Abbott poised to profit from CMS review of TMVR coverage

Dive Brief:

CMS is reconsidering a national coverage determination for transcatheter mitral valve repair (TMVR), creating the possibility that Abbott's MitraClip will gain access to a far larger patient population.
The existing determination limits coverage of MitraClip to significant symptomatic degenerative mitral regurgitation (MR). On Wednesday, CMS began reviewing the use of TMVR in significant symptomatic functional MR. Abbott won approval in the indication in March.
Analysts at Cowen estimate CMS coverage in the new indication could triple the number of patients eligible for TMVR, providing a boost to Abbott's fast-selling MitraClip device.

Dive Insight:

MitraClip has emerged as an important growth driver for Abbott. Sales of the device rose 26.7% to $169 million in the second quarter. As MitraClip is unlikely to face competition in the near term, the opportunity to further grow sales of the device is limited only by the size of the TMVR market.

CMS' reassessment of TMVR is a huge development for MitraClip. The current determination, which dates back to 2014, permits the use of TMVR in the treatment of significant symptomatic degenerative MR. Analysts at Cowen estimate that gives Abbott access to 60,000 to 70,000 patients in the U.S.

The market for functional MR is far bigger. According to the analysts, the indication being considered by CMS covers anywhere from 60,000 to 140,000 patients, suggesting a positive determination will double or triple the size of the market. The analysts said their estimates may be conservative.

If Abbott doubled its current quarterly sales of MitraClip, the product would generate more than $1 billion a year for the company. The final size of the TMVR market may be bigger still.

"We believe Abbott has the lead in a multi-billion-dollar U.S. market for edge-to-edge transcatheter mitral repair that is still very early in its development," Cowen analyst Josh Jennings wrote in a note to investors.

Edwards Lifesciences and Medtronic are among the companies hoping to challenge Abbott for the TMVR market, but those rival devices are still in clinical development. The Cowen analysts expect Abbott to effectively have the U.S. TMVR market to itself for the next three years.

The CMS decision will shape how big an opportunity that virtual monopoly is for Abbott. CMS has begun a 30-day comment period to gather feedback on whether it should expand use of TMVR.

CMS is also using the review of the coverage determination to look at whether it should continue to require randomized controlled trials of non-FDA approved indications. Broadening the scope of the determination to include transcather mitral valve treatments beyond TMVR is also under consideration.