Sonavex | David Narrow, CEO

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David Narrow  0:03  

Good afternoon, everyone. My name is David narrow. I have background in Biomedical Engineering and healthcare strategy consulting and I'm the CEO of Sonic X, where a clinical stage medical device company spun out from Johns Hopkins. Founded by myself a surgeon and world renowned professor in medical imaging. We've been supported with significant equity in addition to $7 million of non dilutive financing from the NIH and NSF. We have a two part technology called Echo mark and echo shore that helps support AV fistula maturation for dialysis patients. These technologies have been FDA cleared with general indications and we're currently pursuing AV fistula specific labeling. Now, we have multiple patents to protect the technology, we use a razor and blade business model with a high margin consumable, and there's a $1.8 billion opportunity for these technologies. Here raising a Series A to financing we've closed half of it to date looking to fill out another couple million. And the use of funds for this financing or to finish a randomized controlled clinical trial, achieved some market access goals and advance our pipeline technology called Echo guide forward. So for those who don't know, Medicare pays $36 billion a year for end stage renal disease of the 100 and 20 billion spent on kidney care. In the next few years, there'll be 5 million patients on dialysis, and this is growing at a 6% CAGR. And despite the fact that these patients represent just 1% of this EMS patient population, they consume 8% of the budget. So as you can imagine, the federal government has tried to come up with a number of programs to try to reduce the morbidity, mortality and cost for this patient population. But there's a long way to go. If you're one of the millions of patients that requires dialysis, there are three ways to get to connect your bloodstream to the dialysis machine. The first of which is where 8% of patients start is called a central venous catheter, which is a plastic tube that goes from your neck into your heart. Though it provides immediate dialysis, it is a high risk for mortality, hospitalization, and catheter exchange procedures that nephrologist and surgeons are trying to get the catheters out and onto another form of access. The next best option is called an AV graft. This is a synthetic tube connecting a vein to an artery in the arm. Far better than a catheter. However, there's a high incidence of thrombosis and it's therefore very expensive to maintain. The best option is called an AV fistula. This is a direct connection between a vein to an artery in the arm. While this is the best option for patients before you can actually use it for dialysis. It must undergo a natural process called maturation, where the vein will expand in size to be able to accommodate the flow rates necessary to deliver dialysis. Now while you're waiting for the fistula to mature, you're stuck getting your dialysis to a catheter. The take home points for why catheters are bad or a you have a high risk of bloodstream infections that result in expensive hospitalizations on average twice per year, you have a two to three times greater risk of mortality compared to patients on a fistula or graft. And then finally, for the payer, the incremental cost for a catheter is more than $160 more per day, or about 30,000 per patient. Now, if you look at the numbers here, 80% of patients that begin with a catheter, more than 30% of newly created fischels failed to mature and the median time that it takes to get that catheter out is now more than six months. The reason it takes so long is to be able to assess the status of a fistula, you either need to be a physician and do a physical exam oriented and ultrasound reading. Now these patients they live pretty tough lives, they go to the dialysis clinic three times a week for four hours a day, but you don't have physicians in the dialysis clinic, nor do you have some ographers. And then the compliance rate for them to go see that Doc outside of their routine dialysis or CSN ographers just 12 to 33%. So this results in a delay in decision making, therefore a delay in maturation. So we see a really compelling opportunity to meet the patient where they are, and let's bring the power of ultrasound to the dialysis clinic. Now the way that we've done that is with a two part solution called Echo Mark and echo shore. Echo mark is an implantable bio resorbable polymer that's placed underneath the fistula during the original procedure. It acts as an ultrasound reflector or fiducial marker to work with our echo shore device, which is an automated 3d ultrasound that uses deep learning and other image processing algorithm algorithms to enable any layperson to be able to collect vascular lab quality ultrasound readings. Here in practice, you see the echo Mark has just slipped in underneath the fistula as the last step of the procedure. And on the right, the tech simply places the 3d probe on the arm adjacent to where the echo Mark was inserted, and the system takes care of the rest. So now the nephrologist concerns and they get this information, compare the ultrasound readings to existing established criteria to determine whether they should use the fistula intervene on one that needs some help with an endovascular or surgical procedure, or to abandon a failing fistula and get them on a new access as soon as possible. So regardless of the outcome of the fistula, you're able to reduce that catheter dependency.

We're very excited to announce we just had a paper published last week that validated the performance of echo shore in the hands of our end user type of dialysis. Next, and nurses that are in the dialysis clinic, we compare to echo shore with these users to conventional ultrasound operated by trained registered vascular technologists. And we looked at the flow rate, diameter and depth seen on maturing fistulas. And we found that the accuracy was as good or better with echo short, and the coefficient of variation, the precision was far better for Echo shore than it was for regular ultrasound. And that's clearly shown here in this plot on the bottom left of the screen, the black line shows perfect accuracy. And the red dotted line shows a plus or minus 20% accuracy, which is clinically meaningful. The light blue diamonds show regular ultrasound, the state of the art that we're relying on now, you see there's a ton of variation. And with our fiducial marker and our algorithms, were able to take away a lot of that error and be able to stick within that 20% window, which we're really excited about. We're gearing up now for a large randomized controlled study to show what this really means for patients and payers. So we're going to show that with our echo shores solution, we're able to reduce time to maturation and improve upon other parameters like maturation rate, hospitalization rate and the total cost of care. The IDI access market is large and growing the same exact technology has significant opportunity and other indications where you're worried about the functionality of a blood vessel after surgery. Our business model is centered around the Eco Mark consumable. It's a very high margin solution that really drives the business and the Eco share solution is simply leased to the dialysis clinic. I'm most proud of the team that we've assembled. We're headquartered in Baltimore, Maryland. Aleksey Aslan is our chief medical officer. He's a full professor and director of interventional nephrology at the University of Michigan, and he was the vice chair of the National Kidney Foundation Kadowaki guidelines for vascular access, which is sort of the Bible that these nephrologist and surgeons read to manage their dialysis patients. He's also started a number of companies in the space. John Rapp. He's our chief business officer. He held the same title for another dialysis company that was acquired by Medtronic in 2019. And joined us immediately after that transaction and brings over 25 years of sales and marketing experience in the medical device arena, Michelle's ornamin She has held a number of exciting roles in product development and quality and lead to operations quality and strategy for the business. Ben Kang. He is a expert across ultrasound physics, and deep learning software development and he leads our technical team and was recruited away from Siemens when we started the company. And then finally, Katie Feeney, she has over a decade of clinical trial management experience and she leads all of our Clinical Affairs efforts. Were also supported by a phenomenal board and advisory board. Bill Nylund is a four times successful med tech entrepreneur including a nine figure exit and an IPO. Bob Hallenbeck. He is was one of Becton Dickinson's. President for one and beckoned Dickens six business units before he retired. And Jerry Prince is world renowned for his expertise in medical image analysis. Our advisory board is really made of top tier nephrologist, surgeons and patient care advocates. Dr. Cooper is nationally recognized for his work based out of Phoenix and is also a medical director at the Vita Terry Litchfield has just been really the linchpin of this industry and has been a patient care advocate, and is just really an outstanding asset to the team. And then John Ross, he's probably the most famous man in the world of dialysis and has created the most fistulas of anybody on the planet. So just to wrap up, we're raising a Series A to preferred financing. The goal is to get level one clinical data, incremental payment associated with the technology and to advance our Eco guide pipeline product forward. Thank you for your attention.