Boston Scientific Corp. (BSX) backed on Tuesday forecasts for how a 1,820-patient study could expand use of implantable devices that treat heart-failure patients and emphasized a potential positive impact on health costs, despite the devices' high price tag.

The fresh "Madit-CRT" trial details built upon evidence released earlier showing cardiac resynchronization therapy defibrillators, known as CRT-D devices, can slow the course of heart failure in patients with milder cases when compared with more basic defibrillators.

The fuller data from the $38 million, Boston Scientific-sponsored study were unveiled Tuesday at a European heart conference and published online by the New England Journal of Medicine. The study showed a more pronounced benefit than prior analysis released in June, although analysts said there were no big surprises.

Boston Scientific, which competes closely in the $6 billion global market for implantable defibrillators with Medtronic Inc. (MDT) and St. Jude Medical Inc. (STJ), believes the domestic market for more complex CRT-D defibrillators will grow by up to $250 million in the next few years due to the study.

The global market could grow by $400 million to $500 million, said Fred Colen, group president for Boston Scientific's cardiac-rhythm business, on a call with analysts following the Madit-CRT data release. The Natick, Mass., company has previously cited such targets.

Boston Scientific is being conservative in its market estimates, but "would love nothing more than to see actual results being much better," Colen said.

Shares of heart-rhythm companies still moved lower following the study's release and a downturn for the broader market. Shares of Boston Scientific were down 4.3% to $11.23 while shares of Medtronic declined 0.9% $37.97. St. Jude shares traded 1.7% lower to $37.87.

Wells Fargo analyst Larry Biegelsen expects a "modest positive impact" while JPMorgan's Michael Weinstein sees market acceleration in the first half of 2010. Citigroup's Matthew Dodds called the results "disappointing," on the other hand, and he doesn't see much benefit.

Lazard Capital Markets analyst Sean Lavin does expect a market benefit, though he noted that some doctors are worried about costs or don't think there is enough data yet to expand usage. "While we believe the large majority will greet these data with open arms, a minority may be vocal and negative," Lavin said.

CRT-D devices provide power to synchronize beating in erratic hearts and also have defibrillators on board to provide jolts when needed to stop life-threatening arrhythmias.

Today only patients with more severe cases of heart failure are typically given $30,000 CRT-D devices, but manufacturers would like to expand their usage to patients with symptoms that haven't progressed as far, and who might only get a cheaper defibrillator under current guidelines. Because CRT-D devices cost on average $7,000 to $8,000 more in the U.S., according to Boston Scientific estimates, upgrading patients carries financial benefits.

It may also raise concerns in an environment of health-reform debates and concerns about rising costs. Amid that backdrop, Boston Scientific highlighted the costs associated with hospitalizing patients for heart failure, which can cause fluid in the lungs or legs.

Avoidance of heart-failure events was the difference maker in the study for patients who had CRT-D devices instead of regular defibrillators.

Official cost-effectiveness data from Madit-CRT are not yet available. But Arthur Moss, a cardiologist at the University of Rochester and the study's main author, said that CRT-D devices did show cost benefits. The cost of hospitalizing sick patients far outweighs the upfront cost of pricier devices, he said in an interview.

"There's every reason to believe there will be a meaningful cost benefit," he added on Tuesday's conference call. He has received grant support from Boston Scientific and lecture fees from the three device makers.

Boston Scientific plans by the end of this year to ask the Food and Drug Administration to expand the approved usage of CRT-D devices to less-sick patients. The company expects regulatory approval in mid-2010.

-By Jon Kamp, Dow Jones Newswires; 617-654-6728; jon.kamp@dowjones.com