The Food and Drug Administration usually follows the advice from the panel of experts it assembles for advisory committee meetings. But when the vote is 6-5 with three abstentions like it was for Medtronic's (NYSE: MDT) Amplify yesterday, there's no telling what the agency will do.
Amplify is a device used to promote bone growth to fuse vertebrae in the spine. The alternative is to implant a piece of the patient's hip bone to bring them together.
The panel had two issues to deal with: whether the device was safe and whether it was effective.
On the safety front, there was an increase in the rate of cancer, but the committee mostly shrugged it off as an artifact. The vote came down 9-4 in favor of the device being safe.
For efficacy, 60.5% of Amplify procedures were successful, compared with 55.5% in the control group. That convinced 10 of the panel members, and only three voted that the device didn't work well enough.
But it's the combination of those two factors that ultimately determines the approvability of a drug or medical device. It's easier to justify potential side effects for a drug or device that works really well than for one with a marginal benefit. In Amplify's case, the combination of the two seems to have left the panel with mixed opinions about the risk-reward benefit.
Spinal products are Medtronic's second-largest business, but the division only grew by 3% during its last fiscal year, hampering the overall growth that came in at 8%. The easiest way to get growing is to launch products to compete with those by Stryker (NYSE: SYK), Johnson & Johnson (NYSE: JNJ), and Zimmer (NYSE: ZMH), which bought Abbott Labs' (NYSE: ABT) spine division a few years ago.
Amplify could be Medtronic's key to amplifying growth, but only if the FDA follows the panel's narrow endorsement.
