AtriCure Files for IPO to Expand in China, Offering Comprehensive Solutions for Over 300,000 Atrial Fibrillation Patients Worldwide

Atrial Fibrillation (AF)Atrial fibrillation, commonly referred to as AF, is the most common sustained arrhythmia encountered in clinical practice. During AF, the atria lose their normal and effective contractile function, entering a state of rapid and disorganized fibrillation with rates ranging from 300 to 600 beats per minute. Consequently, ventricular contractions become rapid and irregular, reaching rates of 100 to 200 beats per minute.

The incidence of atrial fibrillation increases with age. Approximately 1% of patients are under 60 years old, while the incidence rate in the 75–84 age group is as high as 12%. The actual incidence of atrial fibrillation may be higher, as some patients remain undiagnosed and untreated due to nonspecific or absent symptoms. Atrial fibrillation increases the risk of stroke fivefold and accounts for more than 20% of all strokes, making it an increasingly serious public health concern. Without appropriate treatment, atrial fibrillation can lead to disabling and fatal complications.

As a leading company in the field of atrial fibrillation (AFib) treatment, AtriCure holds 138 issued patents in the United States and has served more than 300,000 AFib patients since 2004. AtriCure offers three key therapies—surgical ablation, minimally invasive surgical ablation, and left atrial appendage (LAA) management—which are distributed in over 80 countries worldwide and are utilized by cardiothoracic surgeons and electrophysiologists to treat atrial fibrillation and reduce AFib-related complications.

AtriCure, Inc. was founded in 2000 by Mike Hooven and is headquartered in Ohio, USA.

Mike Hooven is a mechanical engineer who came to Cincinnati, USA, in 1988 to work for Johnson & Johnson’s Ethicon Endosurgery division as the Director of New Product Development. During his tenure at Johnson & Johnson, he led a team of 200 engineers and developed more than 100 new products. Hooven’s long-term plan was to establish his own medical device company. Therefore, in 1994, he left Ethicon Endosurgery with extensive experience. However, due to insufficient capital at the time, his idea of founding a company had to be temporarily shelved.

After leaving Johnson & Johnson, Hooven reconnected with Norman Weldon. In the early 1980s, Weldon served as his mentor while he was working on neurosurgical devices at the medical device company Cordis. Weldon had previously served as CEO of Cordis and later co-founded his own venture capital firm with partner Karen Cassidy. Weldon offered Hooven $100,000 in seed funding, but Hooven declined.

In a later interview with the media, recalling this experience, Hooven stated, “I was only willing to accept that funding once I had a product worthy of investment. Therefore, I accepted just $3,000 from Weldon and Rick D’Augustine, one of the founders of Ethicon Endosurgery.”

Finally, Hooven cashed out all his stock options in Johnson & Johnson for $22,000 and founded Enable Medical Corporation in April 1994, with the company’s total assets amounting to $25,000 at the time.

After the company was founded, he and his wife, Susan Spies, served as co-CEOs, using their home basement as an office. Hooven began collaborating with Daniel Smith, a surgeon at the University of Cincinnati, and the two spent several weeks evaluating surgical procedures in animal laboratories. Three months later, they came up with two product ideas. With Weldon’s assistance, Hooven leveraged these concepts to raise an additional $325,000, building on the initial $100,000 provided by Weldon.

ENABLE Medical’s first product is a pair of radiofrequency surgical scissors, designed for harvesting the saphenous vein in coronary artery bypass grafting, IMA harvesting, and general surgical applications.

Over the next six years, Hooven built Enable Medical into a fully integrated medical device sales and manufacturing organization with 50 employees. In November 2000, he developed a novel surgical technology for treating atrial fibrillation and founded a new company, AtriCure, using traditional risk financing. Following its establishment, the company focused exclusively on the atrial fibrillation business, while ENABLE Medical provided contract development and manufacturing services to AtriCure.

As a leading provider of innovative technologies for the treatment of atrial fibrillation and related conditions, AtriCure delivers premier solutions to electrophysiologists and cardiothoracic surgeons worldwide. The company’s Isolator Synerg Ablation System is the first and only medical device approved by the U.S. FDA for the treatment of long-standing persistent atrial fibrillation, having provided surgical ablation therapy for atrial fibrillation to 200,000 patients globally over the past decade. Currently, AtriCure is expanding into the pain management sector, while its AtriClip Left Atrial Appendage Exclusion System remains the most widely used device globally for left atrial appendage management.

AtriCure’s atrial fibrillation solutions consist of three main components: open surgical ablation, minimally invasive surgical ablation, and left atrial appendage closure management.

AtriCure offers robust radiofrequency ablation, pacing, and sensing devices. Its first product following the company’s formal establishment—the bipolar ablation system—was launched in the U.S. market in 2001 for soft tissue ablation. After more than a decade of development, AtriCure has built a strong portfolio in tissue ablation.

1. Surgical Bipolar Radiofrequency Ablation System

The Isolator Synergy ablation system is AtriCure’s flagship product, available in three models.

The Isolator Synergy OLL2/OSL2, approved by the FDA in 2011, is the first and only surgical device approved for the treatment of atrial fibrillation. This system is designed to ablate cardiac tissue for the treatment of patients with persistent atrial fibrillation lasting more than 7 days, or less than 7 days but requiring pharmacological or electrical cardioversion, as well as patients with long-standing persistent atrial fibrillation (duration greater than 1 year) who are undergoing open coronary artery bypass grafting and/or valve replacement or repair procedures.

Isolator Synergy EML2/EMR2 delivers superior Synergy radiofrequency technology, features selectable right- or left-curved jaws, and allows for easy attachment of Glidepath tape to facilitate guided maneuverability within confined cardiac anatomical structures.

Isolator Synergy EML2/EMR2 employs a dynamic monitoring algorithm to measure tissue response to radiofrequency transmission 50 times per second. The system responds to specific tissue characteristics and adjusts energy output and duration accordingly. It is capable of generating customized columnar lesions based on tissue length, width, and composition, and displays distinct ablation power and time curves tailored to the specific requirements of varying tissue components and thicknesses.

The Isolator Synergy EMT1 is an isolator-based synergistic access clamp, representing an ideal combination of leading synergistic ablation technology and access-driven capabilities.

2. Suction RF Inverter

The COBRA Fusion 150 Surgical Ablation System combines intuitive, real-time TCRF (Temperature-Controlled Radiofrequency) energy control with proprietary Versapolar technology. As the first adaptable and efficient platform of its kind, Versapolar energy delivery provides both bipolar and monopolar energy, enabling surgeons to easily and effectively create reproducible transmural lesions with greater flexibility, reliability, and control.

The COBRA Fusion 150 Surgical Ablation System features versatile and flexible epicardial ablation capabilities, along with a unique suction design that gently draws tissue away from circulating blood in both bipolar and monopolar modes to eliminate the heat-sink effect.

AtriCure also has a suction-based radiofrequency ablation device named the Fusion Magnetic Retriever System. Due to issues with product design and process control, when the device is removed, part of it may detach and remain in the body, which could cause permanent damage or injury to bodily functions or structures. Therefore, AtriCure initiated a recall of this device in September 2016.

3. Linear Pens and Probes

The Coolrail Linear Pen is a sterile, disposable electrosurgical device used to ablate cardiac tissue using radiofrequency energy during cardiac surgery. The Coolrail Linear Pen provides access to difficult anatomical structures while facilitating consistent tissue contact angles during ablation. This product has been commercially available in the United States since 2008.

The Isolator Linear Pen is designed to diagnose arrhythmias and ablate cardiac tissue, representing the latest linear ablation and mapping device in AtriCure’s linear pen portfolio. It combines the capability to deliver 20-mm linear lesions with pace-and-sense functionality, utilizing resistive heating through two 20-mm electrodes to create transmural lesions. Consequently, energy can be delivered deeper into the tissue, reducing the likelihood of gap formation.

1. Closed Thoracic Ablation System

The EPi-Sense Guided Coagulation System features the industry’s first epicardial sensing electrode. Leveraging VisiTrax technology, the device utilizes thoracoscopic, endoscopic, and laparoscopic surgical techniques to coagulate cardiac tissue with radiofrequency energy, enabling cardiac electrophysiologists and cardiothoracic surgeons to sense and record cardiac signals.

The Subtle Cannula is designed for laparoscopic or general surgical procedures, providing access for surgical and diagnostic instruments within body cavities. It allows surgeons to access the pericardial space through a one-inch abdominal incision via the cannula, introducing an endoscope and coagulation device to reach the posterior surface of the heart for coagulation of epicardial cardiac tissue.

4. Cryoablation Probe

The cryoICE cryoablation probe is AtriCure’s flagship product in cryoablation technology and the first cryoablation probe marketed in the United States. It is used to treat arrhythmias and to temporarily ablate peripheral nerves for pain relief. The probe features critical capabilities such as heat-based heat extraction and active defrosting, enabling safe and rapid separation from tissue while maintaining the frozen state of the target tissue.

The cryoICE Cryoablation Probe is available in two models: CRYO2 and CRYO3. The only difference between the two lies in their flexibility. The CRYO2 features a malleable probe, while the CRYO3 utilizes an enhanced malleable probe that reduces bending force by 25% compared to the CRYO2. The product was launched in 2015.

In 2016, AtriCure launched the cryoFORM cryoablation probe in the U.S. market for the cryosurgical treatment of arrhythmias. By freezing target tissue to induce an inflammatory response (cryonecrosis), the probe blocks electrical conduction pathways. The device offers enhanced flexibility to accommodate various surgical ablation procedures, aligning with the trend toward minimally invasive techniques.

AtriCure consulted leading pain management experts to develop a specific protocol for applying cryoanalgesia to the intercostal spaces. Earlier this year, AtriCure, Inc. launched its cryoICE cryoSPHERE probe in the U.S. market. The cryoSPHERE is the first device in the cryoICE series specifically designed to block pain by temporarily ablating peripheral nerves. It delivers precise cryogenic temperatures to the intercostal nerves, providing temporary pain relief during cardiac and thoracic surgeries.

AtriCure’s primary products for left atrial appendage management are the AtriClip series. The AtriClip series is further divided into two major product portfolios: AtriClip and AtriClip PRO.

1、AtriClip

The AtriClip portfolio comprises four products: the AtriClip Standard Device, the AtriClip Long Device, the AtriClip FLEX•V Device, and the AtriClip FLEX Device.

In 2010, the AtriClip Left Atrial Appendage Exclusion System was first launched in the United States for occluding the left atrial appendage under direct visualization in conjunction with other open-heart surgical procedures. By 2017, global sales had exceeded 100,000 units, reaching a significant milestone. In 2018, the AtriClip FLEX•V device was introduced to improve the placement of thoracotomy clips.

2、AtriClip PRO

In 2016, the new AtriClip device, AtriClip PRO2, was launched in the U.S. and European markets. This new device enhanced the ability to occlude the left atrial appendage during minimally invasive cardiac surgery. In 2017, the AtriClip PRO•V device was introduced in the U.S. market. The new device incorporated several modifications to facilitate easier navigation and placement in minimally invasive surgical settings.

In December 2013, AtriCure announced the acquisition of Endoscopic Technologies (Estech). Headquartered in San Ramon, California, Estech was a privately held company that developed and marketed a portfolio of innovative surgical ablation devices, enabling physicians to perform various conventional minimally invasive procedures using its patented temperature-controlled radiofrequency energy.

Estech is an ideal strategic choice for AtriCure, expanding its reach and strengthening its position in the atrial fibrillation treatment market. The merger of the two companies enhances AtriCure’s leadership and intellectual property standing in surgical ablation and epicardial left atrial appendage occlusion, and accelerates the availability of AtriCure’s broader portfolio of surgical ablation products by combining Estech’s capabilities with AtriCure’s global sales, marketing, and R&D infrastructure.

In 2015, AtriCure announced the acquisition of nContact Surgical, a privately held developer of innovative cardiac ablation solutions, for a total consideration of $99 million.

nContact, founded in 2005, holds more than 100 patents related to ablation technologies. The company’s first ablation device received FDA approval in 2006. During the acquisition period, nContact developed EPi-Sense, a minimally invasive closed-chest surgical system designed to reduce patient pain and shorten hospital stays. This technology is utilized in a “convergent procedure” involving collaboration between surgeons and electrophysiologists. AtriCure stated that by acquiring nContact, it has incorporated this minimally invasive surgical approach into its portfolio.

Since all of the company’s equipment is sold directly to medical institutions, AtriCure has established a direct sales force and distributor network to market its products—including bipolar ablation clamp systems and related radiofrequency ablation devices—to hospitals worldwide, which account for the vast majority of its revenue.

On April 26, AtriCure announced its financial results for the first quarter of fiscal year 2019. The announcement showed that AtriCure’s revenue in the first quarter was $54 million, a year-on-year increase of $7 million, or 14.8%. Driven by growth in sales of thoracotomy products related to ablation and ancillary management products, AtriCure’s U.S. business revenue grew by 11.9% to $43 million. In the first quarter of 2018, international revenue was $11.1 million, a year-on-year increase of $2.4 million, or 28.1%, mainly driven by growth in Asian and certain European markets.

Gross profit for the first quarter of 2019 was $40 million, compared with $34.5 million in the first quarter of 2018. Driven by operational improvements and cost reductions, AtriCure’s gross margin increased to 73.9% in the first quarter of 2019 from 73.4% in the first quarter of 2018, while its operating loss decreased by $4.1 million year over year.

On April 29, AtriCure’s stock price plummeted by 48.28%, falling below its 52-week low of $19.76. The stock had previously risen by 4.01%, reaching $29.30 on April 26, 2019. During the most recent trading session, the price fluctuated between $28.50 and $29.96. The company’s share price is currently 29.11% below its target price of $37.83, with a market capitalization of $1.09 billion. On April 29, foreign media reported that this outcome led to the exit of 14 institutional investors from AtriCure.

In 2017, a sampling survey of China’s medical insurance database covering 10 million individuals revealed that the incidence of atrial fibrillation had increased 20-fold over the preceding 11 years. It is estimated that one in five adults faces a lifetime risk of developing atrial fibrillation.

AtriCure has been selling atrial fibrillation ablation devices in China for 14 years, with its products used in more than 200 top-tier hospitals across the country. In addition, the company expects to seek approval for new products in the coming years to introduce its full portfolio of surgical ablation and left atrial appendage management devices into the Chinese market.

In June 2018, Baiyang Pharmaceutical and AtriCure jointly announced a strategic partnership to provide solutions for atrial fibrillation. Under the agreement, Qingdao Baiyang Pharmaceutical Co., Ltd., a subsidiary of Baiyang Pharmaceutical Group, will serve as the exclusive distributor in China for AtriCure’s surgical ablation medical devices for atrial fibrillation, catering to more than 10 million Chinese patients affected by this condition.

(Text by Nie Guanghong)

References:

https://www.atricure.com/

https://www.crunchbase.com/organization/atricure

http://stock.10jqka.com.cn/usstock/20180427/c604176709.shtml