Nuwellis Stock

Nuwellis, Inc. (Nuwellis) operates as a medical technology company dedicated to transforming the lives of patients suffering from fluid overload through science, collaboration, and innovative technology.

The company is focused on developing, manufacturing, and commercializing medical devices used in ultrafiltration therapy, including the Aquadex FlexFlow and the Aquadex SmartFlow systems (collectively the ‘Aquadex System’). The Aquadex SmartFlow system is indicated for temporary (up to eight hours) or extended (longer than 8 hours in patients who require hospitalization) use in adult and pediatric patients weighing 20 kg. or more whose fluid overload is unresponsive to medical management, including diuretics.

The Aquadex System

The Aquadex System is designed and clinically proven to simply, safely, and precisely remove excess fluid (primarily excess salt and water) from patients suffering from fluid overload who have failed diuretic therapy. With the Aquadex System, medical practitioners can specify and control the amount of fluid to be extracted at a safe, predictable, and effective rate. The Aquadex System has been shown to have no clinically significant impact on electrolyte balance, blood pressure or heart rate.14 Unlike other forms of ultrafiltration, which typically require administration specifically by a nephrologist, the Aquadex System may be prescribed by any physician and administered by a healthcare provider, both of whom have received training in extracorporeal therapies.

The Aquadex System consists of a console, a piece of capital equipment containing electromechanical pumps, an LCD screen and stand; a one-time disposable blood circuit set, an integrated collection of tubing, filter, sensors, and connectors that contain and deliver the blood from and back to the patient; and a disposable catheter, a small, dual-lumen, extended length catheter designed to access the peripheral venous system of the patient and to simultaneously withdraw blood and return filtered blood to the patient.

The Aquadex blood circuit set is proprietary, and the Aquadex System can only be used with the Aquadex blood circuit set. The dual lumen extended length catheter (dELC) is designed for use with the Aquadex System, although it is one of many potential catheter options available to the healthcare provider.

Strategy

The company provides healthcare professionals with a reliable, predictable, and easy-to-use mechanical pump and filtration system to remove excess fluid in fluid overloaded patients.

The company’s strategic focus is to demonstrate a strong business model by driving revenue growth. The company’s field-based employees include both sales representatives and clinical education specialists in 12 sales territories in the United States. The company also has distribution agreements in several countries in Europe, South America, the Middle East, and Asia. The company intends to focus on the acute needs of fluid overloaded patients in cardiac surgery and other areas of critical care, while continuing to support heart failure patients in the inpatient setting, and the outpatient setting. With the company’s U.S. Food and Drug Administration (‘FDA’) 510(k) clearance for use in pediatric patients weighing 20kg or more, the company has expanded its commercialization efforts to treatments for pediatric patients.

Critical Care: After the company launched a marketing campaign focused on the benefits of the Aquadex System in treating patients suffering from fluid overload following cardiac surgery procedures, such as coronary artery bypass graft (CABG) surgery, valve repairs and replacements procedures, VAD implants and other cardiac surgical procedures. The company then realigned its salesforce to further focus on the acute needs of fluid overloaded patients in the critical care setting. The company will continue to grow revenue in this faster-growing segment of the company’s business by leveraging the synergies between heart failure cardiologists and cardiovascular surgeons, traditional technology adoption rates of cardiac surgeons, and product purchase cycle of the cardiac surgical and other critical care centers at large hospitals.

Pediatrics: Ultrafiltration is used by physicians to treat fluid overload in various conditions in pediatric patients, including heart failure, cardiac surgery, ECMO therapy, solid organ transplantation, and kidney replacement therapy for neonatal patients. In February 2020, the company received 510(k) clearance for the Aquadex System to include pediatric patients who weigh 20kg or more. With this clearance, the company expanded its commercialization efforts to include promotion to physicians and hospitals who treat this pediatric population, and the company is investing in the development of new clinical evidence around use of ultrafiltration in pediatric patients, including the November 2020 launch of the ULTRA-Peds pediatrics registry, a multi-center, single-arm study. The company is also investing in the development of a new dedicated pediatric device, to further address the needs of the pediatric population, and in clinical studies supporting the use of this device.

Heart Failure In-Patients: The company intends to continue to support its sales efforts on inpatient facilities, leveraging the clinical benefits and economic advantages of using the Aquadex System over diuretic therapy. The company is investing in additional clinical evidence supporting the use of ultrafiltration in patients with decompensated heart failure, including a multicenter, randomized controlled trial, the REVERSE-HF study, comparing ultrafiltration and IV diuretics.

Heart Failure Out-Patients: Further, the company intends to expand the use of the Aquadex System with heart failure patients in the outpatient setting, such as an infusion clinic or hospital outpatient department (e.g., observation unit). On January 1, 2022, the American Medical Association (AMA) granted a new and dedicated Category III Current Procedural Terminology (CPT) code, 0692T, for Therapeutic Ultrafiltration. Healthcare providers can utilize this code when using Aquadex to deliver ultrafiltration to adult and pediatric patients weighing more than 20kg. In addition, the new CPT code provides additional reimbursement for therapeutic ultrafiltration administered in the outpatient setting and will facilitate the migration of the therapy to this setting for a subset of the patient population due to hospital economic and patient quality of life benefits. Continued focus on driving positive coverage policies for various targeted payers will be an ongoing strategy for the company.

Outside the United States, the Aquadex System is sold by independent specialty distributors who in turn sell to hospitals and clinics in their geographic regions. The company has distribution relationships in Austria, Brazil, Colombia, the Czech Republic, Germany, Greece, Hong Kong, India, Israel, Italy, Panama, Romania, Singapore, Slovak Republic, Spain, Switzerland, Thailand, the United Arab Emirates and the United Kingdom. The company intends to continue to establish distribution partners in additional countries outside of the United States. The company received CE Mark Certification for its 24-Hour Blood Circuit Set in January 2022 to be used with the Aquadex SmartFlow system. The CE marking allows the company to market the 24-hour Blood Circuit in the European Union (EU) and all other countries that recognize this certification. This new circuit will help the company expand access to ultrafiltration among patients who need no more than 24 hours of therapeutic ultrafiltration in the inpatient setting. Additionally, this circuit can provide a more economical solution for hospitals to treat patients in the outpatient/ambulatory setting, where therapy can be delivered for up to 8 hours. Such use in the outpatient setting provides the company with the flexibility to better meet the clinical and healthcare economic needs of European markets, while at the same time improving lives by seeking to prevent hospitalizations.

Besides driving near-term revenue growth through sales of the Aquadex System, the company intends to develop product enhancements to improve performance and customer satisfaction. The company has projects designed to improve venous access for the Aquadex catheter and enhance the functionality of the hematocrit sensor that is part of the Aquadex console. As the company expands its commercialization efforts in the pediatric market, the company is developing a Continuous Renal Replacement Therapy (CRRT) console to address the unmet and specific needs of pediatric patients who do not have functioning kidneys and need kidney replacement therapy for survival. It is estimated that approximately 11,000 newborn babies require neonatal kidney replacement therapy each year in the United States.45

Sales and Marketing

As of February 24, 2023, the company had 35 full-time employees in sales and marketing. The company has 12 sales territories in the United States. The company’s U.S. field salesforce includes sales managers, account managers and clinical education specialists who provide training, technical and other support services to the company’s customers. Following the acquisition of the business associated with the Aquadex System (the ‘Aquadex Business’) from Baxter International, Inc. (‘Baxter’) in August 2016, the company’s direct salesforce was focused initially on re-engaging hospital accounts that had ordered Aquadex blood sets in prior years, re-educating customers on the therapy, and assessing each hospital’s use of the Aquadex System to gain additional opportunity for increased utilization, primarily in heart failure. In 2018, the company expanded its commercialization efforts to include post-cardiac surgery. In September 2019, the company realigned its salesforce to further focus on the acute needs of fluid overloaded patients in the critical care setting, while still supporting heart failure. The company expanded its commercialization efforts to include pediatrics, following receipt of 510(k) clearance of the Aquadex system to include pediatric patients who weigh 20kg or more in February 2020.

In the United States, the company’s target customers for the Aquadex System include healthcare systems and academic hospitals specializing in advanced treatment of chronic heart failure and/or critical care patients. With the 510(k) clearance of the Aquadex SmartFlow system for patients weighing over 20kg, the company is also targeting pediatric hospitals.

Clinical Experience

In November 2020, the company launched the ULTRA-PEDs pediatrics registry, a multi-center, single-arm study being conducted at seven clinical sites. The study was enrolling with 88 patients enrolled as of December 31, 2022.

In May 2021, a third-party systemic evaluation of eight randomized controlled trials, ‘Ultrafiltration is better than diuretic therapy for volume-overloaded acute heart failure patients: a meta-analysis,’46 studied the effectiveness of ultrafiltration therapy compared to diuretics in 801 patients hospitalized with acute decompensated heart failure. The meta-analysis demonstrated ultrafiltration increases fluid removal and weight loss and reduces rehospitalization and the risk of worsening heart failure in congestive patients, suggesting ultrafiltration is a safe and effective treatment option for volume-overloaded heart failure patients.

In December 2021, the company launched the REVERSE-HF prospective, multicenter, randomized controlled trial (RCT) to evaluate ultrafiltration compared to IV diuretics in patients with heart failure. This RCT is being conducted at nine clinical sites nationwide, and patient enrollment began in June 2022.

In February 2022, a third party retrospectively reviewed and concluded, ‘The Use of Ultrafiltration in High-Risk Post-operative Coronary Artery Bypass Grafting Patients,’49 that ultrafiltration is a safe and effective modality to manage fluid balance in a patient population with relatively high Society of Thoracic Surgery (STS) scores, but a prospective multicenter study would be warranted in this patient cohort.

A reanalysis of the AVOID-HF data was presented in September 2022, ‘Revisiting The Aquapheresis Versus Intravenous Diuretics And Hospitalizations For Heart Failure (AVOID-HF) Trial: Further Evidence Supporting Aquapheresis To Reduce Heart Failure Events,’50 utilizing the novel Finkelstein-Schoenfeld method of hierarchical win ratio (WR) to explore cardiovascular (CV) mortality and heart failure (HF) events. adjustable ultrafiltration (AUF) was compared to adjustable loop diuretics (ALD) with respect to a primary composite endpoint of CV mortality within 90 days, HF event within 30 days, and time to first heart failure event within 90 days, with HF event defined as HF rehospitalization, unscheduled outpatient or emergency department treatment with IV loop diuretics or vasoactive drugs, or unscheduled outpatient ultrafiltration. The WR analysis yielded results favoring ultrafiltration, demonstrating that AUF is safe and more effective than ALD in reducing CV mortality and subsequent HF events for hospitalized heart failure patients. Secondary analysis of HF events and rehospitalizations within 30 and 90 days, without mortality, statistically favored ultrafiltration.

In December 2022, a third-party, real-world retrospective study of 335 patients treated with the Aquadex FlexFlow System, ‘Ten Year Experience with Ultrafiltration for the Management of Acute Decompensated Heart Failure,’51 compared previous randomized controlled clinical trials with ultrafiltration and demonstrated that ultrafiltration compares favorably in reducing heart failure rehospitalizations, renal function response, and weight/volume loss. The study found ultrafiltration to be safe with regard to renal function despite the cohort in this study being sicker than those studied in other clinical trials, and that UF can be a safe and effective strategy for decongestion in clinical practice wherein the benefits outweigh the potential risks of kidney dysfunction requiring hemodialysis and major bleeding events.

In January 2023, the company began designing an Investigational Device Exemption (IDE) clinical study for the company’s dedicated pediatric device under development. The study is anticipated to begin enrollment in early 2024.

Intellectual Property

The company has submitted patent applications to establish an intellectual property portfolio through which the company seek to protect the company’s system and technology. In connection with the company’s acquisition of the Aquadex Business, the company entered into a patent license agreement with Baxter pursuant to which the company obtained, for no additional consideration, a worldwide license to 49 exclusively licensed and 9 non-exclusively licensed patents used in connection with the Aquadex System to make, have made, use, sell, offer for sale and import the Aquadex System in the ‘field of use.’ Under the patent license agreement, Baxter has agreed to use commercially reasonable efforts to continue maintenance of seven ‘required maintenance patents,’ and the company has agreed to reimburse Baxter for all fees, costs, and expenses (internal or external) incurred by Baxter in connection with such continued maintenance. The rights granted to the company under the patent license agreement will automatically revert to Baxter in the event the company ceases operation of the Aquadex Business or the company files for, has filed against the company, or otherwise undertake any bankruptcy, reorganization, insolvency, moratorium, or other similar proceeding. The company estimates that the patents licensed from Baxter will expire between approximately 2023 and 2026.

The company has fifteen pending patent applications. The first application includes multiple features and capabilities to assist patient fluid balance and to enhance usability for healthcare providers. The second application involves a vacuum pump-controlled wearable appliance to increase vein diameter and venous flow for peripheral ultrafiltration. The third application involves plasma and blood volume measurement to guide ultrafiltration therapy. The fourth application involves features and functions for ultrafiltration for pediatric patients. The fifth application involves a dual-lumen ultrafiltration catheter for enhanced peripheral access. The sixth application involves guidance of ultrafiltration therapy based on one or more diagnostic parameters. The seventh application involves a system for ensuring maintenance of peripheral venous flow during ultrafiltration and other CKRT modalities. The eighth application enhances patient fluid balance through control of an ultrafiltration system.

In addition, as of February 28, 2023, 24 issued patents were assigned to Nuwellis in the United States and in foreign jurisdictions related to the company’s technology, the C-Pulse Heart Assist System (the ‘C-Pulse System’) for the treatment of Class III and ambulatory Class IV heart failure or for the AcQtrac Cardiovascular Monitoring System. The company estimates that most of its issued U.S. patents will expire by 2025. Given the strategic refocus away from the C-Pulse System and toward the Aquadex System, the company has chosen to limit the maintenance of issued C-Pulse System related patents to those innovations that are of high value.

Government Regulations

The company manufactures and markets medical devices that are regulated by the FDA, comparable state agencies and regulatory bodies in other countries.

The company and its contract manufacturers are also required to manufacture the company’s products in compliance with Current Good Manufacturing Practice requirements set forth in the QSR.

In order to import and sell the company’s products in member countries of the European Union, or EU, medical devices must comply with the essential requirements of the European Union Medical Devices Directive (Council Directive 93/42/EEC).

History

The company was founded in 1999. It was incorporated in Delaware in 2002. The company was formerly known as Sunshine Heart, Inc. and changed its name to CHF Solutions, Inc. in 2017 and then to Nuwellis, Inc. in 2021.