Start-Up News, May 2012

This month we profile Transcatheter Technologies, which is developing a repositionable TAVI implant, and Cutting Edge Spine, which has created a family of interbody spacers for spinal repair.

Transcatheter Technologies: Truly Repositionable TAVI Implant

An archer has only one chance to hit the bull’s eye with his bow and arrow; interventional cardiologists and cardiac surgeons also have only one attempt to precisely place a heart valve prosthesis using existing technology. However, new technology developed by German-based start-up Transcatheter Technologies GMBH may solve this shortcoming. The next-generation Trinity system for transcatheter aortic valve implantation (TAVI) is a “truly and fully repositionable valve,” says CEO Wolfgang Goetz, MD, PhD, a cardiac surgeon by training.

A major limitation of existing transcatheter aortic heart valves is that they are unable to be repositioned once implanted. Medtronic PLC’s Sapien device, for example, is mounted in a metal stent that contains a balloon, which is inflated once the valve is placed. The valve is then anchored to the heart wall. “However, you are unable to revise the location of the valve,” Goetz states. “But with Trinity, once the valve is initially placed, you can fully evaluate the valve function to determine whether the valve needs to be repositioned, retrieved, or kept in the same position.” Moreover, Trinity allows for a controlled positioning, by slowly opening the valve stent, for a likely first-attempt correct placement.

With Trinity, once the valve is initially placed, you can fully evaluate the valve function to determine whether the valve needs to be repositioned, retrieved, or kept in the same position. Moreover, Trinity allows for a controlled positioning, by slowly opening the valve stent, for a likely first-attempt correct placement.

Transcatheter Technologies will initially target older patients who are at high risk for cardiac surgery, presently representing around 130,000 patients annually worldwide, with a market cap of around $1 billion that is expected to grow to $2.5 billion in 2015. The company also has its eyes on the more lucrative younger patient market, which has at least three times the market value of older patients. “Currently, transcatheter valve leaflets are damaged when the stent is folded, and it is expected that the injury will reduce the long-term durability of the valve,” Goetz says. “We use the same material as surgical heart valve prostheses.” Unlike its competitors, though, the company’s stent design “does not crush the leaflets when the stent is folded onto the catheter system.”

Transcatheter Technologies was founded in January 2009 by Goetz and Hou-Sen Lim, a mechanical engineer who serves as CTO. The co-founders first met in the US in 2001 while working on a research project in heart valve physiology and anatomy at The International Heart Institute of Montana (IHI). “In 2004, we became aware of the development of the first transcatheter heart valve prosthesis,” Goetz recalls. “I was a bit scared about the problems that might arise. As a cardiac surgeon, I wondered if this procedure would block the coronary. How would you implant the valve tight, so there is no leakage? I was also very much concerned about the ability to reposition the device. As cardiac surgeons, we have learned to never injure the leaflets of a biological heart valve prosthesis. But when I saw how the leaflets were crushed in the folded stent, I worried about the long-term durability of the valve prosthesis.”

For such an interventional procedure, a physician is limited to indirect imaging, which prevents precise placement of a valve. To overcome this limitation, Goetz and Lim developed what they believe is a unique and safe catheter system. They also designed a self-expanding nitinol frame stent that allows for easy folding and unfolding. The company has 10 patents (two issued, eight pending) and will not be sharing royalties/revenues with another entity.

The three components of Trinity are a self-expanding nitonol frame stent, bovine pericardium heart valve leaflets, and a catheter system. The user is shipped two packages: one containing the catheter; the other a liquid preservative-filled jar encasing the heart valve prosthesis mounted on a detachable catheter tip, which is slightly longer than the heart valve prosthesis itself. The detachable tip eliminates the need for an additional technician to mount the prosthesis on a catheter system at the operation site. “You simply take the heart valve out of the jar and connect it to the catheter system,” Goetz notes. “This saves at least 30 minutes.”

The company will have a separate catheter system for each of two access routes: transapical (through the apex of the heart) and transfemoral (through the femoral artery in the groin). For transapical access, a 5-cm incision at the left thorax is followed by a soft-tissue retractor to create a 3-cm diameter access to the apex of the heart. A purse-string suture is sewn around the apex, then a guidewire is inserted. Next, the catheter system is introduced over the guidewire. At this point, the physician is only 15 cm away from the targeted location of the heart valve.

By opening the lever of the catheter handle, the heart valve is unfolded and anchors at the aortic root. After the valve is placed, the physician evaluates the function of the valve, including pressure measurements. “Adjustments are very easy, so we can change the location at least 10 times,” Goetz says. “You can fully expand and fully fold the valve frame again and again.” Once the precise location is achieved, the valve is disconnected.

With the transfemoral approach, a flexible catheter system can be inserted over a guidewire and the prosthesis advanced around the aortic arch to the desired location. Although the transfemoral technique is more popular than the transapical, the company will start with transapical because “it is technically easier and faster to develop,” Goetz says. “But we are committed to serving both markets.” In addition, both approaches use a detachable catheter tip for ease of use.

The transcatheter implantation can be performed in less than 15 minutes, depending on the number of repositionings. The learning curve is also minimal, according to Goetz. The first pilot human clinical trial of Trinity is scheduled to commence next year.

There’s no shortage of medtech companies working in this space. (See (Also see "As TAVI Advances, Adjunctive Devices Multiply" - Medtech Insight, 16 Dec, 2011.).) Transcatheter Technologies says its two closest competitors are Sadra Medical Inc. (a Boston Scientific Corp. company) and Direct Flow Medical Inc. (a percutaneous aortic valve); both companies’ products allow for valve repositioning. However, Sadra’s Lotus valve system employs a woven stent, “for which the technique of folding and unfolding the stent, and detaching the stent from the catheter, is more complex than ours. During the unfolding, Sadra’s stent also experiences a relevant foreshortening,” Goetz says. “In other words, when you fold the stent, it has a small diameter and it is long in height. But when you unfold the stent, it has a large diameter and it is short in height. This foreshortening of the stent during expansion makes correct positioning of the stent more challenging. In addition, because our stent is self-expanding, it requires no interlocking, unlike a woven stent.”

In contrast, Goetz says, the Direct Flow device is an inflatable polyester fabric cuff “that is filled with solidifying inflation media that hardens to form the permanent support structure. Although the stent can be folded very small, the radial force of the stent needed to open the stenotic calcified native valve is limited.”

Transcatheter Technologies anticipates a CE mark for Trinity in 2014 or 2015, with FDA PMA several years later. Trinity should start selling in Europe in 2015, through a network of distributors, at a price comparable to competitors. The product is covered by existing reimbursement codes.

The $3.2 million that the start-up has raised to date represents two rounds of financing: a seed round of $850,000 [See Deal] and a $2.35 million Series A. This summer, it expects to close a VC-backed Series B round of $7 million. A Series C of $15 million will likely close at the end of 2013.

Transcatheter Technologies’ most probable exit strategy is to be acquired by a large, international manufacturer and distributor of stents or heart values. “This could occur anytime,” Goetz says. The company has no other product in development. “We expect very fast adoption of our technology because of the greater ease of use and the increased safety from the ability to reposition.”

Cutting Edge Spine: Cost-Conscious Interbody Spacers

Before founding Cutting Edge Spine LLC in 2009, spine industry veteran Randy Roof had become increasingly frustrated by the interbody spacers he sold. During spinal fusion, these spacers offer structural support to the spine between two vertebrae and help restore spinal balance. The permanent implants also facilitate the growth of bone afterwards.

“As an exclusive agent for a number of orthopedic firms, I was dismayed with interbody spacers from a design perspective,” Roof recalls. “Although I felt the material was often 100% correct for the application, many of the designs, in my opinion, were not complementary to what should have been the absolute and final objective: providing optimal stability, load sharing, and fusion results. Many of the surgeons within my territory of coverage shared the frustration and I had a strong feeling that surgeons, patients, and hospitals could use a better solution.”

Thus was born Cutting Edge Spine (CES). In April 2011, the company received 510(k) clearance for E-Vol (evolutionary), a family of five interbody spacers. Roof estimates that the potential annual US market opportunity for E-Vol is over $1 billion, entailing tens of thousands of spinal fusion procedures. CE mark is expected within the next 12 months.

Roof, who serves as the president and CEO of CES, has nearly 20 years of experience in the spine industry. In 1998, he founded nuSpine Medical Technologies LLC (a distributor of spine and biologic products). Then, in 2006, Roof co-founded and serves on the board of Eden Spine LLC (motion preservation devices and novel fusion systems). He is also co-founder, CEO and president of Band-Lok LLC (a product in development for complex spine applications), which was started in 2010. John Kapitan, co-founder and VP of regulatory and product development, has 18 years of experience in medical device development, including as founder and president of Kapstone Medical LLC, a Charlotte, NC-based engineering consulting firm for medical devices that was started in 2008. Previously, Kapitan was VP of product development, regulatory affairs and quality for Altiva Corp. (spine implant systems), which was acquired by Exactech Inc. in 2007. [See Deal] Roof’s younger brother, Brad Roof, acts as VP of business operations for CES.

E-Vol is available in five different implant styles, depending on surgeon preference, each with a variety of footprints and/or sizes. All of the interbody spacers are made of PEEK-OPTIMA LT1 polymeric biomaterial supplied by [Invibio Inc.] “This material is commonly found in spacers and has a 10-year perfect safety record,” Roof states. In addition, E-Vol comes in 1-mm increments (as opposed to 2 mm for most competitor spacers) for a more precise anatomical, structural approach, with a height from 7 mm to 17 mm.

Specifically, E-Vol CLIF is for lateral and transforaminal approaches, with multiple lengths (28 mm to 44 mm; 4-mm increments) and two widths (12 mm and 18 mm); E-Vol TLIF for a transforaminal approach only, in two lengths (27 mm and 31 mm) and one common width (10 mm); E-Vol PLIF for a posterior approach only, in one common length (23 mm) and one common width (10 mm); E-Vol RLIF for a lateral approach only, in two common lengths (40 mm and 50 mm) and one common width (20 mm) and E-Vol LIF for an anterior, mid-line approach, consisting of two implants placed bilaterally, in one common length (23 mm) and one common width (10 mm).

Orthopedic spine surgeons or neurosurgeons typically perform standard disc decompression to create interbody space for insertion of the spacer. “There is a minimal learning curve to our device, relative to sizing and becoming accustomed to our instrument specifications, in comparison to other spacers,” Roof says.

He explains that the only way that fusion occurs is by bone being under stress, so the implant needs to be load sharing. “E-Vol enables that because of our bilateral mirrored truss design [a framework supporting a structure] on the sides,” he says. “Our sideways are very open as compared to many of the products in this class. The lateral walls are essentially like the mirrored trusses on bridges. We believe that this allows for both inferior and superior load sharing of the implant.”

In addition, part of fusion mandates that bone be in close proximity to bone. “If you don’t have appropriate walls to your implant, there is no way that bone can grow through and around the cage in a sufficient manner, whereby you achieve solid structural fusion,” Roof says. Because of all these potential advantages, “we expect to sell several thousand units between now and the end of the year.” He notes that no new DRG code was required for the products.

CES competes directly with small companies like Calvary Spine Products LLC and Eminent Spine LLC, which sell interbody spacers directly to agent resellers and hospitals. Indirectly, CES completes with large firms such as Medtronic PLC and Johnson & Johnson’s DePuy Synthes Spine Inc. that use intermediary sales representatives. “By being able to sell direct, and with such a lean human infrastructure, we can sell at a much lower price while offering an incredibly progressive implant system,” says Roof.

“It is our design objective to offer an implant that becomes a functional, integral, part of the spine. Our ‘less material’ and ‘more open’ design concept affords us the ability to offer implant systems that provide maximum bone-to-bone interface, loading, and structural support/stability within our design constraints.”

Randy Roof, president and CEO, Cutting Edge Spine LLC

CES began a limited market release of E-Vol last June. As of April, the company had sold approximately 300 units, all through a single distributor. However, a hybrid distribution network (selling both to agents for reselling and directly to hospitals) has been launched. “But we will not do both within the same geographic market,” Roof explains. “An agent reseller will have an exclusive area.”

The company anticipates significant adoption of its technology, due to its “truly intuitive design,” Roof says. “It is our design objective to offer an implant that becomes a functional, integral, part of the spine. Our ‘less material’ and ‘more open’ design concept affords us the ability to offer implant systems that provide maximum bone-to-bone interface, loading, and structural support/stability within our design constraints.”

Besides Invibio, CES has two other strategic partners. Kapstone Medical, VP John Kapitan’s company, has provided a broad array of engineering and quality assurance resources, and Royal Oak Medical Devices (a division of Royal Oaks Industries) produces the majority of E-Vol implants. Roof declines to state how much money CES has raised to date, but he says the company is not looking to raise additional funds.

Meanwhile, CES is preparing to expand the applications for its technology next year to include the cervical spine and additional interbody options for an anterior approach, all while maintaining an emphasis on cost-effective, but high-quality products. “While we believe we will always offer attractive pricing, we will never concede quality,” Roof asserts.