NxStage reveals next-gen hemo, peritoneal dialysis systems

NxStage Medical (NSDQ:NXTM) announced 3 new products in the pipeline for the dialysis-focused device company during a conference call discussing their quarterly earnings last week.

Included in the announcements was a next-generation portable hemodialysis system usable at home or in care centers, a new, simplified peritoneal dialysis machine and a critical care system.

“In short, these innovations are designed to give patients even more flexibility in meeting their clinical and lifestyle needs and take us into valuable new segments of our market. We expect these innovations to expand our reach to $5 billion in market opportunity and significantly enhance our long-term growth,” CEO Jeff Burbank said during the conference call.

The next-generation hemodialysis system will take a pioneering approach to water purification and dialysate, Burbank said on the call.

“This new system produces bicarbonate buffered dialysate on demand from tap water at significantly higher flow rates than we offer today, eliminating the need to prepare a batch of dialysate,” Burbank said.

Burbank said the system was based around a disposable fluid pathway so cleaning and disinfecting with heat and chemicals would be unnecessary. The new portable system, he said, will also have a touch screen display and other features to improve setup and ease of use.

The new system will work as either a home or in-center machine, Burbank said, designed to fit multiple treatment paradigms. Burbank added that the system would be cost effective, and would not require that patients operate the device themselves so that centers can reduce patient staffing.

“With that said, we’re excited about a range of approaches to care delivery that can be explored with our new technology. We believe the ease of use, lack of required infrastructure and capability of the system creates an opportunity for providers to explore more efficient and cost-effective care models, like the ones we’re demonstrating at NxStage kidney care,” Burbank said.

Burbank said they believed the new hemodialysis system would add another $1 billion in market opportunity for the company, and that they expect to bring the product to markets in the 4th quarter next year.

The development will position the new NxStage system to compete with Outset Medical‘s in-development Tablo system, which is designed to be an all-in-one dialysis machine, handling water purification and dialysate production, CEO Leslie Trigg told MassDevice.com. The system comes with a touch-screen interface that allows patients or providers to operate the platform.

NxStage continued their reveal, announcing they were pursuing endeavors into the peritoneal dialysis market, which Burbank claimed to be a $3 billion market used by roughly 10% of dialysis patients worldwide.

The new PD unit from NxStage will be designed to eliminate the need for bags of PD fluid, Burbank said, reducing supplies, storage and lifting patients must do themselves. Burbank added that the system will improve simplicity of the dialysis system, something he said had been a historically weak aspect of PD systems.

Burbank said the product is slated to come to market in 2017, a year after their next-gen hemodialysis system is released.

In the pipe after the PD system is a next-gen critical care system, Burbank said, though details were vague on the device design and functionality.

“About a year after we launch PD, we plan to introduce our next-generation critical care system. That’s the result of the work we’ve been doing with DARPA. We’ve developed some really amazing technology with this program, and we expect to delight the market in terms of flexibility, simplicity and ease of use, all in a surprisingly small package,” Burbank said.

Burbank said the company believes the new critical care systems could bring in an extra $1 billion in revenue, and expand market gains globally.

“I think you can hear how excited and confident we are about what we believe the future will bring — a new product to accelerate the growth of home hemodialysis; expansion into a billion-dollar in-center market opportunity; a truly differentiated product in the $3 billion PD market; and access to another billion-dollar opportunity in our highly successful critical care market — all this built on the skills and assets NxStage has been creating over the last decade of commercialization. These timelines reflect our estimates of regulatory approvals, but, as you know, there’s always some unpredictability in this area,” Burbank said.

Last week, NxStage released 2nd quarter earnings, reporting profits of $5.6 million, or an 8¢ loss per share, on sales of $80.3 million for the 3 months ended June 30. That amounts to a 22.3% slide on profits on sales growth of 8.4% compared to the same period last year.

Loss per share beat expectations by 2¢, and the company topped revenue expectations by around $500,000. Shares rose more than 10% during mid-day trading in response to the news.

“Summing up, we delivered another solid quarter. We continue to make significant progress on our growth initiatives and our march to profitability. We’re bringing to market a robust pipeline that will continue to surprise and delight our patients and customers, as well as position NxStage for years of success,” Burbank said.

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