Vascular Device Forum

Medtronics CEO $8.9 million salary for 2009

TARP Money, Healthcare reform and economic recovery lead the morning news. Now the salary Czar is tackling Citi's $100 compensation package for  the energy division's star trader. Meanwhile at the healthcare reform table are physicians, insurers, pharmaceuticals, hospitals and corporations. What does this have to do with vascular devices? A recent AP wire story ran on the compensation for Medtronics CEO.

Medtronic’s CEO Bill Hawkins received $8.9 million in compensation in fiscal 2009. Hawkins took over as CEO last August and since then Medtronic has cut jobs and taken other steps to trim costs. A filing with the Securities and Exchange Commission showed his compensation included a $2.2 million performance bonus and $1.2 million in salary, plus stock worth $5.5 million

Not a bad year during an economic downturn. Medtronics opens the week at 35.4, down approx 30% YTD

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Cook Medical and Spectrum Technology in PICC Lines

We love breaking news of new disruptive vascular technology at VDF.com and Cook Medical appears to have one here. I spoke to the folks at Cook Medical (Bloomington IN) and they are very optimistic about the impact that this technology will have on patient outcomes.

 

Hospital acquired catheter infections in PICC lines are a significant concern both in terms of patient outcomes as well as healthcare cost considerations. Vascular line infections, considered an avoidable complication by the CMS as a result of the DRA, will be monitored closely by all healthcare facilities.

 

Industry studies suggest that there are approximately 3 million peripherally inserted central lines with an infection rate ranging from 4-7%. Factors associated with line infection include duration of use, patient comorbidities and insertion technique.

 

Current "anti septic" picc lines provide infection resistance for 4-5 days. New spectrum technology demonstrated zones of inhibition for approximately 63 days. This technology appears to represent a significant advance and a relatively underappreciated sector of patient care. If post release studies confirm these results, the technology will provide significant savings to healthcare.

 

Consider all of the pipeline applications for the use of this technology.

      Cook Medical Launches Spectrum Turbo-Ject Antibiotic PICC

May 11, 2009—Cook Medical (Bloomington, IN) announced the launch of the Spectrum Turbo-Ject percutaneously inserted central venous catheter (PICC). The Spectrum Turbo-Ject is an antibiotic-impregnated pressure injection PICC that is capable of accepting the contrast media injection rates required for CT scans while protecting against catheter-related bloodstream infections (CRBSIs). The Spectrum Turbo-Ject PICC is being offered in multiple catheter configurations with a range of flow rates to meet patients' needs. The device's features include maximum pressure-limit settings of 325 psi, 5-F single and double lumen with maximum flow rates of 7 and 5 mL/s, respectively, 4-F single lumen with a maximum flow rate of 4 mL/s, and 50- and 60-cm lengths. Additionally, Cook Medical is offering its PICC procedural tray, designed to efficiently supply the essential components for a clinician placing a PICC, whether bedside or in an interventional radiology lab. The tray provides the vital components for maximal sterile barrier precautions, which is a significant part of patient safety and infection control, the company stated.

According to Cook Medical, Spectrum technology has been shown to establish zones of inhibition > 15 mm for up to 63 days against the leading cause of CRBSIs. The combination of the antibiotics minocycline and rifampin that are impregnated within the material of the catheters provide broad-spectrum protection against gram positive, gram negative, and fungal organisms in both short- and long-term use. This combination has the ability to penetrate the biofilm that forms on all indwelling catheters while not promoting the growth of antibiotic-resistant strains of bacteria in patients receiving the catheters. The company noted that in October 2008, the Centers for Medicare & Medicaid Services eliminated reimbursement to hospitals for treating CRBSIs and other hospital-acquired infections.

CSII Cardiovascular Systerms reports blockbuster results for Q3 Diamondback

The number of hospitals using the Diamondback 360º system rose to 487 by the end of the third quarter, up from 400 at the end of the second quarter of fiscal 2009 and 106 at the end of the third quarter of fiscal 2008. Sales of disposable units also grew with nearly 4,600 units sold in the third quarter this fiscal year, compared to 2,300 units in the third quarter of fiscal 2008. The 90-day reorder rate for the quarter was strong at over 90 percent, and revenue generated from reorders comprised over 80 percent of total revenue for the quarter.

The fiscal third-quarter gross margin increased to 74 percent from 67 percent in the same period last year, driven by higher disposable volumes, product cost reductions and manufacturing efficiencies. Sales, general and administrative expenses grew 41 percent - a rate less than half of the revenue growth rate - to $14.3 million. The increase was due to expansion of the direct sales organization to nearly 100 professionals from 36 in March 2008. The sales team is expected to grow to just over 100 in the fiscal fourth quarter. CSI has continued to invest significantly in innovation and product development; however, research and development expenses declined 21 percent to $3.4 million due to the completion and timing of projects.

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Cardiovascular Systems Inc CSII Organizational Shake Up

Cardiovascular Systems Inc (CSII)fresh off their merger with Replidyne is scheduled to release their Q3 earnings on May 6. The Executive management team has recently undergone some changes and their are rumors that the sales force reps have been forced into a lower commissioned performance arrangement.

A new collaborative distribution agreement with Invatec was presented as a way to enhance the portfolio of CSII. The CSII sales force will now distribute a small vessel platform of PTA balloon, one of which is the amphirion .014 system. It seems like where this is headed is now the physician will be encouraged to follow athrectomy with the diamondback with PTA using one of this series of balloons. Thats somewhat odd since the premise of athrectomy is that its better than PTA. That would seem to be a bait and switch to say that PTA is no good so use our diamondback athrectomy device and then after you use it, now that we carry balloons- just touch it up with one of our very effective balloon products. It all adds up to a costly intervention with as yet unproven benefit

From Tradingmarkets.com

Cardiovascular Systems, Inc. (CSI), a medical device company developing and commercializing interventional treatment systems for vascular disease, announced that Brian Doughty has been promoted to vice president of commercial operations from vice president of marketing, and Scott Kraus, previously a senior sales director, has been named vice president of sales.

Doughty and Kraus will assume responsibilities previously performed by John Borrell, who has left the company to pursue other opportunities. Additionally, the company announced that Dr. Nabil Dib, MSc, FACC, has been appointed to serve as medical advisor to CSI.

"These promotions recognize the outstanding work and abilities of Brian and Scott," said David L. Martin, CSI president and chief executive officer. "Together, they have nearly 30 years of medical device industry experience. They have the skills, experience and drive to implement marketing and sales strategies to accelerate adoption of our Diamondback 360 degrees Orbital Atherectomy System for peripheral arterial disease, as well as lead a growing national sales organization of over 100 professionals. We also want to thank John Borrell for his many contributions to CSI. John played an important role in building our sales organization and launching our Diamondback 360o system."

Doughty came to CSI in November 2006 as director of marketing and was named vice president of marketing in August 2007. Prior to joining CSI, he served as director of marketing at EKOS, a manufacturer of an endovascular treatment system for vascular clots; before that, he worked in practice development at FoxHollow Technologies. In addition, he held various sales and sales management positions at Medtronic and Johnson & Johnson.

Kraus has been with CSI since September 2006, most recently as a senior sales director. Previously, he held sales management positions with Boston Scientific Corp., Guidant and C.R. Bard. Earlier, he gained sales experience at C.R. Bard, Bristol-Myers Squibb and Surgical Specialties Corp.

Dr. Nabil Dib to Serve as Medical Advisor 

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CSII Cardiovascular Systems Quarterly Call-Diamondback device

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.

       

 

 

 

Diamondback from CSI-Niche useless device or Toolbox Asset

For those of you who have entered the world of athrectomy/atherectomy you might be following the trajectory of CSI(Cardiovascular Systems Inc) which was ramping up to conduct an IPO. Information surfaced in early November 2008 that due to the challenging economic conditions and the IPO drought, they would merge with a struggling existing publicly traded company Replidyne. By reports, Replidyne is essentially a shell company with no products, no revenue and very few employees. What they do have is a Nasdaq listing and a ticker symbol.

Over the past few months, IPOs have ground to a halt, forcing companies to either postpone or pull their stock debuts altogether. In the first nine months of this year, 77 companies withdrew their IPOs, 19 in the third quarter alone, according to Bloomberg News. Through September, just 55 companies have gone public, down from 226 during the same period in 2007.

Getting creative

Im interested to get some feedback on this device. We know that the Silverhawk formerly of Foxhollow and now EV3 fame had limitations such as an inability to treat vessel calcification. The initial company push for the Diamondback is for the treatment of calcific athero-occlusive disease. I have successfully used it in densely calcified infra popliteal vessels. The question becomes, depending upon ones population, is the presence of segmentally, calcified infra pop disease so infrequent as to make the indicated use for this device relatively few and far between. I have used it on minimally calcified vessels with underwhelming results as one would expect  based upon its theoretical mechanism of action which is atherectomy of calcific, non compliant tissue.

The major cost associated with the device include multiple catheter sizes and a couple of different crown types for various disease levels. To date, my impression is that a lot of enthusiasm for this device is in the interventional cardiology space. I feel that durable results with minimally invasive technology is really limited to focal tibial level disease with good run off. Unfortunately, many of the diabetic and renal insufficiency patients with dense calcific vessel disease have an extremely diffuse pattern. And in the circumstance when there is significant tissue loss, I personally feel that direct pulsatile flow to the area of tissue loss is the most reliable means of salvaging the limb if adequate conduit is available. Furthermore, products like the propaten graft from Gore Medical and the Venaflo from CR Bard offer reasonable alternatives to spliced vein autologous vessel bypass.

Bottom line, is that I would like to get a some feedback on what others are experiencing in their practice with the use of this technology.

San Francisco organ Donation Case Raises eyebrows

My posts focus on the vascular device industry however occasionally, a story outside of vascular device is so important that it deserves discussion. There is a very important civil and medical malpractice case evolving in San Francisco right now. The circumstances surrounding the case involve a young man named Ruben Navarro who died about 2 1/2 years ago following a long battle with a chronic medical condition.

It's alleged that the physician that was in charge of the transplant organ procurement process hastened the death of Mr Navarro. The case is very important because a plaintiff's verdict may undermine the very principle of trust that is so essential to the organ donor process.

This is the first case of this type against a transpant surgeon

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How do we identify the vulnerable Plaque

One of vascular imagings largest obstacles is identification of the vulnerable plaque. Unfortunately the current gold standard of imaging, digital angiography is largely anatomic in its value. Not physiologic. The ideal modality would allow us to detect the plaque that has characteristics that are identified to be closely associated with plaque rupture. Plaque rupture is the event which typicall leads to vessel occlusion and acute ischemia in the brain or heart. The event usually involves rupture of unstable lipid-laden material which is followed by platelet aggregation and in severe case, thrombus adherence. If one is lucky, the entire lumen of the blood veseel is not completely occluded.

Various modalities like ultrasound have identified characteristics of plaques that are more consistent with embolization like heterogenicity. Cardiac Interventions Today presents a review article discussing current investigational modalities in this important area of plaque characterization

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State of the Industry Report for industry experts-Important reference

Medical Device Daily State of the Industry Report 2008

The industry's most comprehensive annual report on med-tech sectors, companies and products.

With the Medical Device Daily State of the Industry Report 2008, you will be able to:

• Get a competitive overview of each market!
• View financial benchmarks and trends in the industry: IPOs, dealmaking, M&As, VC investments, etc.!
• Understand how certain FDA movements will affect the industry in 2008 and beyond!
• Find potential partners, licensing and marketing opportunities!

Published by Medical Device Daily, the newspaper of record for the med-tech industry, the Medical Device Daily State of the Industry Report 2008 is the "reference of choice" used by executives, investors and analysts to understand where the med-tech industry is heading, which sectors are rising and declining, and what opportunities lay ahead. This industry report covers company financial data, product development, sector trends and more!

The first half of the report offers a generous overview of the industry, with a variety of perspectives on the financial markets, dealmakers and Washington, including legislative/regulatory outlooks for the FDA and reimbursement issues for CMS

Individual market sectors covered in this report include:

• Cardiovascular
• Clinical diagnostics and imaging
• Orthopedics
• Biomaterials
• Surgical/anesthesia/monitoring
• Healthcare IT
• Neurology
• Interventional radiology
• Genetics/stem cells
• Oncology
• Urology
• Ophthalmology
• Diabetes/obesity
• Women's health

Medical Device Investor day prior to IN3E (Investment in Innovation)

Vascular Device Forum (VDF) is excited about the upcoming Medical Device Investor day that is scheduled to precede Investement In Innovation East (IN3E). Held in Boston, this years IN3 event is billed

"As the largest East Coast strategic partnership and investment meeting for senior-level medical technology executives, hundreds of venture capital companies and medical technology companies gather each year to hear about the latest innovations and investment opportunities"

Specifically, the event features members of industry from:

Cardiovascular/Interventional Cardiology

Diagnostics

Drug Delivery

Imaging

Minimally Invasive Surgery

Nanotechnology

Neurostimulation

Orthopedics/Spine

Peripheral Vascular

Stem Cells

Stroke Management

Wound Management

Medical Device Investor Day occurs Oct 22, 2008,  prior to Investment In Innovation program. This is scheduled to be a full day of presentations by some of the most influential companies in the medical device space. Invited presenters include: Johnson & Johnson, Boston Scientific, Covidien, Abbott, Medtronic, Stryker, Zimmer, Edwards Lifesciences, Phillips Medical, BD, Hologic, GE, Baxter, St. Jude Medical, Biomet, and many others

Sample Agenda:

8:30-9:30 a.m.

Keynote Panel Discussion

Stories behind How Financing Deals got Done
• Why we invested in certain technologies/clinical spaces

• What kind of due diligence got done

• How valuations were determined

• What was the rationale behind the deal from an in investment point of view

Panelists:
David Milne, Managing Partner, SV Life Science Advisers LP
Kevin Connors, General Partner, Spray Venture Partners
Amir Nashat, General Partner, Polaris Ventures