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Cambridge Hearts, cost effective, non-invasive Microvolt
T-Wave Alternans test helps save lives by adding efficacy and efficiency to the selection
of patients in need of an implantable defibrillator
Medical Equipment and Supplies
Cambridge Heart Inc.
Oak Park Drive
Bedford, MA 01730
Chairman, President and CEO
Interview conducted by:
Lynn Fosse, Senior Editor
November 3, 2005
Chairman, President and CEO
Mr. Chazanovitz has 30 years experience in sales, marketing and general management of
medical products businesses, ranging from early stage device companies to larger more
established businesses. Prior to joining Cambridge Heart, he has been active in developing
products, marketing and selling to many different medical specialties including
electrophysiology, interventional cardiology and radiology, pediatric cardiology,
gastroenterology, and general surgery.
Mr. Chazanovitz has worked as a Divisional President for NMT Medical, initially with total
responsibility for establishing a start-up effort to develop a new cardiac technology and
more recently as President of their Neurosciences Division. Mr. Chazanovitz has also held
the position of President for several divisions of C.R. Bard, Inc., including Bard
Ventures, Bard Electrophysiology Division and USCI Angiography Division.
Mr. Chazanovitz earned a B.S. degree in Biology from City College of New York and an MBA
in Marketing from Long Island University.
Cambridge Heart, Inc., (CAMH OTC: BB) located in Bedford, Massachusetts, is engaged
in the research, development and commercialization of products for the non-invasive
diagnosis of cardiac disease. Using innovative technologies, they are addressing a key
problem in cardiac diagnosis, the identification of those at risk of Sudden Cardiac Death
(SCD). The Companys products incorporate their proprietary Microvolt T-Wave
Alternans Test (MTWA) technology and are the first diagnostic tool cleared by the
U.S. Food and Drug Administration to non-invasively predict which individuals may be at
risk of ventricular arrhythmias and SCD. All of the Companys products have obtained
the CE mark for sale in the European community and are generally available in most major
Awareness of Cambridge Hearts innovative
products continues to increase through the publication of clinical data from studies
performed in a broad range of patients showing that those patients who test positive for
Microvolt T-Wave Alternans are at increased risk for subsequent sudden cardiac events
including sudden death. Conversely, those patients who test negative for Microvolt T-Wave
Alternans have been demonstrated to be at very low risk and may not benefit from invasive
implantable defibrillator therapy. Patients at risk for sudden cardiac death now have
several treatment options available to them, including implantable defibrillators and drug
therapy. What has been missing is an accurate, noninvasive method to identify those at
risk and separate them from those not at risk. Cambridge Heart now has a noninvasive
product the Heartwave that can detect patients at risk for sudden cardiac
death who need lifesaving intervention.
Cambridge Heart's Microvolt T-Wave Alternans Test measures subtle fluctuations in
the human heartbeat, known as Microvolt T-Wave Alternans, which can be used to identify
patients at risk for sudden cardiac arrest, the leading cause of death in the United
States. These tiny variations, measured at one millionth of a volt, are detected under
elevated heart rates, often during a typical treadmill or bicycle exercise stress test.
The measurements are captured by disposable proprietary Micro-V Alternans Sensors
placed on the patients chest and transmitted to the Heartwave System for detailed
analysis using proprietary algorithms.
Cambridge Heart uses a hybrid model of direct sales representatives and independent
manufacturers representatives to market its core MTWA technology in the U.S. The
Companys standard stress test system, the CH2000 is marketed by DelMar Reynolds. The
Company also utilizes partnering programs with several of the major ICD manufacturers to
increase its visibility and credibility in the medical community and to help its U.S.
sales representatives in accessing many cardiology groups. Internationally, the Company
utilizes exclusive distribution partners to promote its products to the international
medical community throughout much of the world.
CEOCFO: Mr. Chazanovitz,
10 million people are at risk for Sudden Cardiac Death (SCD) this year and thousands will
actually die; how does Cambridge Heart help prevent that?
Mr. Chazanovitz: Sudden Cardiac Death (SCD) is a big
problem; there are over 400 thousand people that will die in the coming year from SCD.
Back in the 1990s Cambridge Heart developed a technology at MIT (Massachusetts
Institute of Technology), which looked for very subtle, anomalous changes in a portion of
an individuals electrocardiogram called the T-Wave. The change would be seen in the
shape or of the size of the T-Wave on an every other beat basis. When seen, that
individual would be deemed to have Microvolt T-Wave Alternans. In extensive studies over
the last ten or more years, weve shown that people that exhibit Microvolt T-Wave
Alternans are at very elevated risk for sudden cardiac death. The flip side of that
equation is also true, namely that if we do not see the Microvolt T-Wave Alternans, even
if the individual is in the high risk category for Sudden Cardiac Death, then it is very
unlikely that they will suffer such an event. Therefore, the results are very important
both on the plus side as well as the minus side for prognostic value.
CEOCFO: Tell us about the product that you have developed to
test for this.
Mr. Chazanovitz: The true product or the Companys
Crown Jewels, is an algorithm, which is a computer based analysis of the
electrocardiogram under modest exercise. Our physical product is called the Heartwave II,
which is a new platform that we released into the marketplace within the last 3 or 4
months. It is used to analyze the electrocardiographic signal and present the physician
with a report that interprets the test for him. It is important that the physician be able
to interpret the report on his own as well, but the computer interpretation is every bit
as good as if my chief technology officer was reading it himself.
CEOCFO: What are the new features of the Heartwave II?
Mr. Chazanovitz: The Heartwave II is a new and updated
platform that offers enhanced abilities to the clinician, while the actual algorithms for
monitoring and reading Microvolt T-Wave Alternans remains untouched. Further, it is very
important that the algorithm does remain untouched, as the algorithm has been clinically
validated for its predictive value in thousands of patients. The efficacy of the product
has developed over time in terms of proving the clinical results, so if you change the
algorithm, you will actually have a new product that is unproven. Therefore, in the
Heartwave II, weve put more user features in it to help guide the technicians
through the test, but the actual analysis algorithm remains the same. The other piece,
which has remained the same, is our disposable sensor or electrode. The sensors are put on
the patients chest to acquire the signal for us to analyze.
CEOCFO: Are there continuing tests being done concerning the
Mr. Chazanovitz: Absolutely, we have been doing
numerous studies now for many years, because you can never develop too much proof. It is
always interesting to hear a physician say, well this is interesting, but another
study would be even more interesting. Therefore, we are somewhat used to that the
continuous desire for more and more clinical information. Three studies have completed the
enrollment of patients within the last 2 to 12 months called, ABCD, MASTER and REFINE.
Collectively these studies have looked at an additional 1,500 plus patients. Typically, in
our field, when you do an exam or a study on a patient, you need to wait at least one year
to get follow-up information to be able to demonstrate the predictive value of the test.
Throughout 2006 and into 2007, the new studies that we have already completed, we will
present their results at medical meetings and publications in various peer reviewed
journals. Therefore, in addition to the thousands of patients that we have already
reported on, we will continue to have more clinical data to present I anticipate that
within the next few months we expect to see a publication on a 550 patient study on the
use of Microvolt T-Wave Alternans in heart failure patients. Much of that information has
been presented at medical meetings, but I anticipate that the written presentation in a
peer review journal should occur within the next few months. We know the results of that
study and they are quite astounding. They suggest that heart failure patients who test
negative with T-Wave Alternans are at very low risk of SCD and therefore may not benefit
from ICD therapy.
CEOCFO: Are there many units in operation today?
Mr. Chazanovitz: Yes, there are well in excess of 500
units out in the market in the United States. The task now is a combination of making sure
that those units are used on a routine basis, as well as to continue to put more units out
there. The biggest obstacle that we have toward getting the Heartwaves used in a routine
manner is to make certain that the physicians can get paid for each and every test that
they do. This means that it is necessary to gain appropriate reimbursement, or coverage,
from all of the various health insurance companies.
CEOCFO: Where are you in the process of getting the insurance
onboard with your product?
Mr. Chazanovitz: It is difficult to quantify, but we
say that we are probably 60 to 70% along the continuum. Medicare, which is the Federal
insurance carrier that covers individuals 65 years and older, covers Microvolt T-Wave
Alternans through local carrier decisions. This means that each local state Medicare
carrier can decide if they want to pay for Microvolt T-Wave Alternans testing and for
which indications. For the most part Medicare pays for the T-Wave Alternans tests across
the country, with an average payment to the physician for testing in his office of about
$321.00. This rate goes higher in high cost of living areas like New York, Boston and San
Francisco. Many private insurance carriers also pay for the test, but there are also a
number of the large private carriers that dont. Those that do not pay include
carriers like WellPoint, Inc. (NYSE: WLP), which is the largest of the Blue Cross Blue
Shields units, AETNA Inc., and United HealthCare Services, Inc. However, we are very
actively approaching those carriers to say, its time that you should start
paying for this test.
Weve been very fortunate in receiving assistance from the American College of
Cardiology supporting the need for payment of the T-Wave Alternans test. Their Advocacy
office has sent letters about T-Wave Alternans to the various insurance carriers advising
them of the usefulness of TWA in predicting arrhythmic events and also predicting freedom
from arrhythmic events. They have made a very important statement, which suggests that the
insurance companies (who do not pay) are discouraging the use of our non-invasive
technology, which may actually result in potential harm to large numbers of patients. This
is due to the slowing of the adoption of our non-invasive technology and the overzealous
implantation of implantable defibrillators as a primary prevention strategy for Sudden
Cardiac Death. The American College of Cardiology recognizes the value of our test and we
have many clinical studies to use in demonstrating clinical efficacy to the insurance
companies. The challenge becomes that each insurance company becomes its own project for
We go to the insurance companies and meet with them to convince them that of the benefits
their membership receives by having MTWA available. Unfortunately, there is no one magic
formula to get all of the insurance companies to universally pay. Because of the
importance we do put a significant amount of time and effort into this project. One item
that I believe will help us significantly deal with Medicare. I mentioned that Medicare
pays for the Microvolt T-Wave Alternans test on a local basis; weve gone to Medicare
on a national basis and suggested that they should issue a payment or coverage policy
Microvolt T-Wave Alternans, to make broad coverage uniform across the entire country. A
broad national coverage determination by Medicare should carry some weight with the other
private carriers in our effort to gain reimbursement for the test.
CEOCFO: What is the current financial position at Cambridge
Heart as it is always expensive getting new products out?
Mr. Chazanovitz: Yes it is, and we have been at this
for awhile. Although we have spent a lot of money, we are cash conscious, as all small
companies should be. Our cash is actually in a very respectable position at this
point-in-time. As of midyear we had about $6 million of cash in the bank. This leaves us
with over two years worth of cash in the bank. Weve taken steps to reduce our cash
burn as well and Im sure that some of those steps will enable us to increase the run
rate as we work very hard to get our technology defused into the marketplace.
CEOCFO: There have been some new studies on ICDs; how does
that fit in with Cambridge Heart?
Mr. Chazanovitz: Good question! Many of your readers
may know that in the last two years there have been a few very big studies on implantable
defibrillators, one called SCD-HeFT and the other MADIT II. By and large, those studies
have shown that ICDs are, as we know, life saving products. While the advantage of the ICD
over drug therapy in those studies was shown to be statistically significant, the benefit
was fairly modest in its magnitude. The largest of these studies is called SCD-HeFT
(Sudden Cardiac Death in Heart Failure). It compared the use of implantable defibrillators
and standard drug therapy in heart failure patients. If you had the ICD, your chance of
dieing was about 5½ to 6% on an annual basis. If you were treated with drug therapy, then
that number grew to a little over 7%. Therefore, the difference was not overly dramatic
between ICD therapy and drug therapy, even though it was a statistically significant
event. From a common sense and lay standpoint this means that you would have to place many
implantable defibrillators to gain a small incremental value.
Implantable defibrillators are very expensive devices and have an enormous impact on the
national healthcare budget. We can help this budgetary crisis by making the identification
of patients a more efficient process. In similar groups of patients weve shown that
the risk of needing the defibrillator in a patient that tests Microvolt T-Wave Alternans
negative is really quite small, approximately 1 to 2% on an annual basis. With a 1-2% risk
of dieing if you have had a negative MTWA test, this is approximately a 3x lower death
rate then the ICD patients mentioned above. While defibrillators are great products they
have their own set of issues. In the last year there have been over 100,000 ICD recalled
by the major manufacturers. The implant procedure has its own morbidity as problems can
arise such as infections resulting from the procedure and the wires that go from the
defibrillator to the heart are subject to breakage. Also, defibrillators are known to fire
inappropriately and that is not a pleasant experience for the patient. So while they are
great products, we can help risk stratify the population, to make the use of implantable
defibrillators a lot more cost effective and a lot more beneficial.
CEOCFO: How do you address that particular feature, with a
community that needs to understand that and act on it?
Mr. Chazanovitz: The typical cardiac patient is seen by
his cardiologist, who is typically not the same doctor that implants the defibrillator
(electrophysiologist). Most cardiologists today are still hesitant to refer all of the,
appropriate patients, to the electrophysiologist; partially because of the
issues that I have expressed with implantable defibrillators. Our presentation of
Microvolt T-Wave Alternans and the Heartwave to the cardiologist serves dual purposes. If
the patients tests negative then the MTWA test serves to reinforce the cardiologists to
treat the patient conservatively with drug. If the patient does not test negative then we
become the enabler to help the cardiologist make the decision that those people need to be
referred on to the electrophysiologist for ICD implantation. Whether the test is positive
or negative, the information is valuable to the cardiologist in determining the best care
for his patient.
CEOCFO: So its really a win, win.
Mr. Chazanovitz: We look at it that way all of the time
and that is exactly what we like to share with our clinicians.
CEOCFO: How do you get the cardiologist to pay more attention
than they have so far?
Mr. Chazanovitz: We point out to the cardiologist that
while he is taking care of his patients, he can also take care of his family by using our
Heartwave II test. Meaning that, no matter how good a therapy or diagnostic product is, if
the physician cant make an appropriate profit it on it; it is unlikely to become
routinely used. Therefore, we work diligently to make sure that the physician can get paid
for the utilization of our Microvolt T-Wave Alternans test. As such working on the
reimbursement issue is paramount. The other key element is to continue to supply
additional clinical efficacy information to the physician. So it is a combination of
clinical proof and economic value to the physician.
CEOCFO: In closing, please address potential investors - what
should they know that they dont see when they look at the company and why is this a
good time for their interest?
Mr. Chazanovitz: As you know, the stock is quite
depressed at this point-in-time; it is approximately 30 cents right now. It is
substantially easier to be able to take a 30-cent stock and double it, than it is a $50.00
stock and double it. Now that is not to say that a 30 cent stock doesnt come with
its own inherent risk, obviously it does and the people that read your publication
certainly understand the inherent risks associated with micro-cap stocks. It is also
important to realize that in almost every case, it is frustrating to watch an emerging
medical company, because invariably success takes longer than you think it will. So for
the people to give up on it too soon, typically they loose money. For the people that have
patience we hope to be able to reward those individuals that have stayed with us and maybe
ridden us down, so that hopefully they can ride us back up.
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