Investors’ hearts racing at cardio company presentations

By Larry Haimovitch

Medical Device Daily Contributing Writer

December 13, 2010

SAN FRANCISCO — The annual Canaccord Genuity (Vancouver, British Columbia) Cardiovascular Conference, held here last week, featured a diverse and interesting group of public and private companies primarily addressing the cardiovascular device markets on the first day and some interesting players in the diabetes and obesity space on Day Two.

Over the last decade, vascular site access closure has developed into one of the larger med-tech markets, with estimated global revenue in 2010 in the neighborhood of $600 million. There have been numerous large companies entering the market over the past many years, with St. Jude Medical (STJ; St. Paul, Minnesota) being both the most prominent and dominant. Through its acquisition of the vascular access technology of AngioSeal several years ago, STJ is by far the market leader with an estimated global share of approximately 65%.

Despite the appearance of proprietary technology and intellectual property, many competitors have jumped into the market. For a variety of reasons, success has been elusive and most have fallen by the wayside.

However, a relatively new entrant, privately-owned, venture capital-backed Access Closure (Mountain View, California) has achieved notable progress. The company presented at 22nd annual Piper Jaffray (Minneapolis) Health Care Conference two weeks ago and was scheduled to appear here but had to cancel.

CEO Greg Casciaro, a veteran of the med-tech industry, noted in his New York talk that while the vascular closure market size trails several other more visible and larger markets (e.g., drug eluting stents, abdominal aortic aneurysm endovascular repair), “it is the second largest domestic cardiovascular opportunity because it is very under penetrated.”

Casciaro explained that of the approximately 5 million potential procedures in the U.S., vascular sealing devices account for only about 2 million, or 40% of the cases. The remaining 60% of access sites are either treated with manual compression or the use of very inexpensive hemostatic patches, which he strongly believes are ripe for conversion. Outside the U.S., the penetration rate is considerably lower.

He ticked off the key attributes of a “perfect” vascular sealing device, which are provided in the box below:

According to Casciaro, the “magic of the Mynx” (the tradename for its device) is threefold: (1) It features a hydrated, porous sealant that expands to 3-4 times its size sealing both the puncture site and the tissue tract; (2) When fully expanded sealant is 95% blood and fluids; (3) The sealant dissolves within 30 days, leaving nothing behind but a healed artery.

Since beginning its commercialization in 2007 with its Mynx closure system, Access Closure has enjoyed stellar growth. Casciaro estimated that its global revenue will reach $72 million in 2010, which represents a 26% increase over the previous year but is significantly lower than the previous CEO estimated in January at the JP Morgan Healthcare Conference.

As with virtually every successful med-tech company, excellent clinical data and a strong direct sales effort have been key ingredients. With regard to its selling efforts, Access Closure now has about 100 direct sales reps covering 50 territories in the U.S.

Exemplifying its clinical excellence, an article in the August 2010 issue of Endovascular Today, titled “Two Years of Extravascular Closure With the Mynx Vascular Closure Device,” concluded that “. . . favorable outcomes, including consistently achieved hemostasis and a low rate of complications . . . along with patient satisfaction, provide evidence supporting continued usage of the Mynx device.”

An intriguing new competitor is looming, with the potential based on its unique access site closure technology, to change the paradigm in this field. Privately- owned Arstasis (Redwood City, California) received FDA marketing clearance earlier this year and is planning a nationwide launch in early 2011.

Arstasis CFO Alex Arrow, MD, a former Wall Street sell side analyst, told the Canaccord audience that his company has taken a totally new approach to vascular access closure, not by focusing on closing the access site itself but by changing the way that vascular entry is performed.

By way of background, traditionally all angiographic, angioplasty or other procedures, approximately 11 million procedures per year have relied on the modified Seldinger technique to obtain safe access. It is named after Sven- Ivar Seldinger, MD, who introduced the procedure in 1953. However, every patient is left with a hole at the entry site after the procedure, which requires significant effort and hospital resources to the terminate bleeding. As noted above, in the U.S. an estimated 40% of these patients receive a vascular closure device, while 60% are managed with compression and some type of hemostatic patch.

The Arstasis vascular access procedure, called Arstaotomy, takes a completely different approach. It creates a short shallow-angle needle pathway through the wall of the femoral artery prior to the placement of an introducer sheath. At the end of the cath lab procedure, the sheath is removed and then the shallow-angle pathway collapses from the normal pressure of the patient’s blood flow, resulting in a quick cessation of bleeding.

Patients can ambulate much sooner than the traditional approach of manual compression or placement of any type of access closure device.

In addition to using a natural bodily mechanism to quickly create hemostasis, another key advantage is that this approach achieves this result without leaving any foreign substance or device in the body. Many industry observers feel that vascular closure device penetration would be much higher if no foreign substance was left behind.

Perhaps the best feature of all, surprising even to Arstasis according to Arrow, has turned out to be the security of the resulting closure. In the more than 700 patients who have been treated with Arstaotomy procedures in the U.S., there has not been a single incidence of a re-bleed. Internationally, the incidence was one patient in over 1,000. This contrasts dramatically with a 4% re-bleed rate that was reported for other access site closure devices in a meta-analysis article in the April 2010 issue of the American Heart Journal.

The company’s clinical data appears to strongly support its contention that this marks a major technology leap in the catheterization lab. In a study of nearly 1,200 patients that was reported at this year’s Transcatheter Cardiovascular Therapeutics meeting held in Washington in September, the mean time to hemostasis and overall device-related complication rate were outstanding.

As a result of these stellar results, the accolades from the interventional community have been flowing. To wit, Zoltan G. Turi, MD, director of the Vascular Center at Cooper University Hospital (Camden, New Jersey) said recently that “the Arstasis One femoral artery access system marks the beginning of a new approach to heart catheterization,”

In November, Artsasis began enrolling patients in the RECITAL (A Patient Registry Evaluating Closure Following Access with the Arstasis One Access System) study. Dr. Turi is the principal investigator of this trial. The non-randomized, prospective, post-approval study is anticipated to enroll up to 500 patients in at least seven U.S. hospitals. The goal of the study is to observe the clinical safety and effectiveness of the Arstasis One Access System in patients undergoing diagnostic angiography procedures through the femoral artery.

The first patient enrolled in RECITAL was at La Paz Regional Medical Center (Parker, Arizona). Frank Kresock, MD, chief of interventional cardiology at La Paz Regional Medical Center, the physician who performed the procedure said that “we’ve begun performing Arstaotomy procedures routinely in our cath lab because they make femoral artery access safer . . . easier . . . and less expensive for our hospital compared with closure devices or manual compression.”

Arstasis has raised about $41 million since its inception but is unusual amongst innovative med-tech companies because it has raised only about half of its funding from the VC community. A significant portion of its invested capital has been derived from a distinguished group of wealthy private ”angel” investors, who have all had notable financial and clinical successes in their careers.

Arrow concluded his remarks saying that “once we launch, we think that Arstaotomy could become the new standard of care for starting cath lab cases.”

2010 Canaccord Genuity Cardiovascular and Diabetes Conference

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The “Perfect” Vascular Access Closure Device

  1. No Complications

  2. Extravascular

  3. Leaves Nothing Behind

  4. Intuitive: Simple to Use

  5. Low Cost

  6. Minimal Vessel Trauma

  7. Clinical Versatility

  8. Maintains Hemostasis