SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
| x | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
| For the fiscal year ended December 31, 2002 |
or
| ¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934. |
| For the transition period from to . |
Commission File Number: 0-22419
CARDIMA, INC.
(Exact name of registrant as specified in its charter)
| Delaware |
94-3177883 | |
| (State or Other Jurisdiction of Incorporation or Organization) |
(I.R.S. Employer Identification No.) |
47266 Benicia Street
Fremont, California 94538-7330
(510) 354-0300
(Address, including zip code, and telephone number, including area code,
of registrants principal executive offices)
Securities Registered Pursuant to Section 12 (b) of The Act: None
Securities Registered Pursuant To Section 12 (g) of The Act:
Common Stock, $0.001 par value per share
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) had been subject to such filing requirements for the past 90 days. Yes x No ¨
Indicate by check mark if disclosure of delinquent filers pursuant to item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrants knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Securities Exchange Act of 1934). Yes ¨ No x
The aggregate market value of the voting stock held by non-affiliates of the registrant was $58,573,500 based on the last reported sales price of the Common Stock on the Nasdaq National Market on June 28, 2002. Shares of Common Stock held by each executive officer and director and by each person who owned 10% or more of the outstanding shares of Common Stock have been excluded in that such persons may be deemed to be affiliates. This determination of affiliate status is not necessarily a conclusive determination for other purposes.
As of March 21, 2003, there were 55,531,628 shares of Registrants Common Stock outstanding.
CARDIMA, INC.
FORM 10-K
For the Fiscal Year Ended December 31, 2002
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DOCUMENTS INCORPORATED BY REFERENCE
Portions of our Definitive Proxy Statement filed with the Securities and Exchange Commission (the SEC) pursuant to Regulation 14A in connection with our 2003 Annual Meeting of Stockholders are incorporated herein by reference into Part III of this report.
FORWARD-LOOKING STATEMENTS
The statements incorporated by reference or contained in this report discuss our future expectations, contain projections of our results of operations or financial condition, and include other forward-looking information within the meaning of Section 27A of the Securities Act of 1933, as amended, (the Securities Act) and Section 21E of the Securities and Exchange Act of 1934, as amended, (the Exchange Act). Our actual results may differ materially from those expressed in forward-looking statements made or incorporated by reference in this report. Forward-looking statements that express or imply our beliefs, plans, objectives, assumptions or future events or performance may involve estimates, assumptions, risks and uncertainties. Therefore, our actual results and performance may differ materially from those expressed in the forward-looking statements. Forward-looking statements often, although not always, include words or phrases such as the following, or the negative of such words or other comparable terminology:
| will likely result,
are expected to,
will continue,
is anticipated, |
estimate,
believe,
predict,
potential, |
intends,
plans,
projection, and
outlook. |
You should not unduly rely on forward-looking statements contained or incorporated by reference in this report. Actual results or outcomes may differ significantly and materially from those predicted in our forward-looking statements due to the risks and uncertainties inherent in our business, including risks and uncertainties in:
| | our ability to obtain additional financing to support our operations, |
| | clinical trial results, |
| | obtaining and maintaining regulatory approval, |
| | market acceptance of and continuing demand for our products, |
| | the attainment of patent protection for any of these products, |
| | the impact of competitive products, pricing and reimbursement policies, and |
| | changing market conditions and other risks detailed below. |
You should read and interpret any forward-looking statements together with the following documents:
| | our Quarterly Reports on Form 10-Q, |
| | the risk factors contained in this report under the caption Factors Affecting Future Results, and |
| | our other filings with the SEC. |
Any forward-looking statement speaks only as of the date on which that statement is made. We will not update any forward-looking statement to reflect events or circumstances that occur after the date on which such statement is made, unless required by law.
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Overview
We design, develop, manufacture and market minimally invasive, single-use, microcatheter systems for the mapping (diagnosis) and ablation (treatment) of the two most common forms of cardiac arrhythmias: atrial fibrillation and ventricular tachycardia. Arrhythmias are abnormal electrical heart rhythms that adversely affect the mechanical activities of the heart, can significantly affect a persons quality of life and can potentially prove fatal. We develop microcatheter systems designed (1) to locate and provide more extensive and less traumatic access to arrhythmia-causing tissue for diagnosing the arrhythmia, referred to as mapping, and (2) to restore normal heart rhythms by isolating and destroying the arrhythmia-causing tissue using radiofrequency energy, referred to as ablation. Our microcatheters incorporate multiple electrodes at the distal end to record electrical signals for mapping and, with certain microcatheters, emit radio frequency energy for ablation; thereby allowing physicians to both map and ablate arrhythmias using the same microcatheter. Our microcatheters are also designed with variable stiffness guidewire technology and a highly flexible distal tip to allow more extensive and less traumatic access to the chambers and vasculature of the heart. In addition, all of our microcatheters are disposable, single-use products that can be adapted to and used with all existing signal display systems and radiofrequency generators, eliminating the need for significant new investment in capital equipment by hospital labs.
During 2002, we made significant progress in our plans to seek and receive approval for the first product to be approved for the curative treatment of atrial fibrillation in the United States. We have completed our Phase III clinical trial to treat atrial fibrillation with the REVELATION Tx microcatheter system and on September 30, 2002 submitted our pre-market approval, or PMA application to United States Food and Drug Administration, or FDA. On November 5, 2002, our PMA was accepted by the FDA and we were granted expedited review status. On March 6, 2003, we were notified by the FDA that we would meet with the Circulatory Systems Device panel on May 29, 2003.
In Europe, on June 4, 2002, we completed a 43 patient clinical trial with the REVELATION Helix microcatheter system to treat atrial fibrillation originating in the pulmonary veins of the heart. This trial, which began in August 2001 in Germany, was designed to potentially expedite feasibility studies in the United States and accelerate market acceptance of the REVELATION Helix throughout the European Union. In December 2001, independent of this study, we applied for and received, CE Mark approval for the REVELATION Helix. This CE Mark is given when a medical device is in substantial compliance with provisions set forth under the jurisdiction of the Medical Device Directive 93/42/EC and national derivatives in any European Member State. The affixed CE Mark permits commercial distribution of the REVELATION Helix throughout the European Economic Area.
While we also produce and sell microcatheters for the diagnosis of ventricular tachycardia, our current efforts focus on the development of microcatheters to diagnose and treat atrial fibrillation. In January 2001, we restructured the Company to conserve our limited cash resources and concentrate on the clinical trials for our atrial fibrillation products with the objective of completing the regulatory approval process in both the United States and Europe. As part of the restructuring, we deemphasized our ventricular tachycardia program and suspended the clinical study of the THERASTREAM microcatheter system. A time frame for resuming the THERASTREAM clinical study has not yet been established.
Following the closing on March 28, 2003 of our private placement, we have cash and cash equivalents of approximately $2.6 million. Our management believes that our cash balances as of March 28, 2003, will be sufficient to fund planned expenditures through the middle of June 2003. Although our management recognizes the need to raise funds in the near future and is currently negotiating with certain third parties the terms and conditions of financing transactions in addition to the private placement closed on March 28, 2003, there can be no assurance that we will be successful in consummating any such transaction, or, if we do consummate such a transaction, that the terms and conditions of such financing will not be unfavorable to us. Any failure by us to
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obtain additional funding will have a material effect upon us and will likely result in our inability to continue as a going concern. Our independent auditors have concluded that there is substantial doubt as to our ability to continue as a going concern for a reasonable period of time, and have, therefore, modified their report in the form of an explanatory paragraph describing the events that have given rise to this uncertainty.
Heart and Arrhythmic Disorders
The heart is an electromechanical pump that relies on self-generated electrical signals to contract its muscle fibers and pump blood throughout the body. It is divided into four chambers: the two upper chambers, or atria, and the two lower chambers, or ventricles. The heart consists of two pumps working side by side, each with its own atrium and ventricle. The pump on the right side collects venous blood from the body and sends it to the lungs for oxygenation. The pump on the left side receives the oxygenated blood from the lungs and pumps it throughout the body. The process is repeated, on average, 72 times per minute.
The heart, as with any other organ, requires oxygen and nutrients to function efficiently. Because the heart has large oxygen and nutrient demands of its own, it requires an extensive, well-developed vascular network to bring blood to and carry blood away from its muscle tissue. This vascular network is located throughout the majority of the hearts walls and serves to nourish the heart tissue directly. This network is comprised of an arterial system and a venous system, both of which originate on the epicardium, or outer surface, of both the atria and the ventricles, and penetrates into the tissues of the walls of the heart. Thus, the anatomy of the heart walls consists of a thick mass of muscle cells supported by a framework of blood vessels.
The hearts pumping action is controlled by its electrical conduction system comprised of cells within the heart muscle tissue. This conduction system allows electrical signals to propagate through the heart in a systematic and very organized way. These specialized conduction cells are placed throughout the walls of the four chambers of the heart. In a systematically timed sequence, this conduction system carries electrical signals to the muscle cells throughout the heart. This electrical conduction cycle results in a normal heartbeat that originates in the right atrium, commencing in a specialized group of cells called the Sino-Atrial node.
The Sino-Atrial node is the hearts natural pacemaker, regularly discharging an electrical signal that is responsible for setting the heart rate, usually at a rate of 60 to 100 beats per minute. The signal generated in the Sino Atrial node is propagated through the atrial tissue until it reaches the Atrio-Ventricular node, located just above the ventricles. A momentary delay of the signal provides enough time for the atria to fill the ventricles with blood before the ventricles are signaled to contract.
Once the electrical signal exits the Atrio-Ventricular node, it is rapidly conducted down the His Bundle, and is distributed widely throughout both ventricles via the Purkinje Fibers, delivering the electrical signal to both ventricles at the same time and causing them to contract in unison. Since the ventricles pump blood to the lungs and the rest of the body, they are surrounded by a larger amount of muscle tissue than the atria. The left ventricle, in particular, is the stronger of the two ventricles, generating higher pressure and working harder in order to pump oxygenated blood through the entire body. In the normal heart, the four chambers work rhythmically with each other to ensure that properly oxygenated blood is constantly delivered throughout the body. This normal heart rate is called normal sinus rhythm, or NSR.
Arrhythmias
Arrhythmias are abnormal electrical heart rhythms that adversely affect the mechanical activities of the heart, have detrimental physical effects and impair a persons quality of life. Arrhythmias result in insufficient blood flow, which may cause dizziness, inadequate function of important organs in the body, stroke and even death. Arrhythmias have numerous causes, including congenital defects and tissue damage from either heart attacks or arteriosclerosis. There are two general types of arrhythmias: tachycardia, a fast resting heart rate, typically more than 100 beats per minute; and bradycardia, a slow resting heart rate, typically less than 60 beats
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per minute. Tachycardias fall into one of two major categories: (1) atrial tachycardia, which has its origin in the atria and (2) ventricular tachycardia, which has its origin in the wall of the ventricles. Generally, arrhythmias are degenerative and worsen over time.
Atrial Fibrillation
Atrial fibrillation, the most common form of atrial tachycardias, is characterized by the irregular fluttering and/or very rapid beating of the atria that results from malfunctioning of the electrical conduction system in the walls of the atria, leading to irregular and chaotic atrial beating. During atrial fibrillation, the regular pumping action of the atria is replaced by irregular, disorganized and quivering spasms of atrial muscle tissue. Symptoms of atrial fibrillation typically include a rapid and irregular heartbeat, palpitations, discomfort and dizziness. This malfunction results in the failure of the atria to fill the ventricles completely and, consequently, the failure of the heart to pump adequate amounts of blood to the body. Once atrial fibrillation becomes symptomatic, it is typically associated with significant morbidity related to reduced blood flow. Often, the greatest concern is that the reduced cardiac output can lead to blood pooling in the atria and cause the formation of blood clots. Over time, blood clots in the left atrium can dislodge and travel through the bloodstream to the brain, resulting in stroke or even death.
According to the North American Society of Pacing and Electrophysiology, atrial fibrillation affects more than 2 million people in the United States, with approximately 160,000 new cases being diagnosed each year. The American Heart Association estimates that atrial fibrillation is responsible for over 70,000 strokes each year in the United States. The American Heart Association also estimates that the cost of treating these patients is more than $3.6 billion annually. The cost of drug treatment for atrial fibrillation alone is estimated to be in excess of $400 million worldwide each year.
Standard electrocardiograms may be unable to locate the origin, or focus, of the atrial fibrillation. The preferred diagnostic method, called mapping, involves placing catheters with electrodes inside the chambers of the heart to record the electrical signals generated by the heart in order to locate the focus, or origin, of the arrhythmia.
Current atrial fibrillation treatments are primarily supportive and palliative and do not cure atrial fibrillation. The most common therapies used in treating atrial fibrillation are anti-arrhythmic and anticoagulant drugs. Anti-arrhythmic drugs are typically used in an attempt to reduce the number of episodes of atrial fibrillation severity and/or to reduce the duration of each individual episode. Anticoagulants are used to reduce the normal clotting mechanism of the blood, therefore reducing the potential of creating blood clots. Anti-arrhythmic drug therapy often becomes less effective over time, with approximately half of the patients developing resistance to the drugs. In addition, anti-arrhythmic drugs have potentially severe side effects, including pulmonary fibrosis and impaired liver function, and may significantly affect the patients quality of life. Another palliative procedure for atrial fibrillation is external cardioversion, or the application of a strong electrical current using an external defibrillator to attempt to shock the heart back into normal sinus rhythm. This treatment only effects a single episode of atrial fibrillation, therefore it has no effect on the basic cause of atrial fibrillation and is not curative. Another treatment is the deliberate destruction of the atrio-ventricular node and subsequent implantation of a pacemaker. This is typically considered a treatment of last resort for atrial fibrillation patients as it does not cure or treat the atrial fibrillation itself, but rather allows rate control of the ventricles. The patient still has atrial fibrillation. Also, the patient is dependent on the pacemaker for life. Pacemakers are a device implanted into the chest, are battery-powered and typically require replacement approximately every seven to ten years, depending on manufacturer, type of device and amount of electrical energy delivered. Patients with pacemakers are usually required to continue with chronic anticoagulant drug therapy to attempt to prevent clotting. Anticoagulant drug therapy may result in the weakening of the blood vessels in the brain that may increase the risk of hemorraghic stroke.
The only curative therapy for atrial fibrillation used today is an open heart operation commonly known as the surgical maze procedure. In the maze procedure, concomitant with another heart procedure, such as valve replacement or coronary artery bypass surgery, a surgeon makes a series of cuts in a specific maze-like formation through the wall of the atrium with a scalpel and then sutures these cuts back together. These scars re-
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direct and contain the chaotic electrical impulses and channel the electrical signal emanating from the Sino-Atrial node, thereby returning the heart to normal sinus rhythm. This open-heart operation is traumatic to the patient, is very expensive, is associated with long hospital stays and may require a three to six month recovery time. Although this approach is not commonly used because it is limited to atrial fibrillation patients who also have some other surgical need, it is generally considered highly effective in controlling atrial fibrillation.
Some leaders in electrophysiology are experimenting with minimally invasive, catheter-based ablation procedures that replicate the surgical maze procedure from inside the heart, thereby reducing the procedure time, patient recovery time and overall procedural costs. If a catheter procedure is to successfully mimic the maze procedure, it is necessary to make various shaped lines, including straight, curvilinear and circumferential lesions. We developed the REVELATION Tx, REVELATION T-Flex and REVELATION Helix, respectively, to mimic these required shapes.
Ventricular Tachycardia
Ventricular tachycardia is a life-threatening condition in which heartbeats are improperly initiated from within the ventricular wall, in addition to the sino-atrial node, bypassing the hearts normal conduction system. A typical ventricular tachycardia patient has experienced a myocardial infarction, or heart attack, which can result in the formation of a scar or electrical barrier inside the tissue of the ventricular wall, leading to improper electrical conduction in the cells immediately surrounding the scar. During episodes of ventricular tachycardia, the ventricles beat at such an abnormally rapid rate that they are unable to fill completely with blood, thus reducing the amount of oxygenated blood being pumped throughout the body. The resulting reduction in the amount of oxygen transported to the tissues and organs of the body can cause dizziness and loss of consciousness. Ventricular tachycardia can often progress into ventricular fibrillation, an extremely irregular, chaotic and ineffective spasming of the ventricles. Ventricular fibrillation is fatal within a few minutes of its occurrence, unless orderly contractions of the ventricles are restored through immediate external electrical cardioversion or defibrillation.
The American Heart Association estimates that more than 220,000 people in the United States die from sudden cardiac arrest each year. Among the approximate 50,000 people who survive cardiac arrest, the primarily intervention is with emergency defibrillation. We estimate that each year over 100,000 people in the United States are diagnosed with symptomatic ventricular tachycardia. The American Heart Association also estimates that approximately 1.5 million people in the United States suffer myocardial infarctions each year, and that approximately one million of those 1.5 million people survive. Approximately 30% of the survivors of a myocardial infarction suffer an episode of ventricular tachycardia within the following year.
At this time, we have stopped all research and clinical development of the THERASTREAM microcatheter designed to treat ventricular tachycardia in order to focus our limited resources on our atrial fibrillation program.
Limitations of Current Catheter-Based Diagnosis and Therapy
The demonstrated medical benefits and cost efficiency of minimally invasive procedures have encouraged electrophysiologists to seek new, minimally invasive techniques for the diagnosis and treatment of arrhythmias. In the case of atrial fibrillation, electrophysiologists have experimented with a treatment technique, often referred to as the drag and burn procedure, in which conventional radiofrequency tip ablation catheters are dragged across the inside surface of an atrium to attempt to create a linear lesion and electrophysiologists have also experimented with the dot to dot procedure, whereby the surgeon attempts to make a line by connecting a series of dot burns in the atria. Creating continuous, linear, transmural lesions to isolate portions of the atria using either of these methods with standard tip catheters has proven time consuming, difficult and ineffective.
We believe that the disadvantages of existing catheter-based approaches to treat atrial fibrillation are attributable not to the minimally invasive approach of the procedure, but rather to the existing catheter technology. The catheters currently used are larger and stiffer than our products and have a single electrode at the
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end of the catheter designed to create an ablation at the tip only. This single electrode catheter approach makes creating a solid line of lesion or burn very difficult.
Based on experience with standard endocardial catheters, electrophysiologists recognize the need to record and evaluate a greater amount of electrical information from various areas in the heart simultaneously during atrial fibrillation or ventricular tachycardia procedures. In the case of atrial fibrillation, we believe there is a need for catheters that are able to access both right and left atria to create linear lesions replicating, less invasively, the surgical maze procedure.
Our Microcatheter System Solution
The principal clinical goals in the diagnosis and treatment of atrial fibrillation and ventricular tachycardia are effective mapping and safely creating appropriate lesions. To achieve this, the electrophysiologist must be able to use easy-to-perform techniques to access areas of the heart that are currently inaccessible. We are designing microcatheter systems which provide more extensive and safe access to the arrhythmia-causing tissue in our quest to achieve these goals. We also believe it is important to be able to both map (diagnose) and ablate (treat) with a single catheter. A microcatheter that both maps and ablates may decrease procedure time, improve treatment outcomes and enhance the overall safety of the procedure. Our current Phase III clinical trial to treat atrial fibrillation with the REVELATION Tx involves three anatomical ablation lines placed in pre-determined areas of the atria, mimicking the surgically performed maze procedure. All of our microcatheter systems are designed to offer the following perceived advantages over existing, competitive catheters:
| | Minimally invasive approach. Our microcatheter systems are designed to provide greater access simply because they are smaller and more flexible than competitive technologies. Size constraints prevent other systems from reaching small vessels that our microcatheters can reach. We believe that this increased access results in decreased procedure time, shorter hospital stays, lower procedure costs and fewer complications than the surgical procedures currently in use. |
| | Single microcatheter that can both map and ablate. We initially developed microcatheters for diagnosing arrhythmias. Our primary focus today is the development of therapeutic microcatheters, which we call the REVELATION family of microcatheters, capable of both mapping and ablating. We that because our microcatheter systems can both map and ablate, they will decrease procedure times, improve treatment outcomes and enhance the overall safety of the procedure. |
| | Enhanced access to the vasculature of the heart. Our microcatheters are approximately one-third to one-fourth the size of standard electrophysiology catheters, and incorporate what is called variable stiffness technology. Variable stiffness technology involves our use of a tapered core guide wire as the basic building block of each catheter. We then attach a highly flexible, atraumatic tip to the leading end of each catheter. As a result of this variable stiffness technology, our microcatheters are more torqueable and flexible than standard electrophysiology catheters and thus allow more extensive and less traumatic access to the vasculature of the heart. This variable stiffness technology also allows for our REVELATION series of mapping and ablation catheters to easily conform to the contours of the heart wall, thereby maintaining controlled, regular contact even in a fast-beating heart. |
| | Less tissue damage at safer power setting. Because our REVELATION series ablation catheters are smaller, we create thinner lesion lines while maintaining the same depth of tissue penetration. This significant reduction in surface tissue damage may be important in lesion formation in the pulmonary veins where pulmonary vein stenosis after conventional ablation therapy is an issue. The REVELATION series of ablation catheters creates thinner lines. We also can create these lesions at lower power settings because of the effect of current density emitted from our smaller coiled electrodes. While conventional catheters require at lest 30 watts to ablate, we can ablate at power settings as low as 5 watts. We believe that lower power means being effective while preserving more cardiac tissue and therefore more cardiac function when compared to conventional ablation. |
| | Compatible with existing capital equipment. Our microcatheter systems are designed to be compatible with leading electrophysiology signal display systems and radiofrequency generators currently in use by |
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| all electrophysiology departments. This eliminates the need for new investment in additional capital equipment. As a result of the compatibility between our microcatheter systems and the equipment used by most electrophysiology labs, we believe our microcathers will be most effective for these labs. |
| | Reduced procedure and radiation exposure times. We believe that the dual functionality of our microcatheter systems will reduce procedure times and enhance safety. Since the electrophysiologists must use x-rays to place and determine location of all catheters, faster procedures equate to decreased cumulative x-ray exposure to patients, physicians and lab personnel. |
Curative Treatment for Atrial Fibrillation
Our REVELATION, REVELATION Tx and REVELATION T-Flex microcatheter systems are designed to diagnose and treat atrial fibrillation in the right atria by creating long, thin, continuous, linear, transmural lesions. Our REVELATION Helix microcatheter system is designed to diagnose and treat atrial fibrillation that originates from the pulmonary veins, located in the left atria. Our REVELATION Tx Phase III clinical trial data was submitted to the FDA on September 30, 2002 in the United States to treat atrial fibrillation. On November 5, 2002, the FDA accepted and granted expedited review status to our PMA application. A panel date for the PMA application is set for May 29, 2003. The REVELATION Helix can both diagnose and treat focal, or localized, atrial fibrillation. The REVELATION Helix makes circumferential or partially circumferential scar patterns within the pulmonary veins or on the ostia, or outer base of the pulmonary veins, to contain atrial fibrillation. The REVELATION Helix received CE Mark approval in December 2001 to treat atrial fibrillation originating in the pulmonary veins.
Our microcatheter systems typically deliver less radiofrequency energy and create thinner lesions than standard electrophysiology catheters, preserving a greater amount of atrial tissue following the procedure. We believe these thinner lesions will result in an improvement in atrial function and a reduction in the risk of blood clotting, reducing or possibly eliminating the need for chronic anticoagulant therapy. We also designed the REVELATION Tx, REVELATION T-Flex and REVELATION Helix microcatheters with temperature-sensing bands between each electrode that are designed to be in direct contact with the atrial tissue. This direct contact between the temperature sensing bands and the atrial tissue is designed to give a more accurate temperature reading during ablation. Temperature sensing is extremely important when treating tissue in the left atria. The delivery of radiofrequency energy creates scar tissue and has the potential to coagulate blood. Blood clots are extremely dangerous on the left side of the heart because these clots can flow through the arterial system to the brain and cause a stroke. Competitive systems use temperature sensors positioned under their electrodes that are not in direct contact with the tissue. Given concerns about creating clots or coagulum during an ablation procedure, we believe the direct contact design and more accurate temperature monitoring during an ablation is a competitive advantage. We believe this approach has the potential to offer the effectiveness of the open-heart surgical cure for atrial fibrillation, but with less trauma, fewer complications, reduced pain, shorter hospital stays and lower procedure costs.
Curative Approach for Ventricular Tachycardia
Our PATHFINDER, PATHFINDER mini and TRACER microcatheter systems for mapping ventricular tachycardia and our THERASTREAM microcatheter system for both mapping and ablation of ventricular tachycardia are all designed for use inside the vasculature of the heart wall, facilitating access to arrhythmia-causing tissue through the venous system. We believe that at least half of the ventricular tachycardia foci are located in the intramyocardium and the epicardium, areas that are ineffectively accessed using standard endocardial catheters or basket type catheters currently in development. The intravascular approach to ventricular tachycardia ablation should permit our microcatheters to be positioned in close proximity to the arrhythmia-causing tissue, facilitating the creation of smaller, more focused lesions. We believe that this approach has the potential to be more effective than standard endocardial ablation procedures, with reduced destruction of surrounding healthy tissue, thus maximizing and optimizing the normal function of the heart after the procedure. We are aware of at least one other epicardial mapping catheter in addition to the PATHFINDER, PATHFINDER
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mini, TRACER and THERASTREAM which is currently under development. In January 2001, we decided to focus our efforts on our atrial fibrillation program and postpone our work on the therapeutic ventricular tachycardia program until such time that we have the appropriate funding and resources to resume this project.
Our Business Strategy
Our objective is to be a leading developer of innovative products that provide safer and more effective diagnosis and treatment of atrial fibrillation and ventricular tachycardia. We are currently focusing our development efforts on getting regulatory approval in the United States for our REVELATION family of microcatheters which are designed to treat atrial fibrillation. If our REVELATION Tx is approved in the United States, we intend to focus our efforts on commencement of a clinical trial in the United States for the REVELATION Helix for mapping and treating atrial fibrillation originating in the pulmonary veins of the heart. Our strategy incorporates the following key elements:
| | Develop microcatheter technology to address unmet clinical needs for both mapping and ablation. We are developing microcatheter systems to address clinical needs that are not adequately addressed by current technology. We are focusing on endocardial access for atrial fibrillation. We are designing systems, which incorporate variable stiffness guidewire technology originally developed at Target Therapeutic, including guiding catheters and fixed-systems, in order to optimize the physicians ability to access the areas of interest in the heart easily and safely. Additionally, we believe our REVELATION family of microcatheters will be used to create long, thin linear lesions designed to replicate the maze surgical procedure. The maze procedure, while expensive and highly invasive, has a high rate of success. By using microcatheters that can map as well as ablate, we believe the electrophysiologist need to access the arrhythmia-causing tissue only once, in order to map it, verify that it is causing the arrhythmia and then ablate the tissue using the same catheter. |
| | Provide microcatheter systems that lower the cost of treating electrophysiological disorders. Our microcatheter systems are designed to reduce the average time required for atrial fibrillation and the diagnostic and therapeutic procedures for ventricular tachycardia. As a result, less time should be spent in high cost electrophysiology laboratories, reducing the overall cost of atrial fibrillation or ventricular tachycardia treatments. The shorter procedure time that we believe will result from the use of our microcatheter systems should enable physicians to perform a greater number of atrial fibrillation or ventricular tachycardia procedures and reduce the overall cost per procedure. In addition, we intend to use data derived from our clinical studies to establish enhanced reimbursement for atrial fibrillation and ventricular tachycardia procedures using our microcatheter systems. We believe that our microcatheter systems will appeal to patients and third-party payors seeking a cost-effective solution to the diagnosis and treatment of atrial fibrillation and ventricular tachycardia. |
| | Accelerate acceptance and adoption of our microcatheter systems by leading electrophysiologists. We have formed relationships with leading medical centers in the United States, Europe and Japan to perform clinical trials of our microcatheter systems for the diagnosis and treatment of atrial fibrillation. Based on data submitted upon completion of our Phase II clinical trial, we obtained approval from the US Food and Drug Administration to expand to a Phase III pivotal trial. We believe that successful acceptance and adoption of these systems by widely recognized experts in the field of electrophysiology is an important step in the overall market acceptance of our microcatheter systems. We intend to continue to work with leading physicians and medical centers to demonstrate through our Phase III clinical trial submission the safety and effectiveness of our microcatheter systems in treating AF. We hope this will allow us to establish broad market acceptance of our products. In addition, we intend to accelerate physician education regarding our microcatheter systems through additional training with our clinical investigators and peer-reviewed publications concerning the clinical trials of our microcatheter systems. |
| | Increase sales by further penetrating international markets. We intend to increase international sales, especially in Europe, by expanding of our network of international distributors to further penetrate international markets, given their substantial size and the relatively lower regulatory barriers. We |
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received ISO 9001 (EN 46001) Quality Systems certification for our manufacturing facilities from the European Union regulators, as well as European approval (CE Mark approval) to market a number of our products. We received regulatory approval in the United States, Europe, Japan, Australia and Canada for our PATHFINDER microcatheter system for mapping ventricular tachycardia and have received regulatory approval in the United States, Europe, Japan and Australia for our REVELATION microcatheter system for mapping atrial fibrillation. We received CE Mark approval to market the REVELATION, REVELATION Tx, REVELATION T-Flex and REVELATION Helix ablation microcatheter systems to treat atrial fibrillation which were approved in the European Union in August 1998, December 1998, June 2000 and December 2001, respectively.
Products
We are currently focused on developing microcatheter systems for the diagnosis and treatment of atrial fibrillation. These systems are designed to access both the right and left atria. Our microcatheter systems are designed to be used endocardially in the atria, to map and then ablate atrial fibrillation through the creation of long, thin, continuous, linear, transmural lesions. The series of electrodes at the distal ends, depending on the particular product, may both receive electrical signals for mapping and emit radiofrequency energy for ablation. In addition, these microcatheter systems are smaller in diameter and are designed to be more flexible and torqueable than other existing electrophysiology catheters, providing thinner linear lesions and less destruction of tissue. Our microcatheters are designed as single use, disposable products. We are designing our products to be used with existing electrophysiology recording systems and radiofrequency ablation generators. Our ancillary products, including guiding catheters, electrical switch boxes and connecting cables, support these microcatheter systems.
The following table describes our products and their intended indications and regulatory status:
| Therapeutic Products |
Description |
Indication |
U.S. Regulatory Status(1) |
International Regulatory Status(1) | ||||
| REVELATION® |
Eight-electrode microcatheter designed to map in both right and left atria. |
Mapping |
510(k)(2) clearance obtained. |
Approved in the European Economic Area (CE Mark)(3) and Canada. | ||||
| Can also be used for linear ablation in approved markets. |
Ablation |
N/A |
Approved in the European Economic Area (CE Mark) for ablation. | |||||
| REVELATION® Tx |
Guidewire based eight-electrode microcatheter system with tissue temperature sensors designed to map and create long, thin, continuous, linear, transmural lesions in the atrium. |
Mapping and Ablation |
Phase III IDE(4) finalized; PMA(5) Application filed in September 2002; Approval pending; Panel date May 29, 2003. |
Approved in the European Economic Area (CE Mark) and Canada. | ||||
| REVELATION® T-Flex |
Deflectable and steerable eight-electrode microcatheter system with temperature sensors designed to map and create long, thin, continuous, linear, transmural lesions in the right atrium. |
Mapping and Ablation |
Supplemental PMA submission to FDA planned if REVELATION® TX is approved. |
Approved in the European Economic Area (CE Mark) and Canada. | ||||
| REVELATION® Helix |
Helical shaped guide-wire eight-electrode microcatheter system with temperature sensors designed to map and create circumferential, focal linear lesions in the pulmonary vein ostia of the left atrium. |
Mapping and Ablation |
Clinical trial planned to begin in second half of 2003. |
Approved in the European Economic Area (CE Mark) and Canada. |
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| NAVABLATOR |
Deflectable and steerable Hot Tip ablation microcatheter system with a temperature sensor designed to map and create transmural spot lesions in the right atrium. |
Mapping and Ablation |
Incorporated into US-PMA(5) application for REVELATION® Tx as part of the mapping and ablation system. |
No submission currently planned. | ||||
| CARDIMA® Ablation System |
The Cardima® Ablation System is intended to ablate cardiac tissue during cardiac surgery using radio frequency, or RF, energy. |
Ablation of cardiac tissue |
510(k) clearance obtained. |
Approved in the European Economic Area (CE Mark) and Canada. |
| Diagnostic Products |
Description |
Indication |
U.S. Regulatory Status(1) |
International Regulatory Status(1) | ||||
| PATHFINDER |
Guide-wire based multi-electrode microcatheter system designed for accessing coronary sinus vasculature to locate arrhythmia-causing tissue. |
Mapping |
510(k) clearance obtained. |
Approved in the European Economic Area (CE Mark) Canada and Japan. | ||||
| PATHFINDER mini |
Smallest Cardima PATHFINDER microcatheter (1.5 French) designed to provide access to more distal and smaller coronary veins. |
Mapping |
510(k) clearance obtained. |
Approved in the European Economic Area (CE Mark), Japan and Canada. | ||||
| TRACER® |
Over-the-wire multi-electrode microcatheter system designed to be used in the veins of the heart wall over a guidewire. |
Mapping |
510(k) clearance obtained. |
Approved in the European Economic Area (CE Mark), Canada and Japan. | ||||
| THERASTREAM |
Over-the-wire multi-electrode microcatheter system designed for mapping and ablation from within the veins of the heart wall. |
Ablation |
US IDE(4) approved for feasibility trial. Clinical trial on hold. |
No trial currently planned in the European Economic Area. | ||||
| Support Products |
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| VENAPORT |
Guiding catheters to access coronary sinus with a family of curve shapes and lengths. Designed to deliver Cardima microcatheters. |
Venous access |
510(k) clearance obtained. |
Approved in the European Economic Area (CE Mark), Canada, Japan and Australia. | ||||
| VUEPORT |
Balloon-tipped coronary sinus guiding catheter designed to facilitate delivery of electrophysiology catheters, for injection of contrast material to facilitate and provide occlusive venography. |
Venous access, delivery of Electro-Physiology, or EP Cathethers, venography |
510(k) clearance obtained. |
Approved in the European Economic Area (CE Mark), Canada and Australia. | ||||
| NAVIPORT |
Deflectable guiding catheter designed to facilitate delivery of EP catheters. |
EP catheter delivery and support |
510(k) clearance obtained. |
Approved in the European Economic Area (CE Mark), Canada and Australia. |
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| Accessories |
||||||||
| EP SELECT |
Switch box designed to interface with existing electrophysiology lab equipment and multi-electrode catheters. |
Connectivity for pacing and electrophysiology recording |
510(k) clearance obtained. |
Approved in European Economic Area (CE Mark), Canada, Japan and Australia. | ||||
| TX SELECT |
Switch box designed to interface with existing electrophysiology lab equipment and multi-electrode catheters. |
Connectivity for pacing, electrophysiology recording and radio frequency ablation |
Incorporated into US-PMA(5) application for REVELATION Tx as part of the mapping and ablation system. |
Approved in European Economic Area (CE Mark) and Canada. |
| (1) | The regulatory status of our microcatheter systems reflects our current status of regulatory submission or approvals in the United States, Europe and Japan. See Government Regulation. The actual submission times could differ materially from those anticipated in these estimates as a result of certain factors, including failure to complete development of microcatheter systems or to demonstrate safety or effectiveness in clinical studies, as well as the other factors set forth under our Managements Discussion and Analysis of Financial Condition and Results of OperationsFactors Affecting Future Results and elsewhere in this Annual Report on Form 10-K. |
| (2) | 510(K) clearance is granted when a product has been found by the Food and Drug Administration to be substantially equivalent to other similar and legally marketed devices and receives clearance for commercial distribution. A 510(K) product usually requires less time to receive FDA approval to market than a Class III PMA device. |
| (3) | CE Mark means that a medical device is in substantial compliance with provisions set forth under the jurisdiction of the Medical Device Directive 93/42/EC and national derivatives in any European Member State. The affixed CE Mark allows commercial distribution throughout the European Economic Area. |
| (4) | IDE is an Investigational Device Exemption issued by the US Food and Drug Administration to study the safety and effectiveness of an unapproved investigational device in humans. Approval to begin an IDE study is issued if the US Food and Drug Administration believes the device potentially offers benefits for public health that outweigh the identified risk(s). |