Medtronic, Edwards Lifesciences to continue battling beyond court system

The fight between Medtronic’s CoreValve and Edwards Lifesciences over transcatheter valve technology moves from the courts to the streets.

The protracted battle over transcatheter heart valves between Medtronic Inc. (NYSE:MDT) and Edwards Lifesciences Inc. (NYSE:EW) will be decided in the streets rather than the courts.

Judge Gregory Sleet of the U.S. District Court for Delaware this week rejected an Edwards motion to enjoin Medtronic from making and selling the aortic valve replacement device Medtronic acquired in its $700 million buyout of CoreValve Inc. in 2009. In April 2010, a jury found that CoreValve willfully infringed an Edwards patent, awarding $73.5 million in damages and opening the door for Edwards to seek triple that amount due to a finding of willfulness. Sleet’s latest ruling also closed that door for Edwards.

The ruling sets Medtronic up to start selling its CoreValve System in the U.S. once it clears regulatory hurdles, something Edwards was looking to avoid (or at least delay) as long as possible as it gears up its own launch of the Sapien valve technology stateside this fall.

The companies already duke it out in other parts of the world. Last week, Edwards reported $206.3 million in global sales of Sapien, a 94 percent increase from the prior year. Medtronic doesn’t break out CoreValve sales from its cardiac and vascular unit in regulatory filings, according to a company spokesman. But the device has been implanted in more than 12,000 patients in 34 countries, according to a prepared release.

During an earnings call with investors last week, Edwards CEO Michael Mussallem said the two companies actually end up competing in a lot of the same cardiac centers across the globe. The Edwards sales force spends a lot of time trying to “differentiate our product and point out the positive features,” Mussallem said, adding that it’s a company-wide priority to push several of the shared accounts with CoreValve their way.

But it’s in the mighty U.S. market that the fight will really take shape, with an estimated 100,000 patients seen as candidates for a therapy which involves replacing the diseased aortic valve without open heart surgery. That’s roughly a third of the global market.

At this point, Edwards has something its much larger competitor in Minnesota doesn’t have— a head start. Or at least the promise of a head start.

Edwards filed for pre-market approval with the Food & Drug Administration in October 2010 for Sapien and has a couple of clinical trials for both that device and its next-generation Sapien XP technology in cardiac centers in the States (the first of which is scheduled to be concluded by the spring). Both generations of Sapien are already available outside the U.S.

And Edwards staked its flag on an October 2011 release of Sapien; sinking about $40 million into a launch team that Mussallem said can compete in 400 centers in the U.S.

“We know that in the U.S. there’s going to be a period where we’re going to be the only provider of this technology,” Mussallem told MassDevice last month. That’s an edge the company didn’t enjoy in Europe, where Sapien and CoreValve entered the markets at virtually the same time in the spring of 2007. Edwards has forecast about $25 million in 2011 U.S. sales for Sapien.

For Medtronic, the path to the U.S. market will almost certainly take longer. In October, the company received conditional approval for a 1,200-patient pivotal trial of the CoreValve system in 40 centers in the U.S. and launched the study in December.

The company has not revealed its hopes for a U.S. launch timetable should it win a regulatory nod. But even with court battles over the technology going back four years, you can be sure the fight is just heating up. Edwards may have a step on Medtronic, but the Minnesota monolith has much deeper pockets. Stay tuned.