Message from the President
May 1, 2011
Dear Shareholders,
2010 was a year of continuous advancement to further drive Novadaq’s core SPY® technology towards adoption by leading hospitals and surgeons in the United States. Simultaneously, we significantly increased our distribution capabilities in North America by signing the sales and marketing alliance agreement with LifeCellTM Corporation, a leading company in plastic surgery. We have also completed the integration of our SPY technology into the Intuitive Surgical® da Vinci® Robot, which we expect will be commercialized in 2011.
Our vision is being realized–Novadaq is the imaging company for the operating room. We were the first to introduce and demonstrate the clinical and economic value of intra-operative fluorescence imaging technology to surgeons, and we are pleased with the increasing acceptance of this vision by the healthcare community. On behalf of the remarkable and relentless team at Novadaq, I share with you the accomplishments achieved in the past twelve months.
As it quickly became obvious, in the first half of the year, that plastic and reconstructive surgery would be a dominant market for SPY, we evaluated the opportunity to drive significant growth by partnering with a market leading company. In September 2010, Novadaq entered into a five-year agreement with LifeCell, for the exclusive rights to market and distribute the SPY Imaging System in the fields of open plastic reconstructive, gastrointestinal and head and neck surgery in North America. We are excited to partner with LifeCell, because its management team has a proven track record for turning innovative ideas into a multi-billion dollar business. Additionally, LifeCell possesses the sales and marketing expertise and strong customer relationships, and are highly recognized for providing best-in-class professional education to surgeons. Most importantly, the LifeCell sales team already serves the same operating room procedures where SPY has been shown to provide the greatest value, thereby we are leveraging the great call point synergy that exists between our companies.
Novadaq’s partnership with Intuitive Surgical has advanced to the commercialization phase. We have completed our engineering development and all milestone payments have been received and recognized. With support provided by Intuitive, we have scaled our manufacturing capabilities and are now manufacturing and shipping commercial grade products to Intuitive for integration into the da Vinci Robot from our facility located near Vancouver. We are delighted to report that Intuitive received FDA 510 (k) clearance for the integrated system in early 2011. Surgeon feedback regarding the clinical utility of SPY imaging technology continues to be positive in both minimally invasive and robotic surgery. For example, researchers from the University of Rochester received the top academic award in their category at the 2010 New England Urological Society Meeting for their presentation featuring SPY Imaging technology in minimally invasive and robotic urological surgery.
Throughout the year, we continued to invest in research and development to further advance the SPY technology platform and to drive growth. In 2010, we launched our SPY-Q® analysis tools for use in plastic and reconstructive surgical procedures and completed the development of SPY-QC® a similar program for use during cardiac surgeries. These software analysis tools further enhance the value proposition for SPY by providing real time, relevant, quantifiable information about dynamic blood flow in vessels and the quality of perfusion in tissue. Ensuring adequate blood flow is critical to proper healing and postoperative recovery.
We remain committed to supporting our existing partners in driving the momentum for SPY technology in plastic and reconstructive procedures and in robotic surgery. We also continue to recognize other applications where SPY can bring value to patients by reducing rates of complications and healthcare costs. One such emerging application is in the area of wound care, where the use of SPY has been shown in early studies to improve the treatment of diabetic foot ulcers, pressure sores and poorly healing incisions.
We at Novadaq are the category creators for real time, perfusion analysis through fluorescence imaging in the operating room. SPY imaging and the need for accurate perfusion analysis is being accepted across multiple applications as evidenced by the ever increasing support we receive from leading surgical specialists ranging from cardiac to plastic to vascular surgeons. Further confirming evidence that our vision is being realized is founded in the fact we have partnered for growth with two of the world’s top medical device companies.
On behalf of our management team and Board of Directors, I thank you for your confidence in Novadaq and look forward to updating you on our progress in the months and years to come.
Arun Menawat, Ph.D, MBA, Chief Executive Officer