Cardiovascular Systems (CSII) has its quarterly report on May 6. Recently the company has undergone some organizational changes. As you probably know, CSII went public via a merger with Replidyne in February of 2009 (see VDF post regarding the merger). The 2nd quarter results, released just days before that merger demonstrated strong revenue growth over the prior ytd.
I think its a fascinating story of a small niche device company navigating the choppy waters. I've received a great deal of feedback about CSII, their Diamondback Atherectomy device as well as feedback on the best known first generation Athrectomy system The Silverhawk (formerly of Foxhollow fame and now EV3). The feedback has come from the end user physicians including interventional radiologists, cardiologists and vascular surgeons.
Today, I would like to raise a couple of issues of concern. This will be a several part post on this interesting technology. First, Im interested in the lack of evidence that bolsters the effectiveness and clinical utility of this technology. The Diamonback is formally positioned as the only option for the percutaneous treatment of calcified, infra popliteal calcified arterio-occlusive disease. The premise is that angioplasty and stenting of these vessels has marginal results in the presence of calcium. Technically, the diamondback from CSII has a diamond impregnated crown which applies a differential sanding effect as the crown rotates at 60-200,000 RPM
Practically speaking, all calcified arterial lesions are not resistant to PTA. In my opinion, only the most moderately severe to severe calcified lesions are refractory. And in my experience, these lesions tend to be associated with total occlusions and long segmental disease. Coupled with calcium, both of these features are challenging for Diamonback technology just as much as they are with angioplasty or any other available modality. What Im suggesting is that the mild and moderately calcified lesions which the Diamondback treats, are likely amenable to PTA. Until I see patency comparisons, it's is difficult for me to think otherwise
Additionally, I have concerns that the shift in the field will be to encourage the use of the device in the non calcified, atherosclerotic lesions and I think this practice has unclear consequences including diminished efficacy and potential issues of distal embolization (the fracture of particulate material that migrates into the small vessels and lodges in those arteries causing pain and perhaps ulceration
Next, the premise that the use of this Diamondback system in the above knee space (which is a more frequent and commonly treated pattern) has limited benefit over the currently available technology. (PTA, bare metal stent, covered stent, directional athrectomy). I believe that the projection that this above knee space is potential future market share is lacking in evidence based upon this impracticallity.
Finally, every device company has the R&D pitch that their device will work in the much larger coronary space and that future iterations will allow that market to be captured. (the conference call investor pitch about future growth). Ask any knowledgeable person if they believe that EV3 will develop Silverhawk technology to the point of wide spread use in the treatment of coronary or carotid disease? Im guessing that the answer will be resoundingly No.
In my opinion, its quite easy to select vascular lesions which have favorable characteristics to make a device safety and feasibility acceptable, however, it's the real world use of the technology by the high volume end user which determines if technology will be a long term major player in a vascular space as opposed to the "flash in the pan" newest "toy" only to be relegated to dust collecting section of the cath lab.
It seems to me that one of the main differences in the roll out of the Diamondback compared to the Silverhawk system is that Foxhollow had a much more dramatic direct to patient marketing and advertisement effort. To the extent, that physicians really felt compelled to have the technology in the Toolbox because patients were calling to ask if hospitals and physicians have it. I dont see that penetration into the physician community or into the lay community with the diamondback. Perhaps it's because their salesforce is significantly smaller.
Currently, the Diamondback device from CSII is on a trajectory to follow the Silverhawk system. New niche technology roled out as the next best tool for vascular disease. Trial adoption by members of the cardiovascular, interventional radiology and vascular surgery community. New physcians, new hospital accounts to grab some market share of the 8-12 million and growing PAD patient population. Several physicians (with options) touting the benefit in the absence of any substantial evidence based support from unbiased randomized prospective studies by broad group of physicians competent with all technologies.
If this data is eventually collected and presented to demonstrate advantage to the use of diamondback technology in the infrapopliteal space, I will be very happy. The disease pattern is challenging and patients would benefit tremendously from effective technology.
David L. Martin, president and chief executive officer of CSI, and Laurence L. Betterley, chief financial officer, will discuss the company's results for the fiscal third quarter ended March 31, and outlook for the remainder of the fiscal year.
To access the live webcast, go to the investor information section of the company's Web site, csi360.com, on the day of the conference call and click on the webcast icon. A webcast replay will be available beginning at 7 p.m. CT the same day.
To participate in the conference call, dial (888) 713-4214 and enter 26726197. Please dial in at least 10 minutes prior to the call. Participants may pre-register online for the call by logging on to the following Web site: theconferencingservice.com/prereg/key.process?key=PVLJH9LB3
If you do not have access to the Internet and want to listen to an audio replay of the conference call, dial 888-286-8010 and enter access number 71489482. The audio replay will be available beginning at 8 p.m. CT on Wednesday, May 6, through 6 p.m. CT on Friday, May 8.
Cardiovascular Systems is a medical device company focused on developing and commercializing interventional treatment systems for vascular disease.
I've been researching heart surgery and some of this is over my head, but it does give me more insight from a medical viewpoint. Thanks!
Posted by: heart surgery | June 18, 2009 at 06:18 PM