Trans-Pacific medical device company Osprey Medical, Inc. (OSP) did not enjoy a great reception after floating on the Australian Stock Exchange (ASX) in May 2012, but it is sitting nicely as a major trial of its technology starts to take shape.
Osprey CDIs (CHESS Depositary Instruments) cost 40 cents in the initial public offering, which raised $A20 million. Subsequently they have traded as low as 32 cents, in September 2012, and as high as 69 cents in January 2013. Currently they sit at 54 cents.
Incorporated in the USA, Osprey listed on the ASX in a nod to the fact that its core technology was developed at the Baker IDI Heart and Diabetes Institute in Melbourne and funded by Australian venture capital. The system, called CINCOR, treats contrast-induced nephropathy (CIN), a form of kidney injury caused by the X-ray-visible dye that cardiologists inject during common heart procedures such as stenting and angioplasty. The dye is used as a contrast medium to help the doctors certain body parts and interpret the X-rays better.
Patients with normal kidney function don’t usually have a problem with the dye. But about 25% of all patients undergoing heart operations and stenting procedures have pre-existing kidney disease, and can incur problems ranging from reduced kidney function all the way to kidney shutdown and the risk of death.
The trouble is, there is no effective way for cardiologists to prevent dye from reaching the kidneys. More correctly, there was no way, until CINCOR – it captures most of the dye before it reaches them.
Osprey estimates about 400,000 patients out of 2.2 million who undergo angioplasty and stenting procedures in the US and western Europe are at risk of CIN because of pre-existing kidney disease and says the global market for its device is worth as much as $US800 million.
When it gets to market, that is.
CINCOR is CE-marked for sale in the European Union (EU), and indeed Osprey expects to start selling the system in Germany and the Netherlands; but it needs approval from the Food & Drug Administration (FDA) to be sold in the USA. The pathway to that for medical devices differs to that for a drug: first, Osprey must complete an investigational device exemption (IDE) that allows the investigational device – that is, CINCOR – to be used in a clinical study in order to collect safety and effectiveness data.
Then the company goes to premarket approval (PMA), the FDA process of scientific and regulatory review to evaluate the safety and effectiveness of Class III medical devices.
In March 2013, Osprey announced commencement of its US registration- directed IDE clinical study of the CINCOR system with the first patient enrolled at the Leipzig Heart Centre in Germany. In May 2013, the first US patients were enrolled, at St. Luke’s Medical Center (sic) in Phoenix, Arizona. Ultimately Osprey expects the IDE trial to cover 600 patients in up to 40 centres around the world.
The trial, called PRESERV, will continue into 2014 as Osprey builds its case for FDA regulatory clearance for CINCOR, which it has told the ASX it expects towards the end of 2014. Once FDA clearance is granted, Osprey says, “large-scale commercialisation” will follow.
In the meantime, the company is also commercialising the CINAVERT system, an offshoot of the CINCOR technology that is used in patients undergoing an angiogram or diagnostic catheterisation procedure where the dye volume usage is moderate and predictable. Osprey says CINAVERT gives it the potential to expand its CIN protection offerings to an additional one million patients a year.
In addition, in the current quarter, the company anticipates gaining FDA clearance for its AVERT Reflux Modulation System for the controlled delivery of dye. Once approved AVERT will be given a “controlled launch” through selected “opinion-leading Physicians” in the US and Australia.
Finally, using funding from the Victorian Government’s Market Validation Program (MVP), Osprey is conduct a first-in-man clinical study of its Limb Recovery System, derived from the core technology of the CINCOR system. Osprey says the Limb Recovery System will enable the localised delivery of high-dose antibiotics to the lower limb in diabetic patients who present with life or limb-threatening foot infections. This trial is underway at the Royal Melbourne Hospital.
But CINCOR and FDA approval is the main game.
The stock has moved out of its May trough since the trial gathered momentum. At 54 cents, the stock is a punt on good news from the PRESERV trial, but many good judges believe this is a potential belter of a biotech stock. There is about 30 cents of cash backing each share, but Osprey’s fans are focused on much greater rewards from potentially a world-leading technology.
