Volcano Corporation
Volcano Corporation Announces Acquisition of Novelis, Inc.
May 20, 2008
by Joan Trombetti, Writer
Volcano Corporation, a provider of intravascular ultrasound (IVUS), functional measurement (FM) and Optical Coherence Tomography (OCT) products designed to enhance the diagnosis and treatment of coronary and peripheral vascular disease, has acquired Novelis, Inc., a privately-held company with proprietary ultrasonic visualization and therapy technology for minimally invasive diagnostic and therapeutic devices.
Novelis' proprietary forward-Looking IVUS technology platform is expected to build upon Volcano's existing suite of products and further enhance Volcano's position as an imaging technology leader in the field of interventional medicine by enabling IVUS and associated therapies in the interventional cardiology market. Volcano expects to add the Novelis products and capability onto its s5i multi-modality integrated platform/hub.
Novelis' core product line is based on Forward-Looking Intravascular Ultrasound (FLIVUS) technology. The product line includes an image-guided crossing catheter that combines visualization, steerability and RF tissue ablation, which is designed to permit Interventional Cardiologists to safely cross chronic total occlusions ("CTO") in the coronary and peripheral arteries, and an FLIVUS catheter (imaging-only version) to facilitate current guidewire-based CTO crossing techniques as well as other potential product offerings with possible applications outside of vascular medicine.
This platform technology may have applications for numerous minimally invasive procedures including plaque modification in the coronary or peripheral arteries, guidance in structural heart procedures, including cardiac ablation guidance and therapy, breast biopsy guidance and therapy, and orthopedic (spine) guidance and therapy.
Under the terms of the agreement, Volcano paid approximately $12 million in cash at closing. In addition, Volcano may make an additional cash payment of $3 million based on the achievement of a specific regulatory milestone.
"As was the case with our acquisition of CardioSpectra's OCT business, the Novelis offering represents a highly complementary technology to our IVUS offering. By adding new modalities, we will leverage the Volcano integrated imaging suite provided by our s5i integrated platform and expect to drive installed-base growth and per-procedure utilization as we address sizeable therapy markets that are estimated to be in the hundreds of millions of dollars," said Scott Huennekens, president and chief executive officer of Volcano.
"Novelis' proprietary technology has potential applications for a number of minimally invasive diagnostic and therapeutic applications in the coronary and peripheral arteries, including the treatment of CTOs. It is estimated there are currently over 200,000 CTOs performed in the U.S., Europe and Japan each year. These procedures, which remain one of the most challenging issues faced by interventionalists today, often fail or take hours to successfully complete due to inadequate visualization. Furthermore, due to the lack of adequate tools for CTO crossing, many interventionalists simply refer patients with CTOs to highly invasive and costly coronary artery bypass grafting (CABG) procedures. The products under development by Novelis have the potential to shorten procedure times and minimize complications plus dramatically add to the total number of procedures being performed -- enabling patients with CTOs to be treated in the cath lab rather than in the surgery suite. At the estimated procedure volume of over 200,000 cases per year -- and factoring in the potential for market expansion -- the total market potential for Novelis' CTO products is estimated at over $500 million," he added.
"We believe the regulatory path is fairly straightforward in all major geographies and that this offering will leverage our strong presence in the cath lab through our sales and distribution programs. Given our sales team's role as advisor to interventionalists in ultrasound image interpretation, we believe this is an absolutely perfect match with our sales and marketing capabilities. We are also very excited to explore the potential for this technology platform in other large expanding markets like ablations for atrial fibrillation and spine therapy," Huennekens concluded.
"CTOs continue to be a challenge for even the very experienced interventionalist. Current angiographic tools are simply inadequate to guide CTO crossing," commented Dr. Gary Mintz, M.D., Chief Medical Officer, Cardiovascular Research Foundation, Medical Director and Editor-in-Chief, TCTMD.com and advisor to Volcano. "The next step to improve success rates will come in the form of intravascular image guided therapies such as this truly unique 'forward looking' approach to CTO imaging," he added. "Many technologies have been tried; but to date, none have been particularly successful. Novelis is the first forward-looking technology that I have seen that makes sense and seems to have a strong likelihood of providing a viable solution for guiding CTO recanalization."
Novelis' offering consists of a forward-looking manually steered imaging system comprised of a laptop-sized console with advanced custom software and single-use catheters both with and without RF ablation. The system and accessories are not approved for human use at this time and have not been submitted to FDA for regulatory clearance.
The company expects to file for appropriate U.S. and international approvals on the first of several devices during 2009 and begin commercialization of a stand-alone imaging console in the second half of 2009 in the U.S. and Europe. Volcano expects a majority of the purchase price to be written off immediately as in process research and development and to incur ongoing development costs in the range of $300,000 to $400,000 per quarter.
About Volcano
Volcano Corporation offers a broad suite of devices designed to facilitate endovascular procedures, enhance the diagnosis of vascular and structural heart disease and guide optimal therapies. The company's intravascular ultrasound (IVUS) product line includes ultrasound consoles that can be integrated directly into virtually any modern cath lab. Volcano IVUS offers unique features, including both single-use phased array and rotational IVUS imaging catheters, and advanced functionality options, such as VH(TM) tissue characterization and ChromaFlo®. Volcano also provides functional measurement (FM) consoles and single-use pressure and flow guide wires and is developing a line of ultra-high resolution Optical Coherence Tomography (OCT) systems and catheters. Currently, more than 3,300 Volcano IVUS and FM systems are installed worldwide, with approximately half of the revenues coming from outside the United States. For more information, visit the company's website at http://www.volcanocorp.com.
About Novelis
Novelis is creating a platform technology for forward visualization in minimally invasive procedures. Its initial products are designed to enhance the Interventional Cardiologist's ability to treat coronary chronic total occlusions (CTOs) during minimally invasive procedures in the cardiac catheterization laboratory. Chronic total occlusions -- complete blockages of the coronary arteries -- remain one of the most challenging clinical problems faced by Interventional Cardiologists. Current solutions for the treatment of CTOs require the costly, cumbersome, and time consuming use of a series of devices to treat these occlusions. As a consequence, most patients with CTOs continue to be referred for the far more invasive and expensive procedure -- coronary artery bypass grafting (CABG).
Novelis is developing a patented, guided CTO crossing catheter that will provide visualization and therapy in a single, easy-to-use, handheld device. By combining a sophisticated forward- looking imaging technology with occlusion-crossing therapy, the guided CTO crossing catheter is expected to allow clinicians to cross CTOs with a reduced risk of complications such as vessel wall perforation and dissection. In addition, Novelis expects to introduce an "imaging only" version of the catheter which will be the first forward- looking intravascular ultrasonic (IVUS) imaging catheter aimed at facilitating CTOs and other coronary interventions. For more information, visit the company's website at http://www.novelismedical.com.
Novelis' proprietary forward-Looking IVUS technology platform is expected to build upon Volcano's existing suite of products and further enhance Volcano's position as an imaging technology leader in the field of interventional medicine by enabling IVUS and associated therapies in the interventional cardiology market. Volcano expects to add the Novelis products and capability onto its s5i multi-modality integrated platform/hub.
Novelis' core product line is based on Forward-Looking Intravascular Ultrasound (FLIVUS) technology. The product line includes an image-guided crossing catheter that combines visualization, steerability and RF tissue ablation, which is designed to permit Interventional Cardiologists to safely cross chronic total occlusions ("CTO") in the coronary and peripheral arteries, and an FLIVUS catheter (imaging-only version) to facilitate current guidewire-based CTO crossing techniques as well as other potential product offerings with possible applications outside of vascular medicine.
This platform technology may have applications for numerous minimally invasive procedures including plaque modification in the coronary or peripheral arteries, guidance in structural heart procedures, including cardiac ablation guidance and therapy, breast biopsy guidance and therapy, and orthopedic (spine) guidance and therapy.
Under the terms of the agreement, Volcano paid approximately $12 million in cash at closing. In addition, Volcano may make an additional cash payment of $3 million based on the achievement of a specific regulatory milestone.
"As was the case with our acquisition of CardioSpectra's OCT business, the Novelis offering represents a highly complementary technology to our IVUS offering. By adding new modalities, we will leverage the Volcano integrated imaging suite provided by our s5i integrated platform and expect to drive installed-base growth and per-procedure utilization as we address sizeable therapy markets that are estimated to be in the hundreds of millions of dollars," said Scott Huennekens, president and chief executive officer of Volcano.
"Novelis' proprietary technology has potential applications for a number of minimally invasive diagnostic and therapeutic applications in the coronary and peripheral arteries, including the treatment of CTOs. It is estimated there are currently over 200,000 CTOs performed in the U.S., Europe and Japan each year. These procedures, which remain one of the most challenging issues faced by interventionalists today, often fail or take hours to successfully complete due to inadequate visualization. Furthermore, due to the lack of adequate tools for CTO crossing, many interventionalists simply refer patients with CTOs to highly invasive and costly coronary artery bypass grafting (CABG) procedures. The products under development by Novelis have the potential to shorten procedure times and minimize complications plus dramatically add to the total number of procedures being performed -- enabling patients with CTOs to be treated in the cath lab rather than in the surgery suite. At the estimated procedure volume of over 200,000 cases per year -- and factoring in the potential for market expansion -- the total market potential for Novelis' CTO products is estimated at over $500 million," he added.
"We believe the regulatory path is fairly straightforward in all major geographies and that this offering will leverage our strong presence in the cath lab through our sales and distribution programs. Given our sales team's role as advisor to interventionalists in ultrasound image interpretation, we believe this is an absolutely perfect match with our sales and marketing capabilities. We are also very excited to explore the potential for this technology platform in other large expanding markets like ablations for atrial fibrillation and spine therapy," Huennekens concluded.
"CTOs continue to be a challenge for even the very experienced interventionalist. Current angiographic tools are simply inadequate to guide CTO crossing," commented Dr. Gary Mintz, M.D., Chief Medical Officer, Cardiovascular Research Foundation, Medical Director and Editor-in-Chief, TCTMD.com and advisor to Volcano. "The next step to improve success rates will come in the form of intravascular image guided therapies such as this truly unique 'forward looking' approach to CTO imaging," he added. "Many technologies have been tried; but to date, none have been particularly successful. Novelis is the first forward-looking technology that I have seen that makes sense and seems to have a strong likelihood of providing a viable solution for guiding CTO recanalization."
Novelis' offering consists of a forward-looking manually steered imaging system comprised of a laptop-sized console with advanced custom software and single-use catheters both with and without RF ablation. The system and accessories are not approved for human use at this time and have not been submitted to FDA for regulatory clearance.
The company expects to file for appropriate U.S. and international approvals on the first of several devices during 2009 and begin commercialization of a stand-alone imaging console in the second half of 2009 in the U.S. and Europe. Volcano expects a majority of the purchase price to be written off immediately as in process research and development and to incur ongoing development costs in the range of $300,000 to $400,000 per quarter.
About Volcano
Volcano Corporation offers a broad suite of devices designed to facilitate endovascular procedures, enhance the diagnosis of vascular and structural heart disease and guide optimal therapies. The company's intravascular ultrasound (IVUS) product line includes ultrasound consoles that can be integrated directly into virtually any modern cath lab. Volcano IVUS offers unique features, including both single-use phased array and rotational IVUS imaging catheters, and advanced functionality options, such as VH(TM) tissue characterization and ChromaFlo®. Volcano also provides functional measurement (FM) consoles and single-use pressure and flow guide wires and is developing a line of ultra-high resolution Optical Coherence Tomography (OCT) systems and catheters. Currently, more than 3,300 Volcano IVUS and FM systems are installed worldwide, with approximately half of the revenues coming from outside the United States. For more information, visit the company's website at http://www.volcanocorp.com.
About Novelis
Novelis is creating a platform technology for forward visualization in minimally invasive procedures. Its initial products are designed to enhance the Interventional Cardiologist's ability to treat coronary chronic total occlusions (CTOs) during minimally invasive procedures in the cardiac catheterization laboratory. Chronic total occlusions -- complete blockages of the coronary arteries -- remain one of the most challenging clinical problems faced by Interventional Cardiologists. Current solutions for the treatment of CTOs require the costly, cumbersome, and time consuming use of a series of devices to treat these occlusions. As a consequence, most patients with CTOs continue to be referred for the far more invasive and expensive procedure -- coronary artery bypass grafting (CABG).
Novelis is developing a patented, guided CTO crossing catheter that will provide visualization and therapy in a single, easy-to-use, handheld device. By combining a sophisticated forward- looking imaging technology with occlusion-crossing therapy, the guided CTO crossing catheter is expected to allow clinicians to cross CTOs with a reduced risk of complications such as vessel wall perforation and dissection. In addition, Novelis expects to introduce an "imaging only" version of the catheter which will be the first forward- looking intravascular ultrasonic (IVUS) imaging catheter aimed at facilitating CTOs and other coronary interventions. For more information, visit the company's website at http://www.novelismedical.com.