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Cardiac Device Spurs MEMS Market

EL SEGUNDO, CALIF. — In what could become one of the biggest ever deals involving Microelectromechanical Systems (MEMS) sensors, St. Jude Medical Inc. is investing millions of dollars in an implantable device that can monitor patients after heart surgery, potentially revolutionizing cardiac care, according to the market research firm iSuppli Corp.

The device, commercialized by Atlanta, Georgia-based CardioMEMS Inc., features an implantable MEMS pressure sensor that monitors the heart for the tell-tale buildup of pressure in pulmonary arteries following cardiac surgery. Including signal processing electronics, a user interface and an antenna, the CardioMEMS system wirelessly communicates with the sensor and reports data telemetrically—remotely—to the physician, who then can adjust treatment as necessary. The entire process can take place without hospitalization, yielding huge cost savings for patients and health providers alike.

“Unit sales potential for the CardioMEMS device is pegged at several tens of thousands by 2014, with the likelihood that shipments eventually could amount to hundreds of thousands to even the low millions—a large number for a medical application,” said Richard Dixon, senior analyst for MEMS and sensors at iSuppli. “At present, the only high-volume medical applications for MEMS consist of disposable blood pressure sensors costing $1 that are used during operations, or for respiratory monitoring pressure sensors that are non-disposable and command higher prices. In comparison, the specialist packaging and wireless transmission afforded by the pressure sensor used by CardioMEMS adds considerable value and will lead to a long-term market several times larger in revenue than that of disposable pressure sensors.”

The global market for MEMS used in medical applications is forecasted to reach $430 million by 2014, up from $229 million in 2009, equating to a CAGR of 13 percent, as shown in the attached figure.

High-value MEMS as a fast-growing market
Given the prominent value of implantable sensors as part of the monitoring system, iSuppli has identified CardioMEMS as one of the startup companies with the highest potential in its recent market study of high-value MEMS, a specific space within the overall MEMS technology market for micromachine sensors and actuators with applications in the industrial, energy, optical telecom and aerospace-defense segments. High-value MEMS is the second-fastest growing MEMS segment, next only to consumer and mobile MEMS, and ahead of automotive MEMS or inkjet MEMS.

The CardioMEMS deal represents a coup for St. Jude Medical, the medical device company from Little Canada, Minn., with expertise in cardiac rhythm management such as pacemakers, as well as in heart failure disease management and other cardiac technologies.

In September, a $60 million investment in CardioMEMS by St. Jude Medical gave it a 19 percent share of ownership. Moreover, St. Jude has an exclusive option to buy the company for $375 million, contingent on certain milestones being achieved.

Other companies besides St. Jude Medical have recognized CardioMEMS’ potential: Medtronic, another major medical device company, is also an investor.

In terms of the implantable device itself, the product represents a collaborative effort between two companies. CardioMEMS makes the system—including the electronics reader and output, signal processing electronics and telematics—while contract manufacturer MEMSCAP in France supplies the paper-clip-sized devices, replete with pressure sensor, antenna and packaging.

Should St. Jude exercise its option to acquire CardioMEMS, the transaction will be the largest MEMS deal since the $750 million acquisition 10 years ago of Cronos Integrated by JDS Uniphase to boost its fiber-optic business.

Mass market medical MEMS
The scope of the CardioMEMS deal underscores the potential for new medical MEMS devices, an emerging market on its own. Aside from CardioMEMS, other companies on the cusp in this area include Swiss startup Debiotech, which recently received U.S. FDA clearance for its disposable MEMS-based insulin pump technology; as well as M.I.T. startup Microchips, which is also developing MEMS-based drug delivery systems. Others to watch include Tronics Medtech, working on miniaturized implantable pressure sensors, ISSYS, and OrthoMEMS for orthopedic applications.

The CardioMEMS device, however, is considered particularly promising given its possible use in a number of applications. CardioMEMS already markets its Endosure system for monitoring aneurisms, for example, but the current application in heart failure has a much bigger potential. In the United States alone, for instance, heart-failure patients number about 6 million, and more than 600,000 new cases are diagnosed annually.

As with most medical applications in which a long gestation period is needed, it could be years before the CardioMEMS device attains widespread implementation. How quickly the technology can be established in the market will depend on various factors, including the time it takes for the device to receive FDA approval, for insurance companies to make their own assessments on the value of the device and for insurance companies to implement appropriate reimbursement schemes.

Nevertheless, the appeal of telemedicine—remote measurement and reporting of information—is undeniable. And the CardioMEMS device, in a paradigm shift for patient treatment, could well represent the first foray of what turns out to be an extremely lucrative venture for high-value MEMS sensor suppliers.

Learn more about the MEMS market with the upcoming report from Bouchaud and Dixon, entitled Medical, Industry, Aerospace and Energy: Fertile Ground for MEMS, High Value MEMS H2 2010 Market Tracker.

iSuppli

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