Inari Medical Update

Inari Medical treats dangerous blood clots, aka Pulmonary Embolisms (PE)as well other blood clots with a catheter system that removes blood clots without the use of dangerous (sometimes deadly) drugs, and it treats the clots without the need of extensive stays in the ICU. The aging population and increasing obesity epidemic will increase the numbers of PE and other blood clots.

First Quarter Revenue and Business Highlights (May 11, 2021):
*Treated a record number of patients, driving revenue of $57.4 million, which was up 18% sequentially and 113% over the prior year period.

*Announced first patient enrolled in FLAME study, the largest clinical trial ever conducted on high risk PE patients.

*Ended the quarter with $174.1 million in cash, cash equivalents, and short-term investments.
Key comments: Growth muted due to COVID headwinds.

Everything sounded peachy, but I was warned by Ethan1234 that it’s not unusual for medical devices get a burst of growth, initially, from research hospitals, but device growth often slows after that first burst. He was adamant that the medical device maker’s websites often inflate device claims over actual performance. He wasn’t convinced the device was worth the cost. He also told me that hospitals are in BAD financial shape, and unlikely to spend on new devices at this time. I contemplated his thoughts, and reread the earnings report.

I found two things interesting in the report (note: I am not a doctor. Ethan is). First, NARI was actively studying the catheter system in medical trials. If it was already proven to be as good as their website said, then I would think that the medical trials would be behind them. Second, they claimed, in their earnings call that COVID was muting their ability to sell the product to hospitals. I’ll get to the last point again a little later.

Because of Ethan’s comments, I decided to sell half my shares (meri beaucoup).

Second Quarter Revenue and Business Highlights (August 10, 2021):
*Treated a record number of patients, with revenue of $63.5 million for the second quarter of 2021, up 11% sequentially and 150% year-over-year.

*Announced FDA clearance of FlowSaver, enabling bloodless thrombectomy with the use of Triever Catheters.

*Presented interim results of the CLOUT DVT registry at New Cardiovascular Horizons, confirming best in class safety, clot removal, and clinical results for patients treated with ClotTriever.

*Ended the quarter with $176.1 million in cash, cash equivalents and short-term investments.

In their earnings call, NARI announced two things. First, NARI expected their growth to decelerate from 151% to 81% in the third quarter. Second, contrary to their first quarter call, they announced that COVID actually boosted it’s sales due to increased numbers of COVID related blood clots. NARI immediately dropped about 24%. I sold my remaining shares.

That said, it looks like it could be a good device, and I will be interested to see what happens when they report earnings during the first part of November. Again, I don’t own NARI, and I don’t think anyone would be wise to invest in this company until after the next earnings call.



Ethan – Thanks again.