Acutus Medical has priced an upsized initial public offering at the top end of its target price range, giving it $159 million to crack a market fought over by Abbott, Boston Scientific, Johnson & Johnson and Medtronic.
The IPO pricing, which Acutus disclosed in a statement Wednesday, follows the publication of paperwork detailing how the Carlsbad, California-based arrhythmia management company plans to spend $40 million to step up commercialization of technology that identifies cardiac ablation targets. Acutus is now trading on the Nasdaq under the ticker AFIB.
A clutch of leading medtech companies already sell such technologies. Acutus plans to win market share from the incumbents using a technology designed to map complex or unstable arrhythmias faster and more reliably.
Cardiac ablation entails the destruction of tissue that is thought to initiate or maintain an arrhythmia. The effectiveness of the approach is therefore tied to the ability of a physician to identify the source of the arrhythmia. Companies including Abbott, Boston Scientific, J&J and Medtronic have developed mapping systems to help physicians identify the target tissue.
Still, there remains room to improve on the targeting process. For example, in Abbott’s Star AF II clinical trial, between 41% and 54% of patients experienced a recurrence of atrial fibrillation within 18 months, depending on the ablation approach used. Medtronic achieved a similar result in its STOP AF trial.
Acutus has identified flaws in the mapping process as the likely cause of the recurrences. Existing mapping systems rely on tissue contact to collect and align data. As Acutus sees it, that fact, coupled with the reliance on a fixed timing reference, means current systems are best at mapping simple, stable and repetitive arrhythmias. Even then, the systems can take up to 20 minutes per map.
Patients with complex atrial fibrillation can have large atriums with multiple areas of fibrosis that are at the root of abnormalities in the electrical rhythm of the heart. Current mapping systems are a poor fit for such cases, Acutus contends, and explain why procedures can take two hours, on average, and fail to achieve lasting improvements in a significant minority of patients.
Acutus has a different, non-contact approach that it believes is better suited to atrial fibrillation and other complex or unstable arrhythmias, such as supraventricular tachycardia and premature ventricular contractions.
The Acutus system, called AcQMap, uses ultrasound to reconstruct the endocardial surface anatomy. Paired to the use of charge density for mapping arrhythmias, the ultrasound reconstruction results in a system that Acutus claims maps cardiac anatomy and electrical propagation patterns and pathways in less than three minutes. In the UNCOVER AF trial, 93% of atrial fibrillation patients who underwent two procedures were free from symptoms after 12 months.
Acutus brought an early version of the system and some accessories to market in the U.S. in 2018. In 2019, the products generated sales of $2.8 million. Acutus’ rivals bundle their mapping products with other electrophysiology products in their financial results, making direct comparisons impossible. The electrophysiology units at Abbott and Boston Scientific generated sales of $1.7 billion and $329 million, respectively, last year.
Armed with the IPO gains, Acutus plans to go after some of those sales. A portion of the money will go toward the hiring of commercial staff and other sales activities. Acutus has earmarked another $22 million for the completion of ongoing clinical trials and $24 million for other R&D activities.
Acutus is performing the clinical trials and other R&D activities to expand its portfolio. Notably, the company aims to win FDA approval for its AcQBlate force sensing ablation catheters and control unit in the second half of 2022. The technology, which Acutus acquired from Biotronik, is part of its effort to build a broad portfolio of products that drives recurring revenues through consumable sales.