Wall Street has stabilized enough after the recent pandemic-induced volatility to offer enthusiastic support to a med tech generating significant revenue that already reached breakeven during the first quarter. Inari Medical Inc. priced its IPO at the top of an already upwardly revised range to raise $156 million. It sold 8.2 million shares at $19, above the prior range of $17 to $18. Shares of the Irvine, Calif.-based company (NASDAQ:NARI) then more than doubled to hit about $43 on its first day of trading.
Investors appear extremely excited about this company, perhaps driven not only by the business fundamentals, but also by the potential fit of Inari’s minimally invasive, catheter-based systems with COVID-19 treatment. Inari markets a pair of U.S. FDA-cleared products that respectively treat two types of venous thromboembolism (VTE): deep vein thrombosis (DVT) and pulmonary embolism (PE).
Clotting and vascular issues have been emerging as a notable threat to the most seriously ill COVID-19 patients. Inari sells the mechanical thrombectomy system Clottriever to core, capture and remove clots from large vessels to treat DVT in the extremities. It also has the Flowtriever, a large bore, catheter-based aspiration and mechanical thrombectomy system to remove clots from large vessels to treat PE.
“There [are] probably at least a half-dozen – maybe more now – peer-reviewed publications confirming the link between COVID and [PE],” said Inari CCO Andrew Hykes, who went on to reference a Dutch paper on the subject. “This particular study shows the link between COVID-19 and evidence of blood clots, [and] most of them … were venous, rather than arterial clots. Most of the ones that had venous disease ... were ... pulmonary emboli, and most of those were central, big clots – not microvascular. So, there's a lot of work being done to characterize these clots, but it's very well-known at this point that there is an association that is causative. Most people think so, but it is very early.”
That paper Hykes noted, published April 10 in Thrombosis Research, examined 184 ICU patients with COVID-19 pneumonia. All the patients were given medication to prevent the formation of blood clots, still, 27% had VTE, as confirmed by imaging, and 3.7% had arterial thrombotic events.
PE was the most common thrombotic complication, which occurred in 25 patients. This data suggests that anticoagulants may not be particularly effective in preventing COVID-19-related VTE, which would make clot retrieval a potentially attractive option.
Built for venous
The lack of attractive treatment options, either anticoagulants or repurposed arterial retrievers, has been true of VTE more broadly.
“Historically, what you've seen in the venous market has been the repurposing of arterial-based systems over to the venous side of the body,” said Hykes. “In arterial systems, there [have] been close to 200 thrombectomy platforms approved by the FDA over the last 20 years. With only one exception, all of them have been developed with the arterial system as a target. If you think about the arterial system, we're talking about small vessels, high flow, high pressure – and when you get caught in the arterial
system, it tends to be very acute and soft and focal, not attached to the vessel wall. When it lodges in place, it causes sudden catastrophic unmistakable symptoms, like stroke.
“All of the variables that I described on the arterial side are the exact opposite on the venous side,” he continued. “On the venous side, it’s characterized by large vessels, low flow, low pressure, and, as a result, when you get clot forming, it forms slowly over time. It tends to start on the outside of the vessel and slowly grow in, and symptoms don't appear suddenly and catastrophically. When they finally present to the ER, now you've got a massive amount of clot, thousands of times larger than the kind of clot on the arterial side. You’ve also got chronic clot and acute clot piling up on that.”
In addition, Hykes noted that antithrombotic drugs typically aren’t effective on venous clots. That’s because they are chronic clots that have transitioned from fiber into collagen.
Inari approached the problem by building clot retrievers specifically intended for venous use, rather than adapting arterial ones. Veins carry deoxygenated blood back to the heart, while arteries carry oxygenated blood out to the body from the heart.
The company likely will have a long road ahead to establish its type of VTE retrieval systems as standard of care. More than 90% of PE patients currently are treated with anticoagulants alone, while roughly two-thirds of DVT patients also only receive similar medication.
Clot retrieval for stroke took many years to be established as the standard of care – and to achieve widespread use and reimbursement. VTE clot retrieval likely will need to follow a similar path, although that may be smoothed by the existing evidence and use in stroke. The company already has established a 500-person registry study for each of its VTE products.
As of March 31, the Clottriever registry had enrolled 128 patients, while the Flowtriever had enrolled 186. The patients will be followed for up to two years in the former and up to six months in the latter. There are also an additional 10 ongoing investigator-initiated studies. The minimally invasive systems have been used to treat more than 8,500 patients in about 600 U.S. hospitals.
Inari investors include U.S. Venture Partners (16.8% post-IPO stake), Gilde Healthcare (16.5%) and Versant Venture Capital (12.5%).
Last year, Inari had $51.1 million in revenue and $1.2 million in net losses. In the first quarter, the company made $27 million in revenue, with a net income of $4.1 million. The lack of elective procedures in many regions due to the pandemic pulled sales down by close to 40% at its lowest point, but that has since started to recover.
“We feel like we've had some stabilization here, but we're not quite ready to communicate about what Q2 and beyond looks like,” said Inari President and CEO Bill Hoffman, who previously led Visualase, which sold to Medtronic plc for up to $105 million in 2014. “We all are optimistic that we're coming out of the first wave of this COVID crisis. Hopefully, that means hospitals are beginning to reopen, and there'll be some opportunity for them to get back to normal.”