Nephrology News & Issues
Exit of Baxter in home hemodialysis market could slow modality’s expansion
By Mark E. Neumann
Mr. Neumann is the editor-in-chief of Nephrology News & Issues magazine
It’s lonely at the top.
As the sole manufacturer of a portable home hemodialysis machine in the U.S. market, NxStage Medical may not see things that way. But the decision announced by Baxter Renal Care earlier this month to end clinical trials of its Vivia home hemodialysis machine, and machine manufacturer Outset Medical indicating its new Tablo, unveiled at the American Society of Nephrology’s Kidney Week last November, was heading more for the acute dialysis and in-center clinic market, leaves NxStage as the only manufacturer focused on home hemodialysis today and in the foreseeable future.
The Lawrence, Mass.-based company continues to fine tune its product line, and is now working on developing a new machine for peritoneal dialysis based on its SystemOne technology. The company received U.S. Food and Drug Administration approval in December 2014 to use the System One for nocturnal dialysis. A new version of the SystemOne is also in development that will make the machine attractive for in-center use. NxStage has already aggressively marketed the portability of the machine to hospitals for acute dialysis. Investment analyst Piper Jaffray is taking a bullish approach to NxStage’s “big fish in a little pond” issue, and says the company will do well with or without other players in the market, like Baxter.
“The easy default bear argument to these disclosures is that the HHD market is unattractive from a size and profitability perspective,” wrote Piper Jaffray in a June 22 report to investors. “It is certainly true that the HHD category is still only 2% penetrated despite (NxStage Medical) being on the market for many years. However, the company is generating $200 million in revenue now, and with a second generator that evens the economic playing field (new machine for PD) and in-center dialysis, we believe adoption will improve going forward.”
Growth sluggish
As Piper Jaffray notes, home hemodialysis represents a very small portion of the kidney care market. Once the standard for dialysis care, the build-up of in-center clinics and the option of peritoneal dialysis led to major drops in HHD use during the 1980s and 1990s. NxStage has been the major force in getting patients to return to the modality. Figure 1 shows growth in the HHD market since 2009 among the 10 largest dialysis providers in the U.S.
Growth in HHD Patients, 2009-2016*
2009_____________2,836
2011_____________3,569
2012_____________5,087
2013_____________5,783
2014_____________6,098
2015_____________6,558
2016_____________6,932
Based on the data, only 374 new patients were on home hemodialysis therapy in May 2016 versus the same time the previous year. That is the second lowest year-to-year growth for the modality since 2009. A big jump was seen between 2011 and 2012 when the bundled payment system for dialysis was initiated and the Centers for Medicare and Medicaid Services offered financial incentives to place patients on home dialysis.
Will NxStage’s ongoing investment in HHD help the modality gain in popularity? Time––and innovation––will tell.