), the manufacturer of permanent birth control system Essure,
recently announced a 60-patient clinical trial with its
next-generation Essure procedure. Patient enrollment for the
clinical trial has just begun in the company's two medical centers
in Canada and Mexico.
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The existing Essure procedure does not immediately provide
permanent birth control. It instead requires the patient to wait
for a period of 90 days, during which time the body grows over the
inserted device, thus forming a barrier that prevents the entry of
sperm. Therefore, the woman is not protected during this 90-day
period and needs to use some other form of contraceptive.
The next-generation procedure, for which clinical trial has been
initiated, uses more advanced technology, which the company expects
will eliminate this 90-day waiting period to confirm permanent
birth control. The new procedure requires a simple non-invasive
transvaginal ultrasound, immediately following the insertion, which
would confirm the success of the procedure. Conceptus performed the
first placement on July 3, 2012 at Regina Central Hospital in
If the clinical trial is successful, Conceptus would be able to
initiate the Investigational Device Exemption ("IDE") and
Conformité Européene (CE) Mark studies in 2013, which would take it
a step closer to pre-market approval in the U.S. and approval in
Earlier, in April 2012, Conceptus received the US Food and Drug
Administration (FDA) approval for including 10-year data on
effectiveness of Essure in the Essure procedure U.S. Instructions
for Use (IFU) and Patient Information Booklet (PIB). FDA also
allowed the company to include full five-year clinical study
results, mentioning the effectiveness rate of 99.83% in the IFU and
PIB. With this approval, the clinical trial for Essure (initiated
in 1998 and showed zero pregnancies over five years) closed.
The Essure procedure is elective in nature, and often gets delayed
due to the economic uncertainty and high unemployment rate.
Conceptus' obstetrics and gynecology (OB/GYN) office visit trends
remained mixed during the past few months due to macroeconomic
pressure. Given the difficult economic situation, we think that a
successful completion of the clinical trial could attract more
users, helping the company to strengthen its foothold, not only in
the U.S. but also abroad.
The recent exit of
) Adiana from the permanent birth control market should also be
highly beneficial for Conceptus. Notably, On April 30, Conceptus
announced the settlement of its patent infringement litigation
related to Hologic's competing product Adiana Permanent
Contraception System. As per the agreement, Hologic agreed to
withdraw its Adiana system from the market.
The Supreme Court's decision on June 28, 2012 to uphold the Patient
Protection and Affordable Care Act of 2010 (PPACA) (also known as
Obamacare) is another positive, since it provided a huge impetus to
Conceptus' business. The company is upbeat regarding the fact that
under the PPACA, the entire list of contraceptive methods approved
by the U.S. Food and Drug Administration (FDA), including the
Essure procedure, will be covered by all private insurance plans.
We believe that this Supreme Court ruling will emerge as a landmark
development for women's health care. We also think that the recent
tailwinds will largely benefit Conceptus' sales performance as it
will increase access and affordability of the Essure procedure
Currently, Conceptus retains a Zacks #1 (short-term Strong Buy)