INARI Medical

I was listening to the Industry Focus podcast with Brian Feroldi on June 10th about INARI Medical. They recently went public towards the end of May, 2020. $NARI

They sell medical devices that remove blood clots from the body’s veins as opposed to the competition whose devices remove blood clots from the arteries. These devices are sold directly to the hospitals with no upfront cost to the hospital.

The devices were FDA approved in 2018. In 2019, INARI’s revenue increased 650% to $51M and gross margin was 88%. They did have a loss of $1M in net income in 2019.

1st quarter 2020, they produced $4M in net income. They see more opportunity for growth here in the US and international and expect $120M in revenue this year.

This is a stock I will add to my watchlist. Sharing with the group in case anyone else wants to follow it too.

Have a great day.

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I have a position in NARI but it is probably the lowest conviction of any of the stocks I own. As you mentioned NARI is the only device of it’s kind that can remove clots from veins (while there are hundreds on the market for arteries) without the use of any blood thinners or thrombolysis, which shortens ICU time and reduces complication risk. It is a great improvement from the current methodology for that reason. However, their huge gross margins and fast growth are completely reliant upon the hundreds of other device makers out there making them for arteries not being able to make the same equipment for veins.

These devices are recurring revenue because they are used once and disposed. So it’s great in that regard and they’re seeing great uptick, I am just not very convinced it can last very long.

From their website:

Since 2000, more than 170 thrombectomy devices have been cleared by the FDA and nearly all of them were designed for the arterial system. The “re-purposing” of these devices for venous clot is sub-optimal due to clot morphology and vessel sizes. As a result, treatments include, or rely exclusively upon, thrombolytic drugs and their inherent bleeding risks.

Instead of “re-purposing” arterial devices, Inari Medical is pioneering venous-specific devices with venous anatomy and clot morphology in mind.

Focusing on the critical vessels of venous disease, Inari has designed tools to treat both Pulmonary Embolism (PE) and Deep Vein Thrombosis (DVT).

We believe that removing clot matters, and that it should be done safely. The FlowTriever and ClotTriever were designed as non-thombolytic solutions to venous thromboembolism with that belief in mind.

Both devices are FDA 510(k) cleared for the removal of emboli and thrombi from the peripheral vasculature.

In addition, the FlowTriever System was the first mechanical thrombectomy device to be awarded an FDA indication for treatment of Pulmonary Embolism.

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As you mentioned NARI is the only device of it’s kind that can remove clots from veins (while there are hundreds on the market for arteries) without the use of any blood thinners or thrombolysis, which shortens ICU time and reduces complication risk. It is a great improvement from the current methodology for that reason.

While it may be true that the Inari device is the first one designed specifically for the venous system, it’s simply not true that it’s the only device that can remove clots from veins. We have used numerous devices to remove, dissolve, or break up clots in veins for many years and there are several on the market. Penumbra (Indigo), Boston Scientific (Angiojet), and AngioDynamics (AngioVac) all have competing devices that treat similar sized vessels (typically larger veins, pulmonary arteries, and dialysis access). They’re used in different parts of the body depending on size and amount of clot needed to be removed.

All of them claim to be better than the others, in practice the differences are not all that great and it becomes mostly a matter of operator preference. Certain devices are better than others in certain areas.

Uptake depends mostly on hospital contracts and relationships. Many hospitals might buy a few catheters but whether they get re-ordered depends on the doctors actually using them up, otherwise they just sit on the shelf until they expire. Personally, I was willing to try it out but we already have multiple other options and the hospital wouldn’t buy more devices.

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While it may be true that the Inari device is the first one designed specifically for the venous system, it’s simply not true that it’s the only device that can remove clots from veins. We have used numerous devices to remove, dissolve, or break up clots in veins for many years and there are several on the market. Penumbra (Indigo), Boston Scientific (Angiojet), and AngioDynamics (AngioVac) all have competing devices that treat similar sized vessels (typically larger veins, pulmonary arteries, and dialysis access). They’re used in different parts of the body depending on size and amount of clot needed to be removed.

Do these other devices require blood thinners? That is the whole selling point of Inari’s products, that they don’t.

Do these other devices require blood thinners? That is the whole selling point of Inari’s products, that they don’t.

No, the products I listed don’t require it. Classically, Angiojet was used in combination with thrombolytics (a subtle difference but I believe you are using them interchangeably), but it doesn’t require them. Most people would probably use some thrombolytics during the procedure for any patient that can tolerate it.

The benefits Inari is touting is to avoid the long term thrombolytic therapy which is what was more commonly done until 10 years ago —- a catheter with holes along the side was placed through the clot and the clot dissolving medication was slowly infused in over several hours, usually overnight. Any of these devices can be used with or without thrombolytics, depending on what’s left after clot removal, likelihood of re-clotting, and other factors.

Perhaps the Inari devices are better than the other at removing clot more completely or with less ancillary devices. I wasn’t provided any convincing information during their sales call. I’m usually willing to try new devices, but couldn’t even get our hospital to stock it for trial unless maybe if I was willing to get rid of another option.

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