David Narrow, Sonavex - Definitive Flow, Diameter & Depth Data for Dialysis | LSI USA '24

David Narrow  0:00  
Good morning, everyone. Thanks for being here. My name is David narrow background was originally in Biomedical Engineering, then did a stint doing healthcare strategy consulting and now I'm the CEO of Sonavex. We are a Baltimore based medical device company spun out from Johns Hopkins. We now have a clinically validated technology from a US IDE study that wrapped up last year. What we do is use 3d imaging and deep learning to improve time to AV fistula maturation for dialysis patients with our echo, Mark and echo short solutions. These have already received FDA clearance with a general indication. And we're now using our clinical data to get a specific indication for fistula maturation. We were fortunate to get our first CPT code issued in 2023. And we use a business model that centers around a high margin consumable plus a recurring revenue component. We have a strong global patent portfolio with multiple issued patents across key geographies, and have a really exciting pipeline technology called Echo guide, that solves another problem for these dialysis patients that we'll be announcing soon. The markets for these solutions are about 2,000,000,005 and a half billion respectively, for wrapping and wrapping up and financing in the next few weeks. And looking forward to an exciting week here. For those who aren't aware, dialysis is a large and growing both clinical and financial problem. For us as Americans, there's 52 billion of Medicare spend every year for this patient population. And about two and a half billion of that is specific to catheter related complications that our technology helps us solve. There'll be 5 million patients worldwide on dialysis by next year, and this market is unfortunately growing into 6% CAGR. Despite the fact that these dialysis patients represent just 1% of Medicare beneficiaries. They consume 7% of the CMS budget. So as you can imagine, everyone up to the White House has been trying to figure out how to wrap their arms around this problem. And most recently, there was an initiative called the kidney Care Choice Program, which is a new value based care paradigm that is really a nice tailwind for our technology. The bottom line is if you need dialysis, you need a way to connect your bloodstream to the dialysis machine so your blood can get cleaned. And unfortunately, the vast majority of these patients begin their dialysis journey with the central venous catheter. Now, these are meant to be temporary solutions to bridge to another because they're high risk for infection, hospitalization, and mortality. So you're trying to get this catheter out and onto another type of access. The next option is called a graft. This is far better than a catheter and this is a synthetic tube connecting the vein to an artery in the arm, well better than a catheter. The challenge with these grafts is that they caught off frequently and become very expensive to maintain. Now the best option for the patient, the payer and the physician is called a fistula and this is a direct connection between a vein to an artery again in the arm. However, before you can use that fistula for dialysis, the vein must grow in size, a process called maturation, so you can achieve the blood flow that's needed to actually clean the blood in a reasonable amount of time. Now while you're waiting for that fistula to mature, you're stuck with that catheter in your neck. And unfortunately, these patients rely on these catheters for far too long. The reason these catheters are so badly threefold. First, you have a high risk for infection, which happens on average twice per year, resulting in $23,000 hospitalizations. Next, the mortality risk for these folks is two to three fold greater than a patient on a fistula. And then finally, through the lens of the payer, the incremental cost per day is an extra $160, or about 30,000. Over the course of fistula maturation. When you look across the entire cross section of the country, more than 80% of these patients come crashing into the system and start with these catheters. And when these doctors tried to get them off the catheter and onto a fistula, more than a third of them will fail to mature. And the ones that do end up making it it takes seven months. And obviously a lot of really negative and expensive thing can happen to these patients in that seven month window. And when we peel back the onion a little bit to try to figure out why it takes so long, we were surprised that it's really not a physiologic issue, but rather a workflow issue. And what I mean by that is before you can assess the fistula to determine what to do and either use it, intervene on it or abandon it need to get an ultrasound that tells you the flow rate, the diameter and the depth. Now, these patients, they go to the dialysis clinic three times a week, for four hours a day, they live pretty tough lives. And it's a big burden for them to be able to go other places, but the people that work in these dialysis clinics, they're not physicians, and they're certainly not an ographers. They're typically high school educated folks that are just running the dialysis machine. So in order to get these patients to do an ultrasound, they need to come to a separate visit often far away from their home. And for a number of reasons, the compliance is quite poor. So what ends up happening is the physician doesn't get the information that he or she needs, the catheter stays in and all stakeholders lose. So our vision at Sonic X is to empower these dialysis texts that already see these patients multiple times per week to be able to capture this important data so physicians can deliver the best care at the right time. The way we accomplish this is with a two part technology called Echo mark and echo shore. The echo Mark device is a small bio resorbable polymer placed underneath the fistula at the time of surgery that basically acts as an ultrasound reflector to us with our companion device called Echo shore. Echo shore is an AI enabled 3d ultrasound that enables anybody in this room to collect a vascular lab quality ultrasound with this thing real quick. And because the physician is not there, this is connected to a HIPAA compliant cloud, so the data is immediately transferred to the physician to be able to make a decision at the right time. The way this works in practice is the echo Mark has slipped underneath the fistula at the time of surgery, adding a few minutes to the case, and is secured to the adjacent soft tissue with four sutures. And then in the dialysis clinic tech, simply put the probe on the arm, click the Scan button, and the system takes care of the rest. This data fits into an existing paradigm that has a rubric that dictates how to manage these patients based off the ultrasound. Either things look great, you start using official and you move the catheter, things don't look so hot, it's either too low flow too small, you need to do an intervention, which in which case you refer for that, or you're one of the 30% of unlucky patients that has a failed access recognize that soon and get them back into the or for a new fistula. So regardless of which bucket the patient falls into, we get to that answer sooner, get the catheter out sooner and everybody benefits. Before we started our clinical work, we did a big technology validation study that proved that a dialysis tech or a nurse when using our echo device was able to get results that were as or more accurate and precise than a standard ultrasound operated by a conventional trained monography and this was published in the Journal of vascular access. We're excited that last year we wrapped up a clinical trial here in the US that demonstrated three key things. First, the echo mark is safe when implanted underneath nav fistula. Second, the results from echo shore are as good as a conventional scenographer using regular ultrasound, and most importantly, we can reduce time to maturation. So maturation is two different definitions and those will be a bit technical, but it's important. radiographic maturation is the time point at which by ultrasound you recognize the fistula is ready, and you should start using it. With our study, we were able to demonstrate that all patients reach this radiographic maturation within one month and the median time to recognize this was just two weeks, which demonstrates that that remodeling really does happen early on that process. But more importantly, in where the rubber hits the road is clinical maturation. And this is where over a four week window, at least 75% of your dialysis sessions are using that fistula instead of that catheter. When you compare it to the average data, which is over 200 days here in this country. With just monthly assessments, we were able to bring this down to an average of 80 days and a median of just 66 days, which not only has huge clinical benefit, but a really compelling five figure health economic benefit as well. We're very fortunate to be working with a top tier physician as our national pi Dr. Holman for a 304 patient IDE and IRB approved randomized controlled trial which started recently, this study will not only demonstrate the magnitude of that clinical benefit of reducing time to maturation, but will also measure very specifically the health economic impact of the technology. The business model centers around a high margin consumable and a recurring revenue component from echo shore. Echo mark is paid through a pass through payment initially and followed by category one CPT code. And we were fortunate that our Ecuador CPT code was issued as part of the September meeting last year. Just briefly, there are a lot of important non patient stakeholders that really motivate how things work in this market. You have your large dialysis organizations that are paid either under a fee for service or value based care model where either way they get dinged, pretty bad for catheter use. You have nephrologists, who now have a financial vested interest in getting these catheters out who really manage these patients and their control the referrals to the surgeon that not only creates the fistula, but implants the echo Mark device, these surgeons, they really don't tolerate the postdoc management of these patients quite well until they actually have something to do like an intervention. So they're very happy to offload this post op assessment back to the dialysis clinic and nephrologist knowing that the call when there's something that they can actually do, and then the payer anticipates about a five figure cost savings associated with our early clinical data. I think the thing we're most fortunate is we've got a phenomenal team that we've been able to recruit and retain based in Baltimore, just to name a handful of folks. Dr. Yedlin is our chief medical officer who ran the program at University of Michigan was nominated by the National Kidney Foundation to draft the guidelines that are used by dialysis providers across the country. And John Rapp, he brings 25 years of sales and marketing experience and lead the US commercialization of another access company that was acquired by Medtronic right after right before he joined our business. And then finally, our board and advisory board is top tier. We've got a four time serial med tech entrepreneur, Bill Nylund. Bill, Bob Hallenbeck, who ran one OBD six business units, and Jerry prince who wrote the textbook for medical image analysis. And then for folks in the space. You'll know the Dr. Cooper, Terry Litchfield and John Ross are the best of the best across dialysis access KR here in the country and we're just incredibly fortunate to be working with these folks. So thank you so much for the attention and looking forward to exciting week.