Continuum of care to drive future NOVADAQ imaging growth

NOVADAQ Technologies (NASDAQ:NVDQ; TSX:NDQ), pioneers in fluorescence imaging solutions for the operating room, is now focused on manufacturing and directly marketing and selling imaging solutions for use at multiple points throughout the patient care continuum.

“Our continuum of care includes diagnostics that can be performed at outpatient clinics and by primary care physicians, where vascular flow imaging can direct patients diagnosed with a problem to open, robotic or minimally invasive surgery, where we dominate the fluorescent-imaging ecosystem,” president and CEO Arun Menawat, says in an interview with

“We have the ability to cover every type of surgery that requires fluorescence imaging, allowing surgeons to make the decision of how to proceed,” he adds.

NOVADAQ is best known for its SPY fluorescence imaging technology, which allows healthcare professionals to visualize blood flow in tissue below the surface of the skin during diagnostic and surgical procedures.

Adequate blood flow or “perfusion” is critical to healing, as blood carries oxygen and nutrients to tissue. Seeing beyond what can be seen with the human eye and when it matters most–during procedures, enables physicians to make critical decisions and to take immediate action, if necessary.

For example, if a surgeon planned to make an incision at a certain area in the colon, but learned that blood flow in the area was poor, the operative plan could be altered to place the incision in a more optimal location.

More than 110 peer-reviewed publications demonstrate that the use of SPY fluorescence imaging to assess perfusion during complex and expensive surgeries for diseases such as those for breast, colon, head and neck and other cancers, enhances clinical judgment, leads to fewer post-operative complications and lowers hospital costs.

Use of SPY imaging in heart bypass surgery has been shown to save on average $2,000 per procedure in an independent study conducted by the U.S. Centers for Medicare and Medicaid Services.

Unlike x-ray, SPY fluorescence involves no harmful ionizing radiation or potentially toxic contrast agents and therefore, is highly safe for both patients and hospital and clinic staff. SPY technologies do not require the hospital to invest in any additional infrastructure.

“We take pride in the fact that SPY fluorescence technology is now being used in more than 1,400 U.S. hospitals and in approximately 30,000 procedures each year,” Dr.  Menawat says.

“As the global market leader, we provide value to patients, doctors and hospitals through what we refer to as our fluorescence imaging eco-system—that is, we offer specific systems for specific applications including those for outpatient diagnoses and open, robotic and minimally invasive surgeries,” he adds.

“We have the ability to bring value in all types of procedures and surgeries where understanding the quality of perfusion though fluorescence imaging can be the key to allowing surgeons to make certain decisions about how best to proceed.”

SPY fluorescence imaging is cleared by the FDA in seven surgical specialties, including coronary artery bypass, cardiovascular, plastic, reconstructive, micro, organ transplant and gastrointestinal surgery.

NOVADAQ’s minimally invasive version of SPY technology, called the PINPOINT fluorescence imaging system, is FDA cleared for use in minimally invasive surgery. PINPOINT, combines the capabilities of SPY fluorescence imaging with high definition, visible light visualization offered by conventional endoscopes.

While in the process of building its own direct sales and marketing team to promote PINPOINT and the LUNA fluorescence angiography for use in wound care, NOVADAQ formed a five-year alliance with LifeCell Corp. to sell the SPY Elite system into open, plastic reconstructive, gastrointestinal and head and neck surgery.

NOVADAQ also formed an alliance with Intuitive Surgical (NASDAQ:ISRG) to integrate and supply Firefly fluorescence imaging (SPY imaging) into the da Vinci surgical robotic system. Intuitive Surgical announced in August that it had received FDA clearance to ship Firefly Imaging with all da Vinci Xi Systems.

Dr. Menawat says that the company is making huge sales strides through its direct sales team. In the second quarter this year, sales growth for PINPOINT and LUNA exceeded expectations, he notes. Combined direct sales of the two products reached $5.1-million, up from $1.2-million for the same period in 2013, and up from $4.6-million in the first quarter of 2014. The two products generated a record 46% of total revenue in the latest quarter.

“In the past three quarters, we have shown significant direct sales growth and the trend is accelerating,” he adds.

Further expanding the opportunity for growth, NOVADAQ is engaged in an aggressive clinical trial strategy.

With a focus on establishing PINPOINT as standard of care, NOVADAQ is currently conducting two major clinical trials. The PILLAR III study is a randomized comparison of outcomes in patients undergoing highly complex colorectal resection with and without the benefit of PINPOINT tissue perfusion assessment.

FILM is a study of the use of PINPOINT for lymph node mapping in patients with uterine and cervical cancer. The FILM study is designed to enable NOVADAQ to expand the FDA cleared label for PINPOINT to include lymph mapping. Both the PILLAR III and FILM studies are expected to report data near the end of 2015.

To expand its surgical ecosystem into an even broader continuum of care, NOVADAQ acquired Digirad’s (NASDAQ:DRAD) lymphoscintigraphy imaging technology in 2013. Lymphoscintigraphy combines the use of radiopharmaceuticals and a device to allow for locating lymph nodes in deeper tissue. NOVADAQ’s acquired product, formerly known as Trapper, will be renamed later this year and will be clinically tested in early 2015. Anticipated market launch will be later in the year.

NOVADAQ completed the acquisition of Aïmago SA in the second quarter this year, with the intention of expanding the company’s offering to diagnosticians. Aïmago’s lead product, the FDA cleared and CE Marked EasyLDI perfusion assessment system, incorporates patented, high-speed, full field laser Doppler imaging technology.

The design of EasyLDI is tablet inspired, and is capable of “point-and-shoot” perfusion imaging at the surface of the skin. The technology is ideally suited for use in doctors’ offices, and does not require any injected imaging agent.

“With combined offerings that will include our family of SPY Imaging products and EasyLDI, we will be able to provide optimized perfusion assessment capabilities from first line diagnosis, through to treatment and follow-up,” Dr. Menawat points out, noting that the company plans to sell EasyLDI in tandem with LUNA.

NOVADAQ expects to begin post-marketing studies with EasyLDI in patients with chronic non-healing wounds in the U.S. during the current quarter. It should have results by the end of 2014 and be ready to begin marketing in mid-2015.

Canaccord Genuity analyst, Jason Mills, in a research report in May, said he believes “investors will come to appreciate the sound strategic vision put into motion in 2011 – go to market initially with well-branded partners, set finite license terms and license only part of its robust IP/technology, drive next-generation technology, such as PINPOINT and LUNA, through a direct sales force, focus on collecting randomized clinical data across multiple applications, and ultimately bring all of its product platforms under its direct sales umbrella.”

Regarding its partnered products, NOVADAQ’s agreement with LifeCell expires in September 2015. “To the best of our knowledge, LifeCell sales team is primarily selling the SPY Elite system in breast reconstruction and open GI surgery,” Dr. Menawat says

The company is committed to investing in aggressive research and product development as evidenced by the introduction of the next generation PINPOINT system in the second quarter this year.

Among other things, the latest technology enables surgeons to use PINPOINT throughout the entire surgical procedure instead of only when fluorescence is needed. It also includes a key new feature that color codes and segments anatomy based on differences in fluorescence.

“So now, for example, we can differentiate between the bile duct and liver by demonstrating them in different colors,” Dr. Menawat points out.