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