Adam, it is the company’s 20th anniversary, congratulations. Can you tell us how the company was founded and explain the origin of the company’s name?
The journey to founding Penumbra began in the late '90s when I was a commercial real estate lawyer and my college friend, Dr. Arani Bose, a neurointerventionalist, discussed his medical device ideas with me. Initially, intending to only divert the conversation, I jokingly suggested that we start a company to bring his ideas to life. However, this led to the creation of our first company, Smart Therapeutics, which developed the first stent for use in the brain. We subsequently founded Penumbra in 2004 with a focus on developing a method to remove blood clots from the brain with aspiration, a concept many considered impossible at the time. With this drive to continuously advance our technologies, we have since expanded to addressing blood clots from head-to-toe, changing the way patients with conditions like stroke or pulmonary embolism are treated.
The name "Penumbra" reflects the idea of cooperation, a core value in our company culture. It was chosen for its dual significance: medically, it refers to the part of the brain that can be saved following a stroke, and metaphorically, it represents being in the shadow, highlighting our approach of working effectively and humbly. This name was agreed upon because it was congruent with its specific medical connotation and it also symbolized our collaborative ethos.
What is Penumbra’s current focus? Why did you decide to also engage with Immersive Healthcare and offer virtual reality (VR) programs?
Our company has recently restructured its reporting and operational focus around thrombectomy (removing blood clots) and embolization/access, aligning with our technological advancements and market growth.
Immersive Healthcare, which utilizes virtual reality for rehabilitation and mental health, emerged from a serendipitous introduction to VR technology. Initially unfamiliar with VR, I quickly recognized its potential for stroke rehabilitation by "tricking" the brain into aiding recovery. This division has since forged valuable partnerships, including with the Veterans Affairs Administration, to provide innovative care solutions to veterans, demonstrating significant progress in patient rehabilitation and mental health.
Still, as you mentioned, your main focus is thrombectomy. Can you introduce us to your novel Lightning Flash and Lightning Bolt 7 products?
Lightning Flash and Lightning Bolt 7 represent significant innovations in thrombectomy by improving the efficiency and safety of blood clot removal. These computer assisted vacuum thrombectomy (CAVT) technologies are built on the concept of mechanical clot removal, which is becoming more preferable to drug-based methods due to the latter's risk of bleeding and the necessity for careful monitoring. Our approach, focusing on aspiration, aims to maximize safety, speed, and simplicity and avoid damage to the delicate structure of the blood vessels. Both Lightning Flash and Lightning Bolt 7 technologies employ sophisticated algorithms to recognize the difference between blood clot and blood flow, which is designed to maximize clot removal efficiency and minimize blood loss – ultimately the goal is to improve patient outcomes.
Lightning Flash, our primary venous CAVT product, is designed with a specific catheter and algorithm to address the unique challenges posed by larger veins, including the pulmonary artery. These large, and often life-threatening blood clots need to be addressed quickly to restore the flow of blood to the lungs for oxygenation. Lightning Flash is designed to offer the speed and safety to address these large clots. Lightning Bolt 7 is tailored for the arterial side where the vessels are significantly smaller and the clots are often more fibrous and rigid. Lightning Bolt 7 modulates aspiration to address clogging and maintain a high aspiration rate. This innovation provides a frontline option, which is effective, less invasive, and much quicker compared to traditional surgery.
Do these tools involve AI?
Currently, our CAVT technologies leverage computer microprocessors, though they do not yet incorporate AI. However, having a microprocessor in every device opens up possibilities for real-time data analysis and case-specific adjustments, as well as aggregate data analysis to refine and improve the algorithm over time.
Penumbra has seen significant growth recently. Can you share some insights on your business strategy to sustain that growth from now on?
Indeed, our recent financial success, including a revenue growth projection of 16% to 20% for 2024, is largely attributed to our unique, first-to-market innovations, including Lightning Flash and Lightning Bolt 7 and future CAVT innovations. The U.S. thrombectomy business is expected to see even higher growth this year, between 27% and 30%, underscoring the impact of these products. In addition to our U.S. expansion, our focus globally is to introduce our latest technologies to other markets, hone in on market access opportunities like reimbursement, and navigate the unique challenges of international healthcare systems.
How has Penumbra navigated the post-pandemic landscape?
The pandemic certainly posed challenges across the life sciences industry, but Penumbra navigated this period with resilience, maintaining profitability and almost doubling our revenue from the pre-pandemic era. Our innovations have continued unabated, contributing to our strong performance despite broader market uncertainties. In 2023, our total revenue exceeded $1 billion for the first time. This success is attributed not only to our technological advancements but also to our strategic financial management, allowing us to invest in growth and innovation without the need for external funding.
What is your sales strategy at Penumbra? Do you sell your products directly to hospitals?
Our sales strategy focuses directly on hospitals and the physicians who perform the procedures, with specific approaches tailored to each medical specialty involved. Over the years, Penumbra's products, especially our newer launches, have gained significant recognition, easing the introduction process compared to the early days of the company.
What achievements do you hope to have realized in three years?
In the U.S., there are more than 1 million cases of blood clots in the body, resulting in more than 100,000 deaths. Furthermore, blood clots in the arms and legs are often associated with high amputation rates. Quick diagnosis and treatment can often result in a positive outcome.
However, currently, only about 10% of these patients are treated with interventional approaches while the rest are receiving pharmaceutical treatments or surgery that often come with significant complications.
Our goal is to significantly expand access to CAVT so patients are able to get more advanced treatment quickly, potentially resulting in better care.
Achieving this ambitious goal will involve not just technological innovation but also extensive education efforts within the medical community and beyond. Our progress will be powered by the enthusiasm and support of healthcare professionals who are as committed as we are to improving patient outcomes through the use of advanced medical technologies.
