Motus GI Holdings Stock

Motus GI Holdings, Inc. operates as a medical technology company.

The company has developed the Pure-Vu System, a medical device that has been cleared by the U.S. Food and Drug Administration (the FDA) to help facilitate the cleansing of a poorly prepared gastrointestinal tract during colonoscopy and to help facilitate upper gastrointestinal (GI) endoscopy procedures. The Pure-Vu System is also CE marked in the European Economic Area (EEA) for use in colonoscopy. The Pure-Vu System integrates with standard and slim colonoscopes, as well as gastroscopes, to improve visualization during colonoscopy and upper GI procedures while preserving established procedural workflow and techniques. Through irrigation and evacuation of debris, the Pure-Vu System is designed to provide better-quality exams.

The Pure-Vu System has been assigned an ICD-10 code in the U.S. The company received 510(k) clearance in February 2022 from the FDA for its Pure-Vu EVS System and have commenced initial commercialization of this product.

The company’s system consists of a workstation controller and a single-use, disposable sleeve that fits over most standard and slim colonoscopes. Together with the colonoscope, the Pure-Vu System performs rapid, effective, and efficient intra-procedural cleaning without compromising procedural workflow and techniques. The over-sleeve has an umbilical section that connects the disposable to the workstation. The workstation, through a series of peristaltic pumps activated by foot pedals, delivers an irrigation medium of air and water that creates a pulsed vortex inside the colon to break up fecal matter while simultaneously evacuating the colon content into waste receptacles already used in a standard colonoscopy procedure. The proprietary smart sense suction (evacuation) system in the device has sensors built in that can detect the formation of a blockage and automatically clear it allowing the physician to remove significant debris from the patient. The Pure-Vu System has been clinically demonstrated to be capable of cleaning poorly prepared colons in minutes. The company has built and continue to extend its intellectual property portfolio designed to protect key aspects of the system, including the pulsed vortex irrigation and auto-purge functions.

In 2021, the company announced that it received 510(k) clearance from the FDA for a version of the Pure-Vu System that is compatible with gastroscopes used during upper gastrointestinal (GI) endoscopy procedures to remove blood, blood clots and debris in order to provide a clear field-of-view for the endoscopist.

The company has conducted a controlled series of Upper GI initial pilot procedures in the U.S. market, which is intended to inform the development of a Pure-Vu EVS version of the Upper GI solution for eventual submission to FDA for marketing approval in the U.S. The company successfully completed multiple pre-clinical tests in both porcine and cadaver models to evaluate Pure-Vu EVS platform for use in upper GI bleeding with multiple U.S. physicians. The results of these tests show that the Gastro version of Pure-Vu EVS can effectively break up and suction blood and blood clots, as well as frees up a gastroscope’s working channel for other therapeutic tools.

The company plans on conducting additional pre-clinical and clinical tests for Pure-Vu EVS Gastro device in the first half of 2023. The results of these tests are expected to support submission of a 510(K) application to the U.S. Food and Drug Administration (FDA) in the second half of 2023.

The company’s targeted Outpatient market focused on those patients at risk for inadequate prep presents a large potential commercial market opportunity for the Pure-Vu System.

Strategy

The company’s initial launch strategy in the United States focuses on the acute care hospital market. The company has been building clinical champions amongst key Gastroenterologists, and other GI and nursing floor leadership and staff. Additionally, the company articulates the clinical and economic value of the Pure-Vu System technology to key members of hospital administration. After a pre-defined product evaluation period, the company seeks to work within the Value Analysis Committee approval process, utilized within most U.S. hospitals and integrated delivery networks (IDNs). On September 29, 2022, the company announced that it has officially been recognized as a sole source provider and small business by the Veterans Health Administration (VHA). As it continues to grow its network expansion, the company continues to support its customers with robust training on the effective use of its Pure-Vu System technology through its training and in-servicing programs.

In addition to working with a third-party logistics provider specializing in medical devices to provide front and back office support to successfully fulfill customer orders, the company’s commercial organization has implemented a robust customer relationship management tool to track account progress and help provide accurate forecasting for operations. The company anticipates the sales cycle to be in the range of approximately six months. The company’s primary focus is on gaining system placements in the acute care hospital market, driving utilization of its Pure-Vu System disposable sleeve, growing top line revenues and appropriately scaling the commercial organization.

Intellectual Property

The company’s IP position includes a portfolio covering highly innovative technologies rooted in systems and methods for cleaning body cavities with or without the use of an endoscope. The company has eighteen granted or allowed patents in the U.S., nineteen patents in Asia (Japan, China and Hong Kong), and ten patents in the EU, with patent protection until at least 2040. In addition, the company has eleven pending patent applications in various regions of the world with a focus on the U.S., EU, and Japan. The company has registered trademarks for Motus GI and for the Pure-Vu System in the U.S., EU, and other international jurisdictions. The company also has a pending trademark application in the U.S. to MICRO-PREP.

Research and Development

The company’s research and development expenses were $5.6 million for the year ended December 31, 2022.

Suppliers

The workstation and loading fixture component of the company’s Pure-Vu System is manufactured by Sanmina Corporation at their facilities in Israel. The company may enter into formal supply agreements for the manufacture of the workstation component and loading fixture of its Pure-Vu System with Sanmina Corporation as it continues to establish higher volume capabilities and its commercialization efforts grow. The disposable portion of the Pure-Vu EVS is manufactured by Sterling Industries in their Michigan, U.S. facility. The company entered into a supply agreement with Sterling Industries in Q2 of 2021. The disposable portion of the company’s Gen 2 Pure-Vu System is manufactured by Polyzen, Inc., at their facilities in North Carolina, U.S., pursuant to a supply agreement it entered into with Polyzen, Inc. in September 2017. Both Sterling Industries and Polyzen use Medacys in Shenzhen, China as key sub-supplier for the injection molded parts in the Pure Vu disposables.

Regulatory Matters

The company is subject to either announced or unannounced device inspections by the FDA, as well as other regulatory agencies overseeing the implementation of and compliance with applicable state public health regulations.

The advertising and promotion of the company’s products in the EU and the European Economic Area (EEA) is subject to the laws of individual EU and EEA Member States implementing the EU Medical Devices Directive, Directive 2006/114/EC concerning misleading and comparative advertising, and Directive 2005/29/EC on unfair commercial practices, as well as other EEA Member State laws and industry codes governing the advertising and promotion of medical devices.

The company’s marketing and activities relating to the reporting of wholesaler or estimated retail prices for its products and other information affecting federal, state and third-party reimbursement for its products, and the sale and marketing of its product and any future product candidates, are subject to scrutiny under the federal civil False Claims Act.

The company implemented processes to manage compliance with the California Consumer Privacy Act and continues to assess the impact of the California Privacy Rights Act, and other state legislation, on its business as additional information and guidance becomes available.

The company’s business activities outside of the U.S. are also subject to anti-bribery or anti-corruption laws, regulations, industry self-regulation codes of conduct and physicians’ codes of professional conduct or rules of other countries in which it operates, including the U.K. Bribery Act of 2010.

History

The company was founded in 2008. The company, a Delaware corporation, was incorporated in 2016. It was formerly known as Eight-Ten Merger Corp. and changed its name to Motus GI Holdings, Inc. in November 2016.