Recently, Conceptus received an Approvable Letter from the US Food and Drug Administration (FDA). The letter suggests compatibility between the company’s surgical permanent birth control system, Essure and Hologic’s (HOLX - Analyst Report) Novasure, which treats women suffering from excessive menstrual bleeding.
In the approval letter, FDA stated that the safety of Essure procedure will remain intact while performing Novasure RF endometrial ablation. However, the approval is subject to concurrence with a post-approval study (PAS). The company is presently working to fulfill the requirements as per the PAS protocol to obtain the final approval of the proposed labeling change.
Earlier in July 2008, Conceptus received the CE Mark approval for similar labeling changes related to the addition of GEA technologies (i.e. NovaSure) for effective implementation with Essure.
Conceptus derives a major share of its revenue from Essure, which is approved in many countries, including the US, Europe, Australia, Canada, Mexico, Central and South America, and New Zealand. However, during the third quarter of 2011, domestic sales of Essure plunged 5.5% year over year to $25.8 million, mainly due to the on-going macroeconomic pressure that resulted in lower patient visits to OB/GYN offices and prior-year direct-to-consumer advertising campaign, which was not repeated in the reported quarter.
In a bid to retrieve the situation, the company is expanding its sales coverage and gradually witnessing success in reducing the impact of competition, particularly from physicians’ trialing other competing products. In September this year, the FDA approved the removal of nickel hypersensitivity contraindication from the Essure procedure Instructions for Use (IFU), which will further enable Conceptus to gain traction in its domestic business.
Moreover, sales of the Essure system also depend on the number of physicians trained to perform the procedure. Conceptus is striving toward enhancing the availability of the system worldwide by raising consumer and physician awareness as well as imparting training to the physicians for performing the procedure.
Conceptus currently retains a Zacks #3 Rank (Hold) short term, at par with Hologic.