Catheter Precision, Inc. (VTAK) is a U.S.-based medical device company dedicated to developing innovative technologies for the cardiac electrophysiology (EP) market. With a focus on enhancing the diagnosis and treatment of cardiac arrhythmias, Catheter Precision has established itself as a pioneer in the field, leveraging its proprietary solutions to address the growing need for more effective EP procedures.
The Company's Journey: From Laser-Based Platforms to Cardiac Mapping Innovations
Catheter Precision's history dates back to September 4, 2002, when it was incorporated in California. The company was initially formed to develop, commercialize, and market an advanced excimer laser-based platform for the treatment of vascular and dermatological immune-mediated inflammatory diseases. In July 2018, the company reincorporated in Delaware.
Prior to 2018, Catheter Precision marketed the Destruction of Arteriosclerotic Blockages by laser Radiation Ablation (DABRA) Excimer Laser System, which was developed as a tool for treating Peripheral Artery Disease. The company also marketed the Pharos laser for treating proliferative skin conditions. However, in August 2021, Catheter Precision completed the sale of its Pharos laser business.
A significant shift in the company's focus occurred in June 2022 when the board of directors reviewed strategic alternatives. As a result, Catheter Precision paused all engineering activities related to DABRA and ceased marketing the DABRA Excimer Laser System. The company decided not to commercialize the DABRA 2.0 catheter going forward.
The most transformative event in Catheter Precision's recent history took place on January 9, 2023, when it merged with the former Catheter Precision, Inc., a privately-held Delaware corporation. This merger marked a pivotal moment for the company, as the business of the former Catheter Precision, Inc. became the company's only operating subsidiary. Following this merger, Catheter Precision completely discontinued its legacy lines of business and shifted its focus to the product lines of the acquired entity.
Post-merger, Catheter Precision's activities now primarily revolve around the design, manufacture, and sale of new and innovative medical technologies in the field of cardiac electrophysiology. This strategic shift has positioned the company to leverage its expertise in developing cutting-edge solutions for the growing EP market.
Pioneering the VIVO System: Advancing Cardiac Mapping and Arrhythmia Treatment
One of Catheter Precision's two primary products is the VIVO System, a non-invasive imaging solution that offers 3D cardiac mapping. This technology is designed to help cardiac electrophysiologists localize the sites of origin of idiopathic ventricular arrhythmias in patients with structurally normal hearts prior to EP procedures. The VIVO System has received FDA clearance and CE Mark approval, allowing the Company to market and promote the product in the U.S. and select international markets.
Since the limited commercial launch of the VIVO System in 2021, the product has been utilized in over 1,000 procedures by more than 30 physicians across the U.S. and EU, with no reported device-related complications. The Company's business strategy is focused on establishing VIVO as an integral tool used by cardiac electrophysiologists during ablation treatment of ventricular arrhythmias, aiming to reduce procedure time, patient complications, and increase procedural success.
The VIVO System comprises the main VIVO console and custom VIVO Positioning Patch Sets used in conjunction with the system. For the three and nine months ended September 30, 2024, VIVO System revenue was $34,000 and $142,000, respectively, accounting for 35% and 52% of VTAK's total revenue during those periods. Management is focused on driving increased adoption and usage of the VIVO System as a key tool for cardiac electrophysiologists to enhance their ability to diagnose and treat cardiac arrhythmias.
Expanding the Product Portfolio: The LockeT Suture Retention Device
In addition to the VIVO System, Catheter Precision's newest product is LockeT, a suture retention device indicated for wound healing by distributing suture tension over a larger area in the patient. LockeT is intended to temporarily secure sutures and aid clinicians in locating and removing sutures efficiently. The LockeT device received FDA registration in February 2023, and the Company has since begun initial shipments to distributors.
Catheter Precision has also submitted LockeT for CE Mark approval, which is expected to be obtained in March 2025. This will allow the Company to expand the international distribution of LockeT, complementing its existing U.S. footprint. Clinical studies for LockeT are ongoing, with the goal of demonstrating the product's effectiveness in faster wound closure, earlier ambulation, and potential cost benefits for healthcare providers and insurers.
The Company recorded its first LockeT sales in May 2024, generating $62,000 and $100,000 in revenue for the three and nine months ended September 30, 2024, respectively. These sales represented 65% and 37% of the company's total revenue during those periods.
Additional Products and Intellectual Property
In addition to the VIVO System and LockeT, Catheter Precision's product portfolio includes the Amigo Remote Catheter System, a robotic arm that serves as a catheter control device. While the Company owns the intellectual property related to Amigo, it is currently evaluating future research and development efforts for a potential second-generation version of the product.
Financial Performance
Catheter Precision's financial performance has been marked by both challenges and opportunities. For the fiscal year ended December 31, 2023, the Company reported revenue of $442,000, a significant decrease from the $14,000 generated in the prior year. This decline was largely attributable to the discontinuation of the legacy DABRA-related business and the shift towards the acquired Catheter Precision product lines.
The Company's net loss for the 2023 fiscal year stood at $70.6 million, impacted by a $60.9 million impairment charge related to goodwill. This non-cash charge resulted from a sustained decrease in the Company's share price during 2023, which triggered a goodwill impairment analysis and subsequent write-down.
Despite these financial headwinds, Catheter Precision has taken steps to strengthen its position for future growth. In the third quarter of 2024, the Company reported revenue of $96,000, a decline from the $133,000 generated in the same period of the prior year. This decrease was primarily due to lower VIVO System product sales, partially offset by the introduction of LockeT, which contributed $62,000 in sales during the quarter.
The Company's operating expenses for the nine months ended September 30, 2024, decreased significantly to $8.4 million, compared to $75.8 million in the same period of 2023. This reduction was driven by a decrease in legal fees, professional accounting costs, and salaries and benefits, as Catheter Precision optimized its operations following the merger.
For the fiscal year 2023, Catheter Precision reported an annual operating cash flow of -$20.62 million and an annual free cash flow of -$20.70 million. The net loss for the most recent quarter ended September 30, 2024, was $4.12 million.
Liquidity and Capital Resources
As of September 30, 2023, Catheter Precision had $1.27 million in cash and cash equivalents. The company's debt-to-equity ratio stood at 0.15 as of December 31, 2023. The current ratio and quick ratio as of September 30, 2023, were 0.66 and 0.65, respectively, indicating potential liquidity challenges.
The Company has $1.50 million in short-term promissory notes payable to related parties as of September 30, 2024, with a maturity date of January 31, 2026. Managing liquidity and capital requirements will be crucial for Catheter Precision's future operations and growth initiatives, given its recent financial performance and current liquidity position.
Geographic Market Performance
Catheter Precision has demonstrated a significant international presence, with approximately 35% and 52% of its sales coming from customers outside the United States during the three and nine months ended September 30, 2024, respectively. This global footprint underscores the Company's ability to penetrate diverse markets and highlights the international demand for its innovative EP solutions.
Navigating Challenges and Positioning for Growth
Catheter Precision faces several challenges as it navigates the dynamic cardiac electrophysiology market. The Company's ability to establish VIVO as a standard tool among cardiac electrophysiologists and drive widespread adoption of LockeT will be critical to its long-term success. Additionally, the Company must continue to effectively manage its operating expenses and capital requirements to maintain financial stability and support its growth initiatives.
Despite these challenges, Catheter Precision remains well-positioned to capitalize on the growing demand for innovative EP solutions. The Company's focus on developing and commercializing cutting-edge technologies, such as the VIVO System and LockeT, positions it to address unmet needs in the treatment of cardiac arrhythmias. Furthermore, the Company's recent expansion of its sales and clinical teams, as well as the pending CE Mark approval for LockeT, suggest that Catheter Precision is poised to accelerate its global reach and market penetration.
As Catheter Precision continues to navigate the evolving cardiac electrophysiology landscape, investors will closely watch the Company's ability to drive adoption of its flagship products, manage its financial performance, and capitalize on the significant growth opportunities that lie ahead. The absence of any reported scandals, short seller reports, or CEO departures provides a stable foundation for the Company to focus on its core business objectives and market expansion strategies.