Break­ing Hearts

Heartflow has raised $467 mil­lion for a test to de­tect heart disease. Prob­lem: It might not make pa­tients bet­ter o‚.

Forbes - - Leader Board - BY ELLIE KIN­CAID

John Stevens’ corner o ce in Red­wood City, Cal­i­for­nia, has a nice view of the San Fran­cisco-oak­land Bay Bridge. His desk, though, is a hand-me-down, and the cracked leather upholstery on the chairs re­veals their his­tory as Ikea oor mod­els. “We can prob­a­bly a ord some new chairs now,” he says.

You’d think. Heartflow, the health-tech startup of which Stevens is chief ex­ec­u­tive and pres­i­dent, has raised $467 mil­lion, most re­cently at a $1.5 bil­lion val­u­a­tion, from in­vestors such as Wellington Man­age­ment, Bail­lie Gi ord & Co., GE Ven­tures and Blue­cross Blueshield Ven­tures, ac­cord­ing to Pitch­book.

e val­u­a­tion is based on a big idea: a non­in­va­sive test that peers into a pa­tient’s coro­nary ar­ter­ies to see how blocked they are. Right now, such a test in­volves thread­ing a catheter from the groin up to the heart and mea­sur­ing blood ow, a slightly risky pro­ce­dure called frac­tional ow re­serve (FFR) that is done a mil­lion times a year world­wide to de­cide whether a pa­tient needs a stent to open a clogged artery. Us­ing so ware trained with a deep-learn­ing al­go­rithm, Heartflow says it can get a sim­i­lar mea­sure­ment from a CT scan, a lower-risk, three­di­men­sional pic­ture of the heart con­structed with X-rays. Medi­care re­im­burses Heartflow $1,450 per test.

“ is will be the most e ec­tive way of look­ing at car­dio­vas­cu­lar disease and safer than any­thing else on the mar­ket,” says Bill Wel­don, Heartflow’s chair­man and the former chief ex­ec­u­tive of Johnson & Johnson. “And when you put those to­gether, it’s a com­bi­na­tion you can’t beat.” He sees the test be­ing used rou­tinely.

Skep­tics are le­gion. “Over time, these kinds of tech­nolo­gies get hyped, and when they get stud­ied, real­ity sets in,” says Steven Nis­sen, the chair­man of car­di­ol­ogy at the Cleve­land Clinic. “Some­one takes an idea that seems very sexy and at­trac­tive, but when you get down to the science, it isn’t solid.”

e tech­nol­ogy’s use­ful­ness may come down

to a deeper ques­tion: How e ec­tive are stents for treat­ing heart disease, and do you even need to know whether an artery is open or not?

Heartflow was started by Charles Taylor, who as a PH.D. stu­dent in the 1990s was study­ing how wind coursed over the wings of ghter jets. Could the same math­e­mat­ics ex­plain blood mov­ing through the heart? He hooked up with Christo­pher Zarins, the chief of vas­cu­lar surgery at Stan­ford’s School of Medicine, earn­ing a PH.D. for the car­di­ol­ogy work and be­com­ing a pro­fes­sor at Stan­ford him­self. To­gether, they founded HeartFlow in 2007.

Taylor, Heartflow’s chief tech­nol­ogy o cer, did a study of his early so ware on a dozen pa­tients in Latvia and raised $2 mil­lion in venture cap­i­tal. Stevens had been in­spired to be­come a sur­geon as a boy, a er a pitch­fork went through his toe, but quit his job doing heart op­er­a­tions for the startup life two decades ago. He joined Taylor in 2010.

In a 2014 study, Heartflow’s so ware an­a­lyzed the CT scans of 254 pa­tients, match­ing

FFR 84% of the time in de­tect­ing a clog and

86% when blood was ow­ing freely. Later that year the FDA ap­proved Heartflow’s so ware as a med­i­cal de­vice to eval­u­ate the symp­toms of coro­nary artery disease.

Ex­perts use the Heartflow test mainly in am­bigu­ous cases. Hank Plain, 60, a health­care in­vestor who fo­cuses on med­i­cal de­vices, got a CT scan that showed calci ed plaque in his coro­nary ar­ter­ies, but a stress test (a walk on a tread­mill with elec­trodes on his chest) in­di­cated no prob­lems. en a CT scan was put through Heartflow’s so ware, which re­vealed two par­tial block­ages. His doc­tor de­cided to insert two stents. “It’s very scary to know you have coro­nary artery disease, know­ing it played out with other fam­ily mem­bers,” Plain says. “It’s good to be back, fo­cused on life.”

An open ques­tion is when stents are worth their cost and risk. ey save lives when placed dur­ing a heart at­tack and ease chest pain. But a 2,287-pa­tient study a decade ago and a more re­cent com­par­i­son to a sham pro­ce­dure raised doubts that they are bet­ter than med­i­ca­tion. So does us­ing Heartflow pre­vent un­nec­es­sary pro­ce­dures or cause them?

For ev­ery $1,450 test, Heartflow says, it pre­vents $4,000 in costs. But “do pa­tients live longer and have fewer heart at­tacks when you do this ap­proach, as op­posed to some­thing more rou­tine?,” asks Venkatesh Murthy, a car­di­ol­o­gist at the Univer­sity of Michi­gan. In­deed, do pa­tients need a car­diac ow mea­sure­ment at all?

“I don’t wake up in the mid­dle of the night think­ing can we do an FFR in more peo­ple,” says Ethan J. Weiss, a car­di­ol­o­gist at UC San Fran­cisco.

en there are tech­ni­cal doubts. Heartflow cal­cu­lates ow by look­ing at the shape of a blood ves­sel, as one might guess the speed of a stream from the shape of its banks. “Try­ing to mea­sure FFR from a CT scan is like try­ing to run a marathon on one leg,” says Dar­rel Fran­cis, a pro­fes­sor of car­di­ol­ogy at the Na­tional Heart & Lung In­sti­tute in the U.K. Ac­cord­ing to a re­port in JAMA Car­di­ol­ogy, analy­ses that used CT scans to mea­sure ow, in­clud­ing but not limited to Heartflow, were much less ac­cu­rate in sicker pa­tients. Heartflow says the re­port is “fun­da­men­tally awed.”

ere are also many be­liev­ers, like Robert D. Sa an, a car­di­ol­o­gist at Beau­mont Health in Royal Oak, Michi­gan, who has re­ceived $3,000 from Heartflow for travel. “Ini­tially, I was one of the worst skep­tics, but now I’m com­pletely con­verted and I think it’s amaz­ing tech­nol­ogy,” he says. He’s used Heartflow for the past three years on 2,000 pa­tients.

Most large U.S. in­sur­ers pay for Heartflow’s test, as does the ever-skep­ti­cal U.K. Na­tional Health Ser­vice. Medi­care is pay­ing for it ex­cept in the western U.S. Says Stevens, the chief ex­ec­u­tive, “At the end of the day, the data will win.”

Matthew Her­per con­trib­uted to this story.

Heartflow CEO John Stevens at the Grand Amer­i­can Ho­tel in Salt Lake City. He says he quit be­ing a heart sur­geon be­cause he could help more peo­ple as an en­trepreneur.

HOW TO PLAY ITThe pru­dent way to in­vest in medicine: Own the Van­guard Health Care ETF, a port­fo­lio of 375 stocks avail­able at a mod­est 0.1% an­nual fee. The more dar­ing way: Take a flier on a de­vice com­pany, hop­ing to hit on the next Stryker Corp. (Shares of that im­plant maker are up 131,000% since 1979.) Some in­trigu­ing can­di­dates: Li­vanova, which makes in­stru­ments for heart surgery and im­plants to com­bat epilepsy; In­sulet Corp., which makes in­sulin pumps for di­a­bet­ics; and Nu­va­sive, which makes prod­ucts for spine surgery. Be fore­warned, though, that spec­u­la­tive fer­vor has made the en­tire cat­e­gory richly priced.Wil­liam Bald­win isForbes’BY WIL­LIAM BALD­WINIn­vest­ment Strate­gies colum­nist.

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