67 WALL STREET, New York - August 9, 2012 - The Wall Street Transcript has just published its Medical Devices Report offering a timely review of the sector to serious investors and industry executives. The full issue is available by calling (212) 952-7433 or via The Wall Street Transcript Online.
Topics covered: Innovation Counters Pricing Pressure - Orthopedics and Cardiovascular Medical Devices - Medtech Tax Affects Earnings
Companies include: Nxstage Medical, Inc. (NXTM) and many others.
In the following excerpt from the Medical Devices Report, the CEO of NxStage Medical discusses the outlook for his company for investors:
TWST: Please begin with a background or historical sketch of NxStage Medical, enough information to put into context what you see as the business, and what you see as the company today.
Mr. Burbank: NxStage Medical is a company that I founded about 14 years ago with a vision of providing superior patient care. Since then, our company has been executing against this vision with innovative technology, including the System One, the first and only truly portable hemodialysis system cleared for home use by the U.S. Food and Drug Administration, FDA. The System One offers a flexible home hemodialysis option for patients with kidney disease, so they can treat themselves - a.k.a. "dialyze" - when they want, where they want and in the environment they want. Most of our patients choose to dialyze more frequently than what's been traditionally available to them.
The conventional model for dialysis is in-center on a three times a week dialysis schedule - with each session lasting about four to 4.5 hours. Through innovative technology, NxStage created a simplified, portable, easy-to-use hemodialysis system, the System One, that allows a patient to dialyze in his/her own home, and importantly, gain access to both the clinical and quality of life benefits associated with more frequent dialysis.
In addition to being the leader in home hemodialysis, NxStage is also a leader in disposables, blood-tubing sets and needles for traditional in-center dialysis, and in providing continuous renal replacement therapy for critical care patients with kidney failure.
In sum, NxStage participates in three markets where we hold leadership positions. As a result, we have grown the business to well over $200 million in annual revenue. While this is impressive growth, we believe it represents only a small portion of our existing market opportunity. We believe NxStage is still in the early stages of the adoption of home hemodialysis. To realize much greater market potential, we continue to invest in research and product development to drive adoption higher.
TWST: What is the patient population NxStage is addressing, and do all dialysis users qualify for this in-home treatment?
Mr. Burbank: The System One was designed for use by patients with end-stage renal disease, ESRD, or kidney failure. Although our therapy is not going to be right for every patient, as some folks will find it more complex and burdensome than they'd like, we believe about 10% to 15% of the ESRD patient population would be appropriate for home hemodialysis with the System One and would really prefer the independence, flexibility and quality of life that it offers patients.
TWST: What is the cost comparison between daily home care versus in-center hemodialysis?
Mr. Burbank: The costs that really impact the health care system are not just the treatment costs, but rather the total cost of care of a dialysis patient. The complications of ESRD are far more expensive than the treatment of the disease. For instance, in round numbers, the annual costs of care for a Medicare patient with ESRD is approximately $80,000 to $90,000, whereas only about $30,000 to $35,000 of that cost is for the actual dialysis treatment. The rest consists of other costs associated with support and complications of the disease, i.e., hospitalization.
One of the exciting things about more frequent dialysis that can be delivered in the patient's home is the possibility of this therapy reducing the total cost of complications in exchange for payment to do a few more dialysis treatments a week. It's always been my vision to deliver a superior and cost-effective choice for patients, providers and payers. We think our therapy provides an opportunity to manage or improve costs while providing a better total experience and have patients live longer. As we've demonstrated, we can reduce mortality with more frequent home hemodialysis.
TWST: The System One does not require specialized water or a specialized electrical system. Would you explain the concept behind the technology?
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