Corindus Vascular – Changing The World Of Cardiology

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corpath, corindus, cvrs
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Corindus Vascular Robotics (NYSE: CVRS) is a medical robotics company that has one and only one product: the Corpath.

Heart Disease

Heart disease is currently the leading cause of death in the United States for both men and women.  Though we seem to be moving towards the right path of eating healthy, exercising, etc., it seems that we have yet to prevent heart disease.  According to the CDC, one in four Americans die every year due to heart disease.

So in order to explain what Corindus does, I’ll first explain what happens when one experiences chest pain.  There are various causes of chest pain, but the one we’re most familiar with is the traditional “heart attack.”  Your heart, just like any other muscle in the body, requires blood and oxygen to perform, which is supplied by coronary arteries.  When there’s a blockage in your coronary arteries, there’s no more blood and oxygen flowing into the heart muscle.  This is what is called a myocardial infarction, which leads to muscle death.  This is called a myocardial ischemia.  There are different types of myocardial ischemias, which we don’t need to get into.

Catheterization

An ambulance is called, and an EKG is performed en route, which is then sent to the ER.  If it is a myocardial infarction (heart attack), you are rushed into the cath lab, where there is a protocol called “Door to Balloon,” a 90 minute window in which an interventional cardiologist can thread a catheter to your heart and reopen that blockage, to allow for blood flow and oxygen to be restored, with the hopes that the heart muscle can recover.     

The entire procedure, cardiac catheterization, is done under an imaging called fluoroscopy, which is a real time x-ray, so that the physician can view the location of the blockage and the catheter.  The fluoroscope will expose the physician to high doses of radiation, and while they’re protected by lead vests/collars, it still carries a high risk.  Physicians have previously become injured due to receiving too much radiation, and procedures have become more complicated and involved, leading to more time in the cath lab.  

Corpath

Corindus was able to mitigate these risks with a robotic arm that can safely perform the procedure remotely with the physician sitting a few feet away.

When compared to manual vs corpath, the studies have shown that the procedure takes the same amount of time with the same patient outcome.  The difference (and the selling point) is that the physician is exposed to 98% less radiation, thus significantly reducing the risk to the physician.  Also, Corindus states that less stents are utilized, thus saving the hospital money, and are so confident in this cost-saving incentive that they are running a promotion of reimbursing the hospital $1000 per stent used over the previously planned amount.

Benefits

For the patients, while their outcome is similar, one positive aspect is that the corpath utilizes less contrast material, allowing patients who have problems with their kidneys to better filter out the contrast material.  Another study showed that the patient actually spent less time under fluoroscopy, also benefiting the patient.

For the physicians, on top of decreasing the risk of radiation to the face, it allows them to sit down.  This may not seem like a huge deal, but standing while wearing a lead vest for 10 hours a day is incredibly exhausting.  There have been studies that show decreased performance at the end of the day due to physician farigue.  The machine allows the physician to sit at his or her own leisure and perform the procedure safely while sitting a few feet away.

A few interventional cardiologists I spoke to were not too thrilled about the technology until I mentioned that they can actually sit down, instead of being on their feet, and to them, this facet seemed to be the game changing opportunity.

Safety profile

This machine is the one and only FDA approved PCI machine available in the United States.  Many studies have been done on the efficiency and safety during the procedure, and so far, it looks great.  There are multiple indications that are available for this particular machine, allowing for other vascular indications in the future.

Management

The executives have very deep ties to Boston Scientific, and had also raised $45m in funding from Boston Scientific.

Philips Healthcare took a 15.5% stake in the company as well.

Financials

Q1 2017 saw a revenue of $0.8m with a backlog of $3m to be recognized later this year. Guidance shows that they expect their revenue to be $12 – 15m by EOY.  With a burn rate of $10m per quarter and $45m in cash, this company has room to grow in 2017.

Multiple orders are coming in for the machine, and recently performed live procedures in Asia that was transmitted to thousands of physicians.

Conclusion

After speaking to many cardiologists, the downside here is that physicians are reluctant to change.  They have difficulty adjusting to new technology, but the same can be said about those who refused to adopt laparoscopic procedures, which are now the standard of care.  The future of the company now depends entirely on their financials and sales, and I’m highly optimistic about this company.

Disclosure: I have a large long position in this company since February 2017.

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