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With 15 Million People At Risk Meeting The
Criteria For An Implantable Cardioverter Defibrillator (ICD) And The Lack Of
An Accurate Test Causing Many Over And Under Implantations, Vicor
Technologies Is In The Right Place At The Right Time With Their PD2i Cardiac
Analyzer
Healthcare
Medical Instruments & Supplies
(VCRT-OTC: BB)
Vicor Technologies, Inc.
2300 NW Corporate Boulevard, Suite 123
Boca Raton, FL 33431
Phone: 561-995-7313
David H. Fater
President and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
CEOCFOinterviews.com
Published – April 4, 2008
BIO:
David H. Fater joined Vicor as President, Chief Executive and Financial
Officer, and Director in June 2002. Since January 1993 through the present,
Mr. Fater was the Founder and has been the Chief Executive Officer of ALDA &
Associates International, Inc., a business and financial consulting firm
specializing in healthcare and life sciences. Prior to his founding of ALDA,
Mr. Fater served as a senior executive with three public health care
companies including two in which he led the Initial Public Offering process
(BMJ Medical Management, Inc. and Community Care of America) and one which
he led to a NYSE listing and a $1 billion market capitalization (Coastal
Physician Group, Inc.). Mr. Fater was employed by Coastal Physician Group
from January 1993 to June 1995; Community Care of America from July 1995 to
December 1996; and BMJ Medical from January 1997 to July 1999. From June
2000 through July 2001, Mr. Fater was the Chief Financial Officer of Vector
Medical Technologies, Inc. Prior to his corporate experience, Mr. Fater was
a key international business advisor to senior management and Boards of
Directors as a Senior International Partner during a 24-year career with
Ernst & Young from January 1969 to December 1992. He holds a B.S. in
Accounting from the University of North Carolina. He is a Certified Public
Accountant in Georgia, Illinois, North Carolina and New York.
Company Profile:
Vicor Technologies, Inc. is a biotechnology company dedicated to the
development of innovative diagnostic and therapeutic products. Our medical
device, the PD2i Cardiac Analyzer ("Analyzer"), is based on a patented,
proprietary algorithm and accurately risk stratifies patients into those who
are at high or low risk of suffering a fatal arrhythmic event or Sudden
Cardiac Death ("SCD") within a six month time frame. Vicor's therapeutic
products have been developed by using an innovative drug discovery platform
which focuses on naturally occurring bioactive molecules derived from
state-dependent physiologies such as hibernation.
Vicor's diagnostic platform is based
on a patented, proprietary algorithm. Vicor believes its PD2i Cardiac
Analyzer accurately risk stratifies patients who are at high or low risk of
suffering a fatal arrhythmic event or Sudden Cardiac Death (SCD) within a
six-month time frame.
Vicor's PD2i Cardiac Analyzer addresses an issue involving a patient cohort
of at least 12,000,000 patients. This patient cohort is composed of the
MADIT-II (Multicenter Automatic Defibrillator Implantation Trial II)/SCD-HeFT
(Sudden Cardiac Death in Heart Failure Trial) patient population. Many in
this patient cohort may need an ICD as life saving therapy. However, recent
registry studies have noted that over 70% of implanted ICD's never have an
appropriate firing leading to an over-implantation in these patients as well
as the risk of not identifying patients who need this life-saving therapy
because current criteria do not provide physicians an ability to accurately
risk stratify these patients.
CEOCFO: Mr. Fater, what is the vision for
Vicor?
Mr. Fater: “The vision for Vicor is that
we have a proprietary technology that will revolutionize cardiology because
it will enable physicians once and for all to accurately risk stratify their
patients that are at risk for SCD and very easily to allow them to put a
patient in either a positive bucket who should go on to get an implantable
cardioverter defibrillator or a negative bucket which means the patient is
risk-free of dying from SCD but needs to be managed on medical therapy and
retested every six months.”
CEOCFO: How does your technology work?
Mr. Fater: “Most risk stratification
diagnostics look at just the damaged heart. Our inventing scientist Dr.
Skinner was the first neuroscientist Ph.D. out of UCLA in 1967 and did all
of his seminal research at Baylor College of Medicine at the Debakey Heart
Institute, with Dr. Michael Debakey. His hypothesis was that the heart is
really controlled by the brain and the brain controls the arrythmogenesis or
irregular heartbeat. He performed the seminal experiments there at Baylor,
which allowed him to prove his hypothesis in animals. Our technology allows
us to analyze a digitally collected Electorcardiogram (EKG) as a window into
the interplay between the heart and the brain. When we look at a patient, we
look at a thousand heartbeats that have been collected digitally. We analyze
that data file of heartbeat data using Vicor’s proprietary algorithm that
looks at the interplay between the brain and the heart. When the brain
starts to over control the heart, the result is a diminished PD2i value
which provides a clear indication that the patient is at a high risk of
SCD.”
CEOCFO: Where are you in the process of
getting your products used?
Mr. Fater: “We are conducting a pivotal
FDA trial that has the acronym “VITAL”, for the VITAL Trial. The contract
research organization we are using is Harvard Clinical Research Institute
and the principal investigator is Dr. Matt Reynolds. It is an eighteen to
twenty-four month trial in duration; we currently have eighteen sites that
are enrolling patients and we have approximately eighty enrolled patients.
There is a need to have between seven-hundred and nine-hundred patients
enrolled. Part of the reason for the slow enrollment process is that we have
been constrained by lack of available funds and we are in the process of
remedying that. We anticipate that this trial should be completed in about
eighteen to twenty-four months from today and that the 510(k) will be filed
with the FDA and hopefully three to six months after that the product will
be approved for use in the US cardiology market. We anticipate that we would
be able to get CE-Mark for European clearance before that and there has been
another interesting development over the last several weeks. In January of
this year, it was publicly released that we signed a collaborative research
and development agreement with the United States Army
/*(United States Army Institute of Surgical
Research)*/ for use in helping
them meet a congressional mandate to find a new vital sign to be able to
triage wounded soldiers coming out of Iraq. They have performed several
experiments with our technology and have determined that the PD2i
measurement is a useful tool to triage wounded soldiers. We are currently
pursuing that collaborative research effort. This could conceivably lead to
civilian applications in the trauma and emergency response areas approved by
the FDA for commercial use in advance of the 510(k) approval expected from
the VITAL Trial. Therefore, while our primary application is in SCD, we do
have a platform technology that can be used for other indications because of
what the PD2i is able to do is analyze any biological stream of data.
Through the collaboration with the U.S. Army, we have identified another
potential use using EKG data to triage wounded or traumatized civilians and
soldiers that is working its way from development to commercialization. We
also have a pilot study ready to go for the early detection of Alzheimer’s
disease using electroencephalogram data from the brain. We are a
multifaceted company focused on SCD with a benefit now from the
collaboration with the US Army for potentially civilian emergency response
and trauma care.”
CEOCFO: How do you get the investment
community to pay attention to help your funding, and how do you get the
medical community to take notice?
Mr. Fater: “Interestingly enough we
reached out to the medical community early on. We have about 600
stockholders, 350 of which are physicians. We also reached out and formed a
national cardiac panel of 450 cardiologists around the country that we had
regular interactions with who are aware of the technology and want it in
practice as soon as it becomes commercially available following the
completion of the VITAL Trial and FDA clearance on the 510(k). The
investment community is a little different commodity, we have one competitor
who has an approved product and has met with some real market resistance
because their technology is much harder to use and much more expensive for
the physicians. They also have had some less than stellar clinical trial
results that have negatively impacted the reception of their product. As you
know in the investment community such a result also did cast a cloud over
Vicor even though the same problems do not exist with our technology because
our technology is different and superior. What we are doing from an
investment community standpoint is dropping below the radar screen right
now, and trying to move the U.S. Army collaboration to a point where it will
result in an approved product for the U.S. Army and/or civilian emergency
response and trauma. This will put Vicor in a whole different light both on
Wall Street and in the general business community at which time we can then
go back and raise additional funds for the SCD application to complete the
VITAL Trial.”
CEOCFO: Do you have a plan for
commercialization of your products or is it too early?
Mr. Fater: “We have some preliminary
plans. Obviously once we have FDA approval, we have an early adoption
community on the SCD application with our national cardiac panel. We also
would go through the national Thought Leader seminars; two of the world’s
experts on arrhythmias are on our Scientific Advisory Board. We believe that
we would start to market these products in a conventional manner. On the
emergency and trauma side, we think the major roll out of that would come
under the approval process from the United States Army and the FDA and the
National Trauma Society, which is very protocol driven, may very well
mandate the use of this technology once they see that others are using it.”
CEOCFO: These are exciting times for
Vicor!
Mr. Fater: “Very Exciting times; despite
the current financial market.”
CEOCFO: Please talk about the market
opportunity.
Mr. Fater: “Right now, based on the
existing risk stratification criteria for ICD implantation, there are 15
million people that meet the current criteria that have not yet received an
ICD for a variety of reasons, one of which is the fact that of the people
that have received an ICD, 76% have never received therapy from the device
which meant they didn’t really need the device in the first place. That is
the problem that our technology solves. There currently is over and under
implantation going on from the existing criteria and the physician and
healthcare community is screaming for a risk stratification technology that
is easy to use and, more importantly, accurate. Our PD2i Cardiac Analyzer
does that. Therefore, there are 15 million people in the current pool of
patients (and that pool is growing 5% a year) that should be tested using
our technology. Those patients that test negative need to be retested every
six months. This is a base of 24 to 30 million tests a year and we expect to
charge $100 per test for analysis, which equates to close to a $3 billion
market. Early penetration of only ten percent would result in significant
revenue to Vicor that is recurring and it is capable of delivering a high
profit margin.”
CEOCFO: Your pricing is quite
reasonable!
Mr. Fater: “We would anticipate that the
reimbursement level for the physician from the insurance company would be
$300.00 and we would charge the physician $100.00 to do the analysis. This
is kind of like a Quest Laboratories model where the blood is provided to
the lab, the lab prepares the report and sends the report back to the
physician and charges for the analysis.
Our PD2i is a
very inexpensive test, given the information that it provides the patient
and the physician. You are going to live without complications for the next
six months or you are at high risk of suffering sudden cardiac death in the
next six months and you should get an ICD. We conducted clinical trials on
approximately 1000 patients and for all practical purposes we have had no
false negatives, which means nobody that we said would live, died. We have
had specificity, kind of a positive predictive value of 83%, which means 17%
of the people that we say are going to die, didn’t end up dying so there
might have been an over-treatment of 17%. Contrast that with the current
risk stratification criteria, which are producing over implantation at 76%.
That would be a huge savings for the healthcare community.”
CEOCFO: In closing, why should potential
investors be interested?
Mr. Fater: “Because we are an exciting
story that can deliver maximization of value as the story unfolds. Our
current market capitalization is about $30 million. We anticipate that this
should increase dramatically as we successfully execute our operating
plans.”
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