Boston Scientific Gets Europe OK For Remote Cardiac Monitor

Boston Scientific Corp. (BSX) said Monday it received European approval to launch its LATITUDE remote monitoring program for heart-failure devices and defibrillators across the continent in a move that could potentially boost the adoption of its products there.

Analysts say that no single U.S. player in cardiac rhythm management, or CRM, has advanced far beyond the others in device function, so service aspects like remote monitoring, sometimes called telemedicine, can help differentiate them.

And the U.S.'s big players in CRM have been expanding, even touting, their possibly cost-saving telemedicine systems, as the U.S. government initiates widespread health-care reform. Boston Scientific, Medtronic, Inc. (MDT), and St. Jude Medical, Inc. (STJ) all offer these programs in the U.S., although Medtronic has the lion's share of the market and currently offers its service for pacemakers, unlike the other two.

"This is where therapy is going," said Boston Scientific CRM president Fred Colen. "Remote monitoring for patients, for any condition, is on the rise."

Boston Scientfic said it earned CE-mark approval, which certifies that the product meets consumer safety and health standards in Europe, where the market for heart-failure devices and defibrillators is estimated to be around $1.5 billion. So far, the LATITUDE program has been used for patients in the Netherlands and Denmark, and the company hopes to expand to 14 E.U. countries in a phased approach.

Keay Nakae, an analyst with Collins Stewart LLC, said the company's recent U.S. growth hasn't been mirrored in Europe. There are a few reasons for that, he added, but the lack of a monitoring system has been a disadvantage. He rates the stock a hold.

The system "isn't a primary reason you'd use one device," he said, "but having it as a function and a capability is certainly a positive."

Telemedicine allows doctors to monitor their patients without extra appointments, and to intervene early if they see problems. This has the potential to reduce hospital visits and length of stays, although no company has completed clinical studies on the effect. Analyst Jan David Wald of Noble Financial said it will be helpful as the government begins to focus on medical cost efficiency.

"I think remote monitoring helps," he said. "On net, you're going to decrease the cost of health care."

The yearly cost of patient re-hospitalization for congestive heart failure in the U.S. is estimated to be close to $10 billion, according to the West Wireless Health Institute, a research organization for wireless health technology. The companies' services are included with the charge for the heart devices, and there's no monthly charge for patients. Doctors are reimbursed by insurance or Medicare for remote monitoring check-ups as well.

Each company offers different amenities with its devices. For example, Medtronic's system monitors fluid levels automatically. Boston Scientific's system can monitor patients' weight and blood pressure. St. Jude plans to use its system for its pacemakers, pending FDA approval for the devices, and Boston Scientific plans to use it in its next generation of pacemakers, company representatives said.

Collins Stewart's Nakae thinks that telemedicine is more of a necessity than a bonus for the companies.

"I think it's something that everybody wants to have, and if you don't have it in the bigger picture, you could be at a disadvantage," said Nakae.

CRM is the biggest business for all three companies, a couple of which are facing troubles in other areas. A government report recently questioned the efficiency of tissue-burning catheters used by Medtronic and St. Jude to treat atrial fibrillation, which can also be treated by drugs. And Medtronic announced a recall for 3 million insulin infusion sets Friday.

-By Alexandra Scaggs, Dow Jones Newswires; 212-416-2673; [e-mail]