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Heart-Block Test Could Bring Volcano Corporation, St. Jude Medical (STJ) $2 Billion


1/9/2013 8:15:57 AM

Volcano Corp. (VOLC)’s test that shows which patients need heart stents could lead to a $2 billion market within a decade as more doctors use it to improve care, Chief Executive Officer Scott Huennekens said. Volcano, based in San Diego, and St. Jude Medical Inc. (STJ), based in St. Paul, Minnesota, are the only two companies that sell the technology, known as fractional flow reserve, or FFR. Volcano and St. Jude are both expanding in a “duopoly market,” Huennekens said yesterday during a presentation at the JPMorgan & Chase Co. health-care conference in San Francisco. “Will FFR continue to grow? It’s in its infancy,” Huennekens said. “We have an over $2 billion market opportunity here. We are just getting started.” Millions of people get stents to prop open clogged arteries each year that can lead to heart attacks. The tiny mesh tubes were the leading treatment for people with blockages prior to 2006, generating $5.3 billion a year. Since then, sales dipped 20 percent after studies showed the $3,500 devices can cause clots and aren’t better than less-costly drug therapy at extending life for most patients. Now doctors are starting to turn to tests from Volcano and St. Jude that have been little used over the three decades they’ve been on the market. The technology precisely measures arterial pressure, raising the odds of a good outcome by 30 percent when used to fashion a treatment strategy, according to studies. That allows doctors to provide a new level of certainty to both payers and patients. “There is pressure now in the U.S. and Europe to provide proof the patient needs to be stented,” Huennekens said in a Nov. 30 telephone interview. “Without proof, there may not be reimbursement. We are swimming with the flow of market dynamics.” The market for the tests was expected to hit $200 million in 2012, Huennekens said. The company says it may grow 10-fold to $2 billion annually within a decade if it works in arteries throughout the body.

Read at Bloomberg

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