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SPY, our lead product, gained momentum towards becoming a standard of care in top cardiac surgery centers in the U.S. including 28% of those ranked in America's Top 50 Best Hospitals in 2007 by U.S. News & World Report. The value proposition for SPY was further validated in October of 2007 when, in record time, less than one year following application, the U.S. Centers for Medicare and Medicaid Services implemented the specific ICD-9-CMcode 88.59 for SPY procedures, which now allows hospitals to bill for the cost of using SPY during cardiac surgery. The billable code does not guarantee payment for every patient at this time, but the data collected has the potential of establishing reimbursement rates for the future. I must compliment the efforts of the Novadaq team and our surgeons who are working so hard to establish SPY as a standard in cardiac surgery. Novadaq further strengthened the commitment to cardiac surgery by acquiring the distribution rights from Edwards Life Sciences for PLC Medical Systems, Inc.'s Heart Laser. The Heart Laser is used to treat patients with stable angina, whose symptoms cannot be relieved by conventional means of revascularization. This procedure is typically performed during the same bypass procedure where SPY is used for imaging.
We also began to see a natural expansion of SPY into other surgical markets where surgeons performing procedures, using similar techniques to those used by our cardiac surgeons, learned of the benefits of fluorescence imaging. As we expanded, we recognized that the SPY brand was already highly recognized within the operating room. Although we had trademarked other names like HELIOS and LUNA for use of SPY in surgical markets other than cardiac, our customers preferred and continued to use the name SPY. Always listening to our customers for advice, we have now consolidated the branding of our Fluorescence Imaging Systems all under the one name. SPY is therefore our single product for imaging open procedures in multiple surgical applications.
In 2007, we obtained FDA 510(k) clearance for SPY in plastic and reconstructive surgery which, potentially represents another large market opportunity. SPY imaging is gaining momentum amongst surgeons performing complex, technically demanding reconstructive procedures involving tissue, muscle, bone and other "flaps" for treatment of cancer, traumatic injury and other conditions. Surgeons have confirmed that SPY imaging can improve the quality and safety of their surgeries and outcomes. SPY was featured in presentations given by Dr. Michel Samson from the Cleveland Clinic Florida at both The World and American Societies of Reconstructive Micro-Surgery in June 2007 and January 2008. Dr. Samson reported on his experience during breast reconstructive surgery and concluded that SPY was quite valuable in ensuring surgical technical success, and that it may improve outcomes. Several additional manuscripts and abstracts featuring the use of SPY in plastic reconstructive surgery have been submitted and are currently under journal or society peer review for publication or presentation within the next 12 months. We introduced SPY to plastic/reconstructive surgeons at the American Society of Plastic Surgery Meeting in October 2007, and we are beginning to gain momentum in leading institutions.
We built our direct sales team in Q1, 2007 and recorded a significant increase in our revenue as compared to Q4, 2006. Just as we gained sales momentum, we experienced the most serious supply shortage in our company's history. At the end of March 2007, Akorn, Inc., the supplier of the fluorescence agent, ICG, notified us that the entire reserved inventory of ICG could not be shipped as their new manufacturing facility in which the product had been manufactured had not passed its final FDA inspection in time. This shortage lasted six months, far longer than anyone ever expected. In the interim, the FDA did allow a limited supply of expired ICG to be shipped, but not enough to satisfy the needs of all of our customers. Needless to say, the shortage affected our revenues and the morale of our sales team. Today the ICG situation has been resolved with redundancy in the supply chain. Akorn's manufacturing facility passed its FDA inspection, and they have also qualified another contract manufacturer to produce ICG, further reducing the risks associated with a single production plant. In addition, a second supplier of ICG, Pulsion Medical Systems, has also been FDA approved for ICG sales in the U.S. The FDA has provided us clearance to use either supplier's ICG with SPY. We have reviewed our needs from other critical suppliers and are ensuring that risks from any future shortages are minimized in ways as practical as possible.
We began rebuilding sales and our sales team as of October 1st, 2007, when the supply of ICG was restored. I am happy to report that the majority of our SPY customers before ICG interruption were back on board by the end of the year. In spite of the supply difficulty, our 2007 total revenues grew to $10.3 million compared to revenues of $2.2 million in 2006.
Imaging in the operating room remains our key focus. In 2007 we recognized that SPY's unique imaging could be used in minimally invasive operating procedures and may even have the potential to become a catalyst for changing some of today's complex open procedures into cost saving, minimally invasive procedures. In May 2007,Novadaq acquired valuable intellectual property from Xillix Technologies Corp. (Xillix) to enable us to enter the specialty minimally invasive endoscope market. Combining Novadaq's original and the newly acquired IP enabled our engineering team to develop a new endoscope that we plan to market under the name SPYscope. SPYscope is designed to image not only in conventional white light, like a regular endoscope, but has the additional capability of SPY fluorescence imaging. SPYscope is currently in large animal testing and will be discussed in further detail after clinical trials have been completed. As part of the Xillix asset acquisition, we also acquired their autofluorescence technology, Onco-Life. This technology, re-packaged under the brand name PINPOINT, became Novadaq's first minimally invasive product for the detection of lung cancer. PINPOINT was launched to thoracic surgeons and interventional pulmonologists in October in and around the same time the American College of Chest Physicians recommended the use of endoscopic autofluorescence imaging for the management of lung cancer patients in their 2007 Evidence-Based Guidelines. We believe that SPYscope and PINPOINT have the potential to set new imaging standards for minimally invasive procedures by providing the additional capability to visualize vasculature, cancer or the lymphatic system in real-time, creating a significant business opportunity for Novadaq.
Yes, it's been a remarkable year. SPY is now positioned to grow in open surgical procedures, and we have focused the company to further provide leadership in minimally invasive imaging. Before closing, I want to thank the growing Novadaq team. It is their dedication to improving the lives of patients that made this year so remarkable. Together, the team has proven that they can face challenges head on and solve problems intelligently. Their resilience and resolve will continue to fuel the growth of this company. We are focused on the right markets, we have the resources and most importantly, we possess the drive and determination to succeed.
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March 25, 2008 - 