David Narrow Presents Sonavex at LSI USA ‘23

Transcriptions

Good morning everyone. My name is David Narrow, my backgrounds in Biomedical Engineering and healthcare strategy consulting. And I'm the CEO of Sonavex. We're a clinical Stage Company spun out from Johns Hopkins and the founders include myself, a Hopkins surgeon and world renowned medical imaging professor. We've been supported by over seven and a half million of non dilutive grants primarily from the NIH, in addition to the equity capital raised to date. In one sentence, what we do is we leverage deep learning and 3d imaging to support AV fistula maturation for dialysis patients with our echo mark, and that kosher technologies. These have already been cleared by the FDA with a general indication. And with our current studies, we're pursuing a specific label for these dialysis patients. We have protection with multiple international issued patents. Our business model centers around a high margin consumable with a recurring revenue component as well. And there's about a $1.8 billion market for this first solution. We're also really excited about the pipeline technology we're actively developing called Echo Guide, which helps with another problem that these dialysis patients face to support these dialysis techs and actually calculating these fistulas and graphs. So I know some other speakers have talked a little bit about these stats, so I'll go through them quickly. But dialysis is a major burden on the healthcare system. 36 billion is spent on kidney care, or sorry on end stage renal disease in the United States of the 100 and 20 billion spent on kidney care. There'll be about 5 million patients on dialysis in the next few years. And this market is growing at about a 6% CAGR. And despite the fact that these patients represent just 1% of the Medicare population, they consume 8% of the budget. So as you can imagine, the federal government has come up with a number of incentives to try to not only reduce the morbidity mortality for these patients, but also reduce the financial burden. So bottom line is if you need dialysis, you need a way to connect your bloodstream to the dialysis machine. And where most patients begin their dialysis journey is on a central venous catheter, which is a plastic tube that's inserted from your neck down into your heart. These catheters are by far the worst option for patients due to the high risk for bloodstream infections, and associated hospitalizations. The next best option is called a graft. This is a synthetic tube that connects a vein to an artery in the arm. While these are far better than a catheter. The issue here is that they tend to clot off very frequently and therefore become expensive to maintain. The best option for patients and payers. The gold standard is an AV fistula. This is a direct connection between a vein to an artery in the arm. However, before you can start using these fistulas for dialysis, this small vein that connects to the artery must grow in size to accommodate the high flow rates needed to run the dialysis machine. But while you're waiting for that fistula to mature, you're stuck getting your dialysis through a catheter. And just to hammer this point home catheters are bad for a number of reasons for a number of stakeholders. The most important is that you have a high risk for infection that results in expensive hospitalizations, on average twice per year. And this is a major driver of the two to three times greater mortality that these patients see compared to patients that are on a fistula and then the payer or they're suffering an extra $160 or more of incremental cost per day dealing with this catheter versus a fistula. When you look across the entire US 80% of patients begin their dialysis journey on a catheter. And when they try to shift over to these fistulas, more than 30% of newly created fistula is failed to mature and the median time until you can get that catheter out is more than six months. And obviously a lot of bad things can happen in that period of time. In order to assess the status of officials to make a decision, you either need to be a physician, or ideally have an ultrasound that tells you the flow rate, the size and the depth of the fistula. Now, these patients, they go to the dialysis clinic three times a week for four hours a day. But the people that work in these clinics, they're not Sinagua version, they're not doctors, they're typically high school educated dialysis techs. So when you didn't ask these patients to go to a vascular lab to get a vascular ultrasound performed, due to a number of factors like access to transportation, and a number of others, the compliance of these visits is only 12 to 33%. So if they don't show up, you can't get the diagnostic information. And there's a delay in maturation. So our vision at Sonavex is to meet the patient where they are and empower these dialysis techs to collect this vascular ultrasound data. So these Doc's can make decisions early get these catheters out sooner. The way that we do this is with a two part technology called Echo, Mark and echo shore. The echo mark is an implantable bio resorbable polymer that's manufactured with a highly echogenic or ultrasound reflective method, so that it can be used with our echo short companion device, which is a laptop form factor 3d ultrasound that leverages deep learning and other image processing algorithms to enable anybody off the street to collect vascular lab quality ultrasound in seconds. This is cloud connected so that the doc is able to get the data right on their phone or on their desktop, as soon as that data is collected to tell the dialysis center what to do with that patient at that point in time. The way this looks in practice is the echo mark is slid underneath a fistula during the original procedure, adding about two to three minutes to the case and it's the final step before closing the patient. And then in the clinic. All tech needs to do is place the probe on the arm over where the elbow Mark was inserted. Click the Scan button hold still in seconds later this information is collected and sent to the doc. Fortunately, there are existing ultrasound criteria that dictate what to do with these patients. So things look good, you go ahead and you use that fistula and you pull that catheter out soon. Very commonly, the fistula is either too low flow too deep or too small. You go and you refer for an intervention and the next few days, or for the 30% of patients that have a failed fistula, you go ahead and recognize that soon and get them back to the surgeon for a new fistula creation as soon as possible. So regardless of what happens to this patient, we get to answer sooner and reduce the time they're reliant on that central venous catheter. Last year, we published basically a technology validation study that proved that Eko shore in the hands of a dialysis tech or a nurse was as or more accurate and precise, compared to a trained cinematographer using conventional ultrasound and this was published in the Journal of vascular access. We are currently wrapping up a clinical trial for the dialysis patient population that's nearing completion of enrollment. We have zero events towards the primary safety endpoint, and we've got 100% success rate on the effectiveness endpoint. we're most excited about this study that we're launching in the next few months here called the Mufasa trial. This is a 286 patient randomized controlled trial, where we'll show the routine use of echo mark and echo shore can not only reduce the time to fistula maturation, but some other important secondary endpoints like the rate of hospitalizations, and the total cost of care. we're most excited about this dialysis market but the same technology can be applied to other vascular surgeries where you connect two ends of a vein or an artery together and are concerned about an acute high risk problem we're detecting that early can resolve what would otherwise be a catastrophic complication. The business model centers around the high margin consumable hospitals initially get paid through a pass through payment and ultimately a category one code once the publication's from our active studies are issued. And then echo shore provides some additional revenue on a leasing model from the dialysis clinic. Now, there are a number of non patient stakeholders here that really influence how things are used. So we want to go through them pretty quickly here. The large dialysis organization has a lot of power and has a lot to gain and lose financially with this technology. So in their fee for service business, which right now is about 70% of their business. They're incentivized to reduce Miss dialysis sessions, and more importantly, avoid these Medicare penalties for Kathryn utilization, which can be 2% of their annual payment. In the growing value based care market, the kidney care Choices Program, which is about 30% of the market. Now, all those costs from those hospitalizations and catheter exchange procedures are now born on their p&l. So they're super incentivized to eliminate or reduce these complications. Interestingly, for the first time, nephrologists are actually 5050 partners financially with the dialysis organizations and have those shared financial incentives. In addition to being the primary caregiver for these patients clinically, that are followed just who owns a patient refers the patient to the surgeon for the fistula creation procedure and influences what they do. surgeons will ultimately benefit from incremental payment, but they also get incremental or additional referral volume from these nephrologist by providing the service and they get an higher ROI on their time because now when they're seeing these patients, it's because they're ready for an intervention not just to check in to see how things are going. And then finally the payer. They're able to benefit really dramatically from this and we can send in health economics model over to folks who are interested. Really proud of the team we've assembled we're headquartered in Baltimore and have a presence throughout the country and in Canada. Aleksey Absalon is our chief medical officer. He runs the program at University of Michigan. He also co wrote the National Kidney Foundation guidelines for vascular access is incredibly well respected in the space. John raps our chief business officer. He held the same title for another dialysis company that was acquired by Medtronic in 2019 and joined our team shortly after that transaction. We've also got an incredible board and advisory board with leaders across kidney care, nephrology, patient advocacy and vascular surgery. So really appreciate the time and attention today and if interested in learning more, please find me later on in the conference.