ClearPoint Neuro Stock

ClearPoint Neuro, Inc. (ClearPoint) operates as a commercial-stage medical device company.

The company develops and commercializes innovative platforms for performing minimally invasive surgical procedures in the brain.

The company’s products have been used in over 5,000 clinical and clinical trial procedures at over 65 neurosurgery centers in North America, Europe, South America, and Asia.

The company has more than 50 pharma/biotech, academic, and contract research organization partners who are evaluating or using the company’s products and services in trials to inject gene and cell therapies directly into the brain. These partnerships involve drug development programs that are at various stages of development ranging from preclinical research to late-stage regulatory trials for over 15 distinct disease states.

The company’s ClearPoint system is an integrated system comprised hardware components, disposable components, and intuitive, menu-driven software. It is in commercial use in the U.S., the European Union (the ‘EU’), and the United Kingdom. The primary applications for the ClearPoint system are to target and guide: the insertion of deep brain stimulation electrodes, biopsy needles, and laser catheters; and the infusion of pharmaceuticals into the brain. The ClearPoint system was originally designed for use in an MRI setting. In 2021, the company launched the SmartFrame Array Neuro Navigation System and Software, which allows for operating room placement of the ClearPoint system.

In 2022, the company commenced the limited market commercialization of the ClearPoint Prism Neuro Laser Therapy System, a laser ablation system. The ClearPoint Prism Neuro Laser Therapy System was developed for the company by Clinical Laserthermia Systems AB and its affiliates (‘CLS’) as an additional feature of the ClearPoint system. The ClearPoint Prism Neuro Laser Therapy System is indicated for use to necrotize or coagulate soft tissue through interstitial irradiation or thermal therapy under 3.0T magnetic resonance imaging (‘MRI’) guidance. The company has exclusive global rights to commercialize the CLS magnetic resonance (‘MR’) guided laser interstitial thermal therapy (‘MRgLITT’) system for neuro applications.

The company’s ClearPoint system is subject to appropriate regulatory clearances and approvals covering specific applications and geographic areas.

Products and Services

ClearPoint sought to develop solutions to enable minimally invasive surgical procedures in the brain. For MRI procedures, the company reduced the size and changed the composition of stereotactic headframes, onsite navigation systems and drills, manufacturing them using MRI-safe materials, such as plastics, ceramics and liquids visible under MRI. During an MRI-based ClearPoint procedure, surgeons use the company’s complete navigation system inside an MRI scanner, and define targets in real-time to decide, guide, treat and confirm the procedure with pinpoint accuracy.

In 2021, the company launched the SmartFrame Array Neuro Navigation System and Software which allows the company to expand is ClearPoint system placement to the operating room. The SmartFrame Array tower can be detected by commonly used operating room imaging modalities such as optical imaging and intra-operative Computed Tomography (‘CT’). A large percentage of neurosurgeons prefer to perform surgery in a traditional operating room. Thus, ClearPoint’s expansion into the operating room, where most stereotactic and functional procedures take place today, represents an important growth opportunity.

Both the company’s MRI and operating room systems provide guidance for the placement and operation of instruments or devices during the planning and operation of neurosurgical procedures and are intended to be used as an integral part of procedures, such as biopsies and the insertion of catheters, electrodes and fiber lasers, which have traditionally been performed using stereotactic methodologies. When deployed in the MRI, the company’s systems are designed to be used with both 1.5T and 3T MRI scanners. The company’s research efforts for its ClearPoint system began in 2003. Since then, the company has developed, achieved regulatory clearance, and commercialized several neuro navigation, therapy, and access devices. Today, ClearPoint systems are in clinical use with MRI scanners from Siemens Healthineers, GE HealthCare, and Philips, an interventional MRI manufactured by IMRIS, and an operating room platform manufactured by Brainlab.

ClearPoint Solutions

The design of the company’s ClearPoint system can significantly simplify how stereotactic neurosurgical interventions are performed. Instead of relying on the indirect guidance of pre-operative imaging, the company’s ClearPoint system is based on a direct approach, during which a physician is guided by real-time, high-resolution MRI. The procedure performed with the company’s SmartFrame XG and software version 2.0 is designed to take place in a standard hospital-based MRI scanner or intra-operative MRI. In addition, the introduction of the company’s Smart Frame Array device will allow the physician to perform the procedure in the operating room as well, thus providing the physician and hospital flexibility.

The company’s ClearPoint system is an integrated system comprised hardware components, disposable components and intuitive, menu-driven software.

ClearPoint Hardware: The company’s hardware components consist primarily of a head fixation frame, computer workstation and in-room monitor. The head fixation frame immobilizes the patient’s head during the procedure, and it is designed to optimize the placement of an imaging head coil in proximity to the patient’s head. When performed in the MRI suite, the ClearPoint system software is installed on a computer workstation networked with an MRI scanner, for which the company uses a commercially available laptop computer. The in-room monitor allows the physician to view the display of the company’s ClearPoint system workstation from the scanner room while performing the procedure.

ClearPoint Disposables: The disposable components of the company’s ClearPoint system consist primarily of the company’s SmartFrame trajectory device, a hand controller and related accessories, and the company’s SmartFlow Cannula. The company’s SmartFrame device is an adjustable trajectory guide that attaches to the patient’s skull and holds the targeting cannula. The hand controller attaches to the company’s SmartFrame device, and it is used by the physician to adjust the roll, pitch, and X and Y orientation of the targeting cannula while the patient is in the MRI scanner. The accessories include all other components necessary to facilitate the MRI-guided neurosurgical procedure, such as the company’s SmartGrid patch, which is an MRI-visible marking grid that enables rapid localization of the entry position into the brain, and the company’s customized surgical draping, which creates a sterile field within the MRI scanner. For drug delivery procedures, the company’s SmartFlow cannula, which is an MRI-compatible injection and aspiration cannula, serves as the vehicle for the delivery of the compound.

ClearPoint Software: The company’s ClearPoint system software guides the physician in surgical planning, device alignment, navigation to the target and procedure monitoring. The software uses image segmentation algorithms to help locate and identify the company’s SmartFrame device and its targeting cannula, as well as the anatomical structures of the brain. The software also performs geometric computations to provide the physician with information regarding the positioning of instruments inserted into the patient’s brain relative to the target anatomical structures. At the completion of the procedure, the software generates an automated report that includes the key metrics from the procedure.

ClearPoint Therapeutic Solutions: The company’s ClearPoint Prism Neuro Laser Therapy System is indicated for use to necrotize or coagulate soft tissue through interstitial irradiation or thermal therapy for neuro applications under 3.0T MRI guidance. The laser system can be used in conjunction with the ClearPoint navigation platform to refine the desired trajectory for the laser therapy catheter and to confirm accurate laser catheter placement. The laser system consists of a mobile laser unit, Thermoguide software to monitor changes in tissue temperature during therapy, and disposable laser applicator and MR introducer components.

ClearPoint Services: The company provides consulting services to the company’s pharmaceutical and other medical technology partners for improving outcome predictability and optimizing pre-clinical and clinical workflows. The company’s expertise is concentrated in benchtop testing, pre-clinical studies, clinical trial support, regulatory consultation, and over-arching translation from the pre-clinical to the clinical setting to enhance accuracy and precision of drug delivery.

Regulatory Status

The company’s ClearPoint system 510(k) clearance from the FDA permits the company to market and promote its ClearPoint system in the U.S. for use in general neurosurgical procedures, which includes procedures such as biopsies, laser catheter insertions, and deep brain stimulation lead and electrode insertions. This is the same general indication for use that applies to other devices that have traditionally been used in the performance of stereotactic neurosurgical procedures. In the EU and Israel, the company’s approval carries a similar indication for use.

The company’s SmartFlow cannula has received 510(k) clearance for injection of Cytarabine or for removal of cerebrospinal fluid from the ventricles. It has also received CE mark for the injection of approved fluids into the brain. Delivery of other therapeutic agents using the company’s SmartFlow cannula is investigational. The SmartFlow cannula is a disposable device intended for single patient use only and is not intended for implant.

The company’s development partner CLS received 510(k) clearance for its laser system to necrotize or coagulate soft tissue through interstitial irradiation or thermal therapy in neuro applications under 3.0T MRI guidance. In the U.S., the laser system is commercialized by the company as the ClearPoint Prism Neuro Laser Therapy System.

Sales and Marketing

Commercializing the company’s ClearPoint products and services involves marketing primarily to: physicians who care for patients suffering from neurological disorders, including stereotactic or functional neurosurgeons, who perform the neurosurgical procedures, and neurologists, who interact with patients prior to and following surgery and who refer patients for surgery; hospitals involved in the treatment of neurological disorders, including the opinion leaders at these hospitals; and pharmaceutical companies focused on research and development of therapies for neurological indications.

The company’s business model for the ClearPoint products is focused on producing high margin revenue from sales of the disposable components. Given that focus on disposable product sales, the company sells its reusable components at lower margins in order to secure installations within hospitals. In addition, the company may install the ClearPoint reusable components at a hospital, but retain title, either for an agreed-upon period of time while the hospital evaluates and processes the purchase opportunity, or for a rental fee. The company’s disposable and reusable ClearPoint products are tightly integrated, which allows the company to leverage each new installation of a system to generate recurring sales of the company’s disposable products.

The company’s business model for its ClearPoint services is to provide surgical workflow and guidance to aid in the progression of the company’s pharmaceutical customers’ drug delivery process. The ClearPoint services allow the company to generate early technology integration of the company’s products into the company’s customers’ delivery workflow.

As of February 15, 2023, the company’s sales, clinical support and marketing team consisted of 38 employees. The company believe that the company’s current sales, clinical support and marketing team is sufficient for the company’s current needs. However, the company expect that the company’s sales and marketing team will expand over time as the company adds new geographies and enter new segments. The company expects the size of the company’s clinical support team to increase with the number and locations of the ClearPoint installed base and the volume of procedures utilizing the ClearPoint system.

Research and Development

The company’s research and development costs were $10.9 million for the year ended December 31, 2022.

Manufacturing and Assembly

The company’s ClearPoint system and SmartFlow cannula include off-the-shelf components, custom-made components produced to the company’s proprietary specifications by various third parties, and components that the company assembles in its Irvine, California facility.

The company’s ClearPoint Prism Neuro Laser Therapy System is manufactured by CLS. The company’s operations are subject to extensive regulation by the FDA’s Quality System Regulation (‘QSR’), which requires that manufacturers have a quality management system for the design and production of medical devices.

The company’s Irvine, California facility is FDA-registered, and it is compliant with the FDA’s QSR. The company is also certified to ISO standard 13485.

Typically, the company’s third-party manufacturers and suppliers are certified to ISO standard 9001 and/or 13485. The company also periodically performs audit procedures on its key third-party manufacturers and suppliers to monitor their activities for compliance with the company’s quality management system. The company’s facility and the facilities of the third-party manufacturers and suppliers the company uses are subject to periodic inspections by regulatory authorities, including the FDA and other governmental agencies.

Trademarks, Trade Names and Service Marks

ClearPoint Neuro, ClearPoint, SmartFlow, SmartFrame, SmartGrid, Inflexion, SmartTwist, SmartTip, ClearPoint Maestro, ClearPoint Revolution, SmartFrame Array, ClearPoint Orchestra, ClearPoint Prism, SmartFlow Flex, MyClearPoint, ClearPointer, When Your Path is Unclear, We Point The Way, and MRI Interventions are all trademarks of the company.

Customers

As of February 15, 2023, approximately 65 hospitals in North America, Europe, and Asia were using ClearPoint products. A small number of these hospital customers account for a substantial portion of the company’s revenues from sales of ClearPoint products.

As of February 15, 2023, the company had commercial relationships with over 50 pharma/biotech, academic, and contract research organization partners who have either evaluated or used the company’s SmartFlow cannula or the company’s services. One of these companies, PTC Therapeutics, Inc. and its affiliates (‘PTC’), a related party who is a significant stockholder with a Board representative, accounted for approximately 34% of the company’s biologics and drug delivery revenues in 2022. On May 7, 2019, the company entered into a supply agreement with PTC (the ‘PTC Supply Agreement’) pursuant to which the company supplies certain products and engages in performance of certain services under the terms of mutually agreed upon Statements of Work. Certain products supplied under the PTC Supply Agreement are subject to limited favored pricing terms for such products intended for human use in clinical or commercial settings.

The company and PTC also entered into a Second Source Manufacturing Agreement in connection with the PTC Supply Agreement (the ‘Second Source Manufacturing Agreement’). Under the Second Source Manufacturing Agreement, PTC may, at its expense, request for the company to appoint a backup contract manufacturer to supply products in the event of a supply interruption or a bankruptcy event. The exercise by PTC of its second source manufacturing rights may be subject, in certain cases, to payment by PTC to the company of a per-product royalty payment. The Second Source Manufacturing Agreement shall continue for the term of the PTC Supply Agreement, subject to certain early termination rights.

On November 20, 2020, the company and PTC entered into an Addendum to Supply Agreement pursuant to which PTC agreed to purchase products totaling a minimum quarterly payment in consideration for the company’s commitment to supply such products and provide services consisting of training, pre-clinical and clinical case support and regulatory support. In January 2023, the Addendum to Supply Agreement was amended and restated to allow for the company to provide regulatory support to PTC in additional agreed geographies.

Intellectual Property

Patents and Patent Applications

The company has a significant patent portfolio in the field of neurosurgical and MRI-guided interventions. As of February 15, 2023, the company owned or license over 75 issued U.S. patents. The company’s owned, issued patents expire at various dates beginning in 2023.

Certain License and Collaborative Arrangements

Philips

During 2020, the company entered into a worldwide license and research agreement with Philips, under which Philips has licensed the company to use the technology underlying its Philips Brain Model in the company’s ClearPoint Maestro Brain Model (‘Maestro’), the first generation of which received 510(k) clearance in 2022. Maestro will have use across all the company’s product lines through automatic pathway and trajectory planning and confirmation of device placement, while identifying eloquent structures of the brain so as to avoid crucial anatomy. In early 2022, the company expanded its collaboration with Philips to include additional technology to allow use of the Philips Brain Model with Computed Tomography (‘CT’) imaging.

Blackrock Neurotech

In 2021, the company entered into a joint development agreement with Blackrock to develop an automated surgical solution, leveraging the company’s technology platform, for implanting Blackrock’s brain computer interfaces (‘BCIs’) into patients with a wide range of neurological disorders.

Clinical Laserthermia Systems AB

In October 2018, and as amended in August 2020, the company entered into a license and collaboration agreement and a distribution agreement with CLS that provides the company the exclusive global rights to commercialize and sell CLS’s portfolio of products and to collaborate with CLS on the development and commercialization of new products in the neurosurgical field. Pursuant to these agreements, the company began limited market commercialization of the ClearPoint Prism Neuro Laser Therapy System in the U.S. in 2022.

University of California, San Francisco

In 2013, the company entered into a license agreement with UCSF that provides for the company’s use of design features developed by UCSF, which the company incorporated into the company’s SmartFlow cannula, for which the company is committed to pay royalties based on the company’s sales of the SmartFlow cannula.

Software License Arrangements

In connection with the development of the company’s software products, which includes ClearPoint Software, ClearPoint Array Software, and ClearPoint Maestro Brain Model Software, the company entered into several agreements under which the company receives worldwide, non-exclusive licenses to software code related to certain functional elements of these software products, and for which the company is committed to pay royalties for each copy of software product sold, or in certain cases, loaned by the company to end-users.

Regulatory Requirements of the United States Food and Drug Administration

Most notably, all of the company’s products sold in the U.S. are subject to regulation as medical devices under the federal Food, Drug, and Cosmetic Act (‘FDCA’), as implemented and enforced by the FDA.

Competition

The company is aware of two companies, Monteris Medical, Inc. and Medtronic, which offer devices for laser ablation under direct MRI guidance. In addition, companies, such as Brainlab, Medtronic, Elekta, FHC Inc., Integra Life Sciences and Neurologica Corporation, a subsidiary of Samsung Electronics Co., offer devices and systems for use in conventional stereotactic neurosurgical procedures, such as surgical navigation workstations, frame-based and frameless stereotactic systems, portable computer tomography scanners and computer-controlled guidance systems. These devices and systems are competitive with the company’s ClearPoint system. Also, Zimmer Biomet Holdings, Inc.’s ROSA robot is an operating room alternative to the ClearPoint system.

History

The company was founded in 1998. It was incorporated in the state of Delaware in 1998. The company was formerly known as SurgiVision, Inc. and changed its name to MRI Interventions, Inc. in 2011. Further, the company changed its name to ClearPoint Neuro, Inc. in 2020.