associated thrombus that we've previously published in the range of 3% to 4%. It's clear that those patients who have thrombus do have worse outcomes from those who don't. That's not particularly surprising.
I think for us, the real importance of this data is it highlights the need for careful patient selection, highlights the need for follow-up and medication prescription as per our labeling. But what's reassuring for us is, first off, the vast majority of those cases were able to be managed medical without any adverse event. And in fact, when you look given the relative infrequency of device associated thrombus and then the relative infrequency of stroke in those patients, Actually, strokes due to device associated thrombus were very rare in our clinical trials. And that overall, the outcomes with the device are still clearly comparable outcomes with warfarin and far better than the outcomes for patients who aren't taking anything to protect them. And in fact, I think the more important presentation about Wakebreaker was one that came a little earlier, which was a really large real one evidence look just at usage of referring NOx that really highlights the issue of non adherence to those medications and shows, unsurprisingly, if you don't take a pill, it's not effective.
And to us, really highlights the important role of WATCHMAN in high risk patients who have a vision seeking alternative to all anticoagulation.
Even qualitatively too, the role of the electrophysiologist, which is our core customer in motor management and sort of the progression of the penetration and the therapy awareness and the education of the referring cardiology community is super important. So I don't know if any of you were at the Tuesday stroke LAAC meeting, but I think that is one of my most favorite meetings of the year, run by Vivek covering a whole range of topics pertinent to the LAAC space. So that was great to see as well. Switching gears now from WATCHMAN to our electrophysiology portfolio. Busy slide, right, but we are highlighting a couple of things.
We've been on training starting in very late 2014 where we are essentially launching a novel disruptive mapping and navigation technology. That began with just the hardware and software and what we call Gen 1 with you. Today, we sit globally largely with approval for HD X in all major markets, several major markets. We have converted most of our ablation catheters to be compatible on the navigation, the magnetic navigation platform. So we just got approval in the United States and we just launched last week for our last product in that sort of portfolio.
So we have whether you look at large tip, small tip, open irrigated catheters with my bio electrodes. We now have the full suite of our operation catheters. This is really important because magnetic navigation is clearly the preferred localization and navigation technique around the globe for complex arrhythmias. So today, we sit here with a fairly robust lot of work done by our R and D teams with HDX approved with all of our great ablation catheters, our our historical legacy ablation catheters approved. We're going to talk about some of the other things that we're going to launch and I'll do that on the next slide in 2018 2019 and we're also going to highlight our acquisition of Alpama, a single shot RF based balloon and the Securus novel esophageal temperature monitoring system that we just announced, I believe, in April.
Okay? So let's look at our 2018 portfolio. I already talked about the lab enabled that's virtually our full portfolio, covers 99% of the type of catheters and patients that we review. I have to differentiate where we're on market and where we are approved. So the next thing that comes is what we refer to as our direct sense technology.
This is our 2.0 Widneo software that is actually already approved and we've been in limited market release in Europe for the past 6 months and we've delivered a full market release with 2.0 DirectSense technology, which we think is novel. It is tied and paired with both our HDX hardware, 2.0 software and our latest generation catheter, which is the IntelliNav, means it's got a NAV sensor in it. It's an open integrated catheter and it has these, I don't think you can see it on this slide, but tiny, we're the only company in the world, but tiny light power electrodes. So that enables us to do things that I don't believe any other company has demonstrated or disclosed yet in this area of impedance monitoring at the catheter tip interface. So that is full launch in EU this month and we're still pending FDA clearance on that technology and we expect it sometime in calendar year 2018.
The 3rd column is what we refer to internally as 3.0 software and it's LumaPoint. And I don't think we have any electrophysiologist in the room, so I'm not going to you're
a retired electrophysiologist, I understand.
But that still counts. But we are super excited about this. This takes these unbelievable high density, high quality laps where we say we have a 99 plus percent accuracy in accepting and rejecting these massive high density maps. And think of this as a suite of software algorithms to rapidly sort of figure out what do those maps tell you, whether it be people who want to look at complex, fractionated, split potentials and no one has ever done this in mapping and navigation. So 3.0 software, it's done.
I'm not going to try to talk to you about regulatory approvals because software does and does not sometimes need to have regulatory generation grid the So Ken, do you want to cover this and talk about sort of the 2019 and beyond EP Technologies?
Absolutely. So first is we continue to iterate just in terms of traditional single point RF catheters. Joe mentioned to you Direct Sense, which is going to be embodied on the MabMaf ILI catheter. Next after that is to have our own proprietary force sensing catheter. Again, we recognize the adoption of force in the marketplace for those folks who are still using point on earth catheters and expecting CE mark on that back half of twenty nineteen.
But going beyond point RF to single shot, we are really excited about the possibilities of the APAMA RF balloon catheter. It is, again, multiply differentiated from any other product that's been out there. It's an IF balloon. It has 2 sets of electrodes, 1 around the equator that can be used to ablate, but also a set of electrodes on the distal surface, which gives a lot of flexibility for the lesion pattern to want to put in depending on how the balloon is oriented relative to the vein. And the really cool thing about it is you know how the balloon is orientated by the vein because it does have 4 integrated LED cameras.
So you get full endoscopic visualization of the pulmonary vein osteoarthritis before, while, and after you ablate. And what we're seeing already in our 1st human use trial is the FISHIENT-one trial. It's been conducted in Europe and in New Zealand. Has been wonderful, acute success with this, but also blazingly quick procedure times because of just being able to see things, let's see things.
And we'll show you a video of that on one of the next slides we have in Berlin. And the
last is the Secureis, which should be intervention as a novel technology for monitoring temperature in the esophagus. The big fear with almost every energy technology that's used to ablate within the left atrium is the fear of esophageal damage. People conventionally use thermistor probes for monitoring the esophagus. Those probes are not designed for that use. They're designed to measure core body temperature.
And so they're really poorly reactive. What most EPs do is use a temperature cutoff of 39 degrees to say, above that, it gets dangerous. Everyone in this room has had an esophageal temperature above 39 degrees if you've ever had a fever
or if you've ever had
a cup of coffee. So I can't possibly be right. It's a limitation of technology. The Securus technology gives you full 3 d resolution in the esophagus, so you don't miss any hot points. And it's very quickly responsive to temperature changes.
So if you pick a much more appropriate temperature cut point, I think it'll help both in efficacy and with safety of abrasion procedures in the left atrium. And if we go to the next slide, I think that's the one that's going to show us the epimer balloon. And so what you're seeing here actually is an endoscopic view through the Apama balloon where it's in the osteoarthritis of the and it's a little hard to see in here with the writing, in addition to the ablation electrodes, there are also diagnostic electrodes embedded in that balloon. So you can do the full procedure with that balloon. You don't have to take it out.
You don't have to add a second, a lasso or any kind of curvilinear catheter to establish whether the ablation worked. And as we've said, expecting a CE mark in 2019 and expecting to begin our U. S. IDE, which we're targeting for the first half of twenty nineteen. Now again, just to give you a little more on the cirrus probe, just to show you how it works and how different it is from anything that's out there.
And so it uses infrared thermography, gets a very rapid map of where there's heat in the esophagus, probe rotates and it just I don't know what the technical word is, it goes up and down. And by doing that, you really get again full 3 d view of the temperatures in the esophagus. And you see here with the example, if you get one hot spot and you see it as it develops, in this case, the temperature is in the 50 degrees and likely a physician would choose to come off of that time. It's much easier to use. You can use a single dentistry probes.
You need to constantly go on fluoroscopy and move the probe up and down and back up. And you really don't know if you're matching it to where you're delivering the lesion. And we've seen a lot of excitement, particularly the folks who've used this in clinical trials and so didn't even ever go back to using anything different, targeting commercialization of that in both the U. S. And Europe first half of next year?
Yes. I think the kind of the one bullet point and if you think about Ken's point that if you send a single thalister down the esophagus, you have to keep that position where the vibration catheter is. This system each second will have a flow of 6 centimeters and it gives you 8,000 temperature points without any involvement of electrophysiologist or the anesthesiologist. So it is compared to what is done today in esophageal temperature monitoring, this is a pretty significant leap forward. Okay.
Ken, new data have already had. So we touched on
a couple of the trials here that we're particularly proud of. Again, a nice agenda to say, but really do believe we are the leaders in developing the clinical science that really validates that all innovations meaningfully impact patient lives. We've talked already about the device radiothrombocyte breaker. Told you that I can't tell you anything about the Smart Pass light breaker, but we'd encourage you to look for that when it comes out. And the other big light breaker, and this is one that we co funded.
I'm sure everyone saw the results of Cabana. We were encouraged by those results and missed its primary endpoint, but there were some very clear positive signals in the data. I think we'll have to wait until the full trial is published before we really get a sense of what impact it's going to have overall on the market. But at the very least, the data there clearly reinforced the data from trials like Castle AF on the benefits of RF ablation in patients with heart failure. And so I think overall, I think it's going to be a positive impact.
I'm not going to run through all the different posters that we show here. But there's only one that I would highlight because I think it's really important. Again, it gets back to the core. It's not particularly sexy. But it was a trial that we funded through our investigator initiated trials process by the EPMC by Sender Saba.
And what they did was to use their EMR to identify patients who should be defibrillator candidates, but who don't have a defibrillator. And they randomized sending alerts out to some practices versus not sending alerts out, just going from usual care to other practices, and showed them a randomized trial that sending those alerts out was associated with 23% increase in referrals to EPs for defibrillators. And there's a strong trend in actually feeling mortality benefit for the patients whose physicians got alerts. And the reason I highlight it, I think it tells you that even in a highly penetrated mature market like we see for our primary prevention ICGs in the United States, there still is underutilization. There still is a pool of patients that could be tapped.
And that things like the EMR that can actually be used in a positive way to get more patients into the pipeline. And the only thing I'll say here, which is a preview of the upcoming European Society Cardiology Heart Failure meeting, we do have 6 different abstracts focusing on different features of heart logic and making it clear that we're going to continue to advance the science with the heart logic, heart failure diagnostic and make sure that that gets disseminated to heart failure physicians as well as to EPM planters. Great. So, an closure here. I mean, obviously, as
part of our strategic planning process, we've had the objective of growing operating margins within the Ribbon segment for many
years. I think it's the controller that I'm most proud of is we've been doing that on a short term and
a long term basis, right, consistent results now for 5, 6 years. Clearly, we've seen the growth in profitability. We've really doubled our segment margins on what I
would call modest top line growth within the management. But I think what's most exciting is if you look at our core businesses. So if you start with core CRM,
what you've seen since really the last almost 3 years is consistent performance of that market each period in Core CRM. So we've been growing 2% or 3% in markets that have been flattish over that 3 year period of time. So consistent performance on the core. And all of that's been happening with this replacement curve that we've been talking about for some time. That's behind us now, right?
So now we're in a world where we've closed the major gaps in the core CRM portfolio. We have clear differentiation with things like CardLogic. And we will have the benefit of replacements not only in our
core business but also
in our SIC business, which is a pretty chunky franchise today with very, very little replacements.
And let me just step down on seen the performance the last 3
to 4 quarters. We've been pushing growth rates up into the teens. And clearly, you've seen the portfolio that's been laid
out here today in EP. And as we look to the
future, obviously, with our reporting change in Q1 with our combined women and minerals segment, at this point, we're kind of reconfirming the guidance that Joe had given at Investor Day, which is about 400 basis points in operating margin growth under the new segment. So put that at least at current currency rates around 23 percent in 2020. So with that, I think that's the only prepared remarks and we're ready for Q and A.
I have two questions. One for Joe. As everybody knows SSCDs of a premium. As the market migrates to SSCDs with ATP, can we expect to see that premium maintained across the market? First question.
The second one is for Canis. I was in the ready session this morning with 4% of the patients had demonstrated pharma. Some of them were very late, right? And so it actually speaks to the but ascertainment wasn't uniform and long. And so the question is, is this an underlying fact?
So 4% of the patients have 14% in strokes. So the question is, can thrombus be more common than that? Is that open up opportunities for reducing the stroke rate? Well, I expect to see with either warfarin. And I know it's at the warfarin level now.
I mean, I'll take that first.
It's actually a really deep question. I think you've hit on where we see this going. And I think it's important to point out in terms of first of all, there are concerns about Lilly Lake Thrombus. The fact of the matter is we've had 5 year follow-up now in both randomized trials and in registry studies. And we know that there's no acceleration, there's no increase in stroke risk as you go laid out.
So we're pretty comfortable that unascertaining late thrombus is not any kind of major issue that's going to hamper the overall efficacy of the device. But I think as you point out, is but what would be the we know right now the comparable warfarin, we know we've got 4% device associated thrombinist. If we can come up with things that knock that device associated thrombosis down to 2% or 1%, what impact does that have? And the answer is that gets us to be better than warfare. So what can we do to do that?
There are really 2 different lines of attack for that. One is modifications to the device itself. So I didn't say when I got into Flex, one differentiation features of Flex is that the area of exposed metal, the screw, is smaller than the area of exposed metal on the current generation of WATCHMAN. And we know that many of the mice associated with thrombosis appear to use exposed metal as the nidus for where the thrombus originates. So we're hypothesizing at this point that reducing the area that metal screw may well reduce the DRT rate.
Now that's hypothesis and that we aren't going to know that until we get through trauma like Pinnacle Flex. A second question is whether we're generally doing in terms of the adjunctive drug regimen that would help reduce the thrombus rate. And one of the other exciting features of the FLEX device is that that trial is not just a trial of the Flex device. That trial is also our first trial where we're using one of the novel or actually a dealer's choice for physicians, any of the novel oral anticoagulants as the immediate post implant regimen and not warfarin. And so also time is going to tell for us whether any of the NOACs are better at avoiding device associated thrombus than those warfarin.
Back to your first question, Bruce, over the 6 years of launch as the only LCD around the market and an SIC technology that's 80 gs and has just more stuff going on inside the device. We did launch it at a significant premium. We have maintained that pricing premium very, very consistently around the globe. If I look at what's going to happen through the 2020 timeframe that we've talked about publicly, I don't really see another subcutaneous ICV coming across the day line in any major market. So I don't think the and by the way, our modular system won't come into the market in that timeframe either.
So I don't believe that's going to be an issue in pricing. If you said, well, what's the theoretical for our SICD plus an EMPOWUR pacing or ATP scene. We have the SICD, which is correlated as a premium priced product. And we see one of our competitors launching a needleless pacemaker at a substantial 300% more expensive. So I see the 8th patient that received that modular therapy after we do the clinical trials and after we get approved as being probably a price premium to what we're finding today for ATP.
Joanne? Joanne Lynch from BMO Capital Markets. A couple of questions. What is your view of the Conveyor trial? Wall Street Journal seem to have its own view.
You mentioned your modular CRM systems. Could you give us an update on that, please?
Sure. Let me take the second part. So it's kind of interesting. I was going to point this out at some point in time. But let me give you a little prelude first.
So we love the current portfolio we have. I mean, I don't believe our commercial portfolio around the world has ever been stronger than it is right now in 2018. But if you notice, we have like 4 elitivous programs all finishing at the exact same time. We have our 4 sensing catheter. We have our implantable cardiac monitor, LuxDx and we have our Empower pacing systems and we just forgot all finishing sort of development at the end of this year.
So if we put the timelines for where they're going next clinical studies, etcetera. So in power, the actual seed that will either do single chamber pacing or single chain or IV ATP, That development work will be completed late this year. And then next year, we're going to get a supportive clinical studies that will be required in key markets around the globe. So we'll start those studies in 2019 and finish the development work this year.
And Savannah, run out, John. And everyone, even the Wall Street Journal is entitled to their own opinion. And I'll give you my opinion, but the caveat on that is I think we're really not going to see where things settle out in the community as a whole until the paper is published, because there's a lot more detail in data than what Doug Parker was able to present during the time allotted to a single leaf breaker here, and some of that's important data. But the rigorous statisticians view, we speak as clinical trialists, we've got a label that missed its primary endpoint. I would be behind that, I would leave 3 observations.
The first is this is a worst possible case trial design in that moment. Enrollment of patients in this trial went on over about 8 years. And so nearly began and for many years was carried out with technologies that are now considered obsolete and with strategies for ablation that have subsequently been proven to have limited efficacy. And I would tell you with a high degree of probability that every electrophysiologist here, if you ask them, would say that the results of that trial were started today would be better than the results that we got with the trial that was started 8 years ago. I think the second point is you kind of hate the term negative for a trial.
What really was, was a neutral trial. In the intention of treat analysis, it didn't show a proven benefit to ablation, but it likewise didn't show any harm to ablation, even though this was a high risk group of patients. And you could have gone on and gone into it worrying that adverse events might actually show harm. And so I think everyone is going to take this as saying, hey, what this shows you is that ablation is at least as effective as drugs, even as the first line of therapy for these high risk patients. And then last and the one that I come home to is when you start looking deeper into the data, there's some really strong, really positive signals.
I think the one that's most apparent right at the outset, even the intention to treat is heart failure patients and sort of coming on the heels of Castle AF and the trials that preceded Castle AF. I think this is going to have the very least advance the market for ablation in patients with both heart failure and atrial fibrillation.
We're waiting for Josh. One from the web here. Ken, back on WATCHMAN, physicians are eager to see versus NOAC. And there is a study that this person has seen in PROP comparing WATCHMAN to notes. Can you just talk about that and potential timelines or the significance of that trial?
Yes. I have two minds on this.
So the first one, I understand people want to see how does it stack up against NOx. There's this perception out there that NOx are more effective for the warfarin. That's one of the reasons
I felt that that trial
that DJ MacKenzie presented today at the late point of view session that Vivek was at was so important. And that actually showed a large real world data, claims based survey that, that should not actually be better than warfarin. And in fact, in patients who are poorly adherent, they are actually worse than warfarin. Nevertheless, people ask the question. There are some individual studies or some small multicenter trials that are doing it.
We will be commencing a study called Option. It's going to going to be our first trial comparing use of WATCHMAN with these NOx. That's going to be in the post atrial fibrillation ablation population. And we're looking to launch that trial hopefully in 2019. But the other point and the reason of the question confuses me is I believe it's very upfront all along in saying for those patients who are doing well on an anticoagulant and are predictably going to do well on an anticoagulant, God bless you.
Go ahead and take the pills. Where WATCHMAN is useful, it's as an alternative for patients who are high risk, who are eligible for anticoagulation, but who have valid reasons to seek an alternative. And when you look the discontinuation rate of these medications and when you look at the number of patients who are just being left unprotected, I know that we are going to be left unprotected. And to me, those are the really important patients to focus
on. Okay.
Thank you.
Thanks. Congratulations on the progress of SignUnited for the subcutaneous ICD coverage. I was just wondering, in one of the risks we've historically thought about for the subcutaneous ICD adoption and growth was the reimbursement level. I understand that it's reimbursed at the same level as a single chamber ICBM plan and it's with the premium pricing. If that procedure is not profitable for a hospital, then that could limit the growth in obviously that has not been the case.
You guys have grown. So I just wanted to check-in and see if that's still the case and are these procedures profitable And could you be growing some of the enzyme to driving deeper penetration with a lower premium price so that those procedures aren't actually for hospitals.
We must have talked to Mike by the way, several times. Hypothetically, I can't answer the price sensitivity, etcetera. I think what has driven the 6 year 6 year sort of offense with SICD is the differentiation of the technology. Keeping leads out of the vasculature, out of the valves. It's just intuitively obvious.
Now we will know in 2020 in that core kind of SCUD Health Medicare eligible patient population, how do we do it against a transgamous system. And so I think we're really excited about that and we've funded that study. That was an ISR with Molan Canals. But I'm not going to really speculate like what would it be if I were 10% less. I would say the power of the sort of the value proposition for SICD has not been in huge shipments.
Reimbursement, conversely, right, or limited reimbursement in only patients if you read all of the first wave of private payer reimbursements in the United States, you would see things like no vascular access, previous infection, right? So what we're really excited about is now you see major insurers like United say, no, it's the exact same indication which will take down the actual refusals or the multiple reviews that sometimes you have to go with private pay. So we're pretty encouraged what we see. I'll tell you another other thing too. If you look at markets where the pair isn't really in the decision making process.
So I would put Japan in that category and I would put many markets in the EU, right? We are growing substantially faster than our global 10% double digit number when it's a clinician that gets to make the sole decision for what is right for that patient. And we make a great progress in the United States with the private payers.
Great. Just one follow-up. Just the EMR study that was performed by UPMC, it sounds very interesting. What can Boston do to help centers, I guess, bring that data to the real world? And is there anything you will do individually instead of marking that study?
Is there anything you can do within systems, EMRs to help Boston capture share through that study, etcetera. But that would be interesting to hear. Thanks.
I want to get to that because I have kind of NANDIX and what it's
But I think this is the promise of the digitization of health care data. Right? Think of 15 years ago, you have a whole bunch of mill folders in endless stacks. That's where your healthcare data was. So I think what it does is it gives you a glimpse and this is not just an EP, but we see it in pharma, the ability to quickly gather data out of a landmark that tells you patients that are being undertreated, overtreated, who have comorbidities, who have not seen a specialist.
I think we're just and this is a great example. We're just scratching the surface on how the digitization of your health records and your health status is going to lead to better and earlier identification of patients at risk for a lot of diseases and in this particular issue, prevention of some cardiac death. All I
might add is at least at a higher level, again, it's not the tactical how you're going to deal with this for ICD referrals, but you can imagine similar things to be used in identifying patients who are at high stroke risk, who need some kind of stroke prevention therapy pretty easily. And it fits in also when you think back to heart logic. And this really is, again, using digital technologies to take burden off of caregivers, but to provide notifications that it's time to do something. And it eases workflow, it simplifies work. And again, if you look at the example from UPMC, it clearly helps lead to better outcomes.
2 more from the web, and I think maybe Joe, I'll take the first one and give the second one to you. So first is on the news that about a 60 minute segment. And but the second one for you, Joe, is if you can dig into some of that double digit ICD growth in Q1, you can break it out between how much was MRI, HeartLogic, ENDURALIFE, etcetera. So just quickly first on the 60 minutes segment, we do believe that 60 Minutes will have a segment this Sunday, 13, discussing transvaginal mesh and essentially disparaging its safety and effectiveness in treating women who suffer from stress urinary incontinence and pelvic organ prolapse. We believe there's nothing new in the segment and that all information has previously been publicly disclosed.
And as a reminder, this has been going on for quite some time. As you know, we give consistent updates on our Q1 2018 earnings conference call. We stated that our total legal reserve of which message of portion stood at $1,511,000,000 We expect that about $800,000,000 in cash payments will be made this year as we seek to resolve the situation and close it out. And that we have settled 47,500 out of 49,000 500 cases claims, excuse me, either final, near final or conditional settlements there. So, and I think just one other thing is that many have chosen to exit this market and we have made the specific the purposeful choice to continue to support our physician customers here who need these therapies to provide options for women with terribly debilitating and embarrassing conditions.
And this choice has been supported by leading physician societies and task force such as the American Urogynecological Society. So with that, Joe, back to ICD. So the
question is, can we pinpoint this double digit growth that we saw in Q1? And what would we pinpoint to? I think it's all of the above. So if you look at what has driven our offense prior to getting MRI or heart logic or multi site pacing, it was really a few things. Number 1, this longevity story that we've been telling since 2,008, that has driven a lot of momentum in our transvenous ICDs and CRTVs.
The phenomenal lead reliability that we have had with our joints our taxi leads, right, has been a huge differentiator for our technology. The multi site pacing, the MRI, that's not new in Europe, so that's been driving it for a couple of years now or a year and a half. They clearly didn't hurt in Q1 where we have the 1st and only FDA approved heart logic predictive alert. That drove some of our offense having finally a 105 team attacking the high approval that helped. But I really I don't think we can pinpoint it out.
We just love the fact that we had a 10% plus 10% high voltage growth globally. And I think as you saw one of our competitors report and you'll see the next one, I think that would be dramatically differentiated from what they put up.
What about sorry, part of the question too is on replacement and not to tease it out perhaps, but perhaps, Mark, you want to comment that remains on track and what we've guided to in terms of kind of Yes.
I mean
I would say one more thing and probably peel back the onion a
little further for Joe. But what I was most impressed by in the Q1 performance was all of the high voltage franchises were performed very consistently. So whether I look at our Transvenues business, I look at our CRT therapy business, look at our SIC business, we really hit across the board, not only in the U.
S. But all markets.
I would also say in Q4, you saw acceleration of our high voltage business with backward labeling. And then we really got on the offense throughout Q4 and clearly going into Q1 on the contracting with Resonate. So the acceleration that you see in high voltage growth is partially driven by the contracting cycle on the Resony family devices in the U. S. But I think the consistent high voltage is impressive.
On the replacement curve discussion, we've been clearly giving guidance on this for, I don't know, 3 or 4 years now for some time. When I look at our replacement cycles, as a reminder, it's been driven by EnduraLife, right? When you launch a battery that lasts roughly 3 years now, you have to wait for those devices to come out, right? So if I start with the transvenous devices, at this point, we're seeing growth in our CRT replacement curve, exactly as we said we would. So those markets that launched this technology in 2008 with the launch of the CONVUS device are now seeing the replacements come back in the CRT front.
On the core ICD side, we're
in the trough right now. So we're not really talking about it
as a headwind. We're not really talking about it as a tailwind. But as we start to move forward about 12 months, we'll start
to see more of those devices, particularly in
the dual chamber application come out
and then eventually the single chamber devices along with SICD.
And what we've said on that, just to remind you, I told you at Analyst Day that we see replacements driving 100 basis points of differentiated growth our CRM business through 2020. And then the last thing and Mike you might want to comment on this because you're closest to it. But to date, we've launched in the United States as an example of the Si CV. And what we've actually seen is we've seen an over performance of that battery technology. So we haven't really even began to see SICD replacements.
And those are not 15 year devices like our single chamber ICDs. So we're looking to be less of 'eighteen, 'nineteen, 'twenty. You're also going to see a lot of the momentum that we've had with SICD, the normal patients who are typically younger, right, than the transvenous ICD patients also needing a replacement in the next two and a half years. Yes. That's what I would
say about that is clearly the launch of SICD for all practical purposes was late 2012 into 13. So we launched that Jevgen 1 device for about 2 years. That was a battery longevity that was just north of 6 years, right? So you guys can do the math on that given the timing of that launch and when those replacements
will come.
Clearly, our contemporary devices use a leverage on our DuraLife technologies and then we'll come much closer to 9 years if you look at the latitude data that's in the upper 8s. So that would give you some input for your models.
Perfect. And then one quick one because we're coming up on an hour. Go ahead, Matt.
Sure. Okay. And then I have to take one quick one. I guess, last question that I get a lot is just you touched on Watchmen footprint worldwide sort of competition in Europe and just look to hear your thoughts on how you expect to kind of protect clinically or commercially in the U. S.
As more competition reaches the U. S? Or should we expect and hoping to expect to see some kind of inflection in the market that would help kind of lift all boats?
Yes. I would start with because I think when you think about a technology that came to market with 2 randomized trials, 2 large cap registries, the data you saw from Neste can talk about the Pinnacle Flex. So leading in clinical science and continuing to push the field is a great way to engage our customers. In the relevant sort of through 2020, right, our biggest protection mechanism is to get Flex through its clinical trial and launched. We, as I think we have told people publicly, and if not, this will be the first one.
You know, we both Atri Tech have been working on the Next Gen Watchmen. We inherited that in 2011. We delivered that into a limited market release 2 years ago. And we have sort of 6 design characteristics improvements that Ken talked about. We hit a check plus on 5 of those.
And we did not achieve the same embolization rate. And we have a very well documented embolization rate of WATCHMAN through those 2 randomized trials, the CAP and the global post approval experience that is less than 1%. So that is a strict bar that we have to hit. The original design effects did not hit that. So we spent 2 years redesigning it and tweaking it.
So, obviously, we're super confident that they're running into the IDE that we have fixed that problem and we'll take that 6th that 6th design characteristic and hopefully put a put a check plus on that. But that's why we're doing the Flex ID. So I think in the relevant sort of when somebody get into a big market like the United States, we really like our chances and our timing of the FLUX study. And being able to have that as a true second gen device going up against new market entrants in countries like the U. S.
And being able to Europe much sooner than what idea of the timeline would be in the United States. Ken, anything to add?
Great. Joe, Ken, Mark, thank you very much.