Cardiovascular Systems Profile
Cardiovascular Systems, Inc. operates as a medical technology company.
The company focuses on developing and commercializing innovative solutions for treating vascular and coronary disease. The company’s Orbital Atherectomy Systems (OAS) treat calcified and fibrotic plaque in arterial vessels throughout the leg and heart in a few minutes of treatment time, and address many of the limitations associated with existing surgical, catheter and pharmacological treatment alternatives.
The company is committed to clinical rigor, constant innovation and a defining drive to set the industry standard to deliver safe and effective medical devices that improve the lives of patients facing this difficult disease state. The company has developed a patented orbital atherectomy systems (OAS) for both peripheral and coronary clinical applications. The primary base of the company’s business is catheter-based platforms capable of treating a broad range of vessel sizes and plaque types, including calcified plaque, which address many of the limitations associated with other treatment alternatives. As of June 30, 2022, more than 670,000 patients had been treated with the company’s OAS devices. It continues to expand its business to serve more patients with cardiovascular disease.
Peripheral
The company’s peripheral artery disease (PAD) products are catheter-based platforms capable of treating a broad range of plaque types in leg arteries both above and below the knee, including calcified plaque, and address many of the limitations associated with other existing surgical, catheter and pharmacological treatment alternatives. The micro-invasive devices use small access sheaths that can provide procedural benefits, allow physicians to treat PAD patients in even the small and tortuous vessels located below the knee, and facilitate access through alternative sites in the ankle, foot, and wrist, as well as in the groin.
The United States Food and Drug Administration (FDA) granted 510(k) clearance for various OAS devices as a therapy in patients with PAD. In addition to its Peripheral OAS, the company offers support products within the peripheral space. Peripheral sales in the United States during the year ended June 30, 2022, represented approximately 66% of revenue.
Coronary
The company’s coronary artery disease (CAD) product, the Diamondback 360 Coronary OAS (Coronary OAS), is a catheter-based platform designed to facilitate stent delivery in patients with CAD who are acceptable candidates for percutaneous transluminal coronary angioplasty or stenting due to de novo, severely calcified coronary artery lesions. The Coronary OAS design is similar to technology used in the company’s Peripheral OAS, customized specifically for the coronary application. In addition to the Coronary OAS, the company offers support products within the coronary space as it expands treatment to a broader patient population with complex coronary artery disease.
The company has received premarket approval (PMA) from the FDA to market the Coronary OAS as a treatment for severely calcified coronary arteries. Coronary sales in the United States during the year ended June 30, 2022, represented approximately 27% of revenue.
International
The company serves a growing patient population globally through an expanding distribution and sales network. The sale of the company’s approved products in Japan are made through its exclusive Japan distributor, Medikit Co., Ltd. (Medikit). The sale of the company’s products in the rest of the world, which primarily includes certain countries in Southeast Asia, Europe, Latin America and the Middle East and Canada, are primarily made through a network of distributors and sales agents.
International sales during the year ended June 30, 2022, represented approximately 7% of revenue.
Peripheral OAS and Coronary OAS
The company’s orbital atherectomy systems represent a unique and innovative approach to the treatment of PAD and CAD that provide physicians and patients with a procedure that addresses many of the limitations of other treatment alternatives. The Peripheral OAS and Coronary OAS devices are single-use catheters that incorporate a control handle and flexible drive shaft with an eccentrically mounted diamond-grit-coated crown. The peripheral device is often used for vessel preparation to enable low pressure percutaneous transluminal angioplasty, including the use of drug-coated balloons, and results in lower use of bailout stents. The coronary device is similarly used to prepare a vessel by treating severe calcium prior to stent delivery to help facilitate vessel access and stent expansion and prevent malapposition of stent struts for optimal stent performance.
The OAS treats atherosclerotic plaque, which is harder than a normal vessel wall. The OAS is designed to differentiate between hard, diseased plaque and healthy, compliant arterial tissue, a concept that the company refers to as differential sanding. In addition, the crown’s rotating eccentric mass and orbital motion deliver pulsatile mechanical energy into the vessel wall.
Multiple Applications
The unique OAS mechanism of action used in both the Peripheral OAS and Coronary OAS can be used to treat multiple anatomic locations.
Below-the-Knee and Behind-the-Knee Peripheral Artery Disease: Arteries below and behind the knee are smaller in diameter and may be diffusely stenosed, calcified or both. Reaching and treating these small vessels requires a low profile. Behind-the-knee, or popliteal, lesions also present challenges if a stent is used because stents frequently fracture in this area due to the forces exerted on the vessels when the knee bends or flexes. The Peripheral OAS is effective in treating those vessels. The Peripheral OAS offers a shorter shaft length (60cm), a smaller profile and a more flexible shaft than the predecessors for improved ease of use, and includes a 4-Fr catheter that enables physicians to access lesions below-the-knee using retrograde access through arteries in the ankle or foot.
Above-the-Knee Peripheral Artery Disease: Arteries above the knee are typically longer, straighter and wider than below-the-knee vessels. Plaque in these arteries may also be diffuse, fibrotic and calcific. Physicians often use higher speeds or larger crown sizes of the company’s products to treat lesions above the knee. The company’s Peripheral OAS portfolio includes an extended length OAS that can treat above-the-knee disease through trans-radial access (access through the radial artery in the wrist). The ability to treat the larger above-the-knee arteries with OAS via the small trans-radial access sites is made possible by the unique features of the OAS, including its small crossing profile, its extended length, and ability to orbit at higher speeds for the treatment of larger vessels.
Multi-Level Peripheral Artery Disease: Many patients have multi-level disease requiring treatment both above-the-knee and below-the knee, which can require two or more procedures to treat the patient. The company’s Peripheral OAS Exchangeable series device allows the use of multiple crowns with a single handle, providing physicians with increased flexibility to treat different size vessels above and below the knee with one device in a single procedure.
Coronary Artery Disease: The individuals more at risk for being diagnosed with CAD are those that have high blood pressure, abnormal cholesterol levels, diabetes or renal insufficiency, or have a family history of heart disease. The pathogenesis of CAD is marked by the accumulation of a fatty material called plaque on the walls of arteries that supply blood to the heart. The plaque buildup causes the arteries to harden and narrow (atherosclerosis), reducing blood flow. The Coronary OAS is the only atherectomy device specifically indicated for severe coronary calcium.
Supporting and Ancillary Products
In addition to its OAS, the company offers additional products aimed at supporting procedures that use its OAS and other interventional cases.
Guidewires: The Viperwire atherectomy guide wires are required for using the OAS and were designed to offer the ability to maneuver through tortuous, twisting blood vessels and cross challenging lesions. The OAS travels over this wire to the lesion and operates on this wire. The company’s newest coronary atherectomy guidewire, Viperwire with Flex Tip, is a nitinol guide wire with a stainless-steel support coil that provides reduced wire bias and a flexible tip for trackability. The company’s ZILIENT Peripheral guidewires further expand its low-profile endovascular portfolio and feature TWISTER Core Wire Technology, a proprietary stainless-steel core design that offers strong support with navigation and torque response. The ZILIENT guidewires are designed to get to and across lesions and include four tip load choices across two diameters.
Catheters: The company sells OrbusNeich Teleport Microcatheters in the United States through an exclusive distribution agreement with OrbusNeich. The company also sells its ViperCath XC Peripheral Exchange Catheter, which is the only 200 cm exchange catheter available to address the need for an extended length catheter when performing procedures with a radial access point. The company also acquired a new portfolio of variable-pitch braided peripheral support catheters that are sold under the name of VIPERCROSS.
Balloons: The company sells the OrbusNeich Sapphire semi compliant (SC) and Sapphire non-compliant (NC) percutaneous translumenal coronary angioplasty balloon portfolio in the United States, which includes the only 1.0mm SC balloon on the United States market. Sapphire SC balloons are optimized for lesion entry and crossing with stainless steel hypo-tube for increased pushability and kink resistance. Sapphire NC balloons are optimized for robustness under high pressure and reliable sizing. The company also sells the OrbusNeich JADE PTA balloon catheter in the United States. The JADE PTA balloon catheter series is a non-compliant, over-the-wire design used during peripheral interventions. The company launched the OrbusNeich Scoreflex NC non-compliant specialty balloon.
Embolic Protection System: In the year ended June 30, 2022, the company launched the WIRION Embolic Protection System in the U.S. market and certain international markets. Embolic protection devices contain and remove thrombus and/or debris while performing peripheral vascular intervention. WIRION is compatible with multiple atherectomy devices. Following its launch, the company conducted a voluntary recall of WIRION due to nine complaints of filter breakage during retrieval (of 697 total units distributed), and it is working to address the breakage issues and expect to introduce an improved product in the future.
Other OAS Support Products: The company’s OAS uses a small, portable saline infusion pump that bathes the OAS shaft and crown and provides an electric power supply for the operation of the catheter. The company also sells ViperSlide Lubricant designed to optimize the smooth operation of the OAS.
Strategy
The key elements of the company’s strategy are to drive adoption through its direct the U.S. sales organization, medical education and key opinion leaders; build a strong portfolio of clinical evidence on safety, effectiveness and economic benefits of the OAS; enhance OAS and expand product portfolio within the market for the treatment of peripheral and coronary arteries; expand internationally; and pursue strategic acquisitions and partnerships.
Sales and Marketing
The company markets and sells the majority of its products through a direct sales force in the United States, with direct shipments to hospitals or clinics. The company has targeted sales and marketing efforts to interventional cardiologists, vascular surgeons and interventional radiologists with experience using similar catheter-based procedures, such as angioplasty, stenting, and directional or laser atherectomy. Professional education is also a key element of the company’s sales strategy. In the United States, the company’s products are primarily sold to hospitals and office-based labs.
The company targets its marketing efforts to practitioners through medical conferences, seminars, peer-reviewed journals and marketing materials. The company’s sales and marketing program focuses on showing the safety and efficacy of its products through clinical results; educating physicians on the prevalence and complications of calcium in PAD and CAD; and developing relationships with key opinion leaders.
The company is a party to a purchasing agreement with HealthTrust Purchasing Group, L.P. (HPG), which was extended in 2021 to expire on February 1, 2025. HPG acts as a group purchasing organization for the healthcare providers belonging to HPG as participants. Under the purchasing agreement, all of HPG’s participants located in the United States or its territories are eligible to purchase the company’s OAS and related products at prices set forth in the purchasing agreement. The purchasing agreement may be terminated at any time, without cause, by HPG upon at least 60 days’ prior written notice to the company. The sale of the company’s products outside of the United States are made through a network of distributors and sales agents.
Manufacturing
The company uses internally-manufactured and externally-sourced components to manufacture the OAS. Most of the externally-sourced components are available from multiple suppliers, however, certain key components, including the diamond-grit-coated crown and its ViperSlide Lubricant, are single sourced. Single source supplier risk is mitigated by regular assessments of the quality and capacity of suppliers, the implementation of supply and quality agreements, appropriate inventory level management and the duplication of production capacity, where possible. For example, the company has entered into long-term supply agreements with Fresenius Kabi AB for the supply of ViperSlide and with Abrasive Technology, Inc. for the supply of the diamond-grit-coated crowns. The supply agreement with Fresenius Kabi AB expires on December 31, 2024, and the supply agreement with Abrasive Technology, Inc. expires on June 30, 2025. Each of these supply agreements gives the company certain final purchase rights.
Competition
The company’s OAS competes with a variety of other products or devices for the treatment of vascular disease, including stents, balloon angioplasty catheters and atherectomy catheters, as well as products used in vascular surgery. Competitors in the stent, balloon angioplasty and microcatheter market segments include Abbott Laboratories, Boston Scientific, Medtronic (Medtronic, Inc.), Cook Medical, Johnson & Johnson, Becton Dickinson, Terumo, Asahi, Teleflex, and Cordis. The company also competes against manufacturers of atherectomy catheters and other products designed to treat vascular disease, including Medtronic, Philips/Spectranetics, Boston Scientific, Ra Medical, Angiodynamics, Shockwave, Avinger, and Becton Dickinson.
Patents and Intellectual Property
The company’s U.S. and foreign issued patents and patent applications relate primarily to the design and operation of interventional atherectomy devices, including the Peripheral OAS and Coronary OAS, and also its products in development. These patents and applications include claims covering key aspects of the devices, including the design, manufacture and therapeutic use of certain atherectomy abrasive heads, drive shafts, control systems, handles and couplings.
Government Regulation of Medical Devices
The company has received 510(k) clearances for the Peripheral OAS products. The company’s operations are directly, or indirectly through its customers, subject to various state and federal fraud and abuse laws, including without limitation, the FDCA, the federal Anti-Kickback Statute and the False Claims Act.
In addition, the company’s international expansion, operations, distribution and sales require it to comply with the U.S. Foreign Corrupt Practices Act and similar anti-bribery laws in other jurisdictions and with the U.S. and foreign export control, trade embargo and custom laws, as well as foreign tax laws; employment, immigration and labor laws; local intellectual property laws, which may not protect intellectual property rights to the same extent as in the United States; and privacy laws, such as the European General Data Protection Regulation.
The company is classified and licensed as a Very Small Quantity Hazardous Waste Generator within Ramsey County, Minnesota. There are no regulated wastes requiring licensing in the company’s Texas facility.
The company is registered with the United States Food and Drug Administration (FDA) as a medical device manufacturer and comply with the FDA’s Quality System Regulation (QSR). The company has opted to maintain a Quality Management System to enable it to market its products in the member states of the European Union, the European Free Trade Association and countries that has entered into Mutual Recognition Agreements with the European Union. The company is ISO 13485:2016 certified, and its expiration date is December 2024. Under these registrations, the company’s plants are audited under the medical device single audit program (MDSAP). The company’s MDSAP certificate expiration date is December 2024. The Stealth 360 Peripheral OAS has received CE Mark. The company is registered as a Foreign Medical Device Manufacturer in Japan and its Quality Management System certification will be required to be renewed in June 2026.
The company’s operations are directly, or indirectly through its customers, subject to various state and federal fraud and abuse laws, including without limitation, the Federal Food, Drug, and Cosmetic Act (FDCA); the federal Anti-Kickback Statute; and the False Claims Act.
As part of its Japan commercialization process, the company is subject to the requirements of the Japanese Act on Securing Quality, Efficacy and Safety of Pharmaceuticals, Medical Devices, Regenerative and Cellular Therapy Products, Gene Therapy Products, and Cosmetics (the PMD Act). The company’s quality management system and products are subject to review and examination by Japan’s Pharmaceuticals and Medical Devices Agency and subject to approval and enforcement by Japan’s MHLW. The critical suppliers named in its application are also subject to this review and examination for the activities they perform for it.
In addition, the company’s international expansion, operations, distribution and sales require it to comply with the U.S. Foreign Corrupt Practices Act and similar anti-bribery laws in other jurisdictions and with the U.S. and foreign export control, trade embargo and custom laws, as well as foreign tax laws; employment, immigration and labor laws; local intellectual property laws, which may not protect intellectual property rights to the same extent as in the United States; and privacy laws such as the European General Data Protection Regulation. The company is classified and licensed as a Very Small Quantity Hazardous Waste Generator within Ramsey County, Minnesota.
Significant Events
The company has an exclusive the U.S. distribution agreement with OrbusNeich to offer their full line of semi-compliant, non-compliant and specialty balloons and the Teleport Microcatheter.
In 2021, the company entered into agreements with Chansu Vascular Technologies (CVT) to develop novel peripheral and coronary everolimus drug-coated balloons. Under the terms of the agreements signed with CVT, it will provide milestone-based financing to CVT for the development of the drug-coated balloons. Under an acquisition option agreement, upon CVT’s completion of key technical and clinical milestones in the development program, the company will have exclusive rights and obligations to acquire CVT, subject to the satisfaction of closing conditions set forth in the agreement.
In 2021, the company acquired a line of peripheral support catheters from WavePoint Medical, LLC (WavePoint) and it also engaged WavePoint to develop a portfolio of specialty catheters used in the treatment of chronic total occlusions and complex percutaneous coronary intervention procedures.
In 2021, the company completed a minority investment and entered into an acquisition option agreement with CarePICS, LLC, a telehealth company offering a virtual care platform designed to improve the outcomes of patients suffering from peripheral artery disease PAD, Critical Limb Ischemia (CLI) and lower extremity wounds.
In 2022, the company announced development progress towards the commercialization of intravascular lithotripsy systems for the treatment of calcific coronary and peripheral artery diseases.
In 2022, the company announced a partnership with Innova Vascular, Inc. (Innova) to develop a full line of novel thrombectomy devices to remove blood clots from arteries and veins. Under the terms of the agreements signed with Innova, it has provided financing to Innova for the development of the thrombectomy devices. Under an acquisition option agreement, upon Innova’s completion of key technical, regulatory and clinical milestones in the development program, the company will have exclusive rights to acquire the thrombectomy devices, subject to the satisfaction of closing conditions set forth in the agreement.
Research and Development Expenses
For the year ended June 30, 2022, the company’s research and development expenses included $36.7 million.
Trademarks
The company has received federal registrations in the U.S. Patent and Trademark Office (USPTO) of certain marks, including CSI (a first and second), CSI (Stylized) (a first and second), BE CALCULATED, BE CALCULATED (stylized), CSIQ, CSIQ (Stylized), DIAMONDBACK, DIAMONDBACK 360 (a first and second), DIAMONDBACK 360 (Stylized), GLIDEASSIST, STEALTH 360, STEALTH 360 (Stylized), TAKE A STAND AGAINST AMPUTATION, TAKE A STAND AGAINST AMPUTATION (Stylized), VIPERWIRE, VIPERWIRE ADVANCE, VIPERWIRE ADVANCE (Stylized), VIPERSLIDE, VIPERSLIDE (Stylized), VIPERTRACK, VIPERTRACK (Stylized), WIRION, ZILIENT, and ZILIENT (Stylized). The company has applied for federal trademark registration with the USPTO of certain marks, including DIAMONDBACK 360 PRECISION, DIAMONDBACK 360 PRECSION (Stylized) (a first and second), PROPEL, SHEPHERD, SHEPHERD (Stylized), VIPERCATH, WIRION (Stylized), VIPERCROSS and VIPERCROSS (Stylized).
History
Cardiovascular Systems, Inc. was founded in 1989. The company was incorporated in Delaware in 2000.
