Cardiovascular Systems Receives Approval To Sell Its Flagship Device In Japan
Cardiovascular Systems Inc. hasn’t had a shortage of developments in the last week, among them: selling its New Brighton headquarters, securing a $40 million revolving loan, had a lawsuit against it dismissed and received approval to sell its flagship device in Japan.
The heart device company closed the $20.9 million sale of its facility with Minneapolis-based Krishna Holdings LLC last Thursday, according to an SEC filing. Moving forward, CSI said it would lease the space and put the net proceeds from the property’s sale toward “working capital and general corporate purposes.”
The next day, the company entered into a loan agreement with Silicon Valley Bank to the tune of $40 million. CSI said the $40 million revolver, or line of credit, would also go toward working capital and general corporate purposes.
“Adding this line of credit to our debt-free balance sheet strengthens our financial position and improves our flexibility,” CSI chief executive Scott Ward said in a statement.
Also last week, a federal judge in Minnesota dismissed a class-action shareholder lawsuit that claimed CSI defrauded investors during a time in which CSI salespeople allegedly ran an off-label promotion scheme and offered kickbacks to customers. U.S. District Court Judge Donovan Frank, who oversaw the case, told the Star Tribune he opted to toss out the case because some of the confidential witness statements sounded more like “office gossip.”
CSI faced many of the same accusations in a federal lawsuit that it settled last June for $8 million.
But arguably the most significant news for CSI recently was its approval to sell the Diamondback 360 Coronary OAS Micro Crown device in Japan.
“We are excited to receive this landmark approval which furthers our mission to provide primary tools for the treatment of calcified artery disease and facilitates our first international expansion,” Ward said.
CSI has been gearing up for this approval for nearly a year. Last July, the company announced it submitted an application for Shonin approval (similar to FDA approval) for the Diamondback 360 device. Four months later, it locked down a Japanese distribution partner to sell the device, which is used to sand down calcium and plaque build-up in a patient’s arteries, making room for a stent to be inserted.
Japan is poised to offer enormous market potential for CSI as it is the world’s second largest market for coronary interventions.
There are “over 280,000 [percutaneous coronary interventions] per year, of which 10 percent to 20 percent are estimated to be severely calcified,” Ward said of Japan. “We look forward to working with Medikit, Co. Ltd., our exclusive distribution partner with a large sales force in Japan, to pursue this significant opportunity.”
With all major regulatory hurdles now out of the way, CSI said it is anticipating a full commercial launch of its Diamondback 360 device in Japan next year.