Abbott Laboratories: MitraClip Sees Significant Success in Functional Mitral Regurgitation

- Expectations were low for COAPT due to disappointing results from MITRA-FR. However, some analysts still believed COAPT was different enough to see a more positive outcome

- These analysts were right. COAPT results were overwhelmingly positive; both primary endpoints were met, as hospitalization and mortality saw significant reductions

- Results should provide a boost to ABT stock on Monday and positive read through to other companies pursuing transcatheter mitral valve repair

What Happened - Success on COAPT Results

On Sunday, Abbott presented results from its COAPT trial studying the MitraClip on functional mitral valve regurgitation (FMR). As I had written two weeks ago, while most investors were notably more cautious due to MITRA-FR results, some bulls did believe that the two studies were different enough to the point where COAPT could still see positive results. In the end, they were right - Abbott's results were overwhelmingly successful, with the audience cheering when the results were shown on screen at the TCT conference. This represents a huge success for Abbott, and the stock should see a significant bump on Monday as a result.

Quick Background on MitraClip and MITRA-FR

The MitraClip is an important asset in Abbott's business. While the drug currently only makes up an estimated $300 - $500 million of revenue, it's growing in the double digits, thereby contributing a significant portion to the company's growth plans going forward.

MitraClip is a device that treats mitral valve regurgitation (MR) by repairing the valves with a clip. The device is inserted in a minimally invasive way through the use of a transcatheter - an important delivery method given the condition of many patients that have MR. There are two kinds of MR - degenerative mitral valve regurgitation (dMR), and functional mitral valve regurgitation (FMR). The MitraClip had received approval for dMR, but had not yet received approval for FMR in the US (but did have approval for FMR outside of the US). This was important because FMR cases make up anywhere between 60-80% of all MR cases. There is no proven therapy currently for FMR.  

In late August, results from MITRA-FR (a clinical study funded by France to gain reimbursement there) were presented that examined MitraClip’s effect on patients with FMR. The results showed a miss on all-cause death and unplanned rehospitalizations, and physicians were surprised at the lack of efficacy shown. With COAPT studying MitraClip's impact on FMR as well, analysts were quick to lower expectations for the trial. My best guess at COAPT expectations prior to the release were for a miss on primary endpoints and potentially positive results on secondary endpoints.

However, some analysts and investors pointed out differences between MITRA-FR and COAPT. First, the MITRA-FR study was smaller and based in France versus COAPT which was double the size and based in the US. Second, MITRA-FR patients were very ill and included only patients with severe FMR (vs. COAPT which included moderate-to-severe and severe FMR). Furthermore, the primary endpoints were different. These differences were enough for some bulls to believe that COAPT could see more positive results than expected.

COAPT Results Overwhelmingly Positive

The bulls were right. The COAPT results presented at the TCT 2018 conference on Sunday were strongly positive, as results met both primary endpoints of reduced hospitalization and mortality. Of particular importance was the magnitude of the reductions; hospitalization was lowered by 47%, while mortality was reduced by 38%. This is an enormous reduction, and physicians described COAPT as a "blockbuster" trial. Results also showed an improvement in quality of life for patients, who suffer immensely from their illness.

Stock Implications - Positive for ABT And Others Pursuing Transcatheter Mitral Valve Repair

The implications for Abbott sales and the stock price are strongly positive. The lead author noted that 10% of heart failure patients could be eligible for the treatment. With an estimated 2M - 6M in the US suffering from heart failure, this would imply an opportunity of 200K - 600K patients. These numbers in turn would suggest a MitraClip opportunity in the billions. Additionally, given the strength of the results and the excitement from doctors, adoption could be more rapid than initially believed as well. Expect consensus revenue estimates for Structural Heart to move up for Abbott.

The positive COAPT results should also bode well for other medical device companies targeting transcatheter mitral valve repair. These companies include Medtronic (MDT), Edwards Lifesciences Corp (EW), Boston Scientific Corp (BSX), and LivaNova (LIVN).