CDU Contributing Editor
NEW YORK It may have been frigid and gloomy outside the storied Hotel Pierre where the Piper Jaffray conference was held, but inside the jam-packed meeting rooms, investors heard that the state of the healthcare industry is upbeat and filled with optimism.
Although the conference is primarily focused on public companies, there was plenty of opportunity for emerging private medical technology concerns to share their stories. The virtual shutdown of the initial public offering market in the past few years has forced med-tech firms to remain private, relying on continuing infusions of equity from the venture capital community. As a result, these companies have progressed well into the commercial phase of their lives, registering significant revenue gains, sharply reducing their losses and showing the potential to enjoy lucrative profitability.
Venture capital-backed Atricure (West Chester, Ohio) addresses a huge market opportunity arising from atrial fibrillation (AF), a disease that only recent years been accorded the recognition it deserves for both its prevalence and severity. For example, according to the American Heart Association (Dallas, Texas) AF directly results in 75,000 strokes per year in the U.S., or about 15% of the annual number of strokes. After congestive heart failure, it is the most common diagnosis of heart disease and an estimated 5.8 million Americans will have AF by 2050.
Atricure Chief Executive Officer Dave Drachman said that his company's mission is to treat AF and stroke through an epicardial approach. Its first target market is for the treatment of an existing AF patient who is undergoing open-heart surgery, either bypass grafting or valve replacement. There are an estimated 50,000 cases annually in the U.S. in this category, and according to Drachman, Atricure performed 4,500 procedures for this indication alone in 2003. Its market share was nearly 50% of the total procedures in this category.
"The key to our leadership position is that we offer a very simple, safe and very effective way to perform the procedure," Drachman said. The Atricure system uses a proprietary bi-polar RF energy-based technology to electrically isolate the pulmonary veins, which is believed to be the cause of most cases of AF. The system, featuring an RF generator and disposable clamp, actually monitors the electrical conductivity of the heart tissue as the lesion is being created, enabling the cardiac surgeon to make transmural (full thickness) lesions that electrically isolate the tissue in just a few seconds. An incomplete set of lesions cannot only be ineffective in terminating AF, but can actually make the AF more difficult to treat.
One exciting aspect of its technology is that it also can be utilized for the stand-alone treatment of AF using endoscopic visualization to perform small-incision cardiac surgery. Drachman reported that 12 clinical cases have been performed to date and that the product should be launched for that indication sometime this year. Although he declined to provide specific revenue numbers, Atricure is clearing growing very rapidly and appears poised for continued robust growth in 2004 and beyond.