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TWST: We would like to begin with a brief historical sketch of
Cardiogenesis and a picture of the things you are doing at the present
time.
Mr. Quinn: I have been with the company for a little over five years.
The company is approximately 12 years old. It was founded in Northern
California. When I came to the company five years ago, I moved it from
the San Francisco area down to Orange County. I felt that the
environment in Southern California was much more medical device
friendly, and that has proven to be the case. At the time, we decided to
outsource everything that we possibly could. We have almost become a
virtual company, and we successfully outsourced our manufacturing of
lasers and handpieces to two companies we selected in Central California
' one in Sacramento by the name of New Star that manufacturers all of
our lasers, and a company by the name of Ventrex in Ventura, California,
that manufactures all of our catheters and handpieces. As a result of
that decision, our gross margin went from the high 20s when we were in
Northern California to the low to mid-80s, which could be the highest
gross profit percentage in the entire medical device industry.
Recently, we have migrated our technical product platform from a laser-
based company to a revascularization company to include the capacity to
deliver biologicals into the myocardium. As we are doing TMR
(transmyocardial revascularization) and eventually PMC (percutaneous
myocardial channeling), which is our percutaneous delivery product, we
will be able to deliver whatever the surgeon would like to implant into
the patient's heart simultaneously as we create the TMR channels. The
uniqueness of our Holmium YAG laser is that it creates a thermoacoustic
field around the circumference of the channel that we create with our
laser fiber, and it allows us to excite the tissue. That is the precise
time that surgeons need to implant their stem cells, growth cells and/or
pharma compounds. So we think that we are headed in that direction very
rapidly. We also have been working with the FDA on two new minimally
invasive products. We have a robotic handpiece that can be delivered
through a 0.05-millimeter diameter. At the conclusion of the procedure,
they use Band-Aids to close the small incision. The other handpiece is a
thoracoscopic 0.08-millimeter diameter, and with both procedures, the
patient goes home the next day. Currently, if you receive TMR in a
hospital with either adjunctive or sole therapy, you are in a hospital
anywhere from five to seven days. So the reimbursement people like that
very much and this is going to be a significant improvement. Those two
hand pieces should be approved by the FDA later this year.
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