A Good Tradesman Never Blames His Tools…

There were signs. The stakes weren’t as high, so maybe nobody really noticed until we gained the benefit of hindsight. It didn’t seem stupid or reckless, but perhaps it never seemed like a really compelling idea either.

I’m talking about Boston Scientific’s attempt to be the third player in TAVR with its ACURATE Neo2. The Lancet has published the write up of the trial which failed to show non-inferiority to Edwards’ Sapien and Medtronic’s Evolut [link to article].

I’m talking about that. But I could equally be talking about Woolies having a crack on the tools with Masters. Or Bunnings going to the UK for some reason. None of these companies experienced catastrophe for taking those risks and failing — and none of these companies really offered their respective markets anything that was new or what those markets apparently wanted.

Anteris is very different. A failure of the type experienced by Boston Scientific (BSX) is definitely a multi-bagger thesis killer for Anteris — but what it offers in terms of sheer potential, is also different. It feels different because it is different. It’s not the middle tool at Bunnings between the premium brand and the generic. It’s not a big corporate with an underperforming division having a stab at getting some low-hanging fruit just because it’s a big company and that’s what big companies sometimes do instead of paying dividends to their owners. Anteris’ opportunity is to be the best, or be not much at all.

Boston’s ACURATE Neo 2 was never that. BSX can take or leave TAVR. It’s big enough already without it. I’ve posted this article before from about when Boston Scientific’s failure was first breaking in October last year:

https://www.fiercebiotech.com/medtech/tct-2024-valve-under-expansion-plagues-boston-scientifics-head-head-tavr-trial

In it Dr Reardon — now on Anteris’ scientific board — explained a major failure of ACURATE Neo 2 appeared to be the self-expanding mechanism. Essentially, surgeons not expanding the valve fully enough because, understandably, they prefer balloon expansion. BSX just had the wrong tool for the job, and it sounded a little like they wanted to blame the doctors.

At the start of BSX’s ACURATE Neo 2 Investigational Device Exemption (IDE) they weren’t even looking the best on the data that was already out there —with many hundreds of more patients than Anteris. When it comes to Aortic Valve Replacement lower pressure mean gradients are the best. The best FDA approved product is Evolut at 7.5mm Hg. It’s self-expanding and that’s annoying and fiddly, so most surgeons use the balloon expandable Sapien, at the slightly higher 11.2mm. In 2022 ACURATE Neo 2 sat between the two at 8.0mm.

Meanwhile Paterson is talking about patients regularly getting mean gradients of 5.0 mm Hg. Under that you don’t have aortic stenosis, so you can’t really get much better than that. Which means the outliers in the standard deviation are all at the other end of the spectrum. So Anteris’ 1 year data of the first 37 patients reporting mean average of 8.6 mm Hg — a whole stack of them quite elderly and very sick patients in Georgia — is a potentially a very misleadingly unfavourable comparison to the mean gradient’s BSX could show (having exposure to healthier and younger cohorts) when their IDE started in 2022.

BSX’s main competitive advantage was its regulatory approval in Europe. Expansion into the lucrative US market just made sense. They wanted to get a share of that middle space and they were in a position to get there faster than anyone else — until they just weren’t good enough. That’s all.

Anteris wants to be the best, and most at the company seem to think they are the best. The premium product. There is a market for that — the margins are higher and more people will pay over the odds for a premium ticker valve than would buy an $85 hammer, when there are two next to it for less than half that price.

One of Anteris’ first customers could even be Boston Scientific.