Item 1. Business
ITEM 1.
Business
Overview
enVVeno
Medical Corporation is a late clinical-stage medical device company focused on the advancement of innovative bioprosthetic (tissue-based)
solutions to improve the standard of care for the treatment of venous disease. Chronic Venous Disease (CVD) is the world’s most
prevalent chronic disease, impacting approximately 70% of the adult population of the U.S. Chronic Venous Insufficiency (CVI), is a large
subset of CVD, which most often occurs when valves inside of the veins of the leg become damaged, resulting in the backwards flow of
blood (reflux), blood pooling in the lower leg, increased pressure in the veins of the leg (venous hypertension) and in severe cases,
venous ulcers that are difficult to heal. The Company is developing surgical and non-surgical replacement venous valves for patients
suffering from severe CVI of the deep venous system of the leg.
The
Company’s lead product is the VenoValve®, which is a first-in-class surgical replacement venous valve that is currently being
evaluated in a U.S. pivotal study. The Company is also developing a second product called enVVe®, which is a first-in-class, non-surgical,
transcatheter based replacement venous valve. The Company is currently conducting pre-clinical testing on enVVe. Both the VenoValve and
enVVe are designed to act as one-way valves, to help assist in propelling blood up the veins of the leg, and back to the heart and lungs.
The
VenoValve and enVVe are being developed first for approval by the U.S. Food and Drug Administration (FDA). We expect the VenoValve to
be eligible for FDA approval first, followed two to three years later by enVVe. If approved, we expect the VenoValve and enVVe to co-exist,
with the VenoValve as a surgical replacement venous valve option and enVVe as a non-surgical replacement venous valve option, although
we cannot provide any assurance that either the VenoValve or enVVe will receive approval from the FDA (see the section entitled “Risk
Factors” in this Annual Report on Form 10-K). There are currently no devices approved as surgical or non-surgical replacement venous
valves, and there are currently no effective treatments for deep venous CVI caused by incompetent valves.
Our
team of officers and directors has been affiliated with numerous medical devices that have received FDA approval or CE marking and
that have been commercially successful. We develop and manufacture our products in connection with our clinical trials in a 14,507
sq. ft. leased manufacturing facility in Irvine, California, which has been ISO 13485-2016 certified for the design, development and
manufacturing of tissue based implantable medical devices.
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CVI
Background
Chronic
venous disease (“CVD”) is the world’s most prevalent chronic disease. CVD is clinically classified using a
standardized system known as CEAP (clinical, etiological, anatomical, and pathophysiological). The CEAP system consists of seven
clinical classifications (C0 to C6) with C4, C5 and C6 being the most severe categories of CVD.
Chronic
Venous Insufficiency (“CVI”) is a large subset of CVD and is generally used to describe patients with C4 to C6 CVD. CVI is
a debilitating condition that affects the venous system of the leg causing pain, swelling, edema, skin changes, and ulcerations.
The
human leg contains three vein systems: the deep vein system, the superficial vein system, and the perforator vein system which connects
the deep system to the superficial system. The deep venous system is located below the muscle and facia in the center portion of the
leg and is responsible for approximately 90% of the blood flow. In order for blood to return to the heart from the foot, ankle, and lower
leg, the calf muscle serves as a pump and pushes the blood up the veins of the leg against gravity and through a series of one-way valves.
Each valve is supposed to open as blood passes through, and then close as blood progresses up the veins of the leg to the next valve.
CVI occurs when the one-way valves in the veins of the leg fail and become incompetent. When the valves fail, gravity causes the blood
to flow backwards and in the wrong direction (reflux). As blood pools in the lower leg, pressure inside the veins increases (venous hypertension).
Reflux, and the resulting venous hypertension, causes the leg to swell, resulting in debilitating pain, and in the most severe cases,
venous ulcers.
Severe
CVI sufferers experience a significantly reduced quality of life. Daily activities such as preparing meals, housework, and personal hygiene
(washing and bathing) become difficult due to reduced mobility. For many severe CVI sufferers, intense pain, which frequently occurs
at night, prevents them from getting adequate sleep. Severe CVI sufferers are known to miss approximately 40% more workdays than the
average worker. A high percentage of venous ulcer patients also experience severe itching, leg swelling, and an odorous discharge. Wound
dressing changes, which occur several times a week, can be extremely painful. Venous ulcers from deep venous CVI are very difficult to
heal, and a significant percentage of venous ulcers remain unhealed for more than a year. Even if healed, recurrence rates for venous
ulcers are known to be high (20% to 40%) within the first year and as high as 60% after five years. Patients with severe CVI often become
housebound and experience social isolation due to difficulty with ambulation. As a result, studies have shown that patients with active
venous ulcers experience higher rates of anxiety and depression, with reported rates of anxiety of up to 30% and depression up to 40%.
Rates of depression caused by venous ulcers among the elderly are even higher, with 48% of elderly venous ulcer patients having severe
depressive symptoms.
Prevalence
is generally defined as the portion of the population that has a given condition. Estimates indicate that the prevalence of people in
the U.S. with severe, deep venous CVI (C4 to C6 disease) with reflux to be approximately 20 million. Incidence is generally defined as
the number of new cases of an ailment that develop in a given time period. We estimate that approximately 3.5 million new patients with
severe deep venous CVI are diagnosed each year in the U.S. including patients that develop venous leg ulcers (C6 patients). The average
patient seeking treatment of a venous ulcer spends as much as $30,000 a year on wound care, and the total direct medical costs from venous
ulcer sufferers in the U.S. has been estimated to exceed $3 billion a year.
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VenoValve
The
VenoValve® is a porcine based replacement venous valve developed at enVVeno Medical to be surgically implanted in the deep
venous system of the leg to treat severe CVI caused by valvular incompetence. By reducing reflux and lowering pressure (venous
hypertension) within the deep venous system of the leg, the VenoValve has the potential to reduce or eliminate the symptoms of
severe deep venous CVI, including the potential to heal recurring venous leg ulcers. The VenoValve is implanted into the femoral
vein of the patient in an open surgical procedure via a 5-to-6-inch incision in the upper thigh. As our planned initial entrant to
the replacement venous valve market, we estimate that approximately 2.5 million people each year with severe deep venous CVI in the
U.S. would be candidates for the VenoValve.
VenoValve
Clinical Status
After
consultation with the FDA, and as a precursor to the U.S. pivotal trial, in 2020 we conducted a small first-in-human study for the
VenoValve in Colombia which included eleven (11) patients. The purpose of the first-in-human study was to provide proof of concept,
and to provide feedback to make any necessary product modifications or adjustments to our surgical implantation procedure for the
VenoValve prior to conducting the VenoValve pivotal trial. Endpoints for the VenoValve first-in-human study included safety (device
related adverse events), popliteal reflux time, measured by Duplex Ultrasound, rVCSS scoring, which is a measurement created by
international vascular societies and is used by the clinician to measure disease progression and regression, a VAS score used by the
patient to measure pain, and quality of life measurements.
Results
from the one year first-in-human study were presented at the Charing Cross International Symposium in April of 2021. Among the
eleven (11) patients in the study, rVCSS scores improved an average of 6 points, popliteal reflux time improved an average of 54%,
and visual analog scale (VAS) scores, which are used by patients to measure pain, improved an average of 76%, all at one (1) year
when compared to pre-surgery levels. Revised Venous Clinical Severity Scoring (rVCSS) is a validated measurement commonly used to
objectively assess outcomes in the treatment of venous disease, and include ten characteristics consisting of physician assessments
and patient reported outcomes including pain, inflammation, skin changes such as pigmentation and induration, the number of active
ulcers, and ulcer duration. The improvement in VCSS scores was significant and indicates the VenoValve patients who had severe CVI
pre-surgery, had mild CVI or the complete absence of disease at one-year post surgery.
Related
safety incidences during the one year first-in-human study for the VenoValve included one (1) fluid pocket (which was aspirated), intolerance
from Coumadin anticoagulation therapy, three (3) minor wound infections (treated with antibiotics), and one occlusion due to patient
non-compliance with anti-coagulation therapy.
At
the end of the VenoValve first-in-human study, eight (8) study participants agreed to additional monitoring. In November of 2022, three-year, positive
follow-up data was presented for this cohort of patients at the 49th Annual VEITH Symposium in New York city.
On
August 3, 2020, we announced that the FDA granted Breakthrough Device Designation status to the VenoValve. The FDA’s Breakthrough
Devices Program was established to enable priority review for devices that provide more effective treatment or diagnosis of life threatening
or irreversibly debilitating diseases or conditions. The goal of the FDA’s Breakthrough Devices Program is to provide patients
and health care providers with timely access to medical devices by speeding up their development, assessment, and review, while preserving
the FDA’s mission to protect and promote public health.
In
March 2021, we submitted an IDE application with the FDA and in April 2021, we received notification from the FDA that our IDE application
was approved. An investigational device exemption or IDE from the FDA is required before a medical device company can proceed with a
pivotal trial for a Class III medical device. This approval allowed us to proceed with our U.S. pivotal study for the VenoValve which
is called the SAVVE (Surgical Anti-reflux Venous Valve Endoprosthesis) clinical study. The SAVVE study is a prospective, non-blinded,
single arm, multi-center study of seventy-five (75) CVI patients enrolled at 21 U.S. sites.
Efficacy
endpoints for the SAVVE pivotal study include rVCSS scores, which will be used to provide evidence of clinically meaningful benefit,
as well as reflux time measurements, VAS pain scores, quality of life measurements, ulcer healing (for CEAP class C6 patients), and intra-operative
and one-year vein patency and valve functionality. Safety endpoints include device related events and procedure related events –including mortality, pulmonary embolism, ipsilateral deep vein thrombosis, infection and bleeding.
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The
first patient in the SAVVE pivotal study was enrolled in October of 2021. Following enrollment of the first patient the SAVVE study was
delayed due to COVID-19 restrictions. In November of 2022, we announced we had passed a preliminary safety review by the FDA for the
first twenty (20) patients enrolled in the SAVVE trial. The FDA had requested that we submit preliminary safety data at thirty (30) days
post VenoValve® implantation for the first twenty (20) patients enrolled in the study. The preliminary safety data included one (1)
device related (mild) and two (2) procedure related (moderate) adverse events. After review by the FDA, the study was cleared to continue
without modification or interruption.
On
October 6, 2023, we announced we had achieved full enrollment (75 subjects) in the SAVVE trial, having enrolled eighteen (18) patients
over the final two (2) months of the study. Full enrollment occurred approximately four (4) months earlier than expected due to increased
demand for the VenoValve.
On
November 16, 2023, we presented positive preliminary device related Material Adverse Event (MAE) data at the 50th Annual VEITH
Symposium. The preliminary device related MAE rate for the fully enrolled 75 subject study was eight percent (8%). MAEs for the
SAVVE study are defined as all-cause mortality, pulmonary embolisms (PEs), ipsilateral deep vein thromboses (DVTs), bleeding, and
deep wound infections, occurring within thirty (30) days of enrollment in the study. The report on MAEs presented at the conference
indicated no deaths, no pulmonary embolisms, and six (6) deep vein thromboses (DVTs), from the fully enrolled cohort of 75
patients. All DVTs were adjudicated as being mild in severity. Left untreated, post-thrombotic patients with severe CVI are
known to DVT recurrence rates as high as eighteen percent (18%) at one year.
We
expect to release initial, topline rVCSS efficacy data from the SAVVE study at the VENOUS2024 American Venous Forum Annual Meeting on March 6, 2024. With the FDA indicating that one-year
data for all 75 patients will be necessary prior to the filing of the application seeking pre-market (PMA) approval for the VenoValve,
the Company will be eligible to file the PMA application seeking approval in Q4 of 2024.
enVVe
On
September 21, 2022, we announced the development of a non-surgical transcatheter based replacement venous valve called enVVe®, for
the treatment of CVI of the deep veins of the leg. Initial preliminary bench testing and pre-clinical testing for enVVe have been successfully
completed.
On
October 6, 2023, contemporaneously with the announcement of a twenty-eight-million-dollar capital raise, we announced plans to
expedite the development of enVVe. The Company expects to begin a six (6) month Good Laboratory Practice animal study for enVVe in the
first quarter of 2024 and to be ready to file for IDE approval for the enVVe pivotal trial, the Transcatheter Anti-Reflux, Venous
Valve Endoprosthesis or TAVVE, by the end of 2024.
enVVe
is delivered into the femoral vein of the patient via a minimally invasive procedure requiring no general anesthesia and no overnight
hospital stay. Due to the minimally invasive nature of the procedure, we expect to be able to reach patients with less severe CVI or
who may otherwise not be good candidates for a surgical device, and estimate the U.S. market for enVVe to be approximately 3.5 million
patients.
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Government
Regulation
Our
product candidates and our operations are subject to extensive regulation by the FDA, and other federal and state authorities in the
United States, as well as comparable authorities in foreign jurisdictions. Our product candidates are subject to regulation as medical
devices in the United States under the Federal Food, Drug, and Cosmetic Act (“FDCA”), as implemented and enforced by the
FDA. The FDA regulates the development, design, non-clinical and clinical research, manufacturing, safety, efficacy, labeling, packaging,
storage, installation, distribution, servicing, recordkeeping, premarket clearance or approval, adverse event reporting, advertising,
promotion, marketing, and import and export of medical devices to ensure that medical devices distributed domestically are safe and effective
for their intended uses and otherwise meet the requirements of the FDCA.
PMA
Approval Pathway
Class
III devices such as the VenoValve and enVVe generally require pre-market approval (PMA) before they can be marketed in the U.S. The PMA
review and approval process is more demanding than the 510(k) premarket notification process. In a PMA, the manufacturer must demonstrate
that the device is safe and effective, and the PMA must be supported by extensive data, including data from preclinical studies and human
clinical trials. The PMA also must contain a full description of the device and its components, a full description of the methods, facilities
and controls used for manufacturing, and proposed labeling. Following receipt of a PMA, the FDA determines whether the application is
sufficiently complete to permit a substantive review. If the FDA accepts the application for review, it has 180 days under the FDCA to
complete its review of a PMA, although in practice, the FDA’s review often takes significantly longer, and can take several years.
An advisory panel of experts from outside the FDA may be convened to review and evaluate the application and provide recommendations
to the FDA as to the approvability of the device. The FDA may or may not accept the panel’s recommendation. In addition, the FDA
generally will conduct a pre-approval inspection of the applicant or its third-party manufacturers’ manufacturing facility or facilities
to ensure compliance with the QSR. The FDA will approve the new device for commercial distribution if it determines that the data and
information in the PMA constitute valid scientific evidence and that there is reasonable assurance that the device is safe and effective
for its intended use(s).
The
FDA may approve a PMA with post-approval conditions intended to ensure the safety and effectiveness of the device, including, among
other things, restrictions on labeling, promotion, sale and distribution, and collection of long-term follow-up data from patients
in the clinical study that supported PMA approval, or requirements to conduct additional clinical studies post-approval. The FDA may
condition PMA approval on some form of post-market surveillance when deemed necessary to protect the public health or to provide
additional safety and efficacy data for the device in a larger population or for a longer period of use. In such cases, the
manufacturer might be required to follow certain patient groups for a number of years and to make periodic reports to the FDA on the
clinical status of those patients. Failure to comply with the conditions of approval can result in material adverse enforcement
action, including withdrawal of the PMA approval. Certain changes to an approved device, such as changes in manufacturing
facilities, methods or quality control procedures, or changes in the design performance specifications, which affect the safety or
effectiveness of the device, require submission of a PMA supplement. PMA supplements often require submission of the same type of
information as a PMA, except that the supplement is limited to information needed to support any changes from the device covered by
the original PMA and may not require as much clinical data or the convening of an advisory panel. Certain other changes to an
approved device require the submission of a new PMA, such as when the design change causes a different intended use, mode of
operation and technical basis of operation, or when the design change is so significant that a new generation of the device will be
developed, and the data that were submitted with the original PMA are not applicable for the change in demonstrating a reasonable
assurance of safety and effectiveness. Both the VenoValve and enVVe will require the approval of a PMA.
Clinical
Trials in Support of PMA
Clinical
trials are almost always required to support a PMA submission. All clinical investigations of devices to determine safety and effectiveness
must be conducted in accordance with the FDA’s investigational device exemption (IDE) regulations, which govern investigational
device labeling, prohibit promotion of the investigational device and specify an array of recordkeeping, reporting and monitoring responsibilities
of study sponsors and study investigators. If the device presents a “significant risk,” to human health, as defined by the
FDA, the FDA requires the device sponsor to submit an IDE application to the FDA, which must become effective prior to commencing human
clinical trials. A significant risk device is one that presents a potential for serious risk to the health, safety or welfare of a patient
and either is implanted, used in supporting or sustaining human life, substantially important in diagnosing, curing, mitigating or treating
disease or otherwise preventing impairment of human health, or otherwise presents a potential for serious risk to a subject. The VenoValve
required IDE applications prior to human testing in the United States, and we believe any future products such as the enVVe will also
require IDE applications before human testing in the United States.
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An
IDE application must be supported by appropriate data, such as animal and laboratory test results, showing that it is safe to test the
device in humans and that the testing protocol is scientifically sound. The IDE will automatically become effective 30 days after receipt
by the FDA unless the FDA notifies the company that the investigation may not begin. If the FDA determines that there are deficiencies
or other concerns with an IDE for which it requires modification, the FDA may permit a clinical trial to proceed under a conditional
approval.
In
addition to IDE approval, a human study must be approved by, and conducted under the oversight of, an Institutional Review Board, or
IRB, for each clinical site. The IRB is responsible for the initial and continuing review of the study, and may pose additional requirements
for the conduct of the study. If an IDE application is approved by the FDA and one or more IRBs, human clinical trials may begin at a
specific number of investigational sites with a specific number of patients, as approved by the FDA. Acceptance of an IDE application
for review does not guarantee that the FDA will allow the IDE to become effective and, if it does become effective, the FDA may or may
not determine that the data derived from the trials support the safety and effectiveness of the device or warrant the continuation of
clinical trials. An IDE supplement must be submitted to, and approved by, the FDA before a sponsor or investigator may make a change
to the investigational plan that may affect its scientific soundness, study plan or the rights, safety or welfare of human subjects.
During a study, the sponsor is required to comply with the applicable FDA requirements, including, for example, trial monitoring, selecting
clinical investigators and providing them with the investigational plan, ensuring IRB review, adverse event reporting, record keeping
and prohibitions on the promotion of investigational devices or on making safety or effectiveness claims for them. The clinical investigators
in the clinical study are also subject to FDA’s regulations and must obtain patient informed consent, rigorously follow the investigational
plan and study protocol, control the disposition of the investigational device and comply with all reporting and recordkeeping requirements.
Additionally, after a trial begins, we, the FDA or the IRB could suspend or terminate a clinical trial at any time for various reasons,
including a belief that the risks to study subjects outweigh the anticipated benefits.
Post-market
Regulation
After
a device is cleared or approved for marketing, numerous and pervasive regulatory requirements continue to apply. These include: establishing
registration and device listing with the FDA; QSR requirements, which require manufacturers, including third-party manufacturers, to
follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the design and
manufacturing process; labeling regulations and FDA prohibitions against the promotion of investigational products, or “off-label”
uses of cleared or approved products; requirements related to promotional activities; clearance or approval of product modifications
that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared
devices; medical device reporting regulations, which require that a manufacturer report to the FDA if a device it markets may have caused
or contributed to a death or serious injury, or has malfunctioned and the device or a similar device that it markets would be likely
to cause or contribute to a death or serious injury, if the malfunction were to recur; correction, removal and recall reporting regulations,
which require that manufacturers report to the FDA field corrections and product recalls or removals if undertaken to reduce a risk to
health posed by the device or to remedy a violation of the FDCA; and post-market surveillance activities and regulations.
Regulation
Outside of the U.S.
Each
country or territory outside of the U.S. has its own rules and regulations with respect to the manufacture, marketing and sale of medical
devices. For example, in December of 2018, we received regulatory approval from Instituto Nacional de Vigilancia de Medicamentos y Alimentos,
the Colombian equivalent of the U.S. Food and Drug Administration, for our first-in-human study for the VenoValve in Colombia. At this
time, other than the first-in-human trial in Colombia, we have not determined which countries outside of the U.S., if any, we will seek
approval for our product candidates.
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Our
Competitive Strengths
We
believe we will offer the venous disease treatment market a compelling value proposition with the launch of our product candidates, if
approved, for the following reasons:
●
We have extensive experience
of proprietary processing and manufacturing methodology specifically applicable to the design, processing, manufacturing and sterilization
of our biologic tissue devices.
●
We operate a 14,507 square
foot manufacturing facility in Irvine, California. Our facility is designed expressly for the manufacture of Class III tissue based
implantable medical devices and is equipped for research and development, prototype fabrication, current good manufacturing practices (cGMP), and manufacturing and shipping for Class III medical devices, including biologic cardiovascular devices.
●
We have attracted senior
executives who are experienced in research and development and who have worked on numerous medical devices that have received FDA
approval or CE marking. We also have the advantage of an experienced board of directors and scientific advisory board who will provide
guidance as we move towards market launch.
Intellectual
Property
We
possess an extensive proprietary processing and manufacturing methodology specifically applicable to the design, processing, manufacturing
and sterilization of biologic devices. This includes FDA compliant quality control and assurance programs, proprietary tissue processing
technologies demonstrated to eliminate recipient immune responses, trusted relationship with abattoir suppliers, and a combination of
tissue preservation and gamma irradiation that enhances device functions and guarantees sterility. We have filed numerous patent applications
for the VenoValve with the U.S. Patent and Trademark Office (USPTO) and throughout the world. We currently have twenty-six (26) patents
granted from agencies around the world including seven (7) from the USPTO.
Employees
As
of February 27, 2024, we had thirty-one (31) full-time employees. None of our employees are represented by a collective bargaining
agreement, and we have never experienced any work stoppage. We believe we have good relations with our employees.
Corporate
Information
We
were incorporated in Delaware on December 22, 1999. Our principal executive offices are located at 70 Doppler, Irvine, California, 92618,
and our telephone number is (949) 261-2900. Our corporate website address is www.envveno.com. The information contained on or accessible
through our website is not a part of this Annual Report, and the inclusion of our website address in this Annual Report is an inactive
textual reference only.
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