Repairs To The Heart: The Needle Or The Knife?

http://seekingalpha.com/article/3136146-repairs-to-the-heart-the-needle-or-the-knife



Keith Williams
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Repairs To The Heart: The Needle Or The Knife?
May. 4, 2015 12:37 PM ET | 10 comments | About: Sunshine Heart, Inc. (SSH), Includes: CLDN, MBLTY, MEOBF, NBS
Disclosure: The author is long SSH. (More...)
Summary
Two choices for large markets for Class III heart failure: stem cells or simple devices.
The needle: stem cell therapies (Mesoblast, NeoStem) offer promise, but struggle with late stage clinical trials.
Is the stem cell field too immature yet for successful heart repair?
The knife: Sunshine Heart's C-Pulse is a simple heart assist device that gives the heart a rest.
Sunshine Heart's C-pulse is simple and progressing along a well worn path to a fully implantable device (think pacemaker).
Of all the organs in the body, the heart has mystical and romantic significance, but it is one of the most prosaic of organs… it's just a pump! The problem is that it is a pump that can never fail. Failure means death.
While the technology of heart transplants is mature, there are not enough hearts available and it would be better to be able to address the problem of a failing heart earlier and less traumatically. LVADs (Left Ventricular Assist Devices) are a holding pattern, but it's doubtful that they will ever be more than a temporary solution as a bridge to transplantation. Although some LVADs are being adopted as a long-term solution, risks associated with them being inserted into the bloodstream make it challenging to imagine that they will ever make a big impact as a permanent solution to treating earlier stages of heart failure (such as NYHA Class III).
So what is out there?
Conventional drugs: For some time now, improvements in a conventional drug approach to heart failure have not been very successful, although the recent PARADIGM trial for Novartis' (NYSE:NVS) drug LCZ696, a first in class angiotensin receptor/neprilysin inhibitor combination, produced superiority over the drug enalapril for treating heart failure with reduced ejection fraction (HFREF), where the heart muscle fails to contract effectively and so less oxygen-rich blood is pumped. While there have been stepwise improvement through introduction of various drugs (ACE inhibitors, beta blockers, angiotensin receptor blockers and mineralocorticoid receptor antagonists), LCZ696 is seen as providing a major improvement in treating HFREF heart failure. However, LCZ696 is not without downside, the most notable being symptomatic hypotension, which is likely to mean that those treated will be carefully screened for suitability. However, the drug is targeting approximately half of the six million people in the US living with heart failure, 50% of whom die within 5 years of diagnosis. Note that LCZ696 still needs to get approval and reimbursement, although it has recently been granted FDA priority review and has been given access to the UK Early Access to Medicines Scheme.
Notwithstanding progress with a conventional drug approach, there is a need for better solutions as it does not seem that the conventional drugs prevent long-term decline for those suffering heart failure.
Fully implanted pacemakers: Because the heart pump is controlled electrically, implantable electrical pacemakers have been developed over the last 50 years to address lethal signaling problems. More than 3 million people around the world have had a fully implanted pacemaker inserted to manage irregular heartbeat or risk of atrial fibrillation. Having a pacemaker inserted is not a big deal today.
Heart assist devices: Sunshine Heart (NASDAQ:SSH) has a device (C-Pulse) that does the job of an LVAD, but importantly the device is not a pump that is inserted into a blood vessel. Instead, it supports blood flow by squeezing the aorta to provide extra flow for an ailing heart. It is like a "bandaid" with a small parachute that is inflated by an external device. The inflation is coordinated with the pulsing of the heart.
The device is simple and has features similar to a pacemaker, but provides a mechanical squeeze instead of an electrical signal. At this stage, the controller is worn by the patient, but a fully implantable device (like a pacemaker) is in advanced development in animals.
The key attributes of C-Pulse are that it effectively rests the heart by taking some of the load using a device that can be turned off without risk, and which has no risk of stroke that a blood contact LVAD device has. The early trials have indicated that C-Pulse may in some cases be a route to cure, as some patients have been able to turn off their device and reduce medication. Robert Honeywill has produced a series of excellent articles on the financial, technical and clinical prospects for Sunshine Heart and I refer readers to these.
Stem cell therapy: With emerging understanding of regenerative medicine, and the role of gene therapy and stem cells, it isn't surprising that the heart would be seen as an organ that might be repaired using such technologies. Indeed, my recollection is that about a decade ago Genentech CEO Arthur Levinson said that his company would become a stem cell company and fix hearts using this technology within 10 years. While today Genentech is still excited about stem cells, the early vision of Levinson has been tempered. Levinson has moved on to head up Google's (NASDAQ:GOOG) (NASDAQ:GOOGL) anti-aging startup Calico, and Genentech is talking up stem cell science as an adjunct to improving drug discovery, not as the definitive treatment for ailing hearts.
However, there are companies with advanced clinical trials for both gene therapy and stem cell treatments for treating Class III heart failure or heart repair after heart attack.
In one of Robert Honeywell's reports, he considered stem cell approaches to repair the heart after heart attack with treatments under development by Novartis and NeoStem (NASDAQ:NBS). The results of NeoStem's Phase II PreSERVE AMI study were discussed recently by Steven Giardino, and an update indicates results haven't excited the market, with NBS' share price in steady decline.
Mesoblast (OTCPK:MEOBF) (OTCPK:MBLTY) [ASX:MSB] is a stem cell company with advanced stem cell heart failure products. Teva (NYSE:TEVA) acquired a 17.6% interest in Mesoblast when it acquired Cephalon, and Teva became a partner for Mesoblast's Phase III heart failure candidate MPC-150-IM, which has application both at Class II/III failure as well as in Class IV to assist patients with an LVAD. Mesoblast also has MPC-25-IC for supporting patients who have had a heart attack to maintain/assist heart repair. These products are interesting, but it is still early days and the mechanism of action isn't clear.
The simplistic initial view of stem cell therapy was that you put the cells into the patient and then cross your fingers and hope they target the area you want to fix. It isn't so simple. The heart is a muscle and the status of understanding the use of stem cells for muscle repair is still at an early stage. It's not clear that it will be as simple as injecting some stem cells and waiting for success. Indeed, the early excitement has given way to doubts in the light of many studies.
The problem of getting stem cells to work in heart repair is resolving in two directions:
i) Getting them targeted to the right place, e.g. getting stem cells to lock into the region of the heart that is injured.
The recent failure of NeoStem's autologous stem cell therapy to restore blood flow after heart attack could be due to the cells not staying where they needed to be.
ii) Very recent reports suggest that therapy for skeletal muscle repair may come from a drug approach based on providing signals to stimulate stem cell production from within.
The above studies are great science, but they are a long way from a proven and effective therapy. It shows that the way forward in the stem cell area is still not straightforward, notwithstanding enthusiasm for putting stem cells back into people who face grim future prospects.
While I've focused on stem cells here, use of gene therapy approaches where a gene is transferred into diseased cardiac tissue is similarly challenged, with recent failure of Celladon's (NASDAQ:CLDN) gene therapy Mydicar not meeting endpoints in its Phase IIb CUPID2 trial. There seem to be many challenges to developing a successful gene therapy product, including getting the relevant gene to the right place and persisting, having the gene turned on, and the relevant protein being an effective treatment. This is a big call. Robert Honeywill has just published a detailed commentary on Celladon's Mydicar problems.
There is a need now, and will be for a long time, for a device to give the heart a rest (or ease the load). That's what the C-Pulse is, and all of the evidence points to this device becoming about as important as pacemakers have been for treating electrical problems of pacing the heart.
Of course, implanting a C-Pulse device is more complicated than inserting a pacemaker, as this just needs the device to be put in a pocket near the shoulder and get wires in place to monitor the heart beat and provide ability to reprogram the heart beats through electric stimulation.
For the C-Pulse, a "bandaid" needs to be applied to the outside of the aorta, and the means to assess when the heart is pumping needs to be positioned on the heart. But, unlike inserting an LVAD, no blood vessels are cut and the operation can be performed as a mini-thoracotomy, which does not involve cutting the breast bones. As yet the device is not fully implantable, but animal trials are well advanced with a fully implantable C-Pulse system. Only the timing of when a fully implantable device becomes available for humans is in doubt.
I'm cautious about near-term stem cell solutions because it is still very early days in the science of cell-based therapy.
I find it intriguing that there is a significant scientific effort to develop next generation stem cell pacemakers, with good evidence of potential, but still a long way from imagining that implantable pacemakers will become redundant. Here is a recent review on gene therapy and stem cell solutions as biological pacemakers for those with access to a science library and here is the full text of an older review
I've been mulling over why SSH has been ignored by the market for a long time, and I acknowledge the excellent analyses that Robert Honeywill has written on this company (check out Robert's profile for many excellent articles both on financial as well as technical analysis).
I argue here that the stem cell approach (the "needle" injecting cells) is still immature both intellectually and practically. While C-Pulse involves surgery (the knife), it has a different risk profile to LVADs and it is capable of becoming a widely available therapeutic approach to treating Class III heart failure.
Because of the optimism about prospects for stem cell therapy, I suggest that Sunshine Heart's C-Pulse has been overlooked as a transforming device for early stage heart failure. Put simply, I suggest that the reason that SSH languishes is because the market thinks it is old fashioned and will be overtaken by stem cell technologies. This is a classic case of market expectations missing the reality of a technology.
Conclusion
I've written this article because I think SSH fits the requirements for Seeking Alpha's Best Contrarian Idea.
If you review the history of stem cell science, it has been repeatedly positioned as the next big thing after monoclonal antibodies. This is a very powerful image, as monoclonal antibodies have transformed biotech products over the past decade and made fortunes for many investors.
I can't help thinking that subliminally this is why SSH is overlooked as being old fashioned and clunky. I like simplicity, and the success of the heart pacemaker is a good example of such simplicity. There is substance to the view that the heart pacemaker is pretty primitive, but it has changed millions of lives. I see C-Pulse in the same light.
Ambitious claims about near-term stem cell heart therapy still have resonance. I've indicated here that stem cells have great promise, but it is still very early days and I think SSH will have its fully implantable C-Pulse in a lot of patients before stem cell therapy will be a serious challenge. Indeed, it could end up that stem cell therapy is used as an adjunct to C-Pulse treatment. I'm cautious about how long the value of C-Pulse will take to be appreciated by the market, as the pace of device development can be agonizingly slow. However, I shall be very surprised if within the next 12 months SSH's fortunes have not dramatically changed for the better.
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