What's the Strategy in the U.S. for Neovasc's Reducer?

Posted on February 25, 2020 by Medtech[y] Staff

Neovasc (Nasdaq: NVCN) is a medical device company primarily known for Reducer, which is a minimally invasive device that helps treat patients with refractory angina. The device has been approved in Europe since 2015 and was recently added to the European Society of Cardiology (ESC) Guidelines.

In the United States, the device was awarded the FDA Breakthrough Device Designation in 2018 and the PMA was submitted Dec 30, 2019. Neovasc is projecting a targeted FDA panel in the second half of 2020, with the projected commercialization in the first half of 2021.

Refractory Angina represents a significant market opportunity, with patients not having many options aside from medical management.

In the U.S., more than 500,000 patients present with Angina with Non-Obstructive Coronary Artery Disease. As there are currently limited options for patients, and no cure, Angina is an expensive and debilitating condition for patients and the healthcare system.

How Does Neovasc Reducer Work?

Reducer can be used as a sole therapy or as an adjunctive therapy to CABG and PCI. It's implanted in the coronary sinus and takes approximately 30 minutes to complete. The result is an increase of CS pressure to redistribute blood flow to ischemic areas of the heart.

A recent study, COSIRA, showed that patients treated with Reducer were 2.3 times more likely to see an improvement of two Canadian Cardiovascular Society (CCS) functional classification as compared to the control arm (n = 104, p value = 0.024).

Reducer truly is a game changing product for patients with refractory Angina and the safety profile appears to be positive. In the 12 year follow-up to the first-in-human study, 7 of the 10 patients were available for review. All 7 Reducers were patent and there was no migration, fracture, occlusion or thrombosis in those patients. Additionally, all 7 patients reported sustained improvement of angina class compared with baseline status • Mean CCS class reduction of 1.7 ± 0.76 from CCS 3.14 ± 0.38 at baseline (p= 0.01).

Assuming commercialization stays on track for the first quarter of 2021, Reducer has a chance to do very well as it's a minimally invasive option for patients who have very little option aside from medical therapy.

One of the things to consider is the timing of the catalysts for Neovasc as they currently have enough cash on hand until August of 2020. At that point, there is a strong likelihood they will have to do another stock offering, diluting the stock again. The last offering they did was in January of 2020.

The question then becomes if that will be enough capital to get them to the projected FDA approval of early 2021. There is also the chance they do an offering on that news as well.

The long-term opportunity with Neovasc is significant, and Reducer truly does have a chance to be a significant product in the U.S. once it is approved. The likelihood of a company adding the product to their bag is significant and it would make sense for any of the big medical device companies, including Medtronic, Boston Scientific, Edwards and Johnson & Johnson.

As to the stock, the potential for offerings, and the fact that Neovasc will not be approved until the first quarter of 2021 at a minimum, purchasing at these levels remains risky as there is a strong chance of dilution.

With that said, Neovasc looks to be in strong position to commercialize Reducer and help patients who haven't had other options to treat their refractory Angina.