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Interview With PLC Systems CEO Mark Tauscher

|Includes:PLC Systems, Inc. (PLCSF)

Bio-Wire: Okay, so can you briefly describe for us what RenalGuard is?

Mark Tauscher: RenalGuard is a device that simply allows for goal-directed fluid therapy. It measures the output of urine, and will replace that output with either an equal amount, or more, or less fluid depending on the doctor's prescription for the device - or how the doctor wishes the device be run. It is based on a simple fluid-balancing mechanism.

Bio-Wire: And what exactly is Contrast Induced Nephropathy (CIN)?

Mark Tauscher: CIN, or acute kidney injury from contrast, is a condition and an unintended consequence from an imaging procedure for a stent, or diagnosis of coronary artery disease. A fluid agent is used with x-rays to image the heart and blood vessels so that the diagnosis can be made, and therapy can be administered. The contrast agent can be toxic to patient's kidneys, so this causes Acute Kidney Injury - or CI-AKI.

Bio-Wire: Which procedures have a heightened risk for CIN?

Mark Tauscher: Usually procedures where you're diagnosing problems with arteries and veins. Mostly coronary arteries, but other larger arteries may also require a high dose of contrast. Patients undergoing those procedures are much more susceptible to acute kidney injury - especially those with poor kidney function or existing chronic kidney disease.

Bio-Wire: So realistically, would your indication be limited to these types of patients?

Mark Tauscher: Yes. Not so much by the indication, but by the standards set by the medical community. This is a well-known problem these days and they recommend that patients with certain stages of chronic kidney disease - specifically stages 3, 4, and 5, need to be protected from the contrast used during imaging procedures.

Bio-Wire: Do you have a ballpark estimate on how many patients, both US and international, have these procedures?

Mark Tauscher: On a worldwide basis, there are about 7 million procedures done and 4 million in the US alone that receive contrast for catheterization and peripheral imaging procedures. The at-risk population for these is between 10-20%, depending on which publications are referenced, so we can say that 15% of this population receiving cardiac catheterization and peripheral vascular procedures are at risk. This translates to roughly 1 million patients worldwide, and around 600-700 thousand in the United States alone.

Bio-Wire: So how will the pricing work for RenalGuard in the United States?

Mark Tauscher: The business model is a razor / razor blade model. We have a device and patented single-use disposable. The price that we are planning for the disposable in the US is $500. The device would be placed in the hospital, and the customer would spend $500 for the proprietary, single-use disposable set. This implies that there is a $500 million dollar market.

Bio-Wire: And how long will the patent on the disposable unit last?

Mark Tauscher: We have patents that expire from 2024 out to 2029. We have the method patent for the use of high volume urination for protecting the kidneys from nephrotoxins. We do feel protected, and continue to expand the patent portfolio.

Bio-Wire: So where is RenalGuard in terms of clinical development in the United States?

Mark Tauscher: RenalGuard is currently in a pivotal clinical trial in the United States for contrast induced nephropathy called CIN-RG. Overseas, we are beginning to market the device, which now has CE marking. The revenue generated from overseas sales will help us to offset costs.

Bio-Wire: and how has RenalGuard been doing overseas?

Mark Tauscher: The technology has been performing marvelously. One of the big advantages of selling the products at this time is that we learn a lot about how it's used. We've had thousands of usages of RenalGuard, versus the typical 300-400 uses in a clinical trial. This lets us learn a tremendous amount about the product's use in the clinic like the training required for the device, the physician experience, and the patient experience. Europe's market is essentially giving us a leg-up.

It also exposes new potential markets to us. We are already selling to cardiac cath labs, but we see potential use of the therapy in CAT scan procedures - a market that would be nearly the same size. We're also seeing other potential uses for our fluid management device.

Bio-Wire: So what else has potential?

Mark Tauscher: Certainly in any procedures where contrast is used. In the CAT scan market there are hundreds of thousands of procedures done each year on at-risk patients with the same contrast used in heart imaging procedures. Cancer and antibiotic therapies can also cause acute kidney injury.

Another hot market these days is the replacement of heart valves percutaneously. These are called TAVI procedures, and may be another market for RenalGuard.

Bio-Wire: And what therapy would currently be used to prevent kidney damage in these situations?

Mark Tauscher: AKI from contrast results from the introduction of a toxic substance into the bloodstream, which damages patients' kidneys. The current procedure involves hydrating the patient with IV fluid in an attempt to dilute the nephrotoxin in the circulatory system, which can only do so much. What we added with our therapy is the speed of transit of nephrotoxins through the kidney space in particular.

Bio-Wire: Okay, so going back to US development - is the CIN-RG trial expected to finish in 2015?

Mark Tauscher: We have a unique design. We have approval to do 652 patients, but our adaptive design may allow us to do less than that number. At 163 patients our Independent Data Monitoring Board will take a look at the data, then they'll tell us how many patients we need to study. We have to do a minimum of 326 patients for the trial, but we may not have to reach the maximum of 652 patients.

Forecasting the finish is very difficult because of this, but we certainly believe that we will get to our interim analysis in early 2014. From there it is hard to forecast, but we will communicate any progress at the appropriate time.

Bio-Wire: So assuming that CIN-RG is completed in the first half of 2015, when could we expect possible FDA approval?

Mark Tauscher: Again - it's hard at this time to forecast, but generally the FDA adds 3-6 months to any process after we submit documents.

Bio-Wire: Okay, so it looks like we have a pretty good overview of the device and the opportunity here as well as the next steps for the company itself. Are you optimistic about the future of RenalGuard and PLC?

Mark Tauscher: I am very confident in our future. We have to keep our eye on the ball, as they say, and for us that means two things:

1.) PLC needs to continue to focus on our US clinical trial. Keeping our sites motivated and serving their needs well is critical.

2.) We need to continue growth in international RenalGuard sales. We have a great opportunity to learn more about our product in a real world environment. We still have new countries to expand sales into, and we want to see progress in countries in which we already have a presence. Our primary market (CI-AKI) continues to grow as more procedures are done non-invasively in cath labs across the world. We also keep finding new uses for RenalGuard's unique capabilities. You have to remember, there has never been a device like this in the hands of the medical community. We believe that both existing and new applications will drive RenalGuard's use quite far, as well as PLC's business.

(Original Article)


Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Stocks: PLCSF