John Slump, Atraverse Medical - Next Generation Left-Heart Access | LSI Europe '24

John Slump 00:00
Hello everyone. Good afternoon. My name is John Slump, co-founder and CEO of Atraverse Medical. I'm excited to share a bit more about our latest medical device company with you. Just as a brief introduction, Atraverse is led by a team with multiple prior exits in the medical device arena ranging from $140 million to $800 million plus. We are pioneering a next-generation left heart access device. Importantly, it's worth noting that there was a first mover in the space, Baylis Medical, that was acquired for $1.75 billion cash, or about a 15 times revenue multiple. And that's about 10-year-old technology. We are a next-generation transceptal access device, and I decided to share a little bit more about it with you. We founded the company in July of 2022 and already have FDA clearance for our intravascular device in the blood pool. I think that is pretty remarkable. It's the fastest I've ever seen anyone get it done. You know, we already have initial revenue, about 80% gross profit margin, and the company has raised about $16.7 million to date, predominantly from high net worth individuals and family offices. So we've got a great team. I see my prior co-founder of Farrapulse, Dr. Michael Gschwandtner, in the crowd, and he's also a co-founder here at Atraverse, in addition to his co-founder and CEO role at Field. Our third co-founder is Mr. Eric Goslau, who was actually employee number one at Farrapulse. We've wrapped a really great team around us, including world-class VP of Quality, VP of Sales, VP of Engineering, and SVP of Marketing, and these are all folks with deep experience in cardiac devices and medical device R&D development and commercialization. In addition, we're very proud of the world-class advisory board that we put together, not the least of which, of course, is the one and only Dr. Vivek Reddy and Dr. Andre and Natalie. But of course, other folks like Dr. Nair, Dr. Knight, who was actually one of the first users of the Versacross in the US, and Dr. Price, Dr. Gibson, Dr. Siddiqi, and Dr. Metzl. So I would also say it's worth noting. You know, it's easy to give bits and pieces of your company to physicians, but it's much harder to get them to invest. The majority of folks on this slide have actually invested their hard-earned capital into the business, which we're very proud of.

So what is Atraverse? Well, as the name applies, we're all about traversing the atrium. The standard of care today is to introduce an introducer sheath into the femoral vein, work your way up the blood pool into the chamber of the heart, and mechanically jab your way across. And you know, as you might suspect, when you're using a three-foot-long hypodermic needle jabbing your way across the septum of the heart, things can go wrong. This is a large market, a billion-dollar market opportunity comprised of really three verticals here: atrial fibrillation, ablation, structural heart procedures such as mitral clip and left atrial appendage occlusion, and also other left heart access procedures. It's growing very, very fast, with a double-digit CAGR, about 16% compounded annual growth rate.

As I mentioned, when you're using a three-foot-long spear in the heart, things can go wrong. You can puncture collateral structures, you can introduce air emboli, and there's a well-documented history of adverse events to patients using this 1960s Rock and Brow needle, which we think will be a thing of the past in the next five to 10 years, at least in the US market. Atraverse is pioneering the hot wire system. We have a radio frequency (RF) guide wire, similar to the same workflow where you position adjacent to the septum, but instead of mechanically advancing your way across the septum, you just press the button, use a little blast of radio frequency energy, and/or electrocautery, if you will, to denature the tissue and gently advance across. Then you can introduce your therapy device over the wire and proceed to deliver your therapy, pull out your RF guide wire, and complete the procedure.

Importantly, we do have a purpose-built radio frequency generator. There's a lot of secret sauce in the generator, which we'll talk a little bit more about, but suffice it to say, we're currently cleared on the hot wire RF guide wire, and we're expecting FDA clearance for the generator device by the second quarter of 2025. We're currently in the midst of a limited market release and scaling up to full market release on the heels of the generator approval.

So what are the advantages of the Atraverse hot wire system? First and foremost, we are universally compatible with all existing therapy sheaths. Our motto is, "Let the physician choose." You can use whatever sheath you want, whether it's the Agilis, the Visigo, the Farapulse, or what have you. We have a SKU strategy for you. We feel like we win in all major categories of interest. We're able to do the competition, and I would say, really going kind of double-clicking down a bit deeper, first and foremost, we deliver what several impartial physicians have deemed a clinically significant safety advantage over the market-leading Versacross device. Again, this is the one acquired by Boston Scientific for about $1.75 billion cash.

So how do we do that? Well, we have a unique electro design for the wire that lends itself to what we call our auto-off algorithm. When you're positioned to the septum and you cross within 100 milliseconds, the device can detect a major impedance drop and automatically shuts off to terminate the energy, while the Versacross is a great product. It's documented in the literature that based on the pre-programmed energy duration settings, two or three seconds after it cuts, and it cuts very, very well. It can actually cut adjacent and collateral structures, and again, this is well documented in the literature. Additionally, our wire is actually twice as rigid as a rail, which is important in the advent of increasingly large bore sheaths. It's another way of saying it's easier to advance these larger sheaths over the wire relative to the Versacross device.

Also, importantly, you know, in the US, intracardiac echo (ICE) is how the physicians see where they're at and what they're doing, and our device, as the coils go all the way down to the distal tip, is much easier to see on ICE. Furthermore, I mentioned the universal sheath compatibility. Plus, since we sell the wire only and don't force you to buy a proprietary sheath, we can save you some money and reduce costs, which, in the advent of value analysis committees, is a very important part of the value proposition.

To sum that up, I would say we are safer, easier to use, more ergonomic, and lower cost relative to the market-leading Versacross. So what have we done to date? Well, the company is only two years old, but we've completed over 35 preclinical studies that really inform the final product design. We've already got the FDA clearance. We are now in the clinic, doing commercial cases. As of today, we have completed approximately 40 clinical cases, again, not pursuant to any protocol, just going and getting approvals at hospitals, blocking and tackling, and starting to commercialize the technology on a very limited basis with our scientific advisors.

First and foremost, as you can see here, we filed multiple patents. We're working with world-class IP attorneys at Cooley, the same folks that we worked with at Farrapulse. We also have a clear freedom to operate analysis. We've raised about $17 million to date, have a world-class advisory board, and we are now generating revenues at about 80% gross profit margin—not bad for two years.

A little bit more about the commercial strategy: I think the three Rs—regulatory, reimbursement, revenue. You know, reimbursement is already in place. We have a Class II 510(k). We have established pricing with some early customers in the $800 to $900 range and have great margins out of the gate. As we look ahead, we're gearing up for—we've raised close to a $5 million convertible note bridge round that would convert into Series A. So, we're seeking somewhere in the neighborhood of $10 to $15 million of new money to really finalize the development and gain the FDA clearance for the generator. We have funding on hand to do that. This is really raising six-plus months ahead of our cash-out date in an effort to really fund the company, staff up, and commercialize the technology.

We've already got a VP of Sales and now three clinicals—one in the Southeast, one in the Midwest, and one on the West Coast—and we're going to continue to aggressively hire leading into our full market release at the Heart Rhythm Society meeting next year, which is the big cardiac electrophysiology conference where new technologies are really unveiled. We've got some great investors, as I mentioned. We've funded the company with individual high net worth individuals and angel groups, as well as some family office folks, some of the who's who with us, angel groups across the country, East Coast, West Coast, and the Midwest.

At the end of the day, our exit strategy is strategic acquisition. There are some great comps out there, and we feel like we're a best-in-class transceptal access device that can deliver an attractive return on investment for investors. Thank you.