Stents have been with us for about 20 years now, and they have definitely made a significant impact in both the treatment of coronary artery disease and the med-tech landscape. As the leaders in the space, stents have become valuable profit centers for Abbott Labs , Medtronic , and Boston Scientific , which collectively control the U.S. stent market (with more than 80% combined share) since the 2011 departure of Johnson & Johnson. Stents provide not only a meaningful percentage of revenue to these companies (from 7% at Abbott to 16% at Boston Scientific), but generally above-average margins as well.

The growth of the stent market has not been without controversy. Almost from day one, some clinicians have argued that stents are not necessary and add more to cost of managing patients than they deliver in benefits. This isn't a trivial issue for Abbott, Medtronic, or Boston Scientific. Above and beyond the revenue they reap from stents themselves, they are central to the company's vascular product sales efforts. While Medtronic's transcatheter heart valve business could stand on its own, Abbott and Boston Scientific would both see significant headwinds and sales deleverage in the face of meaningful stent revenue declines. That, in turn, would undermine the growth in vascular devices that both Abbott and Boston Scientifc are counting on from newer products like the MitraClip and Watchman.

With that, threats to the stent industry have above-average significance to all three of these companies.


The next verse... similar to the last
It should certainly be noted that the wide adoption of drug-eluting stents has long occurred despite and over the objections of researchers and clinicians who claim that the devices add a lot to the cost of managing CAD and relatively little to the outcomes of those patients. Now there are two more studies to highlight the extent to which stents may be overused.

A 6,000-patient study conducted by Dr. Siphai in JAMA Internal Medicine on Monday resulted in data showing that patients who had multivessel CAD fared significantly better when they got bypass surgery instead of stents. Those in the bypass group were 27% less likely to have died at the end of four years and were 42% less likely to have experienced a heart attack. Bypass patients also were also 71% less likely to need a follow-up revascularization procedure.

The second study, led by Dr. Stergiopoulos, was likewise not at all favorable for stents. This nearly 5,300-patient study showed that patients receiving only medical therapy (cholesterol-lowering and blood-thinning medications) fared just as well as patients who underwent a stent procedure and then received the same medical therapy.

Will this be enough to move the needle?
I want to reemphasize that there is nothing particularly groundbreaking about these study data. Numerous studies (including the COURAGE study) have shown that stents add little to long-term outcomes for many patients. In fact, as many as 40% of all stent procedures may be medically unnecessary and a waste of money.

To be clear, there IS still very much a role for stents in the treatment of coronary artery disease. Medical therapy is not an option for a patient currently experiencing a heat attack and who needs that vessel (or vessels) reopened right away. Likewise, the second study I mentioned include patients with stable CAD and that is an important detail. Last and not least, the superiority of bypass to stents is also nothing new -- bypass has always been the gold standard in terms of long-term outcomes, but it is expensive and arguably overkill in patients with many forms of CAD. Along those lines, Abbott, Medtronic, and Boston Scientific have all undertaken stent studies that have proven a valid role for drug-eluting stents in the management of unstable or acute heart disease.

Going south
Drug-coated stents have been a mixed bag for these companies as far as being growth drivers -- the overall market for percutaneous coronary interventions hasn't been growing all that much and these companies have been trading leadership from year to year on the basis of new product introductions. Now the market is awaiting the widespread introduction of resorbable drug-coated stents, where the stent opens the artery, delivers a drug to reduce the likelihood of restenosis, and then the coating (or the stent itself) dissolves over time.

In the meantime, all of the companies involved in drug-coated coronary stents and many outside of that market, including Johnson & Johnson, Bard, and Covidien, have been focusing on stents and drug-coated balloons that can be used in the peripheral arteries of the legs -- where blockages still lead to many thousands of amputations a year and where the standard of care is still relatively ineffective. As you might imagine, though, Abbott, Medtronic, and Boston Scientific have all used their coronary stent platforms as cash-generating piggybanks to fund the development of these peripheral products, to say nothing of testing stent designs and coatings.

The bottom line
It's rare for the med-tech world to change quickly, and I'm not calling for these newest studies to lead to a major decline in stenting procedures. Even so, growth is very hard to come by these days, with many med-techs happy to report any organic growth at all. In such an environment every dollar counts, and you can likely expect Abbott, Boston Scientific, and Medtronic to fight hard to maintain and grow their coronary stent businesses, even if the data say they should in fact be smaller.

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The article New Studies Threaten a Rich Source of Med-Tech Profits originally appeared on Fool.com.

Stephen D. Simpson, CFA has no position in any stocks mentioned. The Motley Fool owns shares of Medtronic. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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