St. Jude Medical Struggles to Regain Traction in Neuromodulation Market

by James Cavuoto, editor

St. Jude Medical, the St. Paul, MN manufacturer of neuromodulation systems, became the number two player in the industry behind Medtronic when it acquired Advanced Neuromodulation Systems in 2005. In the years that followed the acquisition, the team put together by ANS CEO Chris Chavez stayed in place in Plano, TX and immediately put competitive pressure on Medtronic, a competitor St. Jude had seen before in the cardiac device market. St. Jude picked up market share in the sizeable spinal cord stimulation market and began making noises in the market for DBS, which Medtronic dominated.

In the last few years, however, St. Jude’s neuromodulation franchise has lost some of its edge, and the company is now in a battle to keep up with Boston Scientific Corp. and several newer competitors in the neuromodulation space. Chris Chavez has left the company to head up a promising firm in the cardiac device market. Rohan Hoare, a Chavez protege who had been tapped as his replacement to run the neuromodulation division, is also out, and was recently hired by Cyberonics. Several other former St. Jude neuromodulation executives have left the firm to join other neuromodulation companies. Indeed, the neuromodulation division itself imploded and is now part of an implantable electronic systems division under the leadership of Eric Fain, who previously headed the cardiac rhythm management division.

Aside from the staff cutbacks and defections, St. Jude has been impacted by many of the other issues facing large medical device companies, including regulatory hurdles, failed clinical trials, and government inquiries. In 2012, the company announced that a clinical trial for treatment of migraine using occipital nerve stimulation failed to meet its primary endpoint.

Despite the setbacks, many industry observers pinned their hopes on St. Jude’s DBS products. The company’s Libra and LibraXP devices are approved for treatment of Parkinson’s disease in Europe and Australia and its compact rechargeable Brio system garnered a favorable reaction from clinicians when it was introduced. All three devices received CE Mark approval for dystonia in Europe earlier this year.

But the company’s fortunes in DBS were particularly thought to lie in the market for treatment-resistant depression. St. Jude had signed a deal with two of the foremost researchers in the field, Andres Lozano of the University of Toronto and Helen Mayberg of Emory University. The company’s BROADEN trial for DBS of Brodmann area 25 for treatment of depression was well underway and initial data looked promising. The company got approval to expand the trial to 20 sites in 2011. The competitive outlook seemed even more promising when Medtronic abandoned its trial of DBS of VC/VS for depression after a failed futility analysis. Many psychiatrists and neurosurgeons felt that St. Jude had selected a better target—and a better team of researchers—than had Medtronic for treating depression.

Unfortunately, those hopes came crashing down when St. Jude itself failed a futility analysis of the BROADEN trial earlier this month. Some attendees at the 2013 NANS meeting who were familiar with the trial put the blame on Fain, whose background in cardiac devices may have biased him against neuromodulation therapies. Others pointed out that Mayberg’s understanding of targeting for depression shifted in the years after commencement of the trial, which targeted Cg25. Still others believe that what we think of as depression is actually several different etiologies and that until we can precisely target the specific patient population that will respond to a particular stimulation regimen, it will be difficult to meet clinical endpoints in this field.

In the advent of the trial failure, there is speculation that much of the key IP involved with neuromodulation for depression will revert back to Lozano’s group in Toronto. St. Jude had previously acquired rights to Northstar Neuroscience’s cortical stimulation portfolio, which included a depression indication. The company never did much with that IP and many observers now believe that St. Jude’s foray into the depression market is all but over.

Despite the setbacks, St. Jude is pressing ahead to achieve a leadership position in SCS. At the 2013 J.P. Morgan Healthcare Conference, St. Jude CEO Dan Starks said that the company would place special attention on recovering the neuromodulation franchise as a growth driver. Earlier this year, the company signed a distribution deal with Spinal Modulation Inc. that also gives them an option to buy them—and their dorsal root ganglion stimulation technology—outright.

At the 2013 NANS meeting, the company announced the Prodigy neurostimulator, the first SCS system able to deliver burst stimulation. The SUNBURST (Success Using Neuromodulation with Burst) study will evaluate whether burst stimulation can be more effective in managing chronic pain than traditional tonic stimulation. A maximum of 442 patients will be enrolled at up to 50 sites in the U.S.

St. Jude also announced it has launched a clinical study to evaluate the combination of peripheral nerve field stimulation and SCS using the company’s Eon and Eon Mini devices to determine whether the two therapies together offer more effective management of chronic low back and leg pain. The first patient in the SENSE (Subcutaneous and Epidural Neuromodulation System Evaluation) study was enrolled at a pain clinic in Mississippi.

With irons in the fire for DRG, burst mode, and PNfS, St. Jude stands a good chance of regaining a leadership position in the SCS segment. But the company will not have an easy path to dominance in the neuromodulation market.