Shockwave Medical Stock

Shockwave Medical, Inc. operates as a medical device company.

The company focuses on developing and commercializing novel technologies that transform the care of patients with cardiovascular disease. The company intends to establish a new standard of care for the treatment of calcified cardiovascular disease (‘atherosclerosis’) through the company’s differentiated and proprietary local delivery of sonic pressure waves, which the company refers to as intravascular lithotripsy (‘IVL’). The company’s IVL system, which leverages its IVL technology, is a minimally invasive, easy-to-use, and safe way to improve outcomes for patients with calcified cardiovascular disease. Additionally, the company intends to transform the standard of care for patients suffering from refractory angina with the company’s coronary sinus reducer (the ‘Reducer’) technology, an innovative technology that creates a permanent, controlled narrowing of the coronary sinus.

Products

The company’s differentiated range of IVL catheters enables delivery of IVL therapy to diseased vasculature throughout the body for calcium modification. The company’s approved IVL catheters that treat peripheral artery disease (‘PAD’) and coronary artery disease (‘CAD’) resemble a standard balloon angioplasty catheter, the device most commonly used by interventional cardiologists. This familiarity makes the company’s IVL System easy for healthcare providers to learn, adopt and use on a day-to-day basis. The Reducer is also a catheter-based device and is implanted in the coronary sinus, which is a major coronary vein located on the left side of the heart. It was developed to deliver this coronary sinus reduction therapy in a safe, simple and effective manner via a minimally invasive catheter that is consistent with contemporary medical practice. The Reducer is implanted using conventional catheter-based interventional techniques and reduces the diameter of the coronary sinus, which redistributes blood into the ischemic myocardium to help reduce angina symptoms. The implant procedure requires minimal training for experienced interventionalists.

The company’s commercial products are cleared or approved for use in a number of countries and development programs are underway to expand indications and geographies.

Pipeline

The company’s product pipeline includes products that target underserved patient populations and is intended to generate a steady cadence of new products that will maximize penetration into their respective markets. The company continues to target the coronary and peripheral markets with next generation products that make the company’s IVL Technology more deliverable. The company is also working to complete the COSIRA-II trial to support FDA approval of the company’s Reducer in the United States. Additionally, the company plans to develop IVL catheters to treat carotid disease, aortic stenosis (‘AS’) and mitral stenosis (‘MS’). The company also will consider enhancing the company’s pipeline through the acquisition of additional technologies. The company’s product pipeline includes the following:

Coronary

Shockwave C2 Aero (‘Aero’): The company’s next-generation coronary IVL catheter designed to be twice as deliverable through complex anatomy as the company’s C2+ catheter.

Shockwave Javelin Coronary: The company’s novel non-balloon-based catheter platform intended to treat tight, difficult-to-cross coronary lesions.

Peripheral

Shockwave L6: The company’s L6 catheter will be upgraded to include faster pulsing than the current L6 catheter on the market.

Shockwave E8 Catheter (‘E8 catheter’): The company’s E8 catheter will have a longer balloon to target challenging long peripheral artery lesions.

Shockwave Javelin Peripheral: The company’s novel, non-balloon-based catheter platform intended to treat tight, difficult-to-cross peripheral lesions.

Carotid IVL

Shockwave Carotid IVL (‘Carotid IVL’): The company’s purpose-built IVL System intended to address calcified carotid artery lesions.

Valvular Transcatheter Lithotripsy

Shockwave Crescendo (‘Crescendo’): The company’s new higher-powered platform developed to treat calcified, stenotic heart valves.

Clinical Research

The company focuses on generating clinical data to demonstrate the safety and effectiveness of the company’s products. In addition to supporting the company’s regulatory approvals or clearances, the data from the company’s clinical studies strengthen the company’s ability to drive adoption of the company’s products across multiple therapies in existing and new market segments. The company’s past studies have also guided optimal procedure technique and informed the design of products in development. In addition, the company has ongoing clinical programs across several products and indications, which, if successful, could allow the company to expand commercialization of the company’s products into new geographies and indications.

During 2023, the company was engaged in the following CAD clinical trials:

EMPOWER CAD Post-Approval Study: This is a post-approval observational study in the United States and Europe to assess the real-world clinical outcomes of female subjects with calcified coronary artery disease. The company began enrollment in May 2023 and enrollment is ongoing.

Disrupt CAD DUO: This is a pre-market investigational device exemption (‘IDE’) study to support a premarket approval application (‘PMA’) for the company’s C2+ 2Hz coronary IVL catheter. The company began enrollment in December 2023 and enrollment is ongoing.

Mini C Flex Early Feasibility Study: This is a pre-market, feasibility study in the United Kingdom (‘UK’) and Australia to assess the safety and effectiveness of the Mini C Flex IVL catheter for the treatment of heavily calcified and stenotic coronary arteries. The company began enrollment in May 2023 and enrollment is ongoing.

In addition, the company was engaged in the following PAD clinical trials in 2023:

BTK II: This is a post-market, prospective, multi-center, single-arm study to assess the effectiveness of IVL for the treatment of BTK PAD. The company began enrollment in November 2021 and study enrollment was completed in January 2024.

Mini S Feasibility: This is a prospective, multi-center, single-arm feasibility study to assess the safety and performance of Javelin Peripheral, known as the Shockwave Medical Mini S Peripheral IVL System, for the treatment of heavily calcified, stenotic peripheral arteries. The company began enrollment in March 2022 and enrollment is ongoing.

FORWARD PAD Study: This is a pre-market IDE study to support a 510(k) application for Javelin Peripheral, known as the Shockwave Medical Mini S Peripheral IVL System, in the study. The company began enrollment in June 2023 and enrollment is ongoing.

The company was also engaged in the following refractory angina clinical trial in 2023:

COSIRA II Trial: This is a prospective, multi-center, randomized, double-blind, sham-controlled IDE trial to assess the safety and effectiveness of the Reducer. The company began enrollment in January 2022 and enrollment is ongoing.

IVL System

For the company’s IVL products, the company has adapted the use of lithotripsy, which has been used to successfully treat kidney stones (deposits of hardened calcium) for over 30 years, to the cardiovascular field with the aim of creating the safest, most effective means of addressing the growing challenge of cardiovascular calcification. By integrating lithotripsy into a device that resembles a standard balloon catheter, physicians can prepare, deliver, and treat calcified lesions using a familiar form factor, without disruption to their standard procedural workflow. The company’s differentiated IVL System works by delivering shock waves through the entire depth of the artery wall, modifying both deep wall and thick calcium, not just at the thin, superficial most intimal layer. The shock waves modify this calcium and enable the narrowed artery to expand at low pressures, thereby minimizing complications inherent to traditional balloon dilations, such as dissections or perforations. Preparing the vessel with IVL facilitates optimal outcomes with other adjacent therapies, including stents and drug-eluting technologies. Using IVL also avoids complications associated with atherectomy devices such as dissection, perforation, and embolism.

The company’s IVL System includes a generator, connector cable, and a variety of IVL catheters designed to treat PAD and CAD. The IVL catheter is advanced to the target lesion and the integrated balloon is inflated with fluid at a low pressure to make contact with the arterial wall. IVL is then activated through the generator with the touch of a button, creating a small bubble within the catheter balloon which rapidly expands and collapses. The rapid expansion and collapse of the bubble creates sonic pressure waves that travel through the vessel and crack the calcium, allowing the blood vessel to expand under low static pressure.

The unique benefits of the company’s Shockwave IVL technology are that it is (1) predictable – calcium can be safely modified while significantly reducing the risk of complications to make procedures more predictable and efficient; (2) distinctly intuitive – treatment of calcium is simplified from the very first case via a unique mechanism of action on an intuitive platform; and (3) consistent – proven to achieve low residual stenosis across multiple vessel beds by disrupting superficial and deep calcium. These benefits enable more hospitals and physicians to address the challenges of calcium without compromise.

Reducer

The Reducer is targeting a patient population that has failed to gain adequate relief from their angina symptoms, despite other medical treatment options. A refractory patient, by definition, is resistant to other existing interventional cardiology therapies and is not receiving adequate relief from available drug regimens to manage their chest pain, shortness of breath and other debilitating symptoms.

The Reducer is an hourglass-shaped, balloon-expandable, stainless steel, bare metal device, which is implanted in the coronary sinus (the main vein draining blood from the heart muscle), creating a narrowing in venous outflow from the myocardium (the muscular layer of the heart wall). This focal narrowing provides a pressure elevation in the coronary sinus which is intended to improve blood perfusion to ischemic territories of the heart muscle by redistributing blood from the less ischemic areas to the more ischemic areas. This can result in improved perfusion of the endocardium, which helps relieve ischemia and chest pain, shortness of breath and other debilitating symptoms. It is implanted using conventional catheter-based procedure interventional techniques. The Reducer is pre-loaded on a balloon catheter compatible with a 9 French delivery sheath and operates over a 0.035 inch guidewire. The implant procedure requires minimal training for experienced interventionalists. The Reducer is not available for sale in the United States.

Growth Strategy

The company’s strategies are to increase market penetration with new products; expand the pool of treatable patients; improve customer economics; invest in clinical data; maintain the company’s team’s high performance; and acquire differentiated platforms selectively.

Manufacturing

The company generally ships its products from its Santa Clara site to either the company’s third-party logistics providers, who then ship the products directly to hospital customers or distributors, or directly to hospital customers or distributors. The company also sells its products directly to its hospital customers through the company’s direct sales representatives.

Research and Development

The company’s research and development expenses were $145.6 million in 2023.

Sales and Marketing

The company markets its products to hospitals whose interventional cardiologists, vascular surgeons and interventional radiologists treat patients with PAD, CAD and refractory angina. The company has dedicated meaningful resources to establish direct sales capability in the United States, Germany, Austria, Switzerland, France, Ireland, Japan, the U.K., Spain, Portugal, Canada and Italy, which the company has complemented with distributors actively selling in over 55 countries in North and South America, Europe, the Middle East, Asia, Africa, and Australia/New Zealand. The company is continuing to add new U.S. sales territories and are actively expanding the company’s international field presence through new distributors, as well as additional sales and clinical personnel and expanded direct sales territories.

The company’s sales representatives and sales managers generally have substantial and applicable medical device experience, specifically in the vascular space and market the company’s products directly to interventional cardiologists, vascular surgeons and interventional radiologists. The company is focused on developing strong relationships with the company’s physician and hospital customers in order to educate them on the use and benefits of the company’s products. Similarly, the company’s marketing team has a significant amount of domain expertise and a strong track record of success.

In the United States, the company’s IVL generators and connector cables may be sold, rented or loaned to hospital customers, while the company’s disposable IVL catheters are sold to hospital customers or may be provided, in limited circumstances, on a consignment basis whereby title to such catheters passes to the hospital once they are used in a clinical procedure. In the consignment model, following such use, the company charges the hospital a predetermined set fee for each IVL catheter, which fee may be determined based on the hospital’s overall use of the company’s IVL catheters. Internationally, in the company’s direct markets where the company sells both its IVL catheters and the Reducer, the company maintains dedicated sales teams in those jurisdictions.

In addition to the company’s direct sales organizations, the company sells to distributors in certain geographies outside the United States where the company has determined that selling through third party distributors is the best way to optimize the company’s opportunities and resources. The company selects distribution partners who have deep experience in the company’s markets, has strong customer relationships, and has a demonstrated track record of launching innovative products.

Intellectual Property

As of December 31, 2023, the company owned 103 issued U.S. patents and 212 issued foreign patents, 47 pending U.S. non-provisional patent applications and 119 pending foreign patent applications (including ten Patent Cooperation Treaty applications). In addition, the company owns or has rights to trademarks and domains in the United States and select locations internationally that the company uses in connection with the operation of its business.

U.S. Pat. No. 8,956,371 (the ‘‘371 patent’), which is one of the company’s issued U.S. patents relating to the company’s IVL Technology, remains the subject of an inter partes review (‘IPR’) proceeding filed by Cardiovascular Systems, Inc. (‘CSI’), which was acquired by Abbott in April 2023. On July 8, 2020, the Patent Trial and Appeal Board (the ‘PTAB’) ruled that one claim (‘Claim 5’) in the ’371 patent is valid and ruled that all other claims in the ’371 patent are invalid. The company has filed an appeal of the PTAB rulings to the United States Court of Appeals for the Federal Circuit, and CSI has filed a cross-appeal to challenge the PTAB’s decision that Claim 5 of the ‘371 patent is valid. Accordingly, Claim 5 and all other claims remain valid and enforceable until all appeals have been exhausted.

The company’s issued patents, and any patents granted from such applications, are expected to expire between 2029 and 2042, without taking potential patent term extensions or adjustments into account.

Government Regulation

When a 510(k) clearance is required, the company must submit a premarket notification to the FDA demonstrating that the company’s proposed device is ‘substantially equivalent’ to a predicate device, which is a previously cleared and legally marketed 510(k) device or a device that was in commercial distribution before May 28, 1976. By regulation, a premarket notification must be submitted to the FDA at least 90 days before the company intend to market a device, and the company must receive 510(k) clearance from the FDA before the company actually markets the device.

FDA regulations require the company to register as a medical device manufacturer with the FDA. Additionally, the California Department of Health Services (‘CDHS’) requires the company to register as a medical device manufacturer within the state. Because of this, the FDA and the CDHS inspect the company on a routine basis for compliance with the QSR. These regulations require that the company manufactures its products and maintain related documentation in a prescribed manner with respect to manufacturing, testing and control activities. The company has undergone and expect to continue to undergo regular QSR inspections in connection with the manufacture of the company’s products at its facilities. Further, the FDA requires the company to comply with various FDA regulations regarding labeling.

The company’s products are regulated in the EU as medical devices per the MDR, which was published in May 2017 and came into application in May 2021, and which replaced, subject to certain transition provisions contained in the MDR, the MDD.

In Japan, the company’s products are regulated as medical devices under the Act on Securing Quality, Efficacy and Safety of Products, including Pharmaceuticals and Medical Devices, Act No. 145 of 1960, as amended (the ‘PMD Act’).

In addition to laws regulating medical devices, the company’s international operations, distribution and sales are subject to a variety of rules of general application: the U.S. Foreign Corrupt Practices Act of 1977, as amended (the ‘FCPA’) and similar anti-bribery laws in other jurisdictions including the UK Bribery Act 2010 (the ‘UKBA’) and Chinese anti-corruption rules and regulations; U.S. and foreign export and trade control laws; U.S. and foreign tax laws; local employment, immigration and labor laws; local intellectual property laws, which may not protect intellectual property rights to the same extent as U.S. law; and privacy laws such as the European General Data Protection Regulation and the UK equivalent, the China Data Security Law, the China Cybersecurity Law, the Personal Information Protection Law of China, and the Regulations on the Administration of Human Genetic Resources of China.

In the People’s Republic of China, excluding the Special Administrative Regions of Hong Kong and Macau, where the company sells its products via a joint venture, such laws mainly include (i) the Criminal Law which penalizes the bribing of State functionaries or non-State functionaries (including healthcare professionals); and (ii) the Anti-Unfair Competition Law which regulates commercial bribery to parties related to specific transactions.

The company is subject to periodic inspections by the FDA and other regulatory entities, such as the company’s European Notified Body and the NMPA, related to the regulatory requirements that apply to medical devices designed and manufactured, and clinical trials sponsored, by the company.

Seasonality

The company has experienced some seasonality during summer months, which is attributable to the postponement of elective surgeries for summer vacation plans of physicians and patients. The company has also experienced some seasonal slowing of demand for the company’s products in the company’s fourth quarters (year ended December 2023) due to year-end clinical treatment patterns, such as the postponement of elective surgeries during the holiday period.

History

ShockWave Medical, Inc. was incorporated in 2009 as a Delaware corporation.