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AVS’ Toland on Next Lithotripsy Launch · Vanguards of Healthcare by Bloomberg Intelligence

0:21
Speaker 1: Welcome to another episode of the Vanguards of Healthcare series.
0:24
Speaker 1: My name is Matt Hendrickson, the medical technology analyst at
0:27
Speaker 1: Bloomberg Intelligence, which is the in house equity research platform
0:31
Speaker 1: of Bloomberg LP. We're pleased to have with us today
0:33
Speaker 1: Mark Tolan, chairman of AVS Pulse, a privately held medical
0:38
Speaker 1: device company that is developing new innovation in intravascular lithotripsy
0:43
Speaker 1: or IVL for short. Mark, thank you for joining us today.
0:46
Speaker 2: Hey, Matt, thanks to Bloomberg for having us. We're really
0:49
Speaker 2: excited to update you on our progress.
0:51
Speaker 1: Perfect And you know, I was just going to say
0:53
Speaker 1: you've been here about a year and a half ago,
0:56
Speaker 1: but you know, IVL is still such a new topic
1:00
Speaker 1: for these listeners. And you know, first off, people, IVL
1:04
Speaker 1: is being intravascular lithotripsy. Let's start with kind of an
1:08
Speaker 1: overview of that technology.
1:10
Speaker 2: Yeah, so, lithotripsy started back in the nineteen eighties in
1:16
Speaker 2: a methodology to go treat kidney stones, and then as
1:21
Speaker 2: it progressed into other disease states, it was recognized that
1:25
Speaker 2: breaking up calcium was something that lithotripsy could play a
1:29
Speaker 2: role in. Unfortunately for the human body. You developed calcium
1:33
Speaker 2: in arteries, so it only made sense to try to
1:37
Speaker 2: understand if lithotripsy could play it a role in calcium
1:42
Speaker 2: modification before you treated the vessel so that you could
1:46
Speaker 2: expand the lumen of the artery. So back in two thousand,
1:52
Speaker 2: Stanford had a technology that I was called Shockwave, eventually
1:57
Speaker 2: purchased by J and J where they took this concept
2:01
Speaker 2: and applied it into the arterial system both for Perferle
2:04
Speaker 2: Vascal disease and coronary artery disease and it worked. And
2:09
Speaker 2: so there's a really keen interest in developing novel technologies
2:15
Speaker 2: in this space that allows physicians to treat very complex
2:19
Speaker 2: disease states in arteries to open them up and restore
2:22
Speaker 2: blood flow for patients.
2:24
Speaker 1: And you know, we talked about shock Wave as kind
2:27
Speaker 1: of being the front runner. Right now, let's start just
2:31
Speaker 1: kind of with their technology as kind of the traditional technology.
2:34
Speaker 1: How does lithotripsy actually work?
2:36
Speaker 2: Yeah, So the concept is around think about energy sources
2:44
Speaker 2: with lithotripsy. So you have these peak pressure waves that
2:48
Speaker 2: are created by a variety of different mechanisms, and these
2:52
Speaker 2: peak pressure waves are essentially allowing you to you know,
2:59
Speaker 2: think about like a piece of dynamite that would explode
3:02
Speaker 2: in a like a cave or something like that. It
3:05
Speaker 2: allows you to, you know, provide a significant amount of
3:08
Speaker 2: force and energy into a specific area that you're trying
3:12
Speaker 2: to break. And and so for the concept of energy
3:18
Speaker 2: inside you know, calcium, you think of it like the
3:22
Speaker 2: way I describe it is if you've ever gone to
3:27
Speaker 2: a tailgate at at a at a football game, and
3:31
Speaker 2: you got the cooler in the back of the of
3:33
Speaker 2: the suv and and you need to go go get
3:36
Speaker 2: ice at the at the store. Well, you go get
3:39
Speaker 2: the ice at the store, but the ice is in
3:41
Speaker 2: one solid block. So your natural reaction is to do
3:45
Speaker 2: what throw it on the ground. Well, that ground is
3:48
Speaker 2: creating energy and it's breaking up the bag of ice
3:52
Speaker 2: so that you can disperse it. The same concept applies
3:55
Speaker 2: with the energy source being attributed through either sonic waves
4:00
Speaker 2: which is shockwave and or pulsatyl waves, which is our product.
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Speaker 1: Okay, And so then you know, walk the listener through
4:09
Speaker 1: then the difference between those two mechanisms, the sonic wave
4:12
Speaker 1: and your pulse tile technology, because from the previous episode
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Speaker 1: that was the differentiating technology between you and some of
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Speaker 1: these other IVL technologies out there.
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Speaker 2: Yeah, that's right. So the sonic wave is off of
4:28
Speaker 2: exactly what you think about, like a sound. So it's
4:32
Speaker 2: developing what's called a cavitation bubble, and the bubble resides
4:37
Speaker 2: inside the housed balloon, and when the bubble pops or bursts,
4:41
Speaker 2: it creates a sound effect. And just like every sound
4:45
Speaker 2: that you would play in a house or in a
4:47
Speaker 2: bar or something like that, you can feel the energy
4:50
Speaker 2: from that, or if you're at a concert, you can
4:53
Speaker 2: feel the energy from that. Even the human body can
4:55
Speaker 2: feel it. So the same concept applies in this particular
4:58
Speaker 2: situation with cavitation and or sonic waves, is that the
5:03
Speaker 2: energy source comes from the sound, the sound effect. And
5:08
Speaker 2: so for us, we're using more of a pulsatile mechanism
5:11
Speaker 2: of action, which is derived from the concept of a
5:17
Speaker 2: surface based hydraulic mechanism that opens and closes very rapidly
5:24
Speaker 2: and creates almost like think of it like a jackhammer effect,
5:27
Speaker 2: where the jackhammer's breaking up the sidewalk. It's just constantly
5:32
Speaker 2: putting pressure, energy forces from a pulsatile hydraulic perspective into
5:38
Speaker 2: the calcium, so it shatters like a piece of glass.
5:42
Speaker 1: Gotcha, okay, and so what does that How does the
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Speaker 1: pulstyle technology, how is that being designed to kind of
5:52
Speaker 1: address any of the shortfalls of the sonic wave technology.
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Speaker 2: Yeah, the biggest difference between our and a cavitation product
6:02
Speaker 2: is cavitation has electrical emitters at the distal portion of
6:07
Speaker 2: the technology, and anytime you have an electrical source going
6:12
Speaker 2: into a product, it's going to create size and bulkiness.
6:16
Speaker 2: So if you're trying to navigate into the human body
6:20
Speaker 2: into very tight crevices, that's going to be a barrier
6:24
Speaker 2: for deliverability. We don't have electrical emitters inside of our technology,
6:30
Speaker 2: so we don't have to have those sort of engineering
6:35
Speaker 2: barriers of size that creates something bigger that you can't
6:40
Speaker 2: navigate into small spaces. So we would be more deliverable
6:45
Speaker 2: and flexible than a technology that has electrical emitters. Check.
6:49
Speaker 1: And that's because you have to cross the lesion to
6:52
Speaker 1: get completely through to be able to then expand it
6:55
Speaker 1: and then be able to break the lesion then correct.
6:57
Speaker 2: That's right. You're working in very very tiny uscles that
7:01
Speaker 2: you know, bend and torque and have all kinds of
7:05
Speaker 2: calcium problems in there, so you're trying to navigate this
7:09
Speaker 2: technology and the treatment zone, and the easier it is
7:12
Speaker 2: to navigate, the higher probability you're going to be more successful.
7:17
Speaker 1: Yeah, and so then let's let's dive into then just
7:20
Speaker 1: the results because you have you know, as part of
7:24
Speaker 1: the development of any medical technology, you need to be
7:28
Speaker 1: able to prove the clinical results. And you have therefore designed,
7:34
Speaker 1: and you've enrolled, and now you have the data out
7:36
Speaker 1: for the power Pad two trial. Let's start with just
7:40
Speaker 1: that process, because when we were speaking a year and
7:43
Speaker 1: a half ago, you had not started the enrollment. We
7:45
Speaker 1: were just talking about the design and what were the
7:49
Speaker 1: process to getting that trial initiated first off, because you
7:53
Speaker 1: had the preliminary data and what was that showing you.
7:56
Speaker 2: Yeah, we took a very deliberate strategy with the power
7:59
Speaker 2: pad to trial. Some of the other products in the
8:04
Speaker 2: IBL space went outside the US to gather their data.
8:09
Speaker 2: We felt like it was very important since we are
8:13
Speaker 2: a newcomer to the game, to really build our evidence
8:17
Speaker 2: in the biggest market in the world, which is the
8:19
Speaker 2: United States. So first off, we are the only one
8:24
Speaker 2: that did a dedicated US clinical trial for perferle vascular disease.
8:29
Speaker 2: Every one of our sites that enrolled in this trial
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Speaker 2: were US based hospitals and it's the US based data.
8:38
Speaker 2: And the reason that we think that was important is
8:42
Speaker 2: number one, the market size in the US is the
8:45
Speaker 2: biggest market. Number two is we wanted the physicians to
8:49
Speaker 2: get used to a different mechanism, action, and technology so
8:52
Speaker 2: that they could experience and communicate to their peers, which
8:55
Speaker 2: helps for potential commercialization down the road. And then the
9:00
Speaker 2: number three is we really wanted to get the FDA
9:03
Speaker 2: and CMS comfortable with the technology where they recognized that
9:07
Speaker 2: this was an IVL platform. And so once they did
9:11
Speaker 2: that and we got both CMS which is the reimbursement
9:14
Speaker 2: ARM and FDA aligned to the strategy, we were able
9:18
Speaker 2: to quickly start the trial and enroll. In order to
9:22
Speaker 2: get the trial up and running, you have to present
9:24
Speaker 2: a decent amount of pre clinical evidence that your technology
9:29
Speaker 2: works equal to the predicate. The predicate for US with Shockwave,
9:33
Speaker 2: and we were able to show that data that supported
9:36
Speaker 2: that we were equal, if not better than Shockwave with
9:39
Speaker 2: pre clinical evidence. And after we did that, we submitted
9:42
Speaker 2: our protocol into the FDA, and fortunately we were able
9:48
Speaker 2: to get the FDA to approve our protocol within what
9:52
Speaker 2: I consider a record amount of time. It was around
9:54
Speaker 2: thirty days. And I've been doing this for thirty years.
10:00
Speaker 2: I've never seen the FDA improve a protocol that fast. Yeah,
10:03
Speaker 2: so that was really encouraging.
10:05
Speaker 1: Let's take a step back because you know, we talked
10:07
Speaker 1: about your background and how you came to be the
10:10
Speaker 1: chairman of ABS in the previous episode. But how about
10:13
Speaker 1: a quick summary, because that thirty years of experience probably
10:16
Speaker 1: has been able to help you, you know, navigate some
10:19
Speaker 1: of this these FDA pathways, these clinical pathways a little
10:22
Speaker 1: bit better than you may what have the beginning of
10:25
Speaker 1: your career, So what what what were your you know,
10:29
Speaker 1: your steps to getting there and kind of was there
10:32
Speaker 1: any one or two experiences that really helped you with
10:35
Speaker 1: this role?
10:36
Speaker 2: Well, I think that you know, anytime you can apply
10:39
Speaker 2: your past experiences to your future opportunities, you're probably going
10:44
Speaker 2: to minimize mistakes. That's probably what you get out of
10:47
Speaker 2: it the most. And you know, fortunately I had a
10:49
Speaker 2: great opportunity to spend a lot of time at Boston
10:52
Speaker 2: Scientific almost twenty years, a very big strategic organization right
10:57
Speaker 2: now focused in on medtech and cardiovasco disease, and fortunately
11:02
Speaker 2: Boston Scientific for me, was a roller coaster ride. It
11:05
Speaker 2: was a matter of peaks and valleys. Okay, And if
11:09
Speaker 2: you follow the journey of Boston Scientific, you recognize that
11:12
Speaker 2: it was a roller coaster ride.
11:13
Speaker 1: Well, I'm assuming that you're referring to like the Guidan time.
11:16
Speaker 2: Well, you learn a lot from product recalls, you learn
11:19
Speaker 2: a lot from warning letters, you learn a lot from
11:22
Speaker 2: integrating companies, and so all the things that we were
11:26
Speaker 2: building as a base for the future of Boston Scientific,
11:30
Speaker 2: some of it was hard, and you learn a lot
11:32
Speaker 2: from the hard times more than you do from the
11:34
Speaker 2: good times. So you apply some of that learning into
11:38
Speaker 2: some things you had to go fix. And that's really
11:41
Speaker 2: my focus was really fixing a lot of problems in
11:44
Speaker 2: Boston Scientific. And then you can predict things before they
11:47
Speaker 2: happen in some of these earliest stage startups. So I
11:50
Speaker 2: think that's really helped our organizations avoid mistakes, and investors
11:57
Speaker 2: like it too, because then you are minimizeding your cash
12:01
Speaker 2: burn because you avoided a couple of mistakes you you
12:04
Speaker 2: probably saw coming before they happened.
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Speaker 1: Yeah, it's just so fascinating because of with Boston's track
12:10
Speaker 1: record the last few years of minimizing those mistakes of
12:14
Speaker 1: successfully integrating key and acquisitions and things like that, that
12:18
Speaker 1: you forget that they had that period where they weren't
12:21
Speaker 1: as efficient back then.
12:23
Speaker 2: That's right.
12:23
Speaker 1: It's kind of let me ask you, this, is there
12:27
Speaker 1: something where was there one key change there at your time?
12:31
Speaker 1: Was there kind of you know, a do playbook that
12:33
Speaker 1: was applied to these things, that kind of change that
12:37
Speaker 1: kind of must not say luck, but that the you know,
12:41
Speaker 1: being less efficient to be more efficient or was it
12:43
Speaker 1: just you know, a change and just you know, the
12:48
Speaker 1: just the environment anything like that that you think that was.
12:51
Speaker 2: You know, it wasn't so much. I think it was
12:54
Speaker 2: an industry issue at the time. So uh, you know,
12:59
Speaker 2: the world of medach evolves so fast, and oftentimes you
13:04
Speaker 2: saw companies acquiring other companies, and the philosophy in the
13:08
Speaker 2: nineties and the two thousands was let those other companies
13:13
Speaker 2: just go do their own thing, and if you ended
13:16
Speaker 2: up acquiring ten companies, you would have ten little companies
13:19
Speaker 2: inside of a big company, all doing different things. That
13:23
Speaker 2: was the wrong approach we took. We should have went
13:26
Speaker 2: to massive integration from day one and move faster. We
13:31
Speaker 2: even made that mistake with Guidan huge acquisition that we made,
13:35
Speaker 2: but we left it alone for about one to two years.
13:39
Speaker 2: That was a mistake, and I think companies have learned
13:42
Speaker 2: from that they've gotten better. Boss of Scientific is a
13:45
Speaker 2: great example of that. They integrate immediately, and whoever they're
13:51
Speaker 2: acquiring in that time period, they're then part of the
13:55
Speaker 2: Boss of Scientific family and they reside in the quality
13:58
Speaker 2: management system. They reside, you know, on the around the
14:02
Speaker 2: table making decisions and they're not a standalone entity inside
14:07
Speaker 2: a bigger company. That I think it was the key
14:10
Speaker 2: learning that we all made, whether it was Metronic or
14:15
Speaker 2: other strategics, that we now have started to move to
14:18
Speaker 2: better integration models that happen on day one, not day
14:22
Speaker 2: three sixty five.
14:23
Speaker 1: Yeah, that's actually really fascinating to see that trend throughout
14:26
Speaker 1: the years. And I apologize to you and the listeners
14:28
Speaker 1: were digressing so much. Let's go back to power Pad two.
14:32
Speaker 1: So you had the feasibility work done, you did the
14:36
Speaker 1: record not record time, but very fast FDA approval to
14:39
Speaker 1: get the ID started. We have the enrollment data came
14:43
Speaker 1: out last November at VIVA. What's your kind of key
14:49
Speaker 1: takeaways from those results and was.
14:51
Speaker 2: There anything that really was.
14:54
Speaker 1: A wow moment for you.
14:56
Speaker 2: Yeah, So we we obviously were excited to present the
15:02
Speaker 2: data because your number one goal when doing a trial
15:06
Speaker 2: like this is the show that the product is safe.
15:10
Speaker 2: So we met our safety endpoint and so that for
15:16
Speaker 2: us was the most critical element because it's going to
15:20
Speaker 2: guide the FDA in terms of our submission for approval,
15:25
Speaker 2: and they're going to be able to use that data
15:27
Speaker 2: to make a decision that we either hit our primary
15:30
Speaker 2: endpoint or we didn't hit our primary endpoint, which we
15:33
Speaker 2: did hit it, so it gives us confidence that the
15:36
Speaker 2: product will be approved in twenty twenty six. And then
15:40
Speaker 2: you fall into other secondary endpoints of well, how is
15:45
Speaker 2: the product working, Is it efficacious, is it working equal
15:48
Speaker 2: to what's currently on the market today, and in some cases,
15:51
Speaker 2: is it working better than what's on the market today.
15:54
Speaker 2: And so what we learned is that from a indoluminal
16:01
Speaker 2: gain standpoint, in other words, making the artery back to normal,
16:05
Speaker 2: we met all of the endpoints we wanted to meet.
16:09
Speaker 2: So we feel very confident that we have an equivalent
16:13
Speaker 2: product to the current product on the market day, which
16:16
Speaker 2: was a shockwave. We also learned that we've got some
16:21
Speaker 2: interesting advantages in the space from the data. One advantages
16:25
Speaker 2: is time to treat. Our product is very efficient and
16:29
Speaker 2: it moves very quickly through the treatment time and oftentimes,
16:34
Speaker 2: particularly when you're treating calcium and arteries, you want to
16:37
Speaker 2: be fast. Yeah, and we saw that our time to
16:42
Speaker 2: treat was faster than the current competition.
16:46
Speaker 1: I actually wrote that down because I caught that attention.
16:49
Speaker 1: It was eighty seconds IVL treatment time. Yeah, so just
16:53
Speaker 1: over a minute once. I mean so basically, but you
16:55
Speaker 1: do have to do all the prep work, you have
16:56
Speaker 1: to cross the lesion everything, But once you cross that
16:58
Speaker 1: lesion and you're ready to go, seconds seems like a
17:01
Speaker 1: remarkably quick time.
17:02
Speaker 2: Yeah, that's quick. So you know, that's really encouraging for
17:06
Speaker 2: physicians because you know, they don't want to spend a
17:09
Speaker 2: lot of time prepping vessels. This is a this is
17:11
Speaker 2: a prepping vessel. This is a break up the calcium
17:13
Speaker 2: and then go treat it. And so they really feel
17:17
Speaker 2: like speed is an important part of their decision making
17:20
Speaker 2: process when choosing products. So we think we have a
17:23
Speaker 2: competitive advantage with efficiency.
17:27
Speaker 1: And then this was if I remember correctly, there was
17:30
Speaker 1: one hundred and twenty patients enrolled. This data was for
17:34
Speaker 1: the first ninety five Is there going to be Do
17:37
Speaker 1: you expect to present that data for the full one
17:40
Speaker 1: hundred and twenty patient cohorts sometime this year? I don't know,
17:45
Speaker 1: acc might be a little too soon, but sometime after that.
17:49
Speaker 2: Yeah. So the way the way it works is you're
17:53
Speaker 2: able to cut data at certain time periods in your trial,
17:57
Speaker 2: and so the ninety five patients that we presented was
18:02
Speaker 2: an analysis for a thirty day follow up. We're required
18:07
Speaker 2: by the FDA to do six month follow up, and
18:11
Speaker 2: so we will eventually present, likely later this year, the
18:15
Speaker 2: full cohort, so all one hundred and twenty patients with
18:18
Speaker 2: six month follow up, probably in the fall at a
18:22
Speaker 2: conference that will likely be either VIV or TCT. So
18:27
Speaker 2: that's a requirement in the clinical trial for approval, and
18:31
Speaker 2: it will be a data set that will be interesting
18:36
Speaker 2: to see because we feel like that because we did
18:41
Speaker 2: this in the United States, the treatment methodology in the
18:46
Speaker 2: US is somewhat different than it is outside the US,
18:51
Speaker 2: meaning you do the IVL procedure, and in this particular trial,
18:56
Speaker 2: the standard of care in the US is to use
18:57
Speaker 2: a drug louting balloon. So because of that, we really
19:02
Speaker 2: think our patency of the vessel is going to be
19:05
Speaker 2: pretty interesting to see and I feel like that we
19:10
Speaker 2: see signals of this where it could be a validator
19:15
Speaker 2: of a better approach to take around the world. So
19:20
Speaker 2: it likely is going to be a powerful story for
19:23
Speaker 2: us from a data perspective.
19:25
Speaker 1: Very interesting. And so we have this data coming out,
19:29
Speaker 1: but you can use the current data published at VIVA
19:32
Speaker 1: last year for your FDA approval coming up. And so
19:37
Speaker 1: we have that data and now you're going through the
19:41
Speaker 1: FDA approval process. My first question is because you were
19:45
Speaker 1: using shock waves technology as a predicate, does that mean
19:49
Speaker 1: you're going down the five to ten K pathway? That's right, okay, yeah,
19:52
Speaker 1: and so what is kind of any either the strategy
19:57
Speaker 1: or the timing of that FDA approval process so far?
20:01
Speaker 2: Yeah, So we still have to in those ninety five patients,
20:05
Speaker 2: we still have to do the six month follow up, Okay,
20:08
Speaker 2: So that should if you do kind of the time,
20:12
Speaker 2: you're probably April okay, And so we're a couple months
20:16
Speaker 2: away from having that ninety fifth patient in a six
20:19
Speaker 2: month follow up. And then you've got a process of
20:23
Speaker 2: filling out your your clinical reports, your ID submission, and
20:30
Speaker 2: then you have to have the chance for the FDA
20:32
Speaker 2: to review it. So we're likely approved sometime this summer.
20:36
Speaker 1: Okay, Okay, that's good to know. And so then that
20:41
Speaker 1: means then you're probably sorrying to prep your strategy commercial strategy.
20:46
Speaker 1: And you know, the thing that you mentioned earlier that
20:49
Speaker 1: cut my attention was the fact that you did your
20:51
Speaker 1: clinical trial the enrollment sites were in the US. I'm
20:55
Speaker 1: assuming that that helps create an initial kind of push
21:01
Speaker 1: with these products because you can do your limited launch
21:03
Speaker 1: with hospitals that have already been using the product.
21:06
Speaker 2: That's right. Yeah, Well, so you have you know, around
21:09
Speaker 2: eighteen sites in the United States that got used to
21:12
Speaker 2: using the product for the last year, and so they
21:16
Speaker 2: are advocates of the technology, and that will be a
21:20
Speaker 2: natural first wave for us. You can always go back
21:22
Speaker 2: to your clinical trial sites and say, hey, we're commercial,
21:25
Speaker 2: do you want to use the product?
21:26
Speaker 1: Yeah?
21:27
Speaker 2: And because of that, it'll it affords us an opportunity
21:32
Speaker 2: to move quickly. So today we're in you know, inventory
21:36
Speaker 2: build mode, so you know, go build your commercial product
21:39
Speaker 2: and be ready to launch, and you have enough technology
21:43
Speaker 2: on the shelf so that you can supply the customers
21:46
Speaker 2: who are interested in using the technology. The other advantage
21:51
Speaker 2: we have from a commercial standpoint is that our capital
21:55
Speaker 2: equipment or the kind of the the brains or the
21:58
Speaker 2: engine of the hood that runs the pulsatyle action. It's
22:04
Speaker 2: it's a relatively a sleek system that should allow a
22:10
Speaker 2: hospital to get it seamlessly. So we won't have a
22:13
Speaker 2: lot of barriers to entry on bringing our engine under
22:16
Speaker 2: the hood in mostly because it's not a really big
22:23
Speaker 2: cost of goods problem for us. Okay, So that that's
22:26
Speaker 2: a strategic advantage on our endto.
22:29
Speaker 1: Well, Okay, I was going to talk about the inventory bill,
22:31
Speaker 1: but let's talk about that the capital equipment side of it,
22:34
Speaker 1: because that usually is a big component. And you know
22:38
Speaker 1: a lot of these companies, not only in IBL but elsewhere,
22:41
Speaker 1: they'll provide the capital for free, so that eats up
22:44
Speaker 1: on their cost of goods. Yeah. Why why why does
22:48
Speaker 1: the pulstyle technology not have that let's call it cost
22:52
Speaker 1: of goods sold burden too for that capital component.
22:55
Speaker 2: Yeah. So our energy source comes from a natural energy
22:59
Speaker 2: source of c O two. Okay, so we're just controlling
23:03
Speaker 2: the CO two to create the pulsatile hydraulic energy. So
23:07
Speaker 2: our capital equipment is just software and electronics, which isn't
23:12
Speaker 2: a big burden as compared to other technologies on the
23:16
Speaker 2: market such as bolt By Boston Scientific uses a laser
23:21
Speaker 2: technology to create cavitation. Okay, well, laser capital is very
23:25
Speaker 2: expensive to make and it's very hard to somewhat control.
23:30
Speaker 2: So as a result, we feel like we have a
23:32
Speaker 2: strategic advantage in launching our product because our cost of
23:35
Speaker 2: goods is lower, it's easier for us to make, and
23:39
Speaker 2: it provides, you know, a good quality product for the
23:42
Speaker 2: hospital to acquire.
23:43
Speaker 1: Yeah, and then with that inventory build itself, how do
23:47
Speaker 1: you balance that pre FDA approval because you want to
23:50
Speaker 1: make sure you have enough product to get the launch going,
23:54
Speaker 1: but you need to focus on your cash burn as well.
23:57
Speaker 2: Yeah, Yeah, the good The good news here is that
24:01
Speaker 2: oftentimes what happens in inventory builds is you've got to
24:06
Speaker 2: question how long your shelf life is. And you know,
24:10
Speaker 2: fortunately for this technology, we'll have at least a one
24:13
Speaker 2: year shelf life to start. You can file for a
24:16
Speaker 2: two year shelf life within a certain time period, so
24:19
Speaker 2: you have two years to sell that product even if
24:21
Speaker 2: you build it today. So even though your inventory builds
24:25
Speaker 2: may be higher on the front end, you can depending
24:29
Speaker 2: upon the demand. Over time, you can either accelerate it,
24:33
Speaker 2: keep it flat, or decrease it depending upon the demand.
24:36
Speaker 2: But at least you've got an initial launch phase where
24:39
Speaker 2: you're going to try to really wile the market. You're
24:41
Speaker 2: going to want to bring some technology in, get physicians
24:44
Speaker 2: used to it. You want them to use it for
24:46
Speaker 2: ten cases in a row, and they're either going to
24:50
Speaker 2: love it or they're going to say, hey, I'm going to,
24:52
Speaker 2: you know, continue to use my previous product. We think
24:55
Speaker 2: they're going to love this technology because it's more deliverable
24:58
Speaker 2: and it's more efficient.
25:00
Speaker 1: How about the commercial team itself, I mean, because there's
25:03
Speaker 1: dividing fields between a gradual build of the commercial team
25:07
Speaker 1: and a let's just build that commercial team now and
25:09
Speaker 1: get it done with so we don't have to keep
25:11
Speaker 1: worrying about further training, new training, all that stuff.
25:15
Speaker 2: Yeah, so I think this is where experience counts. So
25:19
Speaker 2: Number one thing about experience is you know the people
25:24
Speaker 2: on the commercial side of the equation that would be
25:27
Speaker 2: interested in coming over to help launch this product, So
25:31
Speaker 2: that network is important. Number two is you know where
25:36
Speaker 2: the busiest hospitals are and two thirds of our interventions
25:40
Speaker 2: that we do in the United States are east of
25:42
Speaker 2: the Mississippi. Another interesting fact on geography is of those procedures,
25:49
Speaker 2: five states control the bulk of the procedures. It's New York, Ohio, Florida, Texas,
25:56
Speaker 2: and California. Okay, so you don't have to blast as
26:00
Speaker 2: an early stage startup the entire fifty states. So that
26:04
Speaker 2: allows you to control your cash burn and puts you
26:07
Speaker 2: in a position where you can really validate your commercial
26:09
Speaker 2: strategy in more microcosms than you can the whole country,
26:15
Speaker 2: and so you really get some good feedback from physicians
26:20
Speaker 2: right away. And then number three is there's an amazing
26:24
Speaker 2: amount of data out there, so we know where IVL
26:27
Speaker 2: is being done by doctor by hospital. All that data
26:31
Speaker 2: is available and public if you want to go grab it.
26:35
Speaker 2: And so we can then navigate into the number one
26:38
Speaker 2: chalk wave account in the country and launch the product
26:43
Speaker 2: and know exactly where that and that account is, so
26:45
Speaker 2: you can be very laser focused and have a big
26:47
Speaker 2: impact on revenue.
26:49
Speaker 1: Yeah, that's interesting, And what caught my attention to what
26:51
Speaker 1: you just said was two thirds of the cases are
26:54
Speaker 1: done east of the Mississippi. But I know that you
26:57
Speaker 1: know the the population is put pretty close fifty to
27:02
Speaker 1: fifty between east of Mississippi West and the Mississippi. So
27:06
Speaker 1: is there a reason why, like the California and Arizona,
27:09
Speaker 1: I mean, I feel like Arizona would just be like
27:10
Speaker 1: Florida with the retirees, Like, is there a reason why
27:13
Speaker 1: the West coast just has not picked up that technow
27:15
Speaker 1: especially with shock weight being out in California.
27:17
Speaker 2: Well, it is the West coast are healthier people, Okay,
27:22
Speaker 2: if you if you're if you're looking for a cardiovascal disease,
27:25
Speaker 2: you go where people are typically a little overweight and
27:29
Speaker 2: they then they smoke, okay, and so you typically find
27:33
Speaker 2: that mostly east of the Mississippi and particularly in the
27:36
Speaker 2: south there.
27:37
Speaker 1: Okay, that that that that that makes sense. I guess
27:42
Speaker 1: we're not eating as much avocado toast here as we
27:44
Speaker 1: are out there. But all right, so that you get
27:48
Speaker 1: the commercial strategy. And the other thing too is that's
27:50
Speaker 1: interesting is you really haven't dove into how IVL can
27:55
Speaker 1: be used in both the coronary setting and the peripheral setting. Yeah,
27:59
Speaker 1: and you know you have gone with the peripheral first,
28:03
Speaker 1: and just your thoughts on why going there first was
28:09
Speaker 1: better than the coronary and just kind of how that
28:12
Speaker 1: helps with the commercial launch.
28:13
Speaker 2: Yeah, no, it's a great, great question. So you're right.
28:17
Speaker 2: We decided to go peripheral first, and we did that
28:22
Speaker 2: mostly from the guidance of the FDA. So that's the
28:26
Speaker 2: experience the FDA had with Shockwave. Shockwave went peripheral first,
28:31
Speaker 2: coronary second, and as we started to open up dialogue
28:35
Speaker 2: with the agency, they really felt like that was an
28:40
Speaker 2: important strategy that they learned a lot about Shockwave's product
28:45
Speaker 2: in the peripheral space, which is it's an important space
28:49
Speaker 2: to treat, but it's not as life threatening as sticking
28:53
Speaker 2: a product into the heart. Yeah, and so you know,
28:55
Speaker 2: you can make a few mistakes with technology down the
28:59
Speaker 2: legs and recovery easily without implicating some sort of problem
29:04
Speaker 2: for the patient. And so in the corner is after
29:07
Speaker 2: you've done several cases in the peripheral space and you
29:12
Speaker 2: learn about the technology and you understand it's safety profile,
29:17
Speaker 2: then the agency gets a lot more comfortable with putting
29:19
Speaker 2: things like that into the heart. So a lot of
29:22
Speaker 2: it has to do with safety evidence that you're bringing
29:26
Speaker 2: into the equation, so that when you are in the
29:28
Speaker 2: heart and you are bringing in a new technology into
29:32
Speaker 2: the space. They're comfortable that you're not going to harm
29:34
Speaker 2: the patient, and that's really the pathway we chose to take.
29:38
Speaker 1: Two.
29:39
Speaker 2: And now that we've got so much evidence for the FDA,
29:42
Speaker 2: we feel very confident that they're going to be excited
29:45
Speaker 2: about our approach with the coronary trial which starts this year.
29:48
Speaker 1: The Okay, so tell me more about that coronary trial. Yep.
29:52
Speaker 2: So we just like every other technology, you work through
29:57
Speaker 2: technology development and then you work through all your pre
30:00
Speaker 2: clinical work and then you go submit your ID for
30:04
Speaker 2: your trial. So we've done the tech dev piece, so
30:09
Speaker 2: that's done. We've done all the pre clinical work, so
30:12
Speaker 2: that's complete, and now we'll be submitting in the next
30:16
Speaker 2: couple of months our ide protocol for the trial. The
30:20
Speaker 2: trial is a single arm trial. It's a PMA trial,
30:25
Speaker 2: so it's a big one, close to three hundred and
30:27
Speaker 2: fifty patients, probably fifty to sixty sites. Is designed right
30:34
Speaker 2: now to be a US based trial, but we could
30:37
Speaker 2: open up international sites as well, but we want at
30:41
Speaker 2: least fifty percent of our patients to come from US sites.
30:45
Speaker 2: And it's a trial that is a single arm trial
30:51
Speaker 2: that we'll be looking at mostly safety endpoints, but we'll
30:56
Speaker 2: also be looking at intoluminal gain and other app aspects
31:00
Speaker 2: of secondary end points that distinguish whether or not the
31:03
Speaker 2: product's working or not.
31:04
Speaker 1: And you know, the interesting thing too, is the pm
31:07
Speaker 1: A approached this time for coronary because you know, you
31:11
Speaker 1: did peripheral five ten K approach and you still have good,
31:14
Speaker 1: you know, clinical data, robust clinical data supporting you know,
31:18
Speaker 1: the polstyle technology, but you use the predicate of shockwaves
31:23
Speaker 1: peripheral technology. Right coronary there is the you know, predicate
31:30
Speaker 1: shockwave technology, but you're still doing the pm A. Was
31:32
Speaker 1: there a reason for doing the pm A for coronary.
31:36
Speaker 2: Then it's it's all based upon what was established in
31:40
Speaker 2: the IVL space before we even got here. Okay, So
31:44
Speaker 2: in in the coronary space, you're kind of in a
31:49
Speaker 2: position where the agency is going to tell you what
31:52
Speaker 2: you need to do. Yeah, okay, and so we didn't
31:55
Speaker 2: really have much negotiating power on that. We would have
31:57
Speaker 2: preferred to do a five ten K. Yeah, but you're
31:59
Speaker 2: going to seem to instruction. You know, they said, hey,
32:01
Speaker 2: you know, you need to do what everybody else is doing,
32:04
Speaker 2: which is a PMA. So said, okay, yeah, thank you.
32:06
Speaker 1: Very much, gotcha. And then you know the other thing too,
32:10
Speaker 1: just with the pipeline, and you know the other thing
32:12
Speaker 1: with peripheral IBL in general is there's the above the
32:15
Speaker 1: knee section and the below the knee section of IVL. Yeah,
32:20
Speaker 1: we haven't talked it through, but I'm assuming the power
32:23
Speaker 1: Pad two trial that was all above the knee.
32:26
Speaker 2: Correct, Yeah, it's all above me.
32:27
Speaker 1: And then I'm assuming there's also work to be done
32:30
Speaker 1: similar to what you're doing with coronary for the below
32:32
Speaker 1: the knee segment.
32:33
Speaker 2: Yeah, that's right. So below the knee is a whole
32:36
Speaker 2: separate pathway. But fortunately for us, there's not a big
32:41
Speaker 2: lift for the technology development. You make the balloon a
32:46
Speaker 2: little bit longer, obviously a little bit smaller because the
32:49
Speaker 2: vessels are tinier below the knee, and the clinical data
32:54
Speaker 2: that you need to support the blow of the knee
32:57
Speaker 2: trial is only twenty patients. Okay, so you can move
33:00
Speaker 2: pretty quick to get that product approved and into the market.
33:03
Speaker 2: So our plan is to move quickly into the blow
33:07
Speaker 2: of the knee trial right after we launch the above
33:09
Speaker 2: the knee product. Yeah, we've already got the product made.
33:13
Speaker 1: Well, that's about saying it seems like the fact that
33:15
Speaker 1: you're able to compress your balloon because you don't have
33:18
Speaker 1: those electrodes out front, allows you to even cross even
33:21
Speaker 1: narrower lesions below the knee.
33:23
Speaker 2: It will be it will be an advantage from a
33:25
Speaker 2: deliverability standpoint because you're going a long way in smaller
33:29
Speaker 2: vessels that are highly calcified. And the other advantage that
33:33
Speaker 2: we'll likely have is just linked to the balloon, so
33:36
Speaker 2: we'll probably be a little bit longer, which physicians like
33:40
Speaker 2: to use longer balloons to below the knee.
33:42
Speaker 1: And so you know, we have a lot of different
33:44
Speaker 1: developments going on. You're building up your inventory for the
33:47
Speaker 1: above the knee indication. When that gets approved, you get
33:50
Speaker 1: your clinical data for the coronary clinical data for the
33:54
Speaker 1: below the knee. How do you how are you managing
34:00
Speaker 1: the allocation of capital for these kind of you know,
34:04
Speaker 1: for a small company, large capital, large projects. Yeah, and
34:08
Speaker 1: I know recently you've had your Series B financing, so
34:12
Speaker 1: how much of that gets covered by that initial financing.
34:15
Speaker 2: Yeah. We we really prioritize things in the company based
34:19
Speaker 2: upon your return on the investment. So you think of
34:23
Speaker 2: the ROI and what's going to have the biggest bang
34:26
Speaker 2: for your buck. So our number one project this year
34:30
Speaker 2: is the coronary clinical trial. You know, I think Shockwave
34:36
Speaker 2: did close to one point one billion last year. Of that,
34:40
Speaker 2: seventy percent came in the coronary space. So that coronary
34:44
Speaker 2: clinical trial is the most important spin for us, So
34:47
Speaker 2: we're going to make sure that that gets well funded. Yeah.
34:50
Speaker 2: The second most important for US is establishing a revenue
34:55
Speaker 2: source this year. So you've got the peripheral product that's
34:58
Speaker 2: going to launch, will some revenue around it, and depending
35:03
Speaker 2: upon how fast the revenue ramps, you can start to
35:07
Speaker 2: accelerate your spend based upon the ramp. So for us,
35:10
Speaker 2: we'll probably start in a mode where you're spending money
35:15
Speaker 2: on commercialization as your secondary priority, and then your third
35:20
Speaker 2: priority is the evolution of the technology from a tech
35:24
Speaker 2: dev standpoint, So that's the blow the E play, and
35:27
Speaker 2: that's that's the other products you're trying to build. Uh,
35:30
Speaker 2: it's not like we're saying we're going to defund those,
35:32
Speaker 2: but they're going to be the third priority because they're
35:34
Speaker 2: not giving you an ROI right out of the gate.
35:38
Speaker 2: They're nice to have, but they're not a need to have.
35:40
Speaker 2: An accompany at our stage. Interesting, Yeah, and there we
35:44
Speaker 2: the more revenue we accelerate, the more we'll feed the
35:47
Speaker 2: beast on the other projects. Yeah.
35:50
Speaker 1: And then you know, let's close out the episode because
35:53
Speaker 1: you know, there's a lot of interesting developments going on
35:56
Speaker 1: and you know, basically you just talked about with you know,
35:59
Speaker 1: the Quronarya being a very important market for you guys.
36:02
Speaker 1: And let me just also add you know, they're they're
36:04
Speaker 1: there's Shockwave, but you know Boston bought Bolt Abbott is
36:07
Speaker 1: coming out with their cornery. There's a few other private
36:10
Speaker 1: companies out there. So the competitive landscape is evolving. Combining
36:13
Speaker 1: that technology, that development, the market development with the competitive landscape,
36:18
Speaker 1: how do you see IVL playing out over the lot
36:20
Speaker 1: next five years?
36:21
Speaker 2: Yeah. I just think this technology i VL in general
36:25
Speaker 2: is enabler for physicians to do very complex procedures and
36:29
Speaker 2: it's it's simple, it's easy to use, and it's safe.
36:34
Speaker 2: So even a physician that doesn't have a lot of
36:36
Speaker 2: experience doing complex cases can now treat patients that they
36:39
Speaker 2: previously weren't treating. So this is going to continue to
36:43
Speaker 2: be an enabler for those patients and and and those
36:46
Speaker 2: physicians to treat those patients accurately. And let's face it,
36:50
Speaker 2: we are living longer and as we live longer, you
36:53
Speaker 2: build up more calcium in your arteries. So I v
36:56
Speaker 2: L is here to stay and it's going to play
36:58
Speaker 2: a big role over the course of that five to
37:00
Speaker 2: ten to twenty years. What I think is going to
37:04
Speaker 2: be interesting to see. So number one, you typically start
37:08
Speaker 2: with the technology that does work right. It does things well.
37:14
Speaker 2: You know, when we start to think about integrating medtech
37:19
Speaker 2: with information sources like data, you get to the point
37:23
Speaker 2: where you're saying, well, now you can start to create
37:26
Speaker 2: algorithms for physicians to make better decisions. And you know
37:30
Speaker 2: that's what AVS is working on too, or working on
37:32
Speaker 2: what's called smart IVL. It's an interoperative data loop that
37:36
Speaker 2: allows a physician to decide whether or not they need
37:39
Speaker 2: to continue to treat or not. Currently today that decision
37:42
Speaker 2: is based upon a manual image that they see from
37:46
Speaker 2: whether or not there they believe it's it's fully inflated.
37:50
Speaker 2: So this technology developed by AVS has the ability to
37:55
Speaker 2: create algorithms interoperatively that give a feedback loop to a
37:59
Speaker 2: physician that the treatment is done. Yeah, that's that could
38:04
Speaker 2: be pretty interesting for the space as we continue to
38:07
Speaker 2: evolve in this you know world of AI and data
38:12
Speaker 2: integration and how you make decisions better, particularly as a physician.
38:17
Speaker 1: Well, especially when you're down there, you want to make
38:19
Speaker 1: sure it's done before having to go back down or
38:21
Speaker 1: either go into the heart again or go all the
38:23
Speaker 1: way down below the new You want.
38:24
Speaker 2: To make sure it's done. And you also don't want
38:26
Speaker 2: to overtreat. So if you think about overtreating, you can
38:30
Speaker 2: cause future damage. So if if you're done and the
38:34
Speaker 2: data is saying you're done, don't do it again. Yeah, right,
38:38
Speaker 2: measure twice, cut once exactly, don't do it again. That
38:42
Speaker 2: great more.
38:42
Speaker 1: Harm measure choice, throw the big bag of ice on
38:45
Speaker 1: the ground, right, yeah exactly.
38:49
Speaker 2: Yeah.
38:49
Speaker 1: Well, hey, Mark, thank you so much for joining us today,
38:52
Speaker 1: and yeah, I always enjoying hearing the story and looking
38:54
Speaker 1: forward to seeing how twenty twenty six and beyond.
38:56
Speaker 2: Please a big year for us.
38:58
Speaker 1: Thanks for having us, oh yes, and thank you to
39:00
Speaker 1: our producers Mariam Waile and Addia Somani for all the
39:05
Speaker 1: behind the scenes work, and thank you to our listeners
39:07
Speaker 1: for tuning in today. We hope you join us for
39:09
Speaker 1: future episodes and if you'd like to stay up to date,
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