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Cardiovascular Systems Idea Proposal (CSII)

Cardiovascular Systems Idea Proposal (CSII)
 

Will Cardiovascular Systems extend its growth trend, or will it be disrupted by ShockWave and other competitors?

Report Available: March 10, 2021

 

Blueshift’s initial research found the coronary artery disease (CAD) and peripheral artery disease (PAD) treatment space poised for solid recovery as the coronavirus pandemic medical procedure moratorium begins to subside. Two device companies in the space that should benefit from increased procedure volume are CSII and SWAV. With a plethora of treatment options available in the CAD/PAD space, gaining and maintaining market share can be challenging. New and enhanced older devices are always emerging and challenging the standard of care. CSII and SWAV have done an exemplary job at gaining significant market traction, however continued success must be earned and is not guaranteed.

 

Observations

  1. CSII is engaged in developing, manufacturing, and marketing devices for the treatment of vascular diseases. Its primary device is the Diamondback 360 Orbital Atherectomy System (OSA) for the treatment of both coronary and peripheral artery disease (CAD/PAD). The system is a minimally invasive treatment option that allows physicians to remove calcified plaque buildup in the arteries of the heart and legs to help restore blood flow. Using a diamond-coated catheter-type device, the calcium is sanded away, clearing the artery and restoring blood flow.
  2. SWAV is another a medical device company that treats calcified plaque in patients with peripheral vascular, coronary vascular, and heart valve diseases. However, it utilizes a different technology called intravascular lithotripsy (IVL). IVL uses sonic shock waves that pass harmlessly through the vessel wall and break apart the calcified plaque. Approved for the treatment of PAD since 2016, SWAV is on the verge of gaining expanded use indications from the FDA and has been generating significant notice in the treatment of vascular disease. This newer technology could be disruptive and begin to challenge atherectomy, which is considered a standard of care for the treatment of CAD and PAD.
  3. CSII reported Q4 results on Feb. 3, delivering break-even-earnings which beat the Street’s expectations for a loss of $0.07 per share. Revenue declined 6.1% in the quarter to $64.17 million when compared to the year-ago results of $68.33 million. During the quarter, CSII received CE Mark for its Diamondback 360 OSA and announced a partnership to develop new drug-coated balloon technology to be used in its procedures.
  4. SWAV reported Q3 results on Nov. 9, 2020, and is scheduled to report Q4 results on Feb 17. Q3 performance was strong despite some negative impact from the COVID-19 elective surgery slowdown. EPS was a loss of $0.38 vs. an expected loss of $0.55 per share. Revenue was up 72.9% YY to $19.6 million, beating expectations of $14.5 million. During the quarter, SWAV submitted its PMA application for FDA approval of coronary IVL. When approved, it will dramatically expand SWAV’s TAM.
  5. The market opportunity for both companies is very positive as the incidence of coronary and peripheral artery disease is significant and increasing. SWAV estimates its TAM to be in excess of $6 billion and CSII indicates that its annual patient potential will experience significant growth from 80,000 in 2019 to 350,000 by 2022. The CDC says about 18.2 million adults in the U.S. age 20 and older have CAD (about 6.7%) and the American Heart Association says that 8.5 million Americans over the age of 40 have PAD.
  6. Competition in the CAD and PAD treatment space comes from many directions and a plethora of well-established medical device companies. Standard and accepted treatments for CAD and PAD include lifestyle changes and medication, balloon angioplasty and stents, atherectomy, lithotripsy, and bypass surgery. New devices and generations of older devices are introduced regularly, however a specific device or treatment gaining mind share and attention of physicians can be a challenge as medical professionals tend to be cautious and stick with what they have experience using. For CSII to maintain its growth trend and SWAV to challenge for market share, significant positive clinical data and key opinion leaders will need to champion their devices and positive results.

 

How big is the opportunity for CSII and SWAV? In the treatment of PAD, do physicians view SWAV and CSII as complementary or competitive? Will SWAV’s soon-to-be-approved CAD treatment challenge CSII and other device providers in the space? What % of CAD cases use CSII? How will the market change after SWAV’s device is approved? What are the strength and weaknesses of CSII and SWAV technology? How has SWAV been able to gain its market foothold despite limited or no reimbursement? How does the clinical data between CSII and SWAV compare? Does it support each as complementary or competitive treatments? Will CSII extend its growth trend, or will it be disrupted by Shockwave and other competitors? To answer these and other questions, Blueshift will gather data and issue a market research report from independent sources in the following areas: Interventional cardiologists and radiologists and members of their teams, Surgical device sales and distribution channels, Hospitals, and Industry specialists. 

 

Companies: Becton, Dickinson and Company (BDX), Boston Scientific Corporation (BSX), Cardiovascular Systems, Inc. (CSII), Medtronic plc (MDT), Koninklijke Philips N.V. (PHG), ShockWave Medical, Inc. (SWAV)

 

Research Begins: February 15, 2021

 

To see other ideas Blueshift Research is currently working on, please click here.

 

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