Silk Road Medical, Inc Stock

Silk Road Medical, Inc. operates as a medical device company. The company focuses on reducing the risk of stroke and its devastating impact. The company’s business focuses on a relatively new approach for the treatment of carotid artery disease called transcarotid artery revascularization, or TCAR, which it seeks to establish as the standard of care.

TCAR using the company’s portfolio of products has been clinically demonstrated to reduce the upfront morbidity and mortality risks commonly associated with carotid endarterectomy while maintaining a reduction in long-term stroke risk. The company has obtained U.S. Food and Drug Administration, or FDA, approvals, secured specific Medicare reimbursement coverage, and commercialize products engineered and indicated specifically for transcarotid use, in patients who require carotid revascularization and who meet certain treatment criteria. In the second quarter of 2022, the company announced FDA label and Medicare coverage expansions for the use of TCAR in standard surgical risk patients in the TCAR Surveillance Project, or TSP. Effective October 11, 2023, the U.S. Centers for Medicare and Medicaid Services, or CMS, published the final decision memo for National Coverage Determination, or NCD, 20.7 expanding coverage for CAS, including TCAR, under indication B4 for both high risk and standard surgical risk patients. TCAR remains covered within the TSP as well as outside of the TSP under the revised NCD 20.7. As of December 31, 2023, more than 85,000 TCAR procedures have been performed globally, including more than 25,000 in the United States during 2023.

TCAR is a minimally-invasive procedure intended to address the morbidity of CEA and the 30-day stroke risk of CAS while maintaining a reduction in long-term stroke risk beyond the first 30 days. TCAR starts with a small incision in the neck slightly above the collarbone, otherwise known as transcarotid access, through which the company’s ENROUTE Transcarotid Stent System, or ENROUTE stent, is placed during a period of temporary high-rate blood flow reversal that is enabled by its ENROUTE Transcarotid Neuroprotection System, or ENROUTE NPS. Blood flow reversal directs embolic debris that could cause a stroke away from the brain, while the stent braces the plaque and prevents embolization to afford a reduction in long-term stoke risk.

The company’s ENROUTE NPS is the only FDA-cleared transcarotid neuroprotection device. CMS is the primary payer for carotid revascularization procedures as carotid artery disease is most often a disease of the elderly, and it estimates Medicare covers approximately 75% of patients treated.

Product Portfolio

TCAR is enabled by the company’s proprietary portfolio of TCAR products designed to provide direct access to the carotid artery, effective reduction in stroke risk throughout the procedure, and long-term restraint of carotid plaque. In addition to enabling the safety and effectiveness of TCAR, the company’s proprietary products are specifically designed to enable a short learning curve, consistent ease of use and physician comfort. The company’s products are also the only devices cleared and approved by the FDA specifically for transcarotid use.

The company’s product portfolio consists of the following five single-use components:

ENROUTE Transcarotid Neuroprotection System: Used to directly access the common carotid artery and establish temporary blood flow reversal; embolic debris is captured and filtered, returning filtered blood to the femoral vein; allows for flow modulation enabling lesion imaging and patient tolerability; and only FDA-cleared transcarotid neuroprotection system.

ENROUTE Transcarotid Stent System: Cylindrical and tapered configurations with optimized cell design and auto-conforming technology; designed for transcarotid access, improving the accuracy and ergonomics of the TCAR procedure; and only FDA-approved transcarotid stent system optimized for the TCAR procedure.

ENHANCE Transcarotid Peripheral Access Kit: Used to gain initial access to the common carotid artery; and only access kit specifically designed for use in the common carotid artery.

ENROUTE 0.014 inches Guidewire: Designed for precise and atraumatic vessel navigation and target lesion crossing for delivery of interventional devices; and short working length and proprietary tip designed for the TCAR procedure.

ENROUTE Enflate Transcarotid RX Balloon Dilation Catheter: Only transcarotid rapid exchange balloon on the market and only specialty balloon designed for the TCAR procedure; short working length for transcarotid access and sizes optimized for use with the ENROUTE stent system; and highly visible radiopaque markers for accurate positioning.

In the second quarter of 2023, the company received 510(K) clearance for its next generation neuroprotection system, or ENROUTE NPS PLUS, which is designed to support additional ease-of-use and further minimize the risk for complications. The company is planning for the upcoming launch of its ENROUTE NPS PLUS in the first half of 2024. The company also received PMA approval for tapered configurations of its ENROUTE stent in the second quarter of 2023, which will provide greater choice for physicians to address the diversity of patient specific anatomy. The company initiated a limited market release in the first quarter of 2024 with a full market release planned in the first half of 2024.

Commercial Strategy

The company’s vascular surgeons represent the specialty most frequently responsible for managing the care of and receiving referrals for patients with carotid artery disease and are skilled in endovascular procedures. The company’s sales, marketing, professional education and medical affairs efforts are focused on driving adoption and supporting their practice development by offering them an innovative, safe, effective and minimally-invasive alternative for treating carotid artery disease.

The company markets and sells its products in the United States through a direct sales organization consisting of sales management, sales representatives, known as area managers, and clinical support specialists, known as therapy development specialists. The area managers are typically complemented by one therapy development specialist in each territory. The company’s sales professionals have substantial experience launching and establishing new disruptive therapies and converting open surgical procedures to minimally-invasive alternatives. The company primarily markets its products directly to vascular surgeons, their staffs, operating room managers and hospital administrators. The company also markets to other specialists with experience in CEA and/or CAS with the appropriate skill set for TCAR, including neurosurgeons, cardiothoracic surgeons and non-surgical interventionalists in radiology, neuroradiology and cardiology.

The company’s area managers are responsible for developing territory business plans, targeting and opening new accounts, promoting the benefits of TCAR and its products, and driving adoption and penetration of TCAR. Together with the therapy development specialist, they also support the training and proper use of its TCAR portfolio of products and provide clinically consultative support for patient selection, pre-procedure planning, procedure support, and post-procedure care. As it continues to grow the size of its the U.S. sales organization, with a focus on increasing adoption of TCAR by existing customers and expanding its current customer base, it expects to focus on adding a strategic mix of area managers and therapy development specialists.

The company’s highly specialized area managers and therapy development specialists, along with other key employees, receive in-depth training and develop a thorough understanding of carotid artery disease, patient selection, imaging interpretation, procedure planning, reimbursement and regulatory policies to meaningfully support its customers and maintain compliance. The company’s extensive training and continuous education program consists of foundational training, procedure observation, and sales skills development. The company’s personnel are selected based on their focus on patient outcomes and delivering a positive customer experience in addition to their technical and clinical aptitude.

Additionally, the company supports its sales organization with marketing and market and practice development initiatives. The company plans to continue to expand and enhance its marketing and analytics capabilities to support its growing commercial organization and customer base.

The company is pursuing regulatory clearances in Japan and China. In Japan, the company received Shonin approval for the ENROUTE NPS and the ENROUTE stent in the fourth quarter of 2022. During the fourth quarter of 2023, the company entered into an exclusive distribution agreement for its products in Japan and it submitted its updated reimbursement application during the first quarter of 2024. In addition, in the first quarter of 2023, the company received approval from China’s National Medical Products Administration, or NMPA, for its ENROUTE NPS. In the first quarter of 2024, the company received NMPA approval for its ENROUTE stent, and it also entered into an exclusive distribution agreement for its products in China. In both geographies, the company is conducting regulatory activities to support future clearance of its next-generation ENROUTE NPS PLUS that was cleared in the U.S. in the second quarter of 2023. The company’s next steps include assessing the reimbursement process and its pathway and timeline to launch.

Seasonality

The company has experienced moderate procedure volumes during major medical conferences when significant portions of its customer base are attending the conferences.

Cordis License Agreement

In December 2010, the company entered into a license agreement with Cordis, which agreement was amended in May 2023 (as amended, the Cordis License Agreement). Pursuant to the Cordis License Agreement, Cordis granted the company a worldwide, non-exclusive, perpetual, royalty-bearing license to certain of its intellectual property related to the PRECISE carotid stent, or the Licensed IP, for transcervical treatment of carotid artery disease with an intravascular stent for certain applications for accessing blood vessels through the neck and cervical area.

The Cordis License Agreement requires the company to work exclusively with either Cordis or Confluent Medical Technologies, Inc. for the development, manufacture and supply of the licensed products.

The company has the right to assign or transfer the Cordis License Agreement to an entity that succeeds all or substantially all of its equity or assets. The Cordis License Agreement may be terminated by either party in the event of uncured material

Cordis Supply Agreement

In October 2011, the company entered into a supply agreement with Cordis and have since entered into several amendments, most recently in May 2023 (as amended, the Cordis Supply Agreement). Pursuant to the Cordis Supply Agreement, Cordis has assisted in the development of a transcarotid stent delivery system according to its specifications with a PRECISE carotid stent implant, or ENROUTE stent and has supplied the ENROUTE stent through preclinical and clinical trials. Cordis has the exclusive right to manufacture and supply the current generation of the ENROUTE stent during the term of the Cordis Supply Agreement. If Cordis is not able to supply the ENROUTE stent, upon its election, Cordis shall permit Confluent or a third-party manufacturer to provide supply of the ENROUTE stent, provided that Cordis retains the right to manufacture and supply the ENROUTE stent to it to the extent it is able to do so. The Cordis Supply Agreement requires a specified minimum volume purchase commitment from the company from July 2023 through February 2029 based on the actual units purchased during the prior year period from July 1 through June 30, with the unit purchase price dependent upon annual volume during the same prior year period.

Research and Development Expenses

The company’s research and development expenses included $41.3 million during the year ended December 31, 2023.

Intellectual Property

As of December 31, 2023, the company owned 179 patents globally, of which 78 were issued U.S. patents and 101 were patents outside of the United States. The company’s patents expire between November 2024 and July 2039

As of December 31, 2023, the company had 96 pending patent applications globally, including 41 in the United States and 55 outside the United States.

As of December 31, 2023, the company had trademark registrations for Silk Road Medical, the Silk Road Medical logo, TCAR Enroute and the Enroute logo and Enhance in the United States, and various other countries. Including these trademark registrations, its trademark portfolio contained 101 trademark registrations/applications.

Government Regulation

The company’s products and operations are subject to extensive and ongoing regulation by the FDA under the Federal Food, Drug, and Cosmetic Act (FDCA) and its implementing regulations, as well as other federal and state regulatory bodies in the United States.

The company has registered with the FDA as a medical device manufacturer and a specification developer and has obtained a manufacturing license from the California Department of Public Health (CDPH). It is subject to unannounced inspections by the FDA and the Food and Drug Branch of CDPH to determine its compliance with the Quality System Regulation (QSR) and other regulations, and these inspections may include the manufacturing facilities of its suppliers.

Additionally, the company’s Notified Body, British Standards Institute (BSI), regularly inspects the company’s manufacturing, design and operational facilities to ensure ongoing ISO 13485 compliance.

The company’s CE mark is issued by BSI. In addition, the Health Insurance Portability and Accountability Act of 1996 (HIPAA) and other federal privacy regulations, such as Section 5 of the Federal Trade Commission Act, there are a number of state laws regarding the privacy and security of health information and personal data that apply to it.

History

Silk Road Medical, Inc. was founded in 2007. The company was incorporated in the state of Delaware in 2007.