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Our solution, which is comprised of the Zephyr Endobronchial Valve (“Zephyr Valve”), the Chartis Pulmonary Assessment System (“Chartis System”) and the StratX Lung Analysis Platform (“StratX Platform”), is designed to treat severe emphysema patients who, despite medical management, are still profoundly symptomatic and either do not want or are ineligible for surgical approaches.
−Removed: We estimate our solution currently addresses approximately 500,000 patients in the United States and 700,000 patients in select international markets, which represents a global market opportunity of approximately $12 billion.
−Removed: We have a compelling body of clinical evidence with over 100 scientific articles published regarding the clinical benefits of Zephyr Valves, including in The New England Journal of Medicine , The Lancet and the American Journal of Respiratory and Critical Care Medicine .
−Removed: Multiple randomized controlled clinical trials have demonstrated that patients selected with the Chartis System and successfully treated with Zephyr Valves have shown statistically and clinically significant improvements in lung function, exercise capacity and quality of life compared to medical management alone.
+Added: Patients with severe emphysema generally experience a worse quality of life than patients with lung cancer, and we believe there is both an urgent clinical need and a strong market opportunity for a solution that is safe, effective and minimally invasive.
In June 2018, we received pre-market approval (“PMA”) by the U.S.
−Removed: Food and Drug Administration (“FDA”) as a result of our breakthrough technology designation.
+Added: Food and Drug Administration (“FDA”).
The Zephyr Valve is now commercially available in more than 25 countries, with over 100,000 valves used to treat more than 25,000 patients.
We have established reimbursement in major markets in North America, Europe and Asia Pacific and the Zephyr Valve has been included in treatment guidelines for COPD worldwide.
−Removed: There are several treatment options for patients with emphysema, depending on the level of severity of the disease, ranging from medical management to more invasive surgical options.
−Removed: However, these treatment options have significant limitations for patients with severe emphysema.
−Removed: Initial treatment for emphysema is generally limited to medications that primarily target airway obstruction and reduce inflammation, but do not address the underlying lung tissue destruction.
−Removed: As the disease worsens, symptoms increase despite optimized drug therapy, pulmonary rehabilitation exercises and supplemental oxygen.
−Removed: As patients enter the severe phase, many become increasingly unable to engage in the most basic daily activities as a result of the persistent feeling of breathlessness and this reduces their overall health status each year.
−Removed: At this point, physicians may refer patients to thoracic surgeons for single or double lung transplantation or for lung volume reduction surgery (“LVRS”), in which hyperinflated tissue is cut away and removed.
−Removed: These invasive surgical
−Removed: procedures involve substantial risk of complications, prolonged hospital stays and high mortality.
−Removed: In addition, many patients do not qualify for these procedures.
−Removed: Patients with severe emphysema generally experience a worse quality of life than patients with lung cancer.
−Removed: We believe there is both an urgent clinical need and a strong market opportunity for a solution that is safe, effective and minimally invasive.
−Removed: Our solution, which is comprised of the Zephyr Valve, Chartis System and StratX Platform, is designed to address the need for a more effective, minimally invasive treatment option for patients with severe emphysema, offering bronchoscopic lung volume reduction without surgery and its associated risks.
−Removed: Zephyr Valves are indicated for bronchoscopic treatment of adult patients with hyperinflation associated with severe emphysema in regions of the lung that have little to no collateral ventilation.
−Removed: During the one-time bronchoscopic procedure, Zephyr Valves are placed in the airways to occlude the most diseased parts of the lung, allowing trapped air to escape until the lobe is reduced in size.
−Removed: The intended result is a reduction in lung volume and hyperinflation in the targeted lobe, allowing healthier parts of the lung to expand and take in more air.
−Removed: Patients who are successfully treated with the Zephyr Valve report improved breathing and the ability to go back to doing everyday tasks more easily.
−Removed: We believe our solution provides the following important benefits:
−Removed: • Significant, durable improvements in lung function, exercise capacity and quality of life , demonstrated in a substantial body of clinical data;
−Removed: • Well-characterized safety profile , evidenced by the inclusion in global treatment recommendations and more than 25,000 patients treated globally with the Zephyr Valve;
−Removed: • High procedural success driven by innovative and effective patient assessment tools;
−Removed: • Minimally invasive procedure typically lasting less than an hour.
Over 100 scientific articles have been published regarding the clinical benefits of Zephyr Valves, including multiple meta-analyses, review articles, cost-effectiveness analyses and risk-benefit analyses.
The Zephyr Valve showed statistically significant improvements in lung function, exercise capacity and quality of life when compared to medical management alone in multiple randomized controlled clinical trials.
−Removed: Additionally, independent studies have demonstrated that Zephyr Valves deliver increases in the BODE Index (a multi-dimensional health status scoring system for patients with COPD) that have been associated with survival benefits.
−Removed: The LIBERATE study, our pivotal study published in 2018, was a multicenter, multinational, randomized controlled clinical trial of Zephyr Valves that included 190 patients with severe emphysema and little to no collateral ventilation.
−Removed: All primary and secondary endpoints were statistically significant, including the proportion of patients achieving a clinically significant improvement in lung function as well as the mean improvements in exercise capacity, hyperinflation and quality of life.
−Removed: These outcomes were the result of a high rate of procedural success, with 84% of patients achieving a clinically meaningful reduction in treated lobe volume.
+Added: Additionally, independent studies have demonstrated that Zephyr Valves deliver increases in the BODE Index (a multi-dimensional health status scoring system for patients with COPD) that have been associated with long-term survival benefits.
We market and sell our products in the United States through a direct sales organization.
−Removed: Our sales territory managers are focused on promoting awareness and increasing adoption of our solution primarily among the pulmonologists performing interventional pulmonary procedures across approximately 500 high volume hospitals in the United States.
+Added: Our sales territory managers are focused on promoting awareness and increasing adoption of our solution primarily among the pulmonologists performing interventional pulmonary procedures across the United States.
We are expanding our commercial operations in the United States while continuing to foster our international growth.
In international markets, we employ both direct and distributor-based sales models, with over 95% of our revenue generated in markets where we sell directly.
−Removed: In the United States, our solution is reimbursed based on established Category I CPT and ICD-10 Procedure Coding System (“PCS”) codes and associated APC and MS-DRG payment groupings.
−Removed: Current reimbursement in the United States is believed to cover the hospital costs of the procedure and related inpatient care.
−Removed: Commercial payors such as Aetna, Humana, Health Care Service Corporation, and Highmark have issued positive coverage policies for the Zephyr Valve, and United Healthcare no longer considers the procedure unproven or experimental.
−Removed: Medicare covers our solution for patients when medically necessary, and other commercial insurers are approving pre-authorization
−Removed: requests on a case-by-case basis.
−Removed: Outside the United States, our solution is covered by major health systems across much of Europe, Australia and South Korea.
We generated revenue of $53.7 million, with a gross margin of 74.3% and a net loss of $58.9 million, for the year ended December 31, 2022 compared to revenue of $48.4 million, with a gross margin of 73.6% and a net loss of $48.7 million, for the year ended December 31, 2021.
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In 2015, it affected approximately 175 million patients and was responsible for 3.2 million deaths globally.
−Removed: We estimate that there are approximately 8.5 million severe COPD patients in developed markets globally as of 2019.
In the United States, COPD is the third leading cause of death and affected approximately 16 million Americans as of 2013.
−Removed: Emphysema, a form of COPD, which accounts for approximately 25% of all COPD patients, is a debilitating and life-threatening disease that progressively destroys lung tissue, resulting in a diminishing ability to breathe and engage in the most basic daily activities, leading to a high mortality rate.
−Removed: Of the approximately 8.5 million global severe COPD patients, we estimate approximately 3.2 million have severe emphysema and approximately 5 million have severe chronic bronchitis.
+Added: Emphysema, a form of COPD, which accounts for approximately 25% of all COPD patients, is a debilitating and life-threatening disease that progressively destroys lung tissue, resulting in a diminishing ability to breathe and engage in the most basic daily activities such as climbing a flight of stairs, walking, or showering, leading to a high mortality rate.
+Added: We estimate that there are approximately 8.5 million severe COPD patients in developed markets globally as of 2019, and we estimate approximately 3.2 million have severe emphysema.
Of the approximately 3.2 million severe emphysema patients, we estimate that approximately 1.2 million may be eligible for treatment with Zephyr Valves, and an additional number may be able to be treated in the future with other technologies under development by us.
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market opportunity of approximately $5 billion.
−Removed: The lung damage caused by emphysema is irreversible.
−Removed: In patients with emphysema, diseased portions of the lung lose their ability to exchange oxygen and carbon dioxide due to damage to the air sacs, or alveoli.
−Removed: The diseased portions of the lung also lose elasticity, become over-inflated, and crowd out the healthier lung tissue.
−Removed: As a result, patients with emphysema experience shortness of breath, gradually losing their ability to engage in the most basic daily activities such as climbing a flight of stairs, walking or showering.
−Removed: Based on published literature, the five-year mortality rate for patients with severe emphysema is approximately 50%.
−Removed: The following graph shows an increased mortality rate for patients with more hyperinflation relative to patients with less hyperinflation.
−Removed: The inspiratory capacity-to-total-lung capacity (IC/TLC) ratio is an indirect measurement of lung hyperinflation.
−Removed: The graph above depicts two Kaplan-Meier survival analyses of (1) patients with an IC/TLC ratio greater than 25% and (2) patients with an IC/TLC less than or equal to 25%.
Emphysema is diagnosed through a combination of breathing tests and computed tomography (“CT”) imaging of the lungs.
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Initial treatment for emphysema is generally limited to prescribing inhaled medications such as drugs that open the airways and reduce inflammation, which primarily target airway obstruction.
−Removed: However, as the disease becomes more severe, the effectiveness of drug therapy is diminished, and patients feel increasingly breathless.
As the disease progresses, physicians may prescribe pulmonary rehabilitation exercises and supplemental oxygen, but these can be poorly tolerated by patients and often lose effectiveness with time.
As patients enter the severe phase, many become increasingly unable to engage in the most basic daily activities as a result of the persistent feeling of breathlessness and this reduces their overall health status each year.
−Removed: At this point, physicians may refer patients to thoracic surgeons for LVRS, in which hyperinflated tissue is cut away and removed, or for single or double lung transplantation.
+Added: At this point, physicians may refer patients to thoracic surgeons for lung volume reduction surgery (“LVRS”), or for single or double lung transplantation.
LVRS is an invasive surgery that involves cutting away diseased tissue to create space for the remaining lung to inflate more fully.
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Even with a successful procedure and consistent use of anti-rejection medications, lung transplantation patients have a five-year survival rate on average.
−Removed: Due to these limitations, and constraints from limited donor supply, LVRS and lung transplantation combined have fewer than 2,000 procedures performed for COPD each year in the United States.
In addition to recently approved endobronchial valves, there are other approaches to a minimally invasive alternatives to LVRS, including the use of airway bypass, coils and vapor.
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Our solution, which is comprised of the Zephyr Valve, Chartis System and StratX Platform, is designed to treat severe emphysema patients who, despite medical management, are still profoundly symptomatic and either do not want or are ineligible for surgical approaches.
−Removed: Our solution is designed to address the need for a more effective, minimally invasive treatment option for patients with severe emphysema, offering bronchoscopic lung volume reduction without surgery and its associated risks.
−Removed: Zephyr Valves are indicated for bronchoscopic treatment of adult patients with hyperinflation associated with severe emphysema in regions of the lung that have little to no collateral ventilation.
−Removed: During the one-time bronchoscopic procedure, Zephyr Valves are placed in the airways to occlude the most diseased parts of the lung, allowing trapped air to escape until the lobe is reduced in size.
−Removed: The intended result is a reduction in lung volume and hyperinflation in the targeted area, allowing healthier parts of the lung to expand and take in more air.
−Removed: Patients who are successfully treated with the Zephyr Valve report improved breathing and the ability to go back to doing everyday tasks more easily.
−Removed: When combined with the Chartis System for informed patient selection and treatment planning, Zephyr Valves have been shown to have successful procedure rates of 84-90% in clinical trials.
We believe our solution provides the following important benefits:
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The Zephyr Valve is also designed to resist fractures or breakage, adapt to changes in airway size and stay in place following deployment.
−Removed: The following diagram depicts the four sizes of Zephyr Valves (two different diameters and four lengths).
−Removed: 4.0-LP EBV 4.0 EBV 5.5-LP EBV
Physicians select the optimal valve size for each airway to be treated using an EDC that includes sizing wings and depth markers, which allows the physician to perform quick and accurate sizing.
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The Zephyr Valve is designed to be a permanent implant, but unlike surgery, the procedure can be reversed if necessary.
−Removed: The most common serious complications of treatment with Zephyr Valves can include pneumothorax, worsening of COPD symptoms, hemoptysis, pneumonia, dyspnea, respiratory failure and, in rare cases, death.
−Removed: See “Clinical Trials and Results” for a discussion of complications related to Zephyr Valve, including pneumothoraces and death.
+Added: Treatment Steps
+Added: The following graphic illustrates the typical treatment steps associated with our solution.
StratX Platform
−Removed: The StratX Platform is a cloud-based quantitative CT analysis service that provides physicians with an easy-to-read report that we designed for our solution (“StratX Lung Report”) that includes information on emphysema destruction, fissure completeness and lobar volume to help identify target lobes for treatment with Zephyr Valves.
−Removed: The StratX Platform is designed to enable physicians to:
−Removed: • Screen treatment candidates non-invasively;
−Removed: • Prioritize between multiple potential treatment targets, if applicable;
−Removed: • Enhance case planning and optimize procedure time;
−Removed: • Educate themselves and their patients using the simple to read StratX Lung Report.
+Added: The StratX Platform is a cloud-based quantitative CT analysis service that provides physicians with an easy-to-read report that we designed for our solution that includes information on emphysema destruction, fissure completeness and lobar volume to help identify target lobes for treatment with Zephyr Valves.
+Added: After the physician captures a CT scan of the patient’s chest according to the StratX parameters, the CT scan is de-identified of patient information, and the hospital staff uploads the CT scan to a third-party cloud service provider where it is analyzed using validated algorithms within the StratX Platform.
+Added: The StratX Platform is designed to enable physicians to screen treatment candidates non-invasively, prioritize between multiple potential treatment targets, if applicable, enhance case
+Added: planning and optimize procedure time, and educate themselves and their patients using the simple-to-read StratX Lung Report.
In order to make the StratX Platform available to physicians, we contract with a third-party cloud service provider.
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The StratX Lung Report is then made available to physicians in the third-party cloud service.
−Removed: The software of each of these third-party service providers has received either 510(k) approval or a CE mark.
+Added: The software of each of these third-party service providers has received either 510(k) approval or successfully underwent a conformity assessment procedure with a Notified Body and was subsequently CE Marked..
We provide exclusive access to physicians to their StratX accounts and cases and monitor this CT scan upload and analysis process to ensure quality control.
−Removed: A sample StratX Lung Report is below, with each section briefly described afterwards.
−Removed: Summary Graphic :
−Removed: The goal of the Zephyr Valve treatment is to completely obstruct and reduce the volume of a target lobe, thereby reducing hyperinflation and improving breathing.
−Removed: In selecting a target lobe, physicians are instructed to look for higher levels of emphysema destruction and presence of complete or nearly complete fissures with neighboring lobes (which has been associated with absence of collateral ventilation and likely response to therapy).
−Removed: The StratX Lung Report contains tabulated data on fissure completeness by lobe, destruction score by lobe and lobar volume.
−Removed: An infographic “key” for easy interpretation of the data is also included.
−Removed: This infographic includes color coding representing the level of emphysema destruction (with darker colors representing lobes with more destruction) and different levels of fissure completeness relative to a target lobe (with darker and more complete lines having greater completeness).
−Removed: Fissure Completeness :
−Removed: Fissure completeness has been shown to be a predictor of success and a surrogate for collateral ventilation between the target and the neighboring lobes.
−Removed: The StratX Lung Report displays fissure completeness values “by lobe,” meaning the values are computed as a percentage of the total area of the fissure across the lobar boundary.
−Removed: The value of fissure completeness between each lobar region is represented with a dark solid, light solid or dotted line.
−Removed: The dark solid line represents fissures that are ≥95% intact.
−Removed: The light solid line represents fissures that are 80-95% intact.
−Removed: The dotted line represents fissures that are <80% intact.
−Removed: A fissure completeness score of <80% indicates the likely presence of collateral ventilation in that lobe, indicating that the lobe should not be considered for treatment with Zephyr Valves.
−Removed: For fissure completeness values of >80%, fissure completeness should be confirmed using the Chartis System to confirm lobe eligibility.
−Removed: Emphysema Destruction Scoring :
−Removed: Lobar destruction values of greater than 50% at -910 Hounsfield Units (a measure of tissue density) have been commonly used as an inclusion criterion for various clinical trials of Zephyr Valve treatment.
−Removed: The StratX Lung Report also includes lobar destruction values using -950 Hounsfield Units.
−Removed: In the report and summary view, the degree of shading of a lobe and the numbers within the lobe represent the level of destruction.
−Removed: Lobes with less than 50% destruction are colored white and are usually not considered as potential targets for Zephyr Valve treatment.
−Removed: Inspiratory Volume :
−Removed: The inspiratory volume represents the volume of each lobe in mL.
−Removed: The inspiratory volume can help to identify the lobes with the largest volume representing hyperinflation and ones that may be a good target for Zephyr Valve treatment.
−Removed: To use the StratX Platform, users must have an account set up with us.
−Removed: After the physician captures a CT scan of the patient’s chest according to the StratX parameters, the CT scan is de-identified of patient information and the hospital staff uploads the CT scan to our secure encrypted server where it is analyzed using validated algorithms within the StratX Platform.
−Removed: The StratX Platform generates a report that is checked by a trained technician for accuracy and completeness and uploaded to the hospital’s account within two to three working days, where it can be downloaded and reviewed by the treating physician.
−Removed: We continue to gather scan data and refine our algorithms in the StratX Platform.
−Removed: We believe that our high volume of reports and data are a source of durable competitive advantage.
Chartis Pulmonary Assessment System
−Removed: The Chartis System is a proprietary balloon catheter and console system with flow and pressure sensors designed to assess the presence of collateral ventilation and to accurately predict responders to Zephyr Valve treatment.
+Added: The Chartis System is a proprietary balloon catheter and console system with flow and pressure sensors designed to assess the presence of collateral ventilation and has been validated in multiple randomized controlled clinical trials to predict likely responders to Zephyr Valve treatment.
The Chartis System consists of a single-patient-use catheter with a central lumen and a balloon at its tip and a console to allow for the assessment of airflow in the targeted lobe.
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The system works with spontaneous breathing or mechanical ventilation.
−Removed: If the flow of air leaving the occluded lobe is trending towards zero, there is likely no collateral ventilation in the target lobe and it can be successfully treated with Zephyr Valves.
−Removed: By contrast, if the measurement shows continuous airflow from the lobe, the lobe is being refilled through collateral air channels and will likely not respond to Zephyr Valve treatment.
−Removed: The Chartis System has been validated in multiple randomized controlled clinical trials to predict likely responders to the Zephyr Valve treatment.
The Chartis System offers a physiologic technique for measuring collateral ventilation and complements non-invasive estimates of fissure completeness.
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Without assessment by the Chartis System, physicians may treat a lobe that has collateral ventilation, which will likely not respond to valve treatment, or unnecessarily rule out a patient who could have potentially benefitted from valve treatment.
−Removed: For example, in one early study not sponsored by us that treated patients with a broad range of fissure completeness, approximately 60% of patients who had fissure completeness of 80-90% in the treated lobe had a successful procedure.
−Removed: If a physician was using only quantitative computed tomography (“QCT”) and a 90% fissure completeness cutoff to select patients, the physician would inappropriately screen out patients in the 80-90% completeness range that could benefit from valve treatment.
−Removed: In that same study, only 72% of patients with a fissure completeness of 90-100% had successful volume reduction in the target lobe.
−Removed: By comparison, patients selected using the Chartis System in four randomized controlled clinical trials had a success rate of 84%, 88%, 89% and 90%.
−Removed: Thus, while quantitative fissure analysis is an important tool for non-invasively screening out ineligible lobes, we believe it is insufficient for identifying responders to treatment with high accuracy.
−Removed: Treatment Steps
−Removed: The following graphic illustrates the typical treatment steps associated with our solution.
Clinical Trials and Results
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In addition, over 100 scientific articles have been published on the clinical benefits of Zephyr Valves, including multiple meta-analyses, review articles, cost-effectiveness analyses and risk-benefit analyses.
−Removed: Four randomized controlled clinical trials using the Chartis System to select eligible patients (with little to no collateral ventilation) have been completed comparing the treatment of severe emphysema patients with Zephyr Valves with medical management versus medical management alone (which may include drug therapy, pulmonary rehabilitation and supplemental oxygen).
−Removed: All four studies demonstrated statistically and clinically significant benefits across a broad range of endpoints, including measures of lung function, exercise capacity, and quality of life.
−Removed: Patients who received the Zephyr Valve treatment together with medical management experienced increased lung function, a better quality of life and increased exercise capacity—they could walk farther, could do more daily life activities, such as walking, gardening, and getting ready in the morning, with less shortness of breath.
−Removed: This was due in part to the high rate of procedural success in deflating the target lobe of the lung, ranging from 84-90% in the studies.
−Removed: When the target lobe was properly occluded and isolated from airflow, trapped air in that lobe escaped only through the Zephyr Valves until the lobe volume was reduced.
−Removed: The remaining lobes were then able to expand more fully and work more efficiently, improving overall lung function.
−Removed: Additionally, studies have evaluated the impact of Zephyr Valves on the BODE Index, showing magnitudes of improvement that have been associated with survival benefits.
We are following patients enrolled in the LIBERATE study for up to five years for safety and effectiveness (FEV 1 ) assessments.
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We have established a similar registry in France.
−Removed: Summary of Key Clinical Results
As seen in the table below, the results from multiple randomized clinical trials have consistently shown statistically significant and clinically meaningful benefits of Zephyr Valves across multiple measures of effectiveness.
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The complications of treatment with Zephyr Valves can include but are not limited to pneumothorax, worsening of COPD symptoms, hemoptysis, pneumonia, dyspnea and, in rare cases, death.
−Removed: The most common side effect of Zephyr Valve placement is a pneumothorax, which is the collapse of a lung due to an air leak inside the lung.
−Removed: Pneumothoraces are believed to be a direct result of rapid shifts in air volume in the chest as the target lobe deflates and the neighboring lobe expands.
−Removed: A pneumothorax typically requires placement of a chest tube to manage the air leak.
−Removed: While most pneumothoraces can be readily managed with standard medical care, in rare cases they can be life-threatening, particularly if left untreated.
−Removed: In the event the pneumothorax does not resolve with standard management, one or more valves can be removed to re-inflate the lung;
−Removed: these are typically replaced later when the pneumothorax has resolved.
+Added: The most common side effect of Zephyr Valve placement is a pneumothorax, which is the collapse of a lung due to an air leak inside the lung and is believed to be a direct result of rapid shifts in air volume in the chest as the target lobe deflates and the neighboring lobe expands.
In clinical trials, pneumothoraces occurred in 18-34% of patients treated with the Zephyr Valve, and in the LIBERATE Study, 17% of the pneumothorax events required no intervention and resolved on their own.
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Further, our current products are contraindicated, and therefore should not be used, in certain patients, including patients (i) for whom bronchoscopic procedures are contraindicated, (ii) with evidence of active pulmonary infection, (iii) with known allergies to Nitinol (nickel-titanium) or its constituent metals (nickel or titanium) or silicone, (iv) who have not quit smoking or (v) with large bullae encompassing greater than 30% of either lung.
−Removed: Summary of the LIBERATE Study (Pivotal IDE Study)
−Removed: LIBERATE, our pivotal study, was a multicenter, multinational, randomized controlled trial of Zephyr Valves in patients with heterogeneous emphysema and little to no collateral ventilation.
−Removed: The study was conducted between October 2013 and September 2017, and the results were published in May 2018 in the American Journal of Respiratory and Critical Care Medicine.
−Removed: Key inclusion criteria were emphysema patients with heterogeneous disease (≥15 difference in destruction scores between the target and adjacent lobes), ex-smokers between 40 and 75 years of age, with post-bronchodilator (BD) forced expiratory volume in one second (FEV 1 ) between 15% and 45% predicted, Total Lung Capacity (TLC) greater than 100% predicted, residual volume (RV) equal to or greater than 175% predicted, diffuse capacity of the lung for carbon monoxide equal to or greater than 20% predicted, a Six-Minute Walk Distance (6MWD) between 100 and 500 meters after a supervised pulmonary rehabilitation program and little to no collateral ventilation.
−Removed: Patients with two or more COPD exacerbations requiring hospitalization in the last year, two or more instances of
−Removed: pneumonia in the last year, uncontrolled pulmonary hypertension, myocardial infarction or congestive heart failure in prior six months, and prior lung transplantation, LVRS, bullectomy or lobectomy were excluded from the study.
−Removed: The Chartis System was used to confirm that all 190 patients had little to no collateral ventilation and would be likely responders to the Zephyr Valve treatment, and were evaluated initially at six months with follow-up for an additional six months.
−Removed: One hundred ninety patients with hyperinflation were randomized two-to-one for Zephyr Valves plus medical management (Zephyr Valve Group) or medical management alone (which may include drug therapy, pulmonary rehabilitation and supplemental oxygen) (Control Group) (128 Zephyr Valves patients:
−Removed: 62 Control Group patients) and followed for 12 months.
−Removed: Patients in the Zephyr Valve Group had Zephyr Valves placed in the target lobe to achieve lobar occlusion.
−Removed: Both the Zephyr Valve Group and Control Group patients continued to receive optimal medical management according to current clinical practice.
−Removed: Following their 12-month evaluation, the Control Group patients had an option to receive Zephyr Valve treatment, of which 47 out of 59 (80%) elected to do so.
−Removed: The LIBERATE study had high patient retention with 94% of patients completing follow-up for evaluation for 12 months.
−Removed: The primary effectiveness endpoint was the percentage of patients enrolled in the Zephyr Valve Group who met the threshold of ≥15% improved FEV 1 as compared to the Control Group at 12 months.
−Removed: The secondary effectiveness endpoints included standard validated assessments commonly used in COPD studies:
−Removed: 1) FEV 1 , a measure of lung function:
−Removed: Difference between the Zephyr Valve Group and the Control Group in absolute change from baseline for FEV 1 at 12 months;
−Removed: 2) 6MWD, a measure of exercise capacity:
−Removed: Difference between the Zephyr Valve Group and Control Group in absolute change from baseline for 6MWD at 12 months;
−Removed: George’s Respiratory Questionnaire (“SGRQ”), a measure of quality of life:
−Removed: Difference between the Zephyr Valve Group and Control Group in absolute change from baseline for SGRQ score at 12 months.
−Removed: Other endpoints included additional measures of lung function, exercise capacity, breathlessness and quality of life.
−Removed: Adverse events and serious adverse events were evaluated for the Treatment Period (day of procedure to 45 days), and Long-Term Period (46 days after procedure to 12 months) to assess safety.
−Removed: Effectiveness
−Removed: The study met its primary and secondary endpoints at 12 months.
−Removed: In the Zephyr Valve Group, 47.7% of patients achieved an FEV 1 improvement of ≥15% from baseline to 12 months compared to 16.8% of patients in the Control Group (p<0.001).
−Removed: Figure shows the primary endpoint of FEV 1 Responders (FEV 1 improvement of ≥15%) at 12 months
−Removed: The absolute change in FEV 1 showed significantly greater mean improvement (improved forced expiratory volume) in the Zephyr Valve Group compared to the Control Group (Δ Zephyr Valve - Control = +0.106L, p<0.001);
−Removed: the 6MWD showed significantly greater mean improvement (increased distance walked) in the Zephyr Valve Group compared to the Control Group (Δ Zephyr Valve - Control = +39.31 meters, p=0.002), and the SGRQ showed significantly greater mean improvement (score reduction) in the Zephyr Valve Group compared to the Control Group (Δ Zephyr Valve - Control = −7.05, p=0.004).
−Removed: Figure above presents secondary endpoints as mean changes ± standard error of the mean (SEM) from baseline to 12 months for the Zephyr Valve and Control Groups
−Removed: Target lobe volume reduction was successfully achieved with 84% of patients having volume reductions of 350 mL or greater, where 350 mL lobe volume reduction is considered to be the Minimal Clinically Important Difference (MCID).
−Removed: Across a broad range of effectiveness endpoints, patients in the Zephyr Valve Group showed a substantially higher rate of clinically meaningful benefits when compared to patients in the Control Group, with responder rates ranging from 42-62% for individual measures.
−Removed: 73% of patients in the Zephyr Valve Group had a clinically meaningful response to at least one of FEV 1 , 6MWD and SGRQ score.
−Removed: Responder rates based on the individual MCID for the various endpoints at 12 months are shown in the figure below.
−Removed: Figure above shows Responder rates based on individual MCID for various endpoints at 12 months
−Removed: The safety of the treatment with Zephyr Valves was assessed by comparing adverse event profiles of patients in the Zephyr Valve Group and Control Group occurring over two time periods:
−Removed: Treatment Period (day of procedure to 45 days) and the Longer-Term Period (46 days after procedure to 12 months).
−Removed: Serious adverse events included pneumothorax, COPD exacerbation, pneumonia, respiratory failure and death.
−Removed: Proportion of Patients Experiencing Pulmonary Serious Adverse Events
−Removed: Occurring in at Least 3% of Patients in Zephyr Valve and Control Groups
−Removed: Treatment Period
−Removed: Longer-Term Period
−Removed: 46 days to 12 months
−Removed: Zephyr Valve Group
−Removed: ∆ Zephyr Valve - Control Zephyr Valve
−Removed: ∆ Zephyr Valve - Control
−Removed: Death 3.1% 0% 3.1% 0.8% 1.6% -0.8%
−Removed: Pneumothorax 26.6% 0% 26.6% 6.6% 0% 6.6%
−Removed: COPD Exacerbation 7.8% 4.8% 3.0% 23.0% 30.6% -7.6%
−Removed: Pneumonia 0.8% 0% 0.8% 5.7% 8.1% -2.4%
−Removed: Respiratory Failure 1.6% 0% 1.6% 0.8% 3.2% -2.4%
−Removed: There were a higher number of serious adverse events in the Zephyr Valve Group compared to the Control Group during the Treatment Period.
−Removed: The most common serious adverse events in the Zephyr Valve Group versus the Control Group during the Treatment Period were pneumothorax and COPD exacerbations.
−Removed: The majority of pneumothoraces (76%) occurred within three days following a bronchoscopy procedure.
−Removed: Four deaths occurred in the Treatment Period in the Zephyr Valve Group and none in the Control Group.
−Removed: Three of the four deaths were deemed by the investigators to be definitely related to treatment with Zephyr Valves and the remaining one was deemed by the investigators to be probably related to treatment with Zephyr Valves.
−Removed: Each patient that died experienced pneumothorax, with three deaths directly attributed to the pneumothorax and the fourth death the result of respiratory failure after the pneumothorax had resolved.
−Removed: In order to more closely monitor patients, the study protocol was subsequently amended to keep patients in the hospital for five nights.
−Removed: Based on the full study data, current practice is to keep patients in hospital for a minimum of three nights post-treatment.
−Removed: Post-hoc analysis has helped us identify risk factors for the group of patients at higher risk of having a complex pneumothorax event (complex pneumothorax defined as requiring removal of all valves or resulting in death) should one occur.
−Removed: Such high-risk patients include those who are not treated in the most diseased lobe and have greater than 60% destruction of the untreated lung.
−Removed: All four patients who experienced a pneumothorax and died were within this high-risk group.
−Removed: Further, all four pneumothorax events occurred in subjects that were not treated in the most diseased lobe and had more than 60% emphysema destruction in the contralateral lung.
−Removed: This learning is incorporated in our physician training program for physicians to identify such high-risk patients and to consider alternative targets or other risk mitigation strategies.
−Removed: During the Longer-Term Period, there was one death (0.8%) in the Zephyr Valve Group from a COPD exacerbation, deemed by the investigators not to be related to treatment with Zephyr Valves, and one cardiac arrhythmia death in the Control Group (1.6%).
−Removed: Patients who experienced a pneumothorax following treatment with Zephyr Valves and whose pneumothorax had been resolved, experienced meaningful clinical benefit once they recovered from the pneumothorax event, with benefits comparable to patients who did not experience such pneumothorax events.
−Removed: In the Longer-Term Period, the Zephyr Valve Group showed a non-statistically meaningful trend towards a reduction in COPD exacerbations requiring hospitalization and statistically significant reductions in respiratory failure events.
−Removed: There were a number of secondary bronchoscopy procedures (consistent with study protocol) either to adjust a valve or to manage adverse events.
−Removed: There were 11 adjustment procedures in 11 patients following verification of lobar occlusion from the HRCT-assessment at 45-days.
−Removed: There were 21 procedures purely for valve removal (related to an adverse event) in 17 patients, and ten valve replacement procedures in eight patients (valve replacement procedures could entail simultaneous removal and replacement, or replacement for a valve previously removed).
−Removed: Five patients experienced a pneumothorax event following a valve adjustment procedure.
−Removed: See also Part I, Item 1A, “Risk Factors—Risks Related to Our Business and Strategy—Use of the Zephyr Valve involves risks and may result in complications, including pneumothorax or death, and is contraindicated in certain patients, which may limit adoption and negatively affect our business, financial condition and results of operations.”
−Removed: Additional Post Hoc Analysis of LIBERATE Data
−Removed: In July 2020, Dransfield et al.
−Removed: published a post hoc analysis of patient reported outcomes (PRO) from the LIBERATE trial which found that patients with severe emphysema and hyperinflation who achieve lung volume reduction following treatment with Zephyr Valves experience moderate to large improvements in multidimensional scores for breathlessness, activity, and psychosocial parameters that may permit re-engagement in activities of daily living out to at least 12 months.
−Removed: Patients treated with the Zephyr Valves also reported experiencing significantly more days when their symptoms were “better” and fewer days that were “worse” over 12 months compared to the control group.
−Removed: The authors concluded that interruption of the downward spiral of symptom-induced inactivity, muscle deconditioning, and ensuing weakness allows patients to experience improved activity, feeling of well-being, more confidence, and a better quality of life.
−Removed: Summary of the TRANSFORM Study
−Removed: The TRANSFORM study was a company-sponsored, multicenter, prospective, randomized, controlled clinical trial of Zephyr Valve treatment in patients with heterogeneous severe emphysema and little to no collateral ventilation conducted at 17 study sites in Europe.
−Removed: The study was conducted between January 2014 and April 2017, and the results were published in September 2017 in the American Journal of Respiratory and Critical Care Medicine.
−Removed: Key inclusion criteria were severe emphysema patients with heterogeneous disease (≥10 difference in destruction scores between the target and adjacent lobes), ex-smokers over 40 years of age, with post- BD FEV 1 between 15% and 45% predicted, TLC greater than 100% predicted, RV equal to or greater than 180% predicted, and a 6MWD
−Removed: between 100 and 450 meters and little to no collateral ventilation.
−Removed: Patients with two or more COPD exacerbations requiring hospitalization in the last year, known pulmonary hypertension, myocardial infarction or other cardiovascular events in prior six months, and prior lung transplantation, LVRS, bullectomy or lobectomy were excluded from the study.
−Removed: Eligible patients were randomly assigned at a 2:1 ratio into either the Zephyr Valve treatment plus medical management (Zephyr Valve Group) or medical management alone (which may include drug therapy, pulmonary rehabilitation and supplemental oxygen) (Control Group) (65 Zephyr Valve patients:
−Removed: 32 Control Group patients).
−Removed: The Chartis System was used to confirm that all 97 patients had little to no collateral ventilation and would be likely responders to the Zephyr Valve treatment, and were evaluated initially at six months with follow-up for an additional six months.
−Removed: Patients in both groups were observed at 45-day, three-month and six-month periods.
−Removed: Patients in the Control Group were required to complete a minimum six-month follow-up.
−Removed: Following their six-month evaluation, the Control Group patients had an option to receive Zephyr Valve treatment, if eligible, which is commercially available in Europe, or remain in the Control Group for an additional six months.
−Removed: Only two Control Group patients elected to continue for an additional six months and the other patients opted to seek Zephyr Valve treatment commercially.
−Removed: The primary effectiveness endpoint was the percentage of patients in the Zephyr Valve Group meeting the MCID of ≥12% improved post- BD FEV 1 at three months post-treatment compared to the percentage of patients in the Control Group.
−Removed: Other endpoints included additional measures of lung function, exercise capacity, breathlessness, hyperinflation, health status and quality of life measures.
−Removed: Adverse events and serious adverse events were evaluated for the Treatment Period (day of procedure to 45 days) and Longer-Term Period (46 days from procedure day to six months).
−Removed: Effectiveness
−Removed: The study met its primary and secondary endpoints at three months.
−Removed: At three months, 55% of patients on an ITT basis and 67% of patients on a per protocol (PP) basis achieved a ≥12% change in FEV 1 from baseline, compared to 6.5% for the ITT and 6.7% for the PP patients in the Control Group (p<0.001 for both).
−Removed: This was statistically superior to medical management alone.
−Removed: Figure above shows the responder rate (primary endpoint) for the Intention-to-Treat and Per Protocol Populations at three months
−Removed: The study met its secondary endpoints, with durable and statistically significant benefits in favor of the Zephyr Valve Group out to six months across multiple measures.
−Removed: Lung function assessed by FEV 1 showed a 29% (p<0.001) improvement in the Zephyr Valve Group over the Control Group, exercise capacity assessed by 6MWD improved by 79 meters (p<0.001), quality of life assessed by the SGRQ score improved by 6.5 points (p=0.031), hyperinflation assessed by a decrease in residual volume improved by 670 mL (p=0.002), and health status assessed by the BODE Index improved by 1.75 points (p<0.001).
−Removed: Target lobe volume reduction was successfully achieved with 90% of patients having volume reductions of greater than MCID.
−Removed: Figures above show the improvements over time for FEV1, 6MWD, SGRQ, RV, and BODE Index out to six months.
−Removed: At six months, 47.7% patients in the Zephyr Valve Group compared to 9.4% patients in the Control Group (p<0.001) had a respiratory related serious adverse event, with most events occurring within 45 days of the procedure.
−Removed: In the Zephyr Valve Group, there were 13 pneumothorax events in 13 patients (20%) during the 45-day Treatment Period (p=0.004).
−Removed: None of the other respiratory serious adverse events were statistically different between groups during the same period.
−Removed: Over the longer term (46 days through six months), there was no difference in respiratory serious adverse events between groups.
−Removed: There was one death in the Zephyr Valve Group due to an in-hospital cardiac arrest as a complication of a pneumothorax and was deemed by the investigator to be related to treatment with Zephyr Valves.
−Removed: See also “Risk Factors—Risks Related to Our Business and Strategy—Use of the Zephyr Valve involves risks and may result in complications, including pneumothorax or death, and is contraindicated in certain patients, which may limit adoption and negatively affect our business, financial condition and results of operations.”
−Removed: Summary of the IMPACT Study
−Removed: The IMPACT Study was a company sponsored, multicenter, randomized, controlled clinical trial of Zephyr Valves in patients with severe homogeneous emphysema at eight investigational sites in Europe.
−Removed: The study was conducted between August 2014 and March 2017, and the results of the primary endpoint at three months were published in August 2016 in the American Journal of Respiratory and Critical Care Medicine.
−Removed: Key inclusion criteria were emphysema patients with homogeneous disease (<15 difference in destruction scores between the target and adjacent lobes), ex-smokers over 40 years of age, with post- BD FEV 1 between 15% and 45% predicted, TLC greater than 100% predicted, RV equal to or greater than 200% predicted, a 6MWD equal to or greater than 150 meters and little to no collateral ventilation.
−Removed: Patients with three or more COPD exacerbations requiring hospitalization in the last year, known pulmonary hypertension, myocardial infarction or other relevant cardiovascular events in prior six months, and prior LVR or LVRS, and greater than 20% difference in perfusion between the left and right lung were excluded from the study.
−Removed: Eligible patients were randomly assigned at a 1:1 ratio into either the Zephyr Valve procedure plus medical management (Zephyr Valve Group) or medical management alone (which may include drug therapy, pulmonary rehabilitation and supplemental oxygen) (Control Group) (43 Zephyr Valve patients:
−Removed: 50 Control Group patients).
−Removed: The Chartis System was used to confirm that all 93 patients had little to no collateral ventilation and would be likely responders to the Zephyr Valve treatment, and were evaluated initially at six months with follow-up for an additional six months.
−Removed: The primary effectiveness endpoint was the percentage change in FEV 1 at three months relative to baseline in the Zephyr Valve Group, compared to the Control Group.
−Removed: Other endpoints included additional measures of lung function, exercise capacity and quality of life measures.
−Removed: Adverse events and serious adverse events were evaluated for the Treatment Period (day of procedure to 30 days), and Long-Term Period (31 days after procedure to six months).
−Removed: Effectiveness
−Removed: The study met its primary effectiveness endpoint.
−Removed: The mean percent change in FEV 1 (L) from baseline to three months in the Zephyr Valve Group was an increase of 15.3% compared to a decrease of 3.4% in the Control Group.
−Removed: The mean group difference for the change in FEV 1 from baseline to three months was 18.8 ± 22.1% (mean ± SD;
−Removed: Similar changes were observed in the ITT population.
−Removed: The mean percent change in FEV 1 (L) from baseline to three months in the Zephyr Valve Group was an increase of 13.7% compared to a decrease of 3.2% in the Control Group.
−Removed: The mean group difference (Zephyr Valve - Control) for the change in FEV 1 from baseline to three-months was 17.0 ± 21.4% (mean ± SD;
−Removed: Figure above shows the percent change of FEV 1 from baseline (primary endpoint) for the ITT groups at three months
−Removed: The study also met its secondary outcomes.
−Removed: There were statistically significant and clinically meaningful improvements from baseline in the Zephyr Valve Group versus the Control Group at three months and six months with differences between the Zephyr Valve Group and Control Group for FEV 1 (120 mL at 3 months and 120 mL at six months;
−Removed: p<0.001), RV (480 mL at three months and 430 mL at six months;
−Removed: p=0.011 and p=0.015, respectively), 6MWD (40 meters at three months and 28 meters at six months;
−Removed: p=0.002 and p=0.0156, respectively), SGRQ score (-9.6 at three months and -7.5 at six months;
−Removed: p<0.001), and Modified Medical Research Council (mMRC) Dyspnea Scale scores (-0.6 at three months and -0.4 at six months;
−Removed: p=0.01 and p=0.048, respectively).
−Removed: Target lobe volume reduction was successfully achieved with 89% of patients having volume reductions of greater than MCID.
−Removed: Figure above presents secondary endpoints as mean changes ± SEM from baseline to six months for the Zephyr Valve and Control Groups
−Removed: There were a higher number of respiratory serious adverse events in the Zephyr Valve Group compared to the Control Group during the Treatment Period (day of procedure to 30 days;
−Removed: 44.2% patients versus 2.0% patients).
−Removed: most common respiratory serious adverse events in the Zephyr Valve Group versus the Control Group during the Treatment Period were pneumothorax in 23.3% versus 0.0%, respectively;
−Removed: and COPD exacerbations in 14.0% versus 2.0% patients, respectively.
−Removed: All pneumothoraces were managed using standard techniques that included chest tube placement and careful observation.
−Removed: There were a comparable number of serious respiratory adverse events in the Zephyr Valve Group compared to the Control Group during the Longer-Term Period (31 days to six months;
−Removed: 34.9% patients versus 26.0% patients, respectively).
−Removed: The most common respiratory adverse events in the Zephyr Valve Group versus Control Group during the Longer-Term Period were COPD exacerbations in 18.6% versus 20.0% patients, respectively;
−Removed: dyspnea in 4.7% versus 0.0% patients, respectively;
−Removed: pneumothorax in 4.7% versus 0.0% patients, respectively;
−Removed: pneumonia in 2.3% versus 4.0% patients, respectively;
−Removed: and hypercapnia in 0.0% versus 6.0% patients, respectively.
−Removed: There were no deaths in the Zephyr Valve Group and two deaths in the Control Group that occurred in the Longer-Term Period.
−Removed: There was one death in the Zephyr Valve Group that occurred beyond 12-months after the Zephyr Valve implantation following severe COPD exacerbation after an abdominal surgery and was not related to treatment with Zephyr Valves.
−Removed: See also Part I, Item 1A, “Risk Factors—Risks Related to Our Business and Strategy—Use of the Zephyr Valve involves risks and may result in complications, including pneumothorax or death, and is contraindicated in certain patients, which may limit adoption and negatively affect our business, financial condition and results of operations.”
−Removed: Summary of the STELVIO Study
−Removed: The STELVIO study was an independent, non-company sponsored, randomized, controlled clinical trial conducted at a single center in the Netherlands that evaluated 68 patients with severe emphysema and hyperinflation.
−Removed: The study was conducted between June 2011 and November 2014, and the results of the primary endpoint were published in November 2015 in The New England Journal of Medicine .
−Removed: Key inclusion criteria were severe emphysema patients with heterogeneous and homogeneous disease, ex-smokers over 35 years of age, with post- BD FEV 1 less than 60% predicted, TLC greater than 100% predicted, RV greater than 150% predicted, dyspnea score of equal to or greater than two on the mMRC Dyspnea Scale, a 6MWD equal to or greater than 140 meters, and little to no collateral ventilation.
−Removed: Key exclusion criteria were prior LVRS, lung transplantation or lobectomy and evidence of other disease that may compromise survival or would interfere with completion of study.
−Removed: Eligible patients were randomly assigned at a 1:1 ratio to either Zephyr Valve treatment plus medical management (Zephyr Valve Group) or medical management alone (which may include drug therapy, pulmonary rehabilitation and supplemental oxygen) (Control Group) (34 Zephyr Valve patients:
−Removed: 34 Control Group patients).
−Removed: The Chartis System was used to confirm that all 68 patients had little to no collateral ventilation and would be likely responders to the Zephyr Valve treatment, and were evaluated initially at six months with follow-up for an additional six months.
−Removed: The primary outcome measures included differences between groups for changes in FEV 1 , Forced Vital Capacity (FVC) and 6MWD from baseline to six months.
−Removed: Secondary outcome measures, among patients who completed the study, were improvements from baseline to six months in FEV 1 , FVC, 6MWD, SGRQ score and other health related measures.
−Removed: Effectiveness
−Removed: The study met its primary and secondary effectiveness outcomes.
−Removed: There were significantly greater improvements in the Zephyr Valve Group than in the Control group from baseline to six months with a between group increase in FEV 1 of 140 mL (95% confidence interval (CI), 55 to 225), in FVC of 347 mL (95% CI, 107 to 588), in the 6MWD of 74 m (95% CI, 47 to 100) (p<0.01 for all comparisons).
−Removed: are depicted in the figure and table below.
−Removed: Target lobe volume reduction was successfully achieved with 88% of patients having volume reductions of greater than MCID.
−Removed: Figure above presents the co-primary endpoints as mean changes with 95% confidence intervals from baseline to six months for the Zephyr Valve and Control Groups
−Removed: Effectiveness Outcomes for the Zephyr Valve and Control Groups at Six Months
−Removed: Values are Mean Change from Baseline for ITT Population
−Removed: Zephyr Valve Group
−Removed: Control Group
−Removed: Difference Between Groups
−Removed: (Zephyr Valve - Control)
−Removed: 20.9 3.1 17.8
−Removed: FVC (%) 18.3 4 14.4
−Removed: 6MWD (%) 19.6 -3.6 23.3
−Removed: STELVIO was also the first randomized trial that evaluated outcomes in patients with homogeneous disease versus heterogeneous disease and showed that both groups benefited from treatment with Zephyr Valves.
−Removed: In general, the clinical outcomes after Zephyr Valve treatment were lower in the homogeneous patients compared to the heterogeneous patients but were still clinically meaningful (i.e., were greater than the MCID for each measure).
−Removed: Effectiveness Outcomes for the Zephyr Valve Group Who Completed the Study
−Removed: Values are Mean Change from Baseline
−Removed: Homogeneous Emphysema
−Removed: Heterogeneous Emphysema
−Removed: RV (%) -16.3 -16.6
−Removed: 6MWD (meters) 69 72
−Removed: SGRQ score (points) -13 -19
−Removed: In subsequent follow-up of patients in the STELVIO study, these results were shown to be durable to at least one year.
−Removed: Furthermore, the BODE index at one year showed an improvement from baseline of -1.13 points (95% CI, -1.5 to -0.7;
−Removed: a reduction of more than one point in the BODE Index being associated with a decrease in mortality.
−Removed: Over the six months, there were 23 serious adverse events in the Zephyr Valve Group, as compared with five in the Control group (p<0.001).
−Removed: Serious treatment related adverse events in the Zephyr Valve Group included pneumothorax (18% of patients) and events requiring valve replacement (12%) or removal (15%).
−Removed: There was one
−Removed: death in the Zephyr Valve Group due to end-stage COPD with respiratory failure 58 days after treatment which was deemed by the investigator to be unrelated to treatment with Zephyr Valves.
−Removed: There was one death during the six-month to 12-month period in the Zephyr Valve Group due to a myocardial infarction (313 days after treatment) unrelated to treatment with Zephyr Valves.
−Removed: In the Control Group, there were two deaths recorded at 160 and 267 days after the screening visit, both due to COPD progression.
−Removed: See also Part I, Item 1A, “Risk Factors—Risks Related to Our Business and Strategy—Use of the Zephyr Valve involves risks and may result in complications, including pneumothorax or death, and is contraindicated in certain patients, which may limit adoption and negatively affect our business, financial condition and results of operations.”
−Removed: Other Clinical Trials
−Removed: The VENT study was a multicenter randomized clinical trial conducted in the mid-2000s by Emphasys Medical evaluating the safety and effectiveness of the Zephyr Valve.
−Removed: The study enrolled 321 patients in the United States.
−Removed: While the study showed statistically significant improvement in FEV 1 and 6MWD (co-primary endpoints), these were only clinically significant in a post hoc subset of patients that had complete fissures (a surrogate for absence of collateral ventilation) and lobar occlusion.
−Removed: The study did not meet its primary endpoints.
−Removed: The BeLieVeR-HIFi study was a single center randomized, controlled, independent, non-company-sponsored study conducted in the early 2010s that enrolled 50 patients with complete fissures and severe heterogeneous emphysema.
−Removed: Patients were randomized to treatment with Zephyr Valves and medical management or a sham procedure and medical management.
−Removed: While Chartis assessment was performed to assess collateral ventilation prior to the procedure, inclusion in the study was based on visual assessment of complete fissures.
−Removed: The study showed clinical benefit in the Zephyr Valve treated patients although the outcomes were better in patients in whom collateral ventilation was ruled out using the Chartis System.
−Removed: We are not aware of any prospective data regarding survival rates of patients who have undergone endobronchial valve treatment.
−Removed: There are two survival studies, however, that retrospectively evaluate patients treated with endobronchial valves.
−Removed: These studies compared survival rates between patients with significant volume reduction in the treated lobe (also called atelectasis) against those who did not have atelectasis.
−Removed: In one study, the patient population consisted of 449 patients with either heterogeneous or homogeneous emphysema five years following treatment with Zephyr Valves or other endobronchial valves.
−Removed: The majority of patients in this study were treated with Zephyr Valves.
−Removed: The results of this study suggested that patients with atelectasis were approximately 45% more likely to survive than patients without.
−Removed: Another study of 19 patients with only heterogeneous emphysema ten years following treatment with Zephyr Valves suggested that patients with atelectasis were approximately 166% more likely to survive than patients without atelectasis.
−Removed: We believe these studies are relevant because treatment with Zephyr Valves is intended to cause atelectasis in poorly functioning, hyperinflated lobes of the lung.
−Removed: In addition, the results of these studies add to the body of evidence showing the benefits of atelectasis in patients with severe
−Removed: emphysema and hyperinflation, including the potential for increased survival rates when compared to valve treatment without atelectasis.
−Removed: Gompelmann et.
−Removed: Survival after Endoscopic Valve Therapy in Patients with Severe Emphysema.
−Removed: Garner et al (2016):
−Removed: Survival after Endobronchial Valve Placement for Emphysema:
−Removed: A 10-Year Follow-up Study.
−Removed: Amer J Respir Crit Care Med.194 (4):
−Removed: Reprinted with permission of S.
−Removed: Karger AG, Basel and Respiration.
−Removed: Copyright © 2020 S.
−Removed: Karger AG, Basel.
−Removed: Respiration is an official journal of the Swiss Respiratory Society and the European Association for Bronchology and Interventional Pulmonology.
−Removed: Reprinted with permission of the American Thoracic Society.
−Removed: Copyright © 2020 American Thoracic Society.
−Removed: The American Journal of Respiratory and Critical Care Medicine is an official journal of the American Thoracic Society.
Our Commercial Strategy
7 unchanged sentences
Our sales territory managers also call on community physicians and pulmonary rehabilitation centers to raise awareness of Zephyr Valves as a treatment option.
−Removed: We seek to recruit sales territory managers with strong sales backgrounds, with direct experience developing markets with new technologies and an understanding of medical device reimbursement.
−Removed: In the United States, our territory managers are managed by region directors.
−Removed: We plan to expand our commercial organization, recruiting and training talented sales territory managers in existing and new markets in the United States to help facilitate further adoption and broaden awareness of Zephyr Valves.
−Removed: We believe investing in a scalable, efficient direct sales force and continuing the development of our marketing efforts will help us broaden adoption of our solution in order to drive revenue growth.
Our strategy is to identify territories with high unmet need, identify leading hospitals and work with champions of our solution to build emphysema centers of excellence.
We believe there is a significant growth opportunity for hospitals to provide high quality comprehensive diagnosis and treatment for advanced COPD patients.
−Removed: we can efficiently serve the United States market, focusing on approximately 500 high volume hospitals, of which we currently cover a small fraction.
We intend to continue to promote awareness of our solution through training and educating physicians, pulmonary rehabilitation centers, key opinion leaders, various medical societies, and prospective patients on the proven clinical benefits of Zephyr Valves.
−Removed: We continue to develop our relationships with credible third parties, such as our partnership with the American College of Chest Physicians, on continuing medical education-accredited training and with the COPD Foundation on patient and physician education.
−Removed: We also intend to continue helping physicians in their outreach to patients and other healthcare providers.
+Added: We continue to develop our relationships with credible third parties, such as our partnership with the American College of Chest Physicians, on continuing medical education-accredited training and with the American Lung Association and the COPD Foundation on patient and physician education.
In addition, we intend to continue to publish additional clinical data in various industry and scientific journals, online and through presentations at various industry conferences.
−Removed: We believe that many patients who suffer from severe emphysema are eager for a minimally invasive option such as the Zephyr Valve.
−Removed: We also plan to continue building patient awareness through our direct-to-patient marketing initiatives, which include advertising, social media and online education.
−Removed: We also intend to continue supporting physicians in their outreach to patients and other healthcare providers.
−Removed: The objective of this outreach is to bring patients to our website, where they can find educational materials on Zephyr Valves, determine if they may be eligible, find contact information for physicians in their area and sign up for information and news.
We conduct our international business through direct sales in markets with established reimbursement and substantial market potential, and through a distributor-based sales model in smaller markets or markets where we are still developing reimbursement.
−Removed: Our strategy is to offer limited distribution and develop champions of our solution in high potential markets, and as reimbursement becomes available, change from a distributor-based sales model to a direct sales model.
−Removed: We have successfully followed this approach in most markets outside the United States in which we sell and we anticipate following a similar approach in the future.
Third-Party Reimbursement
8 unchanged sentences
CPT codes are published by the American Medical Association and are used to report medical services and procedures performed by or under the direction of physicians.
−Removed: Medicare generally pays physicians for services based on submission of a claim using one or more specific CPT codes.
+Added: Medicare generally pays physicians for services based on submission of a claim using one or more
+Added: specific CPT codes.
Physician payment for procedures may vary according to site of service.
18 unchanged sentences
Without a national coverage determination (“NCD”) or a local coverage determination (“LCD”), Medicare claims are processed by Medicare Administrative Contractors (“MACs”), which assess coverage under Medicare’s reasonable and necessary standard.
−Removed: We estimate that roughly 75% of the potential Zephyr Valve patient population are Medicare/Medicaid beneficiaries of which approximately 30% have managed Medicare/Medicaid and the remaining 45% have traditional fee-for-service Medicare/Medicaid.
+Added: We estimate that roughly 80% of the potential Zephyr Valve patient population are Medicare/Medicaid beneficiaries with approximately 55% having managed Medicare/Medicaid and the remaining 45% having traditional fee-for-service Medicare/Medicaid.
Approximately 20% of the potential Zephyr Valve patient population is under third-party commercial payor policies.
−Removed: A key element of our strategy remains to broaden our coverage by private third-party payor policies.
Commercial payors such as Aetna, Humana, and many of the largest Blue Cross Blue Shield plans including Anthem, Health Care Service Corporation, and BCBS Michigan have all issued positive coverage policies for the Zephyr Valve, and United Healthcare no longer considers the procedure unproven or experimental.
3 unchanged sentences
We believe our patient reimbursement support team is highly effective in working with patients and physicians to obtain appropriate prior authorizations for the Zephyr Valve treatment even when a non-coverage policy exists.
−Removed: We believe patients and providers will continue to benefit
−Removed: from support through the prior authorization process until widespread coverage is streamlined across most commercial payors.
Reimbursement Outside of the United States
6 unchanged sentences
We also work with external vendors in the design and testing of new technologies.
−Removed: Since the early development of the Zephyr Valve, our company has produced a stream of innovations to increase the success rate of using the Zephyr Valve.
−Removed: This includes innovations in our airway sizing and delivery catheters, the introduction of new sizes of Zephyr Valves, improvements to the user interface of the Chartis System to accommodate a variety of anesthesia options and the StratX Platform to assist with patient selection and procedure planning.
−Removed: We are in discussions with the FDA regarding expanding the Zephyr Valve indication to include the management of persistent air leaks.
−Removed: Our pipeline of products that we are currently considering includes innovations in image analysis to support advanced patient selection and optimize patient outcomes, catheter technologies to improve valve deliverability and reduce procedure time and the AeriSeal system for addressing the needs of severe emphysema patients who are not eligible for Zephyr Valves due to collateral ventilation.
+Added: Our pipeline of products that we are currently considering includes innovations in image analysis to support advanced patient selection and optimize patient outcomes, catheter technologies to improve valve deliverability and reduce procedure time and the use of AeriSeal for addressing the needs of severe emphysema patients who are not eligible for Zephyr Valves due to collateral ventilation.
AeriSeal is a polymerizing sealant that can be delivered via a bronchoscope to a targeted region of the lung to reduce volume in the treated area.
We believe that AeriSeal would enable the treatment of patients with collateral ventilation, which would complement the screening of patients for Zephyr Valves.
−Removed: We have secured CE mark and Therapeutic Goods Administration approval in Australia for AeriSeal and have completed initial feasibility research.
+Added: We have successfully undertaken the conformity assessment procedure in the EU with a Notified Body and CE marked AeriSeal and have Therapeutic Goods Administration approval in Australia for the medical device and have completed initial feasibility research.
We have funded an independent feasibility study using AeriSeal and sponsored another study to expand the number of patients that can be treated with Zephyr Valves.
In December 2020, AeriSeal received designation as a Breakthrough Device by the FDA.
−Removed: The breakthrough designation will provide prioritized and potentially accelerated review by the FDA.
−Removed: We intend to submit an IDE to the FDA for commencing a clinical trial with the AeriSeal system.
+Added: We intend to submit an IDE to the FDA for commencing a clinical trial with AeriSeal.
If successfully developed and approved, AeriSeal could further expand the addressable market of our solution.
−Removed: For the years ended December 31, 2021 and December 31, 2020, we incurred research and development expenses, including our clinical trials, of $13.1 million and $7.5 million, respectively.
Our industry is highly competitive and subject to rapid change from the introduction of new products and technologies and other activities of industry participants.
3 unchanged sentences
not approved for use in the United States).
−Removed: The Spiration Valve System is an endobronchial technology designed to offer patients with severe emphysema a minimally invasive treatment option for lung
−Removed: volume reduction by redirecting air away from diseased areas of the lung to healthier tissue so that patients may breathe easier.
+Added: The Spiration Valve System is an endobronchial technology designed to offer patients with severe emphysema a minimally invasive treatment option for lung volume reduction by redirecting air away from diseased areas of the lung to healthier tissue so that patients may breathe easier.
Like Zephyr Valves, the Spiration Valve System is indicated to treat patients with heterogeneous emphysema;
however, the Spiration Valve System is contraindicated for patients with homogeneous emphysema.
−Removed: We believe our solution competes favorably with the Spiration Valve System for several reasons, including the strength of our published clinical data, differentiated patient selection tools and our comprehensive technical and reimbursement support.
+Added: We believe our solution competes favorably with the Spiration Valve System for several reasons, including the strength of our published clinical data, differentiated patient selection tools and our comprehensive
+Added: technical and reimbursement support.
InterVapor System offers a non-surgical and non-implant therapy developed for lung disease including emphysema and lung cancer where vapor ablation is simply the application of heated pure water to tissue.
−Removed: Some of our competitors have several competitive advantages, including more established operating histories, established relationships with pulmonologists who commonly treat patients with emphysema, significantly greater name recognition, widespread distribution channels, and significantly greater sales and marketing resources.
−Removed: In addition to competing for market share, we also compete against these companies for personnel, including qualified sales and other personnel that are necessary to grow our business.
−Removed: We believe the principal competitive factors in our market include the following:
−Removed: • patient outcomes and adverse event rates;
−Removed: • product safety, reliability and durability;
−Removed: • patient experience;
−Removed: • effective marketing to and education of patients, physicians and hospitals;
−Removed: • acceptance by treating physicians and referral sources;
−Removed: • physician learning curve;
−Removed: • ease-of-use and reliability;
−Removed: • patient recovery time and level of discomfort;
−Removed: • economic benefits and cost savings;
−Removed: • availability of coverage and adequate reimbursement;
−Removed: • strength of clinical evidence.
In addition to existing competitors, other companies may acquire or in-license competitive products and could directly compete with us.
−Removed: These competitors may also try to compete with us on price both directly, through rebates and promotional programs to high volume physicians and coupons to patients, and indirectly, through attractive product bundling with complementary products that offer convenience and an effectively lower price compared to the total price of purchasing each product separately.
−Removed: Larger competitors may also be able to offer greater customer loyalty benefits to encourage repeat use of their products and finance a sustained global advertising campaign to compete with commercialization efforts of our products.
−Removed: Our competitors may seek to discredit our products by challenging our short operating history or relatively limited number of scientific studies and publications.
−Removed: Smaller companies could also launch new or enhanced products and services that we do not offer and that could gain market acceptance quickly.
−Removed: Additionally, certain of our competitors may challenge our intellectual property, may develop additional competing or superior technologies and processes and compete more aggressively and sustain that competition over a longer period of time than we could.
−Removed: Our technologies and products may be rendered obsolete or uneconomical by technological advances or entirely different approaches developed by one or more of our competitors.
−Removed: As more companies develop new intellectual property in our market, there is the possibility of a
−Removed: competitor acquiring patents or other rights that may limit our ability to update our technologies and products which may impact demand for our products.
Intellectual Property
7 unchanged sentences
Our patents expire between 2023 and 2041.
−Removed: We have applied to the U.S.
−Removed: Patent and Trademark Office (USPTO) seeking an extension for the term of a material Zephyr Valve patent from 2023 to 2027 under the Patent Term Extension which allows additional term to be added to a patent to compensate for the FDA approval process.
Once a patent expires, the protection ends, and an invention enters the public domain;
that is, anyone can commercially exploit the invention without infringing the patent.
−Removed: There is no active patent litigation involving any of our patents and we have not received any notices claiming that our activities infringe a third party’s patent.
−Removed: We cannot guarantee that patents will be issued from any of our pending applications or that, if patents are issued, they will be of sufficient scope or strength to provide meaningful protection for our technology.
−Removed: Notwithstanding the scope of the patent protection available to us, a competitor could develop treatment methods or devices that are not covered by our patents.
−Removed: Furthermore, numerous United States and foreign-issued patents and patent applications owned by third parties exist in the fields in which we are developing products.
−Removed: Because patent applications can take many years to publish, there may be applications unknown to us, which may later result in issued patents that our existing or future products or technologies may be alleged to infringe.
−Removed: There has been substantial litigation regarding patent and other intellectual property rights in the medical device industry.
−Removed: In the future, we may need to engage in litigation to enforce patents issued or licensed to us, to protect our trade secrets or know-how, to defend against claims of infringement of the rights of others or to determine the scope and validity of the proprietary rights of others.
−Removed: Litigation could be costly and could divert our attention from other functions and responsibilities.
−Removed: Furthermore, even if our patents are found to be valid and infringed, a court may refuse to grant injunctive relief against the infringer and instead grant us monetary damages or ongoing royalties.
−Removed: Such monetary compensation may be insufficient to adequately offset the damage to our business caused by the infringer’s competition in the market.
−Removed: Adverse determinations in litigation could subject us to significant liabilities to third parties, require us to seek licenses from third parties or could prevent us from manufacturing, selling or using the product accused of infringement, any of which could severely harm our business.
−Removed: See Part I, Item 1A, “Risk Factors—Risks Related to our Intellectual Property” for additional information regarding these and other risks related to our intellectual property portfolio and their potential effect on us.
We also rely upon trademarks to build and maintain the integrity of our brand.
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provided, that, the parties are required to negotiate in good faith during such 60-day notice period to attempt to enter into a replacement cross-license prior to such termination.
−Removed: Neither party may assign or otherwise transfer the Spiration Cross-License without the written consent of the other party, except in connection with certain change-of-control transactions.
+Added: Neither party may assign or otherwise transfer the Spiration Cross-License without the written consent of the other
+Added: party, except in connection with certain change-of-control transactions.
We do not have any relationship with Spiration other than with respect to this cross-license agreement.
2 unchanged sentences
Our lease terminates on July 31, 2025.
−Removed: This facility supports production operations, including manufacturing and quality control.
We lease additional facilities in Redwood City, California of approximately 8,000 square feet and 17,000 square feet of space under lease agreements that terminates on May 31, 2024 and September 30, 2024, respectively.
−Removed: These facilities support finished goods storage and distribution.
−Removed: We have manufactured all our products at this facility for over 10 years and to date we have manufactured over 80,000 Zephyr Valves.
There is a mutual early termination option starting November 30, 2021 on the 8,000 square feet of space.
3 unchanged sentences
We have a strict change control policy with our suppliers to ensure that no design or process changes are made without our prior approval.
−Removed: Based on our prior experience with such suppliers to manufacture products for commercialization both inside and outside the United States, we believe these suppliers are capable of continuing to meet our specifications and maintaining quality.
Several components used in our devices rely on single source suppliers and we routinely prioritize, evaluate and qualify backup sources.
−Removed: We typically maintain several months of product in inventory however if one or more of our single source suppliers were to encounter a manufacturing issue or chooses to end supply, we estimate that some of our custom components could take between one and two years to qualify a second source supplier in all markets.
The manufacture of AeriSeal, which is still in development, is completely outsourced to a contract manufacturer.
7 unchanged sentences
We also ship from our Redwood City facilities to distributors in Asia Pacific and other international markets.
−Removed: Our manufacturing and distribution operations are subject to regulatory requirements of the FDA’s QSR for medical devices sold in the United States, set forth in 21 CFR part 820, and the EU’s Medical Device Directive (“MDD”) or Medical Device Regulation (“MDR”) for medical devices marketed in the European Union.
−Removed: We are also subject to applicable local regulations relating to the environment, waste management and health and safety matters, including measures relating to the release, use, storage, treatment, transportation, discharge, disposal, sale, labeling, collection, recycling, treatment and remediation of hazardous substances.
The FDA monitors compliance with the QSR through periodic inspections of our facilities, which may include inspection of our suppliers’ facilities as well.
−Removed: Our European Union Notified Body, British Standards Institute (“BSI”), monitors compliance with the MDD requirements through both annual scheduled audits and periodic unannounced audits of our manufacturing facilities as well as our contract third-party suppliers’ facilities.
−Removed: Our failure, or the failure of our third-party suppliers, to maintain acceptable quality requirements could result in the shutdown of our manufacturing operations or the recall of our products.
−Removed: If one of our suppliers fails to maintain acceptable quality requirements, we may have to qualify a new supplier, which could adversely affect manufacturing of our products and result in manufacturing delays as well as have a material adverse effect on our business and financial condition.
−Removed: Our quality management system in our Redwood City manufacturing facility is currently ISO 13485:2016 certified, MDD certified and licensed by the California Department of Public Health (“CDPH”) Food and Drug Branch.
+Added: Our European Union and Great Britain Notified Body, British Standards Institute (“BSI”), monitors compliance with the MDD (as defined below) requirements through both annual scheduled audits and periodic unannounced audits of our manufacturing facilities as well as our contract third-party suppliers’ facilities.
+Added: Our quality management system in our Redwood City manufacturing facility is currently ISO 13485:2016 certified and licensed by the California Department of Public Health (“CDPH”) Food and Drug Branch.
Our manufacturing facility is an FDA-registered medical device establishment.
−Removed: BSI will audit our facility to the MDR during 2022.
−Removed: The FDA conducted a total of two establishment inspections of our manufacturing facility in 2014 and 2016.
−Removed: We believe that we are in compliance, in all material respects, with all applicable FDA and QSR requirements.
−Removed: Manufacturing of the materials and components of our products are provided by approved suppliers, all of which are single source suppliers of key components, sub-assemblies and materials.
−Removed: The suppliers for the products are evaluated, qualified and approved through a stringent supplier management program, which includes various evaluations, assessments, qualifications, validations, testing and inspection to ensure the supplier can meet acceptable quality requirements.
−Removed: We implement a strict change control policy with our key suppliers to ensure that no component or process changes are made without our prior approval.
−Removed: Order quantities and lead times for components purchased from suppliers are based on our forecasts derived from historical demand and anticipated future demand.
−Removed: Lead times for components may vary depending on the size of the order, time required to manufacture and test the components, specific supplier requirements and current market demand for the components, sub-assemblies and materials.
−Removed: We perform assembly, testing, inspection and final product release activities for our products.
Government Regulation
19 unchanged sentences
The PMA application must provide valid scientific evidence that demonstrates to the FDA’s satisfaction a reasonable assurance of the safety and effectiveness of the device for its intended use.
−Removed: The Zephyr Valve is a Class III device that has received FDA PMA approval.
The Investigational Device Exemption Process (“IDE”)
5 unchanged sentences
Generally, clinical trials for a significant risk device may begin once the IDE application is approved by the FDA and the study protocol and informed consent are approved by appropriate IRBs at the clinical trial sites.
−Removed: There can be no assurance that submission of an IDE application will result in the ability to commence clinical trials, and although the FDA’s approval of an IDE application allows clinical testing to go forward for a specified number of subjects, it does not bind the FDA to accept the results of the trial as sufficient to prove the product’s safety and effectiveness, even if the trial meets its intended success criteria.
+Added: There can be no assurance that submission of an IDE application will result in the ability to commence clinical trials, and although the FDA’s approval of an IDE application allows clinical testing to go forward for a specified number of subjects, it does not
+Added: bind the FDA to accept the results of the trial as sufficient to prove the product’s safety and effectiveness, even if the trial meets its intended success criteria.
All clinical trials must be conducted in accordance with the FDA’s IDE regulations that govern investigational device labeling, prohibition of promotion, recordkeeping, and reporting and monitoring responsibilities of study sponsors and study investigators.
2 unchanged sentences
The results of clinical testing may be unfavorable, or, even if the intended safety and effectiveness success criteria are achieved, may not be considered sufficient for the FDA to grant marketing approval or clearance of a product.
−Removed: The commencement or completion of any clinical trial may be delayed or halted, or be inadequate to support approval of a PMA application, for numerous reasons, including, but not limited to, the following:
−Removed: • the FDA or other regulatory authorities do not approve a clinical trial protocol or a clinical trial, or place a clinical trial on hold;
−Removed: • patients do not enroll in clinical trials at the rate expected;
−Removed: • patients do not comply with trial protocols;
−Removed: • patient follow-up is not at the rate expected;
−Removed: • patients experience adverse events;
−Removed: • patients die during a clinical trial, even though their death may not be related to the products that are part of the trial;
−Removed: • device malfunctions occur with unexpected frequency or potential adverse consequences;
−Removed: • side effects or device malfunctions of similar products already in the market that change the FDA’s view toward approval of new or similar PMAs or result in the imposition of new requirements or testing;
−Removed: • IRBs and third-party clinical investigators may delay or reject the trial protocol;
−Removed: • third-party clinical investigators decline to participate in a trial or do not perform a trial on the anticipated schedule or consistent with the clinical trial protocol, investigator agreement, investigational plan, good clinical practices, the IDE regulations, or other FDA or IRB requirements;
−Removed: • third-party investigators are disqualified by the FDA;
−Removed: • we or third-party organizations do not perform data collection, monitoring and analysis in a timely or accurate manner or consistent with the clinical trial protocol or investigational or statistical plans, or otherwise fail to comply with the IDE regulations governing responsibilities, records and reports of sponsors of clinical investigations;
−Removed: • third-party clinical investigators have significant financial interests related to us or our study such that the FDA deems the study results unreliable, or we or third-party clinical investigators fail to disclose such interests;
−Removed: • regulatory inspections of our clinical trials or manufacturing facilities, which may, among other things, require us to undertake corrective action or suspend or terminate our clinical trials;
−Removed: • changes in government regulations or administrative actions;
−Removed: • the interim or final results of the clinical trial are inconclusive or unfavorable as to safety or effectiveness;
−Removed: • the FDA concludes that our trial design is unreliable or inadequate to demonstrate safety and effectiveness.
+Added: The commencement or completion of any clinical trial may be delayed or halted, or be inadequate to support approval of a PMA application.
The PMA Approval Process
9 unchanged sentences
Overall, the FDA’s review of a PMA application generally takes between one and three years, but may take significantly longer.
−Removed: The FDA can delay, limit or deny approval of a PMA application for many reasons, including:
−Removed: • the device may not be shown safe or effective to the FDA’s satisfaction;
−Removed: • the data from pre-clinical studies or clinical trials may be found unreliable or insufficient to support approval;
−Removed: • the manufacturing process or facilities may not meet applicable requirements;
−Removed: • changes in FDA approval policies or adoption of new regulations may require additional data.
+Added: The FDA can delay, limit or deny approval of a PMA application for many reasons.
If the FDA evaluation of a PMA is favorable, the FDA will issue either an approval letter, or an approvable letter, the latter of which usually contains a number of conditions that must be met in order to secure final approval of the PMA.
When and if those conditions have been fulfilled to the satisfaction of the FDA, the agency will issue a PMA approval letter authorizing commercial marketing of the device, subject to the conditions of approval and the limitations established in the approval letter.
−Removed: If the FDA’s evaluation of a PMA application or manufacturing
−Removed: facilities is not favorable, the FDA will deny approval of the PMA or issue a not approvable letter.
+Added: If the FDA’s evaluation of a PMA application or manufacturing facilities is not favorable, the FDA will deny approval of the PMA or issue a not approvable letter.
The FDA also may determine that additional tests or clinical trials are necessary, in which case the PMA approval may be delayed for several months or years while the trials are conducted and data is submitted in an amendment to the PMA, or the PMA is withdrawn and resubmitted when the data are available.
−Removed: The PMA process can be expensive, uncertain and lengthy and a number of devices for which the FDA approval has been sought by other companies have never been approved by the FDA for marketing.
New PMA applications or PMA supplements are required for modification to the manufacturing process, equipment or facility, quality control procedures, sterilization, packaging, expiration date, labeling, device specifications, ingredients, materials or design of a device that has been approved through the PMA process.
PMA supplements often require submission of the same type of information as an initial PMA application, except that the supplement is limited to information needed to support any changes from the device covered by the approved PMA application and may or may not require as extensive technical or clinical data or the convening of an advisory panel, depending on the nature of the proposed change.
−Removed: In approving a PMA application, as a condition of approval, the FDA may also require some form of post-approval study (“PAS”) or post-market surveillance, whereby the applicant conducts a follow-up study or follows certain patient groups for a number of years and makes periodic reports to the FDA on the clinical status of those patients when necessary to protect the public health or to provide additional or longer-term safety and effectiveness data for the device.
−Removed: We are subject to certain PAS requirements under our PMA for the Zephyr Valve.
−Removed: PAS reports for the Zephyr Valve Registry study are required every six months for the first two years of the study and annually thereafter.
−Removed: PAS reports for the LIBERATE extension study are required annually.
+Added: In approving a PMA application, as a condition of approval, the FDA may also require some form of post-approval study (“PAS”) or post-market surveillance, whereby the applicant conducts a follow-up study or follows certain patient groups for a number of years and makes periodic reports to the FDA on the clinical status of those patients
+Added: when necessary to protect the public health or to provide additional or longer-term safety and effectiveness data for the device.
The FDA may also require post-market surveillance for certain devices cleared under a 510(k) notification, such as implants or life-supporting or life-sustaining devices used outside a device user facility.
8 unchanged sentences
• post-market surveillance regulations, which apply when necessary to protect the public health or to provide additional safety and effectiveness data for the device.
−Removed: We have registered with the FDA as a medical device manufacturer and have obtained a manufacturing license from the CDPH.
−Removed: The FDA and CDPH have broad post-market and regulatory enforcement powers.
−Removed: We are subject to unannounced inspections by the FDA and the Food and Drug Branch of CDPH to determine our compliance with the QSR and other regulations, and these inspections may include the manufacturing facilities of our third-party suppliers.
−Removed: Additionally, our Notified Body, the BSI, regularly inspects our manufacturing, design and operational
−Removed: facilities to ensure ongoing ISO 13485 compliance in order to maintain our CE mark.
−Removed: Failure to comply with applicable regulatory requirements can result in enforcement action by the FDA or other regulatory bodies, which may include any of the following sanctions:
−Removed: • warning letters, fines, injunctions, consent decrees and civil penalties;
−Removed: • repair, replacement, refunds, recall or seizure of our products;
−Removed: • operating restrictions, partial suspension or total shutdown of production;
−Removed: • refusing our requests for 510(k) clearance or PMA approval of new products, new intended uses or modifications to existing products;
−Removed: • withdrawing 510(k) clearance or PMA approvals that have already been granted;
−Removed: • criminal prosecution.
European Union
−Removed: Our portfolio of products is regulated in the European Union as a medical device per the European Union Medical Devices Directive (Council Directive 93/42/EEC) (“MDD”) and, starting on May 26, 2021, the Medical Device Regulation (Regulation (EU) 2017/745) (“MDR”).
−Removed: The MDR sets out the basic regulatory framework for medical devices in the European Union.
−Removed: The system of regulating medical devices operates by way of a certification for each medical device.
−Removed: Each certified device is marked with the CE mark which shows that the device has a Certificat de Conformité.
−Removed: There are national bodies known as Competent Authorities in each member state which oversee the implementation of the MDR within their jurisdiction.
−Removed: The means for achieving the requirements for the CE mark vary according to the nature of the device.
−Removed: Devices are classified in accordance with their perceived risks, similar to the United States system.
+Added: Our portfolio of products is regulated in the European Union as a medical device per the European Union Medical Devices Directive (Council Directive 93/42/EEC) (“MDD”) and the Medical Device Regulation (Regulation (EU) 2017/745) (“MDR”).
+Added: On 26 May 2021, the MDR entered into application, repealing and replacing both the MDD, and Directive 90/385/EEC concerning active implantable medical devices, or AIMD.
+Added: The Medical Device Regulation and its associated guidance documents and harmonized standards govern, among other things, device design and development, preclinical and clinical or performance testing, premarket conformity assessment, registration and listing, manufacturing, labeling, storage, claims, sales and distribution, export and import and post-market surveillance, vigilance, and market surveillance.
+Added: Medical devices must comply with the General Safety and Performance Requirements, or GSPRs, set out in Annex I of the Medical Device Regulation.
+Added: Compliance with these requirements is a prerequisite to be able to affix the CE mark to devices, without which they cannot be marketed or sold in the EEA.
+Added: To demonstrate compliance with the GSPRs provided in the Medical Device Regulation and obtain the right to affix the CE mark, medical devices manufacturers must undergo a conformity assessment procedure, which varies according to the type of medical device and its classification.
+Added: Apart from low risk medical devices (Class I with no measuring function and which are not sterile), in relation to which the manufacturer may issue an EC Declaration of Conformity based on a self-assessment of the conformity of its products with the GSPRs, a conformity assessment procedure requires the intervention of a Notified Body, which is an organization designated by a Competent Authority of an EEA country to conduct conformity assessments.
+Added: Depending on the relevant conformity assessment procedure, the Notified Body audits and examines the technical documentation and the quality system for the manufacture, design and final inspection of the medical devices.
+Added: The Notified Body issues a CE Certificate of Conformity following successful completion of a conformity assessment procedure conducted in relation to the medical device and its manufacturer and their conformity with the GSPRs.
+Added: This Certificate and the related
+Added: conformity assessment process entitles the manufacturer to affix the CE mark to its medical devices after having prepared and signed a related EC Declaration of Conformity.
+Added: As a general rule, demonstration of conformity of medical devices and their manufacturers with the GSPRs must be based, among other things, on the evaluation of clinical data supporting the safety and performance of the products during normal conditions of use.
+Added: Specifically, a manufacturer must demonstrate that the device achieves its intended performance during normal conditions of use and that the known and foreseeable risks, and any adverse events, are minimized and acceptable when weighed against the benefits of its intended performance, and that any claims made about the performance and safety of the device (e.g., product labeling and instructions for use) are supported by suitable evidence.
+Added: This assessment must be based on clinical data, which can be obtained from (1) clinical studies conducted on the devices being assessed, (2) scientific literature from similar devices whose equivalence with the assessed device can be demonstrated or (3) both clinical studies and scientific literature.
+Added: The conduct of clinical studies in the EEA is governed by detailed regulatory obligations.
+Added: These may include the requirement of prior authorization by the Competent Authorities of the country in which the study takes place and the requirement to obtain a positive opinion from a competent Ethics Committee.
+Added: This process can be expensive and time-consuming.
+Added: After a device is placed on the market, it remains subject to significant regulatory requirements.
+Added: The MDR includes transitional provisions.
+Added: Accordingly, CE Certificates of Conformity issued by Notified Bodies in accordance with the MDD or the AIMD, prior to 25 May 2017 will remain valid until the expiration of the CE Certificate of Conformity, except for EC verification CE Certificates of Conformity issued in accordance with Annex IV to the MDD and Annex 4 to the AIMD which shall become void at the latest on 27 May 2022.
+Added: In addition, CE Certificates of Conformity issued by Notified Bodies in accordance with the MDD or the AIMD, from 25 May 2017 will remain valid until the expiration of the CE Certificate of Conformity and at the latest on 27 May 2024.
+Added: Medical devices with such valid CE Certificates of Conformity issued under the MDD or the AIMD may continue to be placed on the market for the remaining validity of the CE Certificate of Conformity or until May 27, 2024 at the latest, provided that (i) the devices continue to comply with the requirements of the MDD or AIMD, (ii) there are no significant changes in the design or intended purpose and (iii) from 26 May 2021, compliance with the EU Medical Device Regulation relating to post-market surveillance, market surveillance, vigilance, registration of economic operators and of devices is ensured in place of the corresponding requirements in the MDD or AIMD.
+Added: In early January 2023 the European Commission proposed that these dates be revised to extend current transitional provisions.
+Added: In February 2023, the European Parliament voted to adopt the proposal..
+Added: The MDR sets out the regulatory framework for medical devices in the European Union.
+Added: The Competent Authorities of each EU Member State oversee the implementation of the MDR within their jurisdiction.
+Added: Devices are classified in accordance with their perceived risks in a manner similar to the United States risk classification system.
+Added: Before a medical device can be marketed in the EU it must undergo a conformity assessment procedure after which the manufacturer may affix the CE mark on the devices.
The class of a product determines the conformity assessment required before the CE mark can be placed on a product.
−Removed: Conformity assessments for our products are carried out as required by the MDR.
−Removed: Each member state can appoint Notified Bodies within its jurisdiction.
−Removed: If a Notified Body of one member state has issued a Certificat de Conformité, the device can be sold throughout the European Union without further conformance tests being required in other member states.
−Removed: The CE mark is contingent upon continued compliance with the applicable regulations and the quality system requirements of the ISO 13485 standard.
−Removed: Our current CE mark is issued by BSI under the MDD.
−Removed: We will obtain a CE mark under the MDR prior to the expiration of the existing CE certificate.
+Added: Our devices are Class IIa and Class IIb and require the involvement of a Notified Body.
+Added: Once the Notified Body has issued a Certificate of Conformity, the manufacturer has drawn up the Declaration of Conformity and affixed the CE mark the device can be sold throughout the European Union.
+Added: We remain subject to ongoing MDR requirements including among others market surveillance after affixing the CE mark to our devices.
+Added: We are currently placing our medical devices on the market in accordance with the stringent requirements of the transitional provisions of the MDR, the requirements of the MDD and the guidance of the European Commission’s Medical Devices Coordination Group.
+Added: We intend to complete conformity assessment procedures for our medical devices in accordance with the MDR prior to the expiration of the existing Certificate(s) of Conformity issued by our Notified Body BSI.
+Added: Following the result of a referendum in 2016, the United Kingdom left the European Union on January 31, 2020, commonly referred to as Brexit.
+Added: Pursuant to the formal withdrawal arrangements agreed between the United Kingdom and the European Union, the United Kingdom, or the UK, was subject to a transition period until December 31, 2020, or the Transition Period, during which European Union rules continued to apply.
+Added: The United Kingdom and the European Union have signed a EU-UK Trade and Cooperation Agreement, or TCA, which became provisionally applicable on January 1, 2021 and entered into force on May 1, 2021.
+Added: This agreement provides details on how some aspects of the United Kingdom and European Union’s relationship will operate going forwards
+Added: however there are still many uncertainties.
+Added: The TCA primarily focuses on ensuring free trade between the European Union and the UK in relation to goods.
+Added: Among the changes that will now occur are that Great Britain (England, Scotland and Wales) will be treated as a “third country,” a country that is not a member of the European Union and whose citizens do not enjoy the European Union right to free movement.
+Added: Northern Ireland will continue to follow many aspects of the European Union regulatory rules, particularly in relation to trade in goods.
+Added: Our devices were regulated under MDD prior to Brexit and are subject to the UK Medical Devices Regulations 2002.
+Added: Pulmonx has registered all products in accordance with the regulation and will be transitioning to the regulation by June 2023 (the end of the transition period).
Health Insurance Portability and Accountability Act
−Removed: The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), established federal protection for the privacy and security of health information.
−Removed: Under HIPAA, the United States Department of Health and Human Services (“HHS”), has issued regulations to protect the privacy and security of PHI used or disclosed by “Covered Entities,” including certain healthcare providers, health plans and healthcare clearinghouses, and their respective “Business Associates” that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity as well as their covered subcontractors, with respect to safeguarding the privacy, security and transmission of individually identifiable health information.
−Removed: HIPAA also regulates standardization of data content, codes and formats used in healthcare transactions and standardization of identifiers for health plans and certain healthcare providers.
−Removed: The HIPAA privacy regulations protect medical records and other PHI by limiting their use and release, giving patients the right to access their medical records and limiting most disclosures of health information to the minimum amount necessary to accomplish an intended purpose.
−Removed: The HIPAA security standards require the adoption of administrative, physical and technical safeguards and the adoption of written security policies and procedures.
+Added: The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”), as amended by the Health Information Technology for Economic and Clinical Health Act (“HITECH”), and its implementing privacy and security regulations, established federal protection for the privacy and security of health information.
+Added: HIPAA applies to Covered Entities and their respective Business Associates that create, receive, maintain or transmit individually identifiable health information for or on behalf of a covered entity as well as their covered subcontractors, with respect to safeguarding the privacy, security and transmission of individually identifiable health information.
In addition, HIPAA requires Covered Entities to execute Business Associate Agreements with their Business Associates and subcontractors who provide services for or on behalf of Covered Entities.
Business Associates have a corresponding obligation to maintain appropriate Business Associate Agreements under HIPAA.
−Removed: In addition, companies that would not otherwise be subject to HIPAA may become contractually obligated
−Removed: to follow HIPAA requirements through agreements with Covered Entities and Business Associates, and some of our customers may require us to agree to these provisions.
−Removed: If we or our operations are found to be in violation of HIPAA, HITECH or their implementing regulations, and similar state laws, we may be subject to significant penalties, including civil, criminal and administrative penalties, fines, imprisonment and exclusion from participation in federal or state healthcare programs, and the curtailment or restructuring of our operations.
−Removed: In addition, HITECH created four new tiers of civil monetary penalties, amended HIPAA to make civil and criminal penalties directly applicable to Business Associates, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce the federal HIPAA laws and seek attorney’s fees and costs associated with pursuing federal civil actions.
+Added: In addition, companies that would not otherwise be subject to HIPAA may become contractually obligated to follow HIPAA requirements through agreements with Covered Entities and Business Associates, and some of our customers may require us to agree to these provisions.
Privacy and Information Security Laws
In the ordinary course of our business, we may process personal data, including health data.
−Removed: Accordingly, we are, or may become, subject to numerous data privacy and security obligations, including federal, state, local, and foreign laws, regulations, guidance, and industry standards related to data privacy, security, and protection.
−Removed: Such obligations may include, without limitation, the Federal Trade Commission Act, the Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, the California Consumer Privacy Act of 2018 (“CCPA”), the European Union’s General Data Protection Regulation 2016/679 (“EU GDPR”), and the EU GDPR as it forms part of UK law by virtue of section 3 of the European Union (Withdrawal) Act 2018 (“UK GDPR”).
−Removed: In addition, states within the United States have enacted or proposed data privacy laws.
−Removed: For example, Virginia passed the Consumer Data Protection Act and Colorado passed the Colorado Privacy Act.
+Added: Accordingly, we are, or may become, subject to numerous data privacy and security obligations, including federal, state, local, and foreign laws, regulations, guidance, and industry standards and contractual obligations related to data privacy, security, and protection.
+Added: Such obligations may include, without limitation, the California Consumer Privacy Act of 2018 (“CCPA”), the European Union’s General Data Protection Regulation 2016/679 (“EU GDPR”), and the UK GDPR.
+Added: In addition, states within the United States have enacted or proposed data privacy laws including Virginia, Colorado, Utah, and Connecticut.
The CCPA and EU GDPR are examples of the increasingly stringent and evolving regulatory frameworks related to personal data processing and that increase our compliance obligations and exposure for any non-compliance.
−Removed: For example, the CCPA imposes obligations on covered businesses to provide specific disclosures related to a business’s collecting, using and disclosing personal data and to respond to certain requests from California residents related to their personal data (for example, requests to know of the business’s personal data processing activities, to delete the individual’s personal data and to opt out of certain personal data disclosures).
+Added: For example, the CCPA imposes obligations on covered businesses to provide specific disclosures related to a business’s collecting, using and disclosing personal data and to respond to certain requests from California residents related to their personal data.
Also, the CCPA provides for civil penalties and a private right of action for data breaches that may include an award of statutory damages.
−Removed: In addition, it is anticipated that the California Privacy Rights Act of 2020 (“CPRA”), effective January 1, 2023, will expand the CCPA.
−Removed: The CPRA will, among other things, give California residents the ability to limit use of certain sensitive personal data, establish restrictions on personal data retention, expand the types of data breaches subject to the CCPA’s private right of action, and establish a new California Privacy Protection Agency to implement and enforce the new law.
+Added: In addition, the California Privacy Rights Act of 2020 (“CPRA”), which became effective January 1, 2023, will expand the CCPA by, among other things, giving California residents the ability to limit use of certain sensitive personal data, along with establishing restrictions on personal data retention and a new California Privacy Protection Agency to implement and enforce the new law.
US federal and state consumer protection laws may require us to publish statements that accurately and fairly describe how we handle personal data and choices individuals may have about the way we handle their personal data.
−Removed: European data protection laws (including the EU GDPR and UK GDPR) impose significant and complex compliance obligations on entities that are subject to those laws.
−Removed: For example, the EU GDPR applies to any company established in the European Economic Area (“EEA”) and to companies established outside the EEA that process personal data in connection with the offering of goods or services to data subjects in the EEA or the monitoring of the behavior of data subjects in the EEA.
−Removed: These obligations may include limiting personal data processing only to what is necessary for specified, explicit and legitimate purposes;
−Removed: requiring a legal basis for personal data processing;
−Removed: requiring the appointment of a data protection officer in certain circumstances;
−Removed: increasing transparency obligations to data subjects;
−Removed: requiring data protection impact assessments in certain circumstances;
−Removed: limiting the collection and retention of personal data;
−Removed: increasing rights for data subjects;
−Removed: formalizing a heightened and codified standard of data subject consents;
−Removed: requiring the implementation and maintenance of technical and organizational safeguards for personal data;
−Removed: mandating notice of certain personal data breaches to the relevant supervisory authorities and affected individuals;
−Removed: and mandating the appointment of representatives in the United Kingdom and/or the European Union in certain circumstances.
+Added: European data protection laws (including the EU GDPR and UK GDPR (collectively “GDPR”)) impose significant and complex compliance obligations on entities that are subject to those laws.
+Added: The GDPR applies to personal data about identified or identifiable data subjects processed by automated means and data contained in, or intended to be part of, non-automated filing systems (traditional paper files) as well as transfer of such data to a country outside of the EU/EEA.
+Added: The GDPR provides the competent authorities of the EU Member States with extensive competences and powers to investigate and act against non-compliances or infringements including the potential to impose fines of up to €20 million, or 4% of the firm’s worldwide annual revenue from the preceding financial year, whichever amount is higher.
+Added: The processing of personal health data of patients in the EU and the UK is subject to stringent requirements regarding transparency and communication towards patients, identifying an appropriate legal basis for processing the personal data, purpose limitation and implementing appropriate technical and security measures as well as safeguards for the transfer of personal data outside of the EU and the UK to countries like the USA.
+Added: These obligations may include limiting personal data processing only to what is necessary for specified, explicit and legitimate purposes and requiring a legal basis for personal data processing;
+Added: and increasing rights for data subjects.
See also Part I, Item 1A, “Risk Factors—Risks Related to Government Regulation and Our Industry” for additional information about the laws and regulations to which we are or may become subject and the risks to our business associated with such laws and regulations.
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Some of these state prohibitions apply to referral of recipients for healthcare products or services reimbursed by any source, not only government healthcare programs, and may apply to payments made directly by the patient.
−Removed: Government officials have focused their enforcement efforts on the marketing of healthcare services and products, among other activities, and recently have brought cases against companies, and certain individual sales, marketing and executive personnel, for allegedly offering unlawful inducements to potential or existing customers in an attempt to procure their business.
Federal False Claims Laws
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Our activities, including those relating to the reporting of discount and rebate information and other information affecting federal, state and third-party reimbursement of our products (such as our patient reimbursement support programs) and the sale and marketing of our products, may be subject to scrutiny under these laws.
−Removed: While we are unaware of any current matters, we are unable to predict whether we will be subject to actions under the FCA or a similar state law, or the impact of such actions.
−Removed: However, the costs of defending such claims, as well as any sanctions imposed, could significantly affect our financial performance.
Civil Monetary Penalties
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In addition, the individual can be subject to an unlimited fine, as can commercial organizations for failure to prevent bribery.
−Removed: There are also international privacy laws that impose restrictions on the access, use and disclosure of health information.
−Removed: All of these laws may impact our business.
−Removed: Our failure to comply with these privacy laws or significant changes in the laws restricting our ability to obtain required patient information could significantly impact our business and our future business plans.
United States Centers for Medicare and Medicaid Services (“CMS”)
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United States Health Reform
−Removed: Changes in healthcare policy could increase our costs and subject us to additional regulatory requirements that may interrupt commercialization of our current and future products.
−Removed: Changes in healthcare policy could increase our costs, decrease our revenue and impact sales of and reimbursement for our current and future products.
−Removed: The Affordable Care Act substantially changed the way healthcare is financed by both governmental and private insurers, and significantly impacts our industry.
The United States and some foreign jurisdictions are considering or have enacted a number of legislative and regulatory proposals to change the healthcare system in ways that could affect our ability to sell our products profitably.
Among policy makers and payors in the United States and elsewhere, there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality or expanding access.
−Removed: Current and future legislative proposals to further reform healthcare or reduce healthcare costs may limit coverage of or lower reimbursement for the procedures associated with the use of our products.
−Removed: The cost containment measures that payors and providers are instituting and the effect of any healthcare reform initiative implemented in the future could impact our revenue from the sale of our products.
The implementation of the Affordable Care Act in the United States, for example, has changed healthcare financing and delivery by both governmental and private insurers substantially, and affected medical device manufacturers significantly.
−Removed: The Affordable Care Act also provided incentives to programs that increase the federal government’s comparative effectiveness research, and implemented payment system reforms including a national pilot program on payment bundling to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models.
−Removed: Additionally, the Affordable Care Act has expanded eligibility criteria for Medicaid programs and created a new Patient‑Centered Outcomes Research Institute to oversee, identify priorities in, and conduct comparative clinical effectiveness research, along with funding for such research.
−Removed: There have been executive, judicial and Congressional challenges to certain aspects of the Affordable Care Act.
−Removed: For example, President Trump signed several Executive Orders and other directives designed to delay the implementation of certain provisions of the Affordable Care Act.
−Removed: Concurrently, Congress considered legislation to repeal or repeal and replace all or part of the Affordable Care Act.
−Removed: While Congress has not passed comprehensive repeal legislation, it has enacted laws that modify certain provisions of the Affordable Care Act such as removing penalties, starting January 1, 2019, for not complying with the Affordable Care Act’s individual mandate to carry health insurance and delaying the implementation of certain fees mandated by the Affordable Care Act.
−Removed: On June 17, 2021, the U.S.
−Removed: Supreme Court dismissed a challenge on procedural grounds that argued the Affordable Care Act is unconstitutional in its entirety because the “individual mandate” was repealed by Congress.
−Removed: Thus, the Affordable Care Act will remain in effect in its current form.
−Removed: On January 28, 2021, President Biden issued an executive order that initiated a special enrollment period for purposes of obtaining health insurance coverage through the Affordable Care Act marketplace.
−Removed: The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare, including among others, reexamining Medicaid demonstration projects and waiver programs that include work requirements, and policies that create unnecessary barriers to obtaining access to health insurance coverage through Medicaid or the Affordable Care Act.
+Added: There have been executive, judicial and congressional challenges, and a number of health reform measures by the Biden administration that have impacted certain aspects of the Affordable Care Act.
+Added: For example, on August 16, 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA”) into law, which among other things, extends enhanced subsidies for individuals purchasing health insurance coverage in Affordable Care Act marketplaces through plan year 2025.
+Added: The IRA also eliminates the “donut hole” under the Medicare Part D program beginning in 2025 by significantly lowering the beneficiary maximum out-of-pocket cost and through a newly established manufacturer discount program.
It is possible that the Affordable Care Act will be subject to judicial or congressional challenges in the future, including congressional legislation to modify or replace the Affordable Care Act or elements of the Affordable Care Act.
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In addition, other legislative changes have been proposed and adopted since the Affordable Care Act was enacted.
−Removed: For example, the Budget Control Act of 2011, among other things, included reductions to CMS payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, including the Infrastructure Investment and Jobs Act, will remain in effect through 2031 unless additional Congressional action is taken.
−Removed: However, COVID-19 relief legislation suspended the 2% Medicare sequester from May 1, 2020 through March 31, 2022.
−Removed: Under current legislation the actual reduction in Medicare
−Removed: payments will vary from 1% in 2022 to up to 3% in the final fiscal year of this sequester.
−Removed: Additionally, the American Taxpayer Relief Act of 2012, among other things, reduced CMS payments to several providers, including hospitals, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.
+Added: For example, the Budget Control Act of 2011, among other things, included reductions to CMS payments to providers of 2% per fiscal year, which went into effect on April 1, 2013 and, due to subsequent legislative amendments to the statute, will remain in effect until 2031 unless additional congressional action is taken.
+Added: Under current legislation the actual reduction in Medicare payments will vary from 1% in 2022 to up to 4% in the final fiscal year of this sequester.
We believe that there will continue to be proposals by legislators at both the federal and state levels, regulators and third-party payors to reduce costs while expanding individual healthcare benefits.
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Current and future healthcare reform legislation and policies could have a material adverse effect on our business and financial condition.
−Removed: Further, it is possible that additional governmental action is taken in response to the COVID-19 pandemic.
+Added: EU Health Reform
+Added: Moreover, in the EU some countries may, after the medical device is CE marked, require the completion of additional studies that compare the cost-effectiveness of a particular medical device candidate to currently available therapies.
+Added: This Health Technology Assessment, or HTA process, which is currently governed by the national laws of the individual EU Member States, is the procedure according to which the assessment of the public health impact, therapeutic impact and the economic and societal impact of use of a given medical device in the national healthcare systems of the individual country is conducted.
+Added: The outcome of HTA regarding specific medical device will often influence the pricing and reimbursement status granted to these products by the competent authorities of individual EU Member States.
+Added: On January 31, 2018, the European Commission adopted a proposal for a regulation on health technologies assessment.
+Added: The Regulation is intended to boost cooperation among EU Member States in assessing health technologies, including new medical devices, and providing the basis for cooperation at EU level for joint clinical assessments in these areas.
+Added: In December 2021 the HTA Regulation was adopted and entered into force on 11 January 2022.
+Added: It will apply from 2025.
Human Capital Management
−Removed: As of December 31, 2021, we had a total of 253 employees, with 198 employees in the U.S., 39 in Europe, and 16 in Asia Pacific.
+Added: Employees, Talent Management & Development
+Added: As of December 31, 2022, we had a total of 269 full time employees, with 202 employees in the U.S., 57 in Europe, and 10 in Asia Pacific.
None of our employees are represented by a labor union or are a party to a collective bargaining agreement.
We believe that we have good relations with our employees.
+Added: We believe that our employees are the foundation of our business and we are committed to the development and retention of our workforce.
Code of Business Conduct and Business Ethics
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We continue to create an inclusive culture where differences drive innovation.
−Removed: In 2021, our task force identified opportunities to increase awareness as well as initiatives to identify, attract and retain underrepresented diverse talent.
−Removed: Talent Management & Development
−Removed: We believe that our employees are the foundation of our business and we are committed to the development and retention of our workforce.
−Removed: Our goal at Pulmonx is to become a “Talent Destination.”
+Added: In 2022, our human resources task force identified opportunities to increase awareness as well as initiatives to identify, attract and retain underrepresented diverse talent.
Compensation Philosophy
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• Employee assistance program
−Removed: In an effort to further align the interests of our employees with our shareholders, employees in most countries in which we operate have the opportunity to have an ownership interest in our company.
+Added: Additionally, in an effort to further align the interests of our employees with our shareholders, employees in most countries in which we operate have the opportunity to have an ownership interest in our company.
We have an equity-based incentive plan that provides for the grant of stock options and awards to eligible employees.
Additionally, we implemented an Employee Stock Purchase Plan that enables eligible employees to purchase our common stock at a discount through payroll contributions.
−Removed: COVID-19 Health and Safety
+Added: Health and Safety
The health and safety of our employees is a key focus at our Company.
−Removed: In response to the COVID-19 pandemic, the Company established safety protocols, facility enhancements, and work from home strategies to protect our employees.
+Added: The Company is committed to protecting its employees everywhere it operates.
+Added: The Company identifies potential workplace risks in order to develop measures to mitigate possible hazards.
+Added: In response to the COVID-19 pandemic, the Company established safety protocols,
+Added: facility enhancements, and work from home strategies to protect our employees.
Some of our employees continue to work remotely.
−Removed: Employees that work on site are provided with personal protective equipment and are required to adhere to protocols for wearing masks at all times, social distancing, and reporting and documenting exposures, all following guidelines issued by the Centers for Disease Control or mandated by local regulations.
+Added: Employees that work on site are provided with personal protective equipment and are required to report and document exposures following guidelines issued by the Centers for Disease Control or mandated by local regulations.
Available Information
+Added: We were incorporated in the state of California on December 26, 1995 as Pulmonx and reincorporated in the state of Delaware on December 4, 2013.
Our website address is www.pulmonx.com.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.