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What changed in CVRx, Inc.'s 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of CVRx, Inc.'s 2023 and 2024 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2024 report.

+280 added−284 removedSource: 10-K (2025-02-18) vs 10-K (2024-02-09)

Top changes in CVRx, Inc.'s 2024 10-K

280 paragraphs added · 284 removed · 245 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

117 edited+16 added−17 removed232 unchanged
Biggest changeIf clinical studies for future indications do not produce results necessary to support regulatory clearance or approval in the U.S. or elsewhere, we will be unable to commercialize our products for these indications. ​ We generated revenue of $39.3 million, a gross margin of 84% and a net loss of $41.2 million for the year ended December 31, 2023, compared to revenue of $22.5 million, a gross margin of 78% and a net loss of $41.4 million for the year ended December 31, 2022.
Biggest changeIf clinical studies for future indications do not produce results necessary to support regulatory clearance or approval in the U.S. or elsewhere, we will be unable to commercialize our products for these indications. ​ Our primary activities include continuing to increase education and awareness among physicians, advanced practice providers and patients, develop a more robust portfolio of clinical evidence, and improve patient access to Barostim Therapy.
The benefits of treatment with Barostim were shown to be similarly robust and reproducible across all three of our HF clinical studies, including BAT-in-HF (Phase I), HOPE4HF (Phase II) and BeAT-HF (Phase III pivotal trial), evaluating 624 patients in aggregate across the U.S., Germany, Italy, France, Canada and the United Kingdom.
The benefits of treatment with Barostim were shown to be similarly robust and reproducible across all three of our HF clinical studies, including BAT-in-HF (Phase I), HOPE4HF (Phase II), and BeAT-HF (Phase III pivotal trial), evaluating 624 patients in aggregate across the U.S., Germany, Italy, France, Canada and the United Kingdom.
A Company-sponsored and co-authored cost-impact analysis, which was published in BMC Cardiovascular Disorders , a peer-reviewed manuscript, predicted BAT plus GDMT would become the lower-cost alternative treatment within three years from implantation, as compared to GDMT alone, resulting in significant cost savings to healthcare systems. • Inherent patient compliance and durability.
A Company-sponsored and co-authored cost-impact analysis, which was published in BMC Cardiovascular Disorders , a peer-reviewed manuscript, predicted BAT plus GDMT would become the lower-cost alternative treatment within three years from implantation, as compared to GDMT alone, resulting in significant cost savings to healthcare systems. • Inherent patient compliance and durability.
Barostim ensures patient compliance, unlike most commercially available drug treatments, as it requires no device interaction by the patient. Our device has a battery that does not require recharging, has an average service life of five to six years and is replaced through a short outpatient procedure.
Barostim ensures patient compliance, unlike most commercially available drug treatments, as it requires no device interaction by the patient. Our device has a battery that does not require recharging, has an average service life of five to six years and is replaced through a short outpatient procedure.
Civil penalties for such conduct can further be assessed under the federal False Claims Act. Violations can also result in criminal penalties, including criminal fines of up to $100,000 and imprisonment of up to 10 years. Similarly, violations can result in exclusion from participation in government healthcare programs, including Medicare and Medicaid.
Civil penalties for such conduct can further be assessed under the federal civil False Claims Act. Violations can also result in criminal penalties, including criminal fines of up to $100,000 and imprisonment of up to 10 years. Similarly, violations can result in exclusion from participation in government healthcare programs, including Medicare and Medicaid.
The government may further prosecute conduct constituting a false claim under the federal criminal False Claims Act. The criminal False Claims Act prohibits the making or presenting of a claim to the government knowing such claim to be false, fictitious or fraudulent and, unlike the federal civil False Claims Act, requires proof of intent to submit a false claim.
The government may further prosecute conduct constituting a false claim under the federal criminal False Claims Act. The federal criminal False Claims Act prohibits the making or presenting of a claim to the government knowing such claim to be false, fictitious, or fraudulent and, unlike the federal civil False Claims Act, requires proof of intent to submit a false claim.
These results demonstrated that BAT is safe in patients with HFrEF and significantly improves the patient-centered symptomatic endpoints of the quality-of-life score, 6MHW and NYHA functional status, as well as the confirmatory nature of the evidence provided by a reduction of NT-proBNP. ​ • Quality of life (measured by MLWHF): BAT resulted in a 14-point reduction (improvement) in quality of life for patients in the BAT+ group relative to patients in the Control group (p • Exercise capacity (measured by the standardized 6MHW distance test): BAT resulted in a 60-meter increase in the distance patients in the BAT+ group were able to walk on a flat, hard surface in a six-minute period relative to that of patients in the Control group (p • Functional status (determined by NYHA classification): BAT demonstrated that 65% of patients in the BAT+ group improved at least one NYHA class (p • NT-proBNP (serum biomarker used as indicator of severity of HF): BAT resulted in a 25% greater reduction (improvement) in NT-proBNP for patients in the BAT+ group relative to that of patients in the Control group (p=0.004; 95% CI = -38% to -9%).
These results demonstrated that BAT is safe in patients with HFrEF and significantly improves the patient-centered symptomatic endpoints of the quality-of-life score, 6MHW and NYHA functional status, as well as the confirmatory nature of the evidence provided by a reduction of NT-proBNP. ​ • Quality of life (measured by MLWHF questionnaire): BAT resulted in a 14-point improvement in quality of life for patients in the Barostim group relative to patients in the control group (p • Exercise capacity (measured by the standardized 6MHW distance test): BAT resulted in a 60-meter increase in the distance patients in the Barostim group were able to walk on a flat, hard surface in a six-minute period relative to that of patients in the control group (p • Functional status (determined by NYHA classification): BAT demonstrated that 65% of patients in the Barostim group improved at least one NYHA class (p • NT-proBNP (serum biomarker used as indicator of severity of HF): BAT resulted in a 25% greater reduction (improvement) in NT-proBNP for patients in the Barostim group relative to that of patients in the control group (p=0.004; 95% CI = -38% to -9%).
The device is rechargeable and therefore requires patients to recharge the battery on a regular basis. ​ Left Ventricular Assist Device (LVAD) ​ LVAD is an irreversible, invasive surgery generally reserved for critical HFrEF patients with NYHA Class IV. An LVAD is a mechanical pump that is implanted inside a patient’s chest and helps pump blood throughout the body.
The device is rechargeable and therefore requires patients to recharge the battery on a regular basis. ​ Left Ventricular Assist Device (“LVAD”) ​ LVAD is an irreversible, invasive surgery generally reserved for critical HFrEF patients with NYHA Class IV. An LVAD is a mechanical pump that is implanted inside a patient’s chest and helps pump blood throughout the body.
Unlike directives, which must be implemented into the national laws of the EEA, the regulations are directly applicable in all EEA member states and are intended to eliminate differences in the regulation of medical devices among EEA member states. ​ The new regulations: ​ • Require demonstration of clinically meaningful outcomes for the performance of the medical device; • Require stricter control of Class IIb and Class III medical devices during the clinical investigational phase; • Require rigorous post-market oversight by the manufacturer and increased post-market surveillance authority by the Notified Body, including unannounced audits and product sample checks and testing; • Establish explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety of devices placed on the market; • Improve the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number; • Provide greater transparency by establishing a central database (EUDAMED) to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU; and • Strengthen rules for the assessment of certain high-risk devices, which may have to undergo an additional check by an independent expert panel before they are placed on the market.
Unlike directives, which must be implemented into the national laws of the EEA, the regulations are directly applicable in all EEA 32 Table of Contents member states and are intended to eliminate differences in the regulation of medical devices among EEA member states. ​ The new regulations: ​ • Require demonstration of clinically meaningful outcomes for the performance of the medical device; • Require stricter control of Class IIb and Class III medical devices during the clinical investigational phase; • Require rigorous post-market oversight by the manufacturer and increased post-market surveillance authority by the Notified Body, including unannounced audits and product sample checks and testing; • Establish explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety of devices placed on the market; • Improve the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number; • Provide greater transparency by establishing a central database (EUDAMED) to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU; and • Strengthen rules for the assessment of certain high-risk devices, which may have to undergo an additional check by an independent expert panel before they are placed on the market.
The MANCE-free rate exceeded the performance criteria of 85%, with 121 out of 125 implanted patients being event free, resulting in an event-free rate of 97% (p ​ In addition to the results noted above, we observed a reduction in the rate of cardiovascular serious adverse events (non-HF related events) by 51% (events per patient-year; 0.101 BAT+ vs 0.206 Control; nominal p= 0.023; 95% CI: 0.10 to 0.73) and there were no significant differences in blood pressure or heart rate. ​ Post-market phase results ​ The BeAT-HF pivotal trial continued enrolling patients in the post-market stage of the trial to determine if Barostim demonstrates a statistically significant improvement in morbidity and mortality in patients with HFrEF.
The MANCE-free rate exceeded the performance criteria of 85%, with 121 out of 125 implanted patients being event free, resulting in an event-free rate of 97% (p ​ In addition to the results noted above, we observed a reduction in the rate of cardiovascular serious adverse events (non-HF related events) by 51% (events per patient-year; 0.101 Barostim group vs 0.206 control group; nominal p= 0.023; 95% CI: 0.10 to 0.73) and there were no significant differences in blood pressure or heart rate. ​ Post-market phase results ​ The BeAT-HF pivotal trial continued enrolling patients in the post-market stage of the trial to determine if Barostim demonstrates a statistically significant improvement in morbidity and mortality in patients with HFrEF.
Under the 510(k) process, the manufacturer must submit to the FDA a premarket notification demonstrating that the device is “substantially equivalent” to either a device that was legally marketed prior to May 28, 1976, the date upon which the Medical Device Amendments of 1976 were enacted, or another commercially available device that was cleared through the 510(k) process. ​ Devices deemed by the FDA to pose the greatest risks are placed in Class III, requiring approval of an HDE or PMA. ​ Our currently U.S.-marketed Barostim devices are Class III devices which have received both a PMA and an HDE approval. ​ PMA & HDE approval pathway Class III devices require PMA or HDE approval before they can be marketed, although some pre-amendment Class III devices for which the FDA has not yet required a PMA are cleared through the 510(k) process.
Under the 510(k) process, the manufacturer must submit to the FDA a premarket notification demonstrating that the device is “substantially equivalent” to either a device that was legally marketed prior to May 28, 1976, the date upon which the Medical Device Amendments of 1976 were enacted, or another commercially available device that was cleared through the 510(k) process. ​ Devices deemed by the FDA to pose the greatest risks are placed in Class III, requiring approval of an HDE or PMA. ​ 28 Table of Contents Our currently U.S.-marketed Barostim devices are Class III devices which have received both a PMA and an HDE approval. ​ PMA & HDE approval pathway Class III devices require PMA or HDE approval before they can be marketed, although some pre-amendment Class III devices for which the FDA has not yet required a PMA are cleared through the 510(k) process.
Penalties for federal civil False Claim Act violations include fines for each false claim, plus up to three times the amount of damages sustained by the federal government and, most critically, may provide the basis for exclusion from the federally funded healthcare program.
Penalties for federal civil False Claims Act violations include fines for each false claim, plus up to three times the amount of damages sustained by the federal government and, most critically, may provide the basis for exclusion from the federally funded healthcare program.
The majority of states also have anti-kickback laws that establish similar prohibitions and, in some cases, may apply more broadly to items or services covered by any third-party payor, including commercial insurers and self-pay patients. ​ The federal civil False Claims Act prohibits, among other things, any person or entity from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment or approval to the federal government or knowingly making, using or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government.
The majority of states also have anti-kickback laws that establish similar prohibitions and, in some cases, may apply more broadly to items or services covered by any third-party payer, including commercial insurers and self-pay patients. ​ The federal civil False Claims Act prohibits, among other things, any person or entity from knowingly presenting, or causing to be presented, a false or fraudulent claim for payment or approval to the federal government or knowingly making, using, or causing to be made or used a false record or statement material to a false or fraudulent claim to the federal government.
These results demonstrated that BAT is safe in patients with HFrEF, showed a directional reduction in the primary endpoint of CV mortality and HF morbidity (although not reaching statistical significance), and favored patient-centered symptomatic improvements at 6 and 12 months in 6MHW and at 6,12 and 24 months in the MLWHF quality of life and NYHA Class. ​ 18 Table of Contents • Exercise capacity (measured by the standardized 6MHW distance test): The BAT+ group showed an improvement at both 6 and 12 months compared to the Control group.
These results demonstrated that BAT is safe in patients with HFrEF, showed a directional reduction in the primary endpoint of CV mortality and HF morbidity (although not reaching statistical significance), and favored patient-centered symptomatic improvements at 6 and 12 months in 6MHW and at 6,12 and 24 months in the MLWHF quality of life questionnaire and NYHA Class. ​ 18 Table of Contents • Exercise capacity (measured by the standardized 6MHW distance test): The Barostim group showed an improvement at both 6 and 12 months compared to the control group.
A total of 146 patients (72 in the U.S. and 74 in Germany, Italy, France and Canada) at 45 centers were randomized 1:1 with 76 patients in the BAT+ group and 70 patients in the Control group. ​ 21 Table of Contents Patients were eligible for the study based on symptoms, historical treatment plan and anatomical criteria, including if they were NYHA Class III, received GDMT for their HF, had a LVEF ≤ 35% and were considered a suitable surgical candidate, among others.
A total of 146 patients (72 in the U.S. and 74 in Germany, Italy, France, and Canada) at 45 centers were randomized 1:1 with 76 patients in the Barostim group and 70 patients in the control group. ​ 21 Table of Contents Patients were eligible for the study based on symptoms, historical treatment plan and anatomical criteria, including if they were NYHA Class III, received GDMT for their HF, had a LVEF ≤ 35% and were considered a suitable surgical candidate, among others.
We currently believe our annual market opportunity in the U.S. is an estimated $2.2 billion, or 76,000 patients, based on this new long-term safety and effectiveness data as well as our commercial experience and, as discussed below, the new reimbursement assignment for Barostim in 2024. ​ We continue to develop and expand upon our significant body of published clinical evidence that supports the meaningful benefits of Barostim Therapy.
We currently believe our annual market opportunity in the U.S. is an estimated $2.2 billion, or 76,000 patients, based on this new long-term safety and effectiveness data as well as our commercial experience and, as discussed below, the new reimbursement assignment for Barostim in 2025. ​ We continue to develop and expand upon our significant body of published clinical evidence that supports the meaningful benefits of Barostim Therapy.
These values are: ​ • Commitments are Sacred — Honor relationships by doing what we say, when we say we’ll do it. • Bold Mindset, Driven Spirit — Always push the boundaries, energetically seeking out impactful opportunities and inspiring others. 40 Table of Contents • Pioneer with Purpose…and a Smile! — As individuals, team leaders and industry innovators, it’s how we pave the way forward that defines us. • Collaborate with Enjoyment — Achieve goals and celebrate as a team. • Determination overcomes Targets — Determine the pathway, overcome obstacles, accelerate and successfully implement. • Embrace the Challenge of Change — Have an eye for identifying when change is needed, and the flexibility to chart a new course.
These values are: ​ • Commitments are Sacred — Honor relationships by doing what we say, when we say we’ll do it. • Bold Mindset, Driven Spirit — Always push the boundaries, energetically seeking out impactful opportunities and inspiring others. • Pioneer with Purpose…and a Smile! — As individuals, team leaders and industry innovators, it’s how we pave the way forward that defines us. • Collaborate with Enjoyment — Achieve goals and celebrate as a team. • Determination Overcomes Targets — Determine the pathway, overcome obstacles, accelerate, and successfully implement. • Embrace the Challenge of Change — Have an eye for identifying when change is needed, and the flexibility to chart a new course.
Additionally, the percentage of subjects improving between the arms at 6, 12 and 24 months was higher in the BAT+ group compared to the Control group. ​ ​ ​ • Hierarchical Win Ratio: The hierarchical composite analysis using the Win Ratio was evaluated using the components of the CV morbidity and HF mortality endpoints and the MLWHF quality of life (CV mortality, heart transplant or LVAD, number of hospitalizations or emergency visits for HF, number of unscheduled clinical visits with IV diuretic and change from baseline in MLWHF at 12 months).
Additionally, the percentage of subjects improving between the arms at 6, 12, and 24 months was higher in the Barostim group compared to the control group. ​ ​ ​ • Hierarchical Win Ratio: The hierarchical composite analysis using the Win Ratio was evaluated using the components of the CV morbidity and HF mortality endpoints and the MLWHF quality of life (CV mortality, heart transplant or LVAD, number of hospitalizations or emergency visits for HF, number of unscheduled clinical visits with IV diuretic, and change from baseline in MLWHF at 12 months).
The differences between the groups at 6, 12 and 24 months are -14, -8 and -10, respectively, which is not only statistically significant, but is greater than a clinically meaningful difference of 5 points. ​ 19 Table of Contents • Functional status (determined by NYHA classification): Approximately two-thirds of the BAT+ group improved at least one NYHA class across the follow-up visits.
The differences between the groups at 6, 12 and 24 months are -14, -8 and -10, respectively, which is not only statistically significant, but is greater than a clinically meaningful difference of 5 points. ​ 19 Table of Contents • Functional status (determined by NYHA classification): Approximately two-thirds of the Barostim group improved at least one NYHA class across the follow-up visits.
When an entity is determined to have violated the federal civil False Claims Act, the government may impose civil fines and penalties ranging from $12,537 to $25,076 for each false claim, plus treble damages, and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs. ​ 36 Table of Contents The Civil Monetary Penalty Act of 1981 imposes penalties against any person or entity that, among other things, is determined to have presented or caused to be presented a claim to a federal healthcare program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent, or offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier. ​ The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) also created additional federal criminal statutes that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
When an entity is determined to have violated the federal civil False Claims Act, the government may impose civil fines and penalties ranging from $12,537 to $25,076 for each false claim, plus treble damages, and exclude the entity from participation in Medicare, Medicaid, and other federal healthcare programs. ​ The Civil Monetary Penalty Act of 1981 imposes penalties against any person or entity that, among other things, is determined to have presented or caused to be presented a claim to a federal healthcare program that the person knows or should know is for an item or service that was not provided as claimed or is false or fraudulent, or offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier. ​ The Health Insurance Portability and Accountability Act of 1996 (“HIPAA”) also created additional federal criminal statutes that prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any healthcare benefit program, including private third-party payers, knowingly and willfully embezzling or stealing from a healthcare benefit program, willfully obstructing a criminal investigation of a healthcare offense and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially false, fictitious or fraudulent statement in connection with the delivery of or payment for healthcare benefits, items or services.
After being treated with pharmaceuticals for a short period, if the symptoms persist, patients move to more invasive and costly treatment options involving other implantable devices, with the most severe patients often requiring LVADs or heart transplants. ​ Other commercially available implantable devices Implantable Cardiac Defibrillators (ICD) ​ ICDs are indicated for patients with NYHA Class II or III and LVEF ≤ 35% for both wide and narrow QRS.
After being treated with pharmaceuticals for a short period, if the symptoms persist, patients move to more invasive and costly treatment options involving other implantable devices, with the most severe patients often requiring LVADs or heart transplants. ​ Other commercially available implantable devices Implantable Cardiac Defibrillators (“ICD”) ​ ICDs are indicated for patients with NYHA Class II or III and LVEF ≤ 35% for both wide and narrow QRS.
Patients assigned to BAT+ group, compared with Control group patients, experienced improvements in MLWHF quality of life score (–17 ± 2.8 points BAT+ vs. 2.1 ± 3.1 points Control; p ​ Positive safety and performance results from the 146-patient combined, randomized, controlled clinical trials were presented in the late breaking clinical trial session of the American College of Cardiology and the European Society of Cardiology HF conference in 2015.
Patients assigned to Barostim group, compared with control group patients, experienced improvements in MLWHF quality of life score (–17 ± 2.8 points Barostim group vs. 2.1 ± 3.1 points control group; p ​ Positive safety and performance results from the 146-patient combined, randomized, controlled clinical trials were presented in the late breaking clinical trial session of the American College of Cardiology and the European Society of Cardiology HF conference in 2015.
Investment in clinical evidence continues to be one of our core strategies, and we intend to continue to develop and expand upon a significant body of published clinical evidence that supports the safety and effectiveness of Barostim Therapy. ​ Pivotal Phase III Study: BeAT-HF Overview ​ BeAT-HF is a multi-center, prospective, randomized, controlled trial that began in April 2016 to develop scientific evidence for the safety and effectiveness of BAT with Barostim.
Investment in clinical evidence continues to be one of our core strategies, and we intend to continue to develop and expand upon a significant body of published clinical evidence that supports the safety and effectiveness of Barostim Therapy. ​ Pivotal Phase III Study: BeAT-HF Overview ​ BeAT-HF was a multi-center, prospective, randomized, controlled trial that began in April 2016 to develop scientific evidence for the safety and effectiveness of BAT with Barostim.
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, 29 Table of Contents 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. ​ The FDA will approve the new device for commercial distribution if it determines that the data and information in the HDE constitute valid scientific evidence and that there is reasonable assurance that the device is safe and has probable benefit for its intended use(s) according to the instructions for use or labeling.
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. ​ The FDA will approve the new device for commercial distribution if it determines that the data and information in the HDE constitute valid scientific evidence and that there is reasonable assurance that the device is safe and has probable benefit for its intended use(s) according to the instructions for use or labeling.
After the titration period, it is recommended that the patient attend a clinical visit two times each year to check impedance, battery longevity and adequacy of programming. ​ Key benefits for patients, physicians and payors Barostim is designed to advance patient care and provide a safe, effective and economically attractive treatment option to an underserved patient population suffering from HFrEF.
After the titration period, it is recommended that the patient attend a clinical visit two times each year to check impedance, battery longevity and adequacy of programming. ​ Key benefits for patients, physicians and payers Barostim is designed to advance patient care and provide a safe, effective, and economically attractive treatment option to an underserved patient population suffering from HFrEF.
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 U.S., for example, has changed healthcare financing and delivery by both governmental and private insurers substantially, and affected medical device manufacturers significantly.
The cost containment measures that payers 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 U.S., for example, has changed healthcare financing and delivery by both governmental and private insurers substantially, and affected medical device manufacturers significantly.
These include: ​ • establishment 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 and marketing regulations, which require that promotion is truthful, not misleading, fairly balanced and provide adequate directions for use and that all claims are substantiated and also prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling; FDA guidance on off-label dissemination of information and responding to unsolicited requests for information; and Federal Trade Commission guidance on endorsements and testimonials; • the federal Physician Payments Sunshine Act and various state and foreign laws on reporting remunerative relationships with health care customers; • the federal Anti-Kickback Statute (and similar state laws) prohibiting, among other things, soliciting, receiving, offering or providing remuneration intended to induce the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as Medicare or Medicaid.
These include: ​ • establishment 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 and marketing regulations, which require that promotion is truthful, not misleading, fairly balanced and provides adequate directions for use and that all claims are substantiated and also prohibit the promotion of products for unapproved or “off-label” uses and impose other restrictions on labeling; FDA guidance on off-label dissemination of information and responding to unsolicited requests for information; and Federal Trade Commission guidance on endorsements and testimonials; 30 Table of Contents • the federal Physician Payments Sunshine Act and various state and foreign laws on reporting remunerative relationships with health care customers; • the federal Anti-Kickback Statute (and similar state laws) prohibiting, among other things, soliciting, receiving, offering, or providing remuneration intended to induce the purchase or recommendation of an item or service reimbursable under a federal healthcare program, such as Medicare or Medicaid.
In the pre-market phase, all effectiveness endpoints were previously met, demonstrating 6-month improvements in 6MHW, quality of life, NYHA Class and NT-proBNP (described below). The post-market phase effectiveness primary endpoint of CV mortality and HF hospitalization was not met. Additional post-market phase effectiveness analyses (Win Ratio, freedom from all-cause mortality) suggested a favorable effect of Barostim Therapy.
In the pre-market phase, all effectiveness endpoints were previously met, demonstrating 6-month improvements in 6MHW, quality of life, NYHA Class and NT-proBNP (defined below). The post-market phase effectiveness primary endpoint of CV mortality and HF hospitalization was not met. Additional post-market phase effectiveness analyses (Win Ratio, freedom from all-cause mortality) suggested a favorable effect of Barostim Therapy.
Our customers bill various third-party payors, such as government agencies, administrative contractors, commercial payors and integrated managed care organizations, for the cost required to treat each patient. ​ Third-party payors generally require physicians and hospitals to identify the service for which they are seeking reimbursement for by using CPT codes, which are created and maintained by the American Medical Association.
Our customers bill various third-party payers, such as government agencies, administrative contractors, commercial payers and integrated managed care organizations, for the cost required to treat each patient. ​ Third-party payers generally require physicians and hospitals to identify the service for which they are seeking reimbursement for by using CPT codes, which are created and maintained by the American Medical Association.
We believe the following factors offer meaningful benefits for patients, physicians and payors that will continue to drive broad adoption of our therapy: ​ • Addresses significant unmet medical need. Barostim addresses a life-threatening disease for patients who failed to receive adequate benefits from existing treatments and who have no alternative treatment options.
We believe the following factors offer meaningful benefits for patients, physicians and payers that will continue to drive broad adoption of our therapy: ​ • Addresses significant unmet medical need. Barostim addresses a life-threatening disease for patients who failed to receive adequate benefits from existing treatments and who have no alternative treatment options.
The hazard ratio for all-cause mortality using a per protocol analysis = 0.589 (95% CI 0.380, 0.923), representing a relative risk reduction of 41% in the BAT+ group compared with the Control group. ​ The system or procedure related MANCE endpoint includes all events that occurred across the duration of follow-up.
The hazard ratio for all-cause mortality using a per protocol analysis = 0.589 (95% CI 0.380, 0.923), representing a relative risk reduction of 41% in the Barostim group compared with the control group. ​ The system or procedure related MANCE endpoint includes all events that occurred across the duration of follow-up.
We will continue to monitor developments in this space, including decisions made by private payors, if any. ​ We will continue to leverage our in-house market access team to obtain appropriate prior authorization approvals in advance of treatment on a case-by-case basis where positive coverage policies currently do not exist.
We will continue to monitor developments in this space, including decisions made by private payers, if any. ​ We will continue to leverage our in-house market access team to obtain appropriate prior authorization approvals in advance of treatment on a case-by-case basis where positive coverage policies currently do not exist.
We believe there is a significant need and market opportunity for a safe, effective and minimally invasive device-based treatment option for HFrEF. ​ We believe Barostim offers meaningful benefits for patients, physicians and payors that will continue to drive adoption of our therapy. The primary benefits include: ​ • Addresses significant unmet medical need.
We believe there is a significant need and market opportunity for a safe, effective, and minimally invasive device-based treatment option for HFrEF. ​ We believe Barostim offers meaningful benefits for patients, physicians and payers that will continue to drive adoption of our therapy. The primary benefits include: ​ • Addresses significant unmet medical need.
We believe our market access team is highly effective in obtaining prior authorizations, including navigating the appeals process. We believe that we will continue to benefit from this efficient prior authorization process in the near-and-long-term by expanding on our positive coverage policies with commercial payors.
We believe our market access team is highly effective in obtaining prior authorizations, including navigating the appeals process. We believe that we will continue to benefit from this efficient prior authorization process in the near-and-long-term by expanding on our positive coverage policies with commercial payers.
The government may assert that a claim includes items or services resulting from a violation of the federal Anti-Kickback Statute and thus constitutes a false or fraudulent claim for purposes of the false claims statute; • clearance or approval of product modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices, or approval of a supplement for certain modifications to PMA and HDE 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 that may present a risk to health; • the federal law and regulations requiring Unique Device Identifiers (UDI) on devices and also requiring the submission of certain information about each device to the FDA’s Global Unique Device Identification Database (GUDID); • the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations; and 31 Table of Contents • post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data for the device.
The government may assert that a claim includes items or services resulting from a violation of the federal Anti-Kickback Statute and thus constitutes a false or fraudulent claim for purposes of the false claims statute; • clearance or approval of product modifications to 510(k)-cleared devices that could significantly affect safety or effectiveness or that would constitute a major change in intended use of one of our cleared devices, or approval of a supplement for certain modifications to PMA and HDE 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 that may present a risk to health; • the federal law and regulations requiring Unique Device Identifiers (“UDI”) on devices and also requiring the submission of certain information about each device to the FDA’s Global Unique Device Identification Database (“GUDID”); • the FDA’s recall authority, whereby the agency can order device manufacturers to recall from the market a product that is in violation of governing laws and regulations; and • post-market surveillance activities and regulations, which apply when deemed by the FDA to be necessary to protect the public health or to provide additional safety and effectiveness data for the device.
In HFpEF, the left ventricle loses its ability to relax properly (due to muscle stiffness), leading to the improper filling of blood in the heart during the resting period between heartbeats. ​ We are currently focused on the treatment of patients with HFrEF, which represents approximately 40% of the patients with HF.
In HFpEF, the left ventricle loses its ability to relax properly (due to muscle stiffness), leading to the improper filling of blood in the heart during the resting period between heartbeats. ​ We are currently focused on the treatment of patients with HFrEF, which represents approximately 31% of the patients with HF.
However, because Barostim is designed to be used in conjunction with pharmaceutical therapies to alleviate the symptoms of HFrEF, we do not consider existing pharmaceutical therapies to be direct competition. ​ We also compete with other medical technology companies to recruit and retain qualified sales, training and other personnel. ​ Intellectual property We rely on a combination of patent, copyright, trademark and trade secret laws and confidentiality and invention assignment agreements to protect our intellectual property rights.
However, because Barostim is designed to be used in conjunction with pharmaceutical therapies to alleviate the symptoms of HFrEF, we do not consider existing pharmaceutical therapies to be direct competition. 26 Table of Contents ​ We also compete with other medical technology companies to recruit and retain qualified sales, training, and other personnel. ​ Intellectual property We rely on a combination of patent, copyright, trademark and trade secret laws and confidentiality and invention assignment agreements to protect our intellectual property rights.
In our discussions with commercial payors, we highlight our compelling and robust clinical data, including the long-term post-market BeAT-HF data, the potential economic cost-savings associated with our highly compliant treatment, increased patient demand and support from leading medical societies and KOLs.
In our discussions with commercial payers, we highlight our compelling and robust clinical data, including the long-term post-market BeAT-HF data, the potential economic cost-savings associated with our highly compliant treatment, increased patient demand and support from leading medical societies and KOLs.
A LVEF • Co-morbidities / clinical fit: A patient’s co-morbidities, such as severe chronic obstructive pulmonary disease (COPD), kidney disease or carotid stenosis, as well as a patient’s physical and psychological fit 10 Table of Contents contribute to a physician’s treatment recommendation given the use of general anesthesia in most HF-related device-based treatment options. • QRS complex: The QRS complex is a classification of ventricle depolarization, or the heart’s ability to open once contracted.
An LVEF • Co-morbidities / clinical fit: A patient’s co-morbidities, such as severe chronic obstructive pulmonary disease (“COPD”), kidney disease or carotid stenosis, as well as a patient’s physical and psychological fit 10 Table of Contents contribute to a physician’s treatment recommendation given the use of general anesthesia in most HF-related device-based treatment options. • QRS complex: The QRS complex is a classification of ventricle depolarization, or the heart’s ability to open once contracted.
HIPAA also requires business associates, such as independent contractors or agents of covered entities that have access to PHI in connection with providing a service to or on behalf of a covered entity, of covered entities to enter into business associate agreements with the covered entity and to safeguard the covered entity’s PHI against improper use and disclosure. ​ 37 Table of Contents The HIPAA privacy regulations cover the use and disclosure of PHI by covered entities as well as business associates, which are defined to include subcontractors that create, receive, maintain, or transmit PHI on behalf of a business associate.
HIPAA also requires business associates, such as independent contractors or agents of covered entities that have access to PHI in connection with providing a service to or on behalf of a covered entity, of covered entities to enter into business associate agreements with the covered entity and to safeguard the covered entity’s PHI against improper use and disclosure. ​ The HIPAA privacy regulations cover the use and disclosure of PHI by covered entities as well as business associates, which are defined to include subcontractors that create, receive, maintain, or transmit PHI on behalf of a business associate.
Failure to comply with the HIPAA privacy and security standards can result in civil monetary penalties up to $63,973 per violation, not to exceed $1.92 million per calendar year for non-compliance of an identical provision and, in certain circumstances, criminal penalties with fines up to $250,000 per violation and/or imprisonment. ​ HIPAA authorizes state attorneys general to file suit on behalf of their residents for violations.
Failure to comply with the HIPAA privacy and security standards can result in civil monetary penalties up to $63,973 per violation, not to exceed $1.92 million per calendar year for non-compliance of an identical provision and, in certain circumstances, criminal penalties with fines up to $250,000 per violation and/or imprisonment. ​ 37 Table of Contents HIPAA authorizes state attorneys general to file suit on behalf of their residents for violations.
The discovery of previously unknown problems with any of our products, including unanticipated adverse events or adverse events of increasing severity or frequency, whether resulting from the use of the device within the scope of its clearance or off-label by a physician in the practice of medicine, could result in restrictions on the device, including the removal of the product from the market or voluntary or mandatory device recalls. ​ The FDA has broad regulatory compliance and enforcement powers.
The discovery of previously unknown problems with any of our products, including unanticipated adverse events or adverse events of increasing severity or frequency, whether resulting from the use of the device within the scope of its clearance or off-label by a physician in the practice of medicine, could result in restrictions on the device, including the removal of the product from the market or voluntary or mandatory device recalls. ​ 31 Table of Contents The FDA has broad regulatory compliance and enforcement powers.
The Data Protection Act of 2018, which came into effect on May 25, 2018 and was amended on January 1, 2021, works alongside and supplements the UK GDPR. ​ We are subject to the supervision of local data protection authorities in those jurisdictions where we are established or otherwise subject to applicable law. ​ We depend on third parties in relation to our provision of our services, a number of which process personal data on our behalf.
The Data Protection Act of 2018, which came into effect on May 25, 2018 and was amended on January 1, 2021, works alongside and supplements the UK GDPR. ​ We are subject to the supervision of local data protection authorities in those jurisdictions where we are established or otherwise subject to applicable law. ​ 38 Table of Contents We depend on third parties in relation to our provision of our services, a number of which process personal data on our behalf.
The MDR repealed and replaced the EU Medical Devices Directive (Council Directive 93/42/EEC — “MDD” or Council Directive 90/385/EEC). ​ 32 Table of Contents Previously, medical devices regulated under the MDD and AIMDD were classified into one of four classes — Class I, Class IIa, Class IIb or Class III — based on the extent of the regulatory controls necessary and sufficient to provide reasonable assurance of safety and effectiveness of the device.
The MDR repealed and replaced the EU Medical Devices Directive (Council Directive 93/42/EEC — “MDD” or Council Directive 90/385/EEC). ​ Previously, medical devices regulated under the MDD and AIMDD were classified into one of four classes — Class I, Class IIa, Class IIb, or Class III — based on the extent of the regulatory controls necessary and sufficient to provide reasonable assurance of safety and effectiveness of the device.
Available Information We make our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, available free of charge at our website as soon as reasonably practicable after they have been filed with, or furnished to, the U.S.
Available Information We make our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, available free of charge at our website as soon as reasonably practicable after they have been filed with, or 40 Table of Contents furnished to, the U.S.
However, CCM is associated with a number of drawbacks, including not being designed to address the imbalance of the ANS; less favorable clinical effectiveness results in patients with LVEF 25–35% as compared to patients with LVEF 35–45% related to exercise capacity, quality of life and NYHA functional status; implantation through an invasive procedure that includes running electrical leads through the veins and attaching them to the heart’s ventricle, which may lead to increased risks to the patient; and the requirement that patients regularly charge the battery in their implanted device. ​ We believe that the primary competitive factors in the HFrEF treatment market are: ​ • product safety, reliability and durability; • quality and volume of clinical data; • adoption by patients, physicians and hospitals; • adequate reimbursement for our device; • product ease of use and patient comfort; • sales force expansion, experience and access; • product availability, support and service; 26 Table of Contents • manufacturing and supply chain; • technological innovation and product enhancements; and • intellectual property portfolio.
However, CCM is associated with a number of drawbacks, including not being designed to address excess of neurohormones; less favorable clinical effectiveness results in patients with LVEF 25–35% as compared to patients with LVEF 35–45% related to exercise capacity, quality of life and NYHA functional status; implantation through an invasive procedure that includes running electrical leads through the veins and attaching them to the heart’s ventricle, which may lead to increased risks to the patient; and the requirement that patients regularly charge the battery in their implanted device. ​ We believe that the primary competitive factors in the HFrEF treatment market are: ​ • product safety, reliability, and durability; • quality and volume of clinical data; • adoption by patients, physicians, and hospitals; • adequate reimbursement for our device; • product ease of use and patient comfort; • sales force expansion, experience, and access; • product availability, support, and service; • manufacturing and supply chain; • technological innovation and product enhancements; and • intellectual property portfolio.
There have been judicial and Congressional challenges to certain aspects of the Affordable Care Act, and we expect additional challenges and amendments in the future. Moreover, the Biden Administration and the U.S. Congress may take further action regarding the Affordable Care Act.
There have been judicial and Congressional challenges to certain aspects of the Affordable Care Act, and we expect additional challenges and amendments in the future. Moreover, the Trump Administration and the U.S. Congress may take further action regarding the Affordable Care Act.
According to independent research that took place in a large multicenter pharmaceutical clinical trial, a 10% change in NT-proBNP is associated with a change in the subsequent risk of cardiovascular mortality and HF hospitalization.
According to independent research that took place in a large multicenter pharmaceutical clinical trial, a 10% change in NT-proBNP is associated with a change in the subsequent risk of CV mortality and HF hospitalization.
As shown below, the hazard ratio for all-cause mortality = 0.662 (95% CI 0.435, 1.007), representing a relative risk reduction of 34% in the BAT+ group compared with the Control group.
As shown below, the hazard ratio for all-cause mortality = 0.662 (95% CI 0.435, 1.007), representing a relative risk reduction of 34% in the Barostim group compared with the control group.
We support all aspects of the patient journey, which includes initial diagnosis, surgical support and patient follow-up. We also highlight our compelling clinical benefits and value 7 Table of Contents proposition to build awareness and adoption among physicians through targeted key opinion leader (“KOL”) development, referral network education and direct-to-consumer marketing.
We support all aspects of the patient journey, which includes initial diagnosis, surgical support, and patient follow-up. We also highlight our compelling clinical benefits and value proposition to build awareness and adoption among physicians through targeted key opinion leader (“KOL”) development, referral network education and direct-to-consumer marketing.
Further, manufacturers, medical practitioners and medical institutions are obliged to report any incident involving a medical device, including any malfunction or deterioration in the characteristics and/or performance of a device, as well as any inadequacy in the labelling or the instructions for use which might lead to or might have led to the death of a patient or to a serious deterioration in his or her state of health.
Further, manufacturers, medical practitioners and medical institutions are obliged to report any incident involving a medical device, including any malfunction or deterioration in the characteristics and/or performance of a device, as well as any inadequacy in the labelling or the instructions for use which 34 Table of Contents might lead to or might have led to the death of a patient or to a serious deterioration in his or her state of health.
An additional limitation for HDE devices is they must be prescribed for a patient population that has a medical condition or disease that afflicts less than 8,000 people per year in the United States and have been designated as a Humanitarian Use Device by FDA. ​ Clinical trials Clinical trials are usually required to support a PMA and are sometimes required to support an HDE, 510(k) or De Novo submission.
An additional limitation for HDE devices is they must be prescribed for a patient population that has a medical condition or disease that afflicts less than 8,000 people per year in the United States and have been designated as a Humanitarian Use Device by the FDA. ​ 29 Table of Contents Clinical trials Clinical trials are usually required to support a PMA and are sometimes required to support an HDE, 510(k) or De Novo submission.
Among policy makers and payors in the U.S. 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.
Among policy makers and payers in the U.S. 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.
In the BAT+ group, the crude event rate was 7.0 per 100 years with 38 events during 544 patient-years at risk. In the Control group, the crude event rate was 10.4 per 100 years with 51 events during 492 patient-years at risk.
In the Barostim group, the crude event rate was 7.0 per 100 years with 38 events during 544 patient-years at risk. In the control group, the crude event rate was 10.4 per 100 years with 51 events during 492 patient-years at risk.
The analysis includes subjects in BAT+ group who had an implant attempted (n=159), representing 6,664 total months of implant follow-up. All implant attempts were successful.
The analysis includes subjects in Barostim group who had an implant attempted (n=159), representing 6,664 total months of implant follow-up. All implant attempts were successful.
We estimate that our annual market opportunity for HFrEF is $2.2 billion in the U.S. and $1.5 billion in select European Markets (Germany, France, Italy, Spain and the United Kingdom, or “European Five”). ​ HF is one of the most prevalent and devastating cardiovascular diseases.
We estimate that our annual market opportunity for HFrEF is $2.2 billion in the U.S. and $2.8 billion in select European Markets (Germany, France, Italy, Spain, and the United Kingdom, or “European Five”). ​ HF is one of the most prevalent and devastating cardiovascular diseases.
In particular, in order to process such data, explicit consent to the processing (including any transfer) is usually required from the data subject (being the person to whom the personal data relates). ​ 38 Table of Contents The EU-wide General Data Protection Regulation (“GDPR”) became applicable on May 25, 2018, replacing the previous data protection laws issued by each EU Member State based on the Directive 95/46/EC.
In particular, in order to process such data, explicit consent to the processing (including any transfer) is usually required from the data subject (being the person to whom the personal data relates). ​ The EU-wide General Data Protection Regulation (“GDPR”) became applicable on May 25, 2018, replacing the previous data protection laws issued by each EU Member State based on the Directive 95/46/EC.
We are continuing to collect data through the U.S. patient registry that we have established in order to evaluate and assess real world outcomes from HFrEF patients who have been implanted with Barostim. ​ We primarily sell Barostim to hospitals through a direct sales organization in the U.S. and Germany and through distributors in Austria, Spain, Italy, the Nordic region and other European countries.
We are continuing to collect data through the U.S. patient registry 7 Table of Contents that we have established in order to evaluate and assess real world outcomes from HFrEF patients who have been implanted with Barostim. ​ We primarily sell Barostim to hospitals through a direct sales organization in the U.S. and Germany and through distributors in Austria, Spain, Italy, the Nordic region, and other European countries.
Liability under the federal Anti-Kickback Statute may also arise because of the intentions or actions of the parties with whom we do business. While we are not aware of any such intentions or actions, we have only limited knowledge regarding the intentions or actions underlying those arrangements.
Liability under the federal Anti-Kickback Statute may also arise because of the intentions or actions of the parties with 35 Table of Contents whom we do business. While we are not aware of any such intentions or actions, we have only limited knowledge regarding the intentions or actions underlying those arrangements.
If clinical studies for additional indications do not produce results necessary to support regulatory clearance or approval in the U.S. or elsewhere, we will be unable to commercialize our products for these indications. ​ For the years ended December 31, 2023 and 2022, we incurred research and development expenses of $11.6 million and $10.0 million, respectively. ​ Competition Our industry is subject to rapid change from the introduction of new products and technologies and other activities of industry participants.
If clinical studies for additional indications do not produce results necessary to support regulatory clearance or approval in the U.S. or elsewhere, we will be unable to commercialize our products for these indications. ​ For the years ended December 31, 2024 and 2023, we incurred research and development expenses of $11.1 million and $11.6 million, respectively. ​ Competition Our industry is subject to rapid change from the introduction of new products and technologies and other activities of industry participants.
Item 1. Business Overview CVRx is a commercial-stage medical device company focused on developing, manufacturing and commercializing innovative neuromodulation solutions for patients with cardiovascular diseases. Barostim is the first medical technology approved by the U.S. Food and Drug Administration (the “FDA”) that uses neuromodulation to improve the symptoms of patients with heart failure (“HF”).
Item 1. Business Overview CVRx is a commercial-stage medical device company focused on developing, manufacturing, and commercializing innovative and minimally invasive neuromodulation solutions for patients with cardiovascular disease. Barostim is the first medical technology approved by the U.S. Food and Drug Administration (the “FDA”) that uses neuromodulation to improve the symptoms of patients with heart failure (“HF”).
Class II devices are subject to the FDA’s General Controls, and special controls as deemed necessary by the FDA to ensure the safety and effectiveness of the device. These special controls 28 Table of Contents can include performance standards, post-market surveillance, patient registries and FDA guidance documents.
Class II devices are subject to the FDA’s General Controls, and special controls as deemed necessary by the FDA to ensure the safety and effectiveness of the device. These special controls can include performance standards, post-market surveillance, patient registries, and FDA guidance documents.
Additional safe harbor provisions providing similar protections have been published intermittently 35 Table of Contents since 1991. Although there are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn narrowly.
Additional safe harbor provisions providing similar protections have been published intermittently since 1991. Although there are a number of statutory exceptions and regulatory safe harbors protecting some common activities from prosecution, the exceptions and safe harbors are drawn narrowly.
Between May 2016 and July 2020, 467 adult patients were randomized at 72 sites within the U.S. and one site in the United Kingdom. ​ The BeAT-HF study was designed to encompass two stages in an integrated and seamless approach: ​ (1) A pre-market stage that examined three primary effectiveness endpoints (quality of life, 6MHW and NT-proBNP), as well as one safety endpoint that included the major adverse neurological or cardiovascular system or procedure-related event rate (“MANCE”). ​ (2) A post-market stage that examined the effects of BAT on rates of HF hospitalization and cardiovascular mortality, as well as sustained safety and symptomatic improvements, which expanded the labeling for Barostim. ​ Patients were eligible for the trial if they were NYHA Class III or Class II (with a recent history of Class III); had an LVEF ≤ 35% and NT-proBNP ≥ 4 weeks; had at least one carotid artery that was below the level of the mandible with no ulcerative carotid arterial plaques or stenosis ≥ 50%; and were an acceptable surgical candidate. ​ Patients who had a Class I indication for a CRT according to the American Heart Association/American College of Cardiology/European Society of Cardiology guidelines were excluded, and there were no restrictions for atrial fibrillation or atrial flutter. ​ In summary, the primary safety endpoint in the pre-market phase was previously met and confirmed in the post-market phase.
Between May 2016 and July 2020, 467 adult patients were randomized at 72 sites within the U.S. and one site in the United Kingdom. ​ The BeAT-HF study was designed to encompass two stages in an integrated and seamless approach: ​ (1) A pre-market stage that examined three primary effectiveness endpoints (quality of life, 6MHW and NT-proBNP), as well as one safety endpoint that included the MANCE-free rate. ​ (2) A post-market stage that examined the effects of BAT on rates of HF hospitalization and CV mortality, as well as sustained safety and symptomatic improvements, which expanded the labeling for Barostim. ​ Patients were eligible for the trial if they were NYHA Class III or Class II (with a recent history of Class III); had an LVEF ≤ 35% and NT-proBNP ≥ 4 weeks; had at least one carotid artery that was below the level of the mandible with no ulcerative carotid arterial plaques or stenosis ≥ 50%; and were an acceptable surgical candidate. ​ Patients who had a Class I indication for a CRT according to the American Heart Association/American College of Cardiology/European Society of Cardiology guidelines were excluded, and there were no restrictions for atrial fibrillation or atrial flutter. ​ In summary, the primary safety endpoint in the pre-market phase was previously met and confirmed in the post-market phase.
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. ​ 30 Table of Contents Post-market regulation After a device is cleared or approved for marketing, numerous regulatory requirements continue to apply.
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 regulatory requirements continue to apply.
We also are subject to similar anticorruption legislation implemented in Europe under the Organization for Economic Co-operation and Development’s Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.
We also are subject to similar anticorruption legislation implemented 39 Table of Contents in Europe under the Organization for Economic Co-operation and Development’s Convention on Combating Bribery of Foreign Public Officials in International Business Transactions.
The pre-market phase of our BeAT-HF pivotal trial met the primary safety and effectiveness endpoints and demonstrated meaningful improvement in the quality of life, both physically and emotionally, for patients suffering from HFrEF.
The pre-market phase of our BeAT-HF pivotal trial met the primary safety and effectiveness endpoints and demonstrated meaningful improvement in the quality of life, both physically and 16 Table of Contents emotionally, for patients suffering from HFrEF.
Also, many U.S. states have similar fraud and abuse statutes or regulations that may be broader in scope and may apply regardless of payor, in addition to items and services reimbursed under Medicaid and other state programs. ​ Additionally, there has been a recent trend of increased foreign, federal and state regulation of payments and transfers of value provided to healthcare professionals or entities.
Also, many U.S. states have 36 Table of Contents similar fraud and abuse statutes or regulations that may be broader in scope and may apply regardless of payer, in addition to items and services reimbursed under Medicaid and other state programs. ​ Additionally, there has been a recent trend of increased foreign, federal, and state regulation of payments and transfers of value provided to healthcare professionals or entities.
We have engaged a CH-REP and the devices may continue to be sold in Switzerland through 2027. ​ 34 Table of Contents Clinical investigation For our medical devices, clinical investigations or evidence will be required to demonstrate safety, performance and the expected clinical outcomes. The term “performance” describes how the medical device functions.
We have engaged a CH-REP and the devices may continue to be sold in Switzerland through 2027. ​ Clinical investigation For our medical devices, clinical investigations or evidence will be required to demonstrate safety, performance, and the expected clinical outcomes. The term “performance” describes how the medical device functions.
In 2017, the Tax Cuts and Jobs Acts was enacted, which, among other things, removed penalties for not complying with the individual mandate to carry health insurance, effective in 2019. 39 Table of Contents ​ In addition, other legislative changes have been adopted since the Affordable Care Act.
In 2017, the Tax Cuts and Jobs Acts was enacted, which, among other things, removed penalties for not complying with the individual mandate to carry health insurance, effective in 2019. ​ In addition, other legislative changes have been adopted since the Affordable Care Act.
This led to the FDA approval of expanded labeling with these results and a simplification and clarification of the following indications for use. ​ Barostim is indicated for patients who are NYHA Class III or Class II (with a recent history of Class III) despite treatment with guideline-directed medical therapies (medications and devices), have a LVEF ≤ 35% and a NT-proBNP ​ The safety and effectiveness of Barostim Therapy have been published in more than 60 peer-reviewed publications, approximately 20 of which relate to the treatment of HF, including, among others, the publication of the pivotal trial results in the Journal of the American College of Cardiology. ​ We have established a U.S. patient registry to evaluate and assess real world patient outcomes from patients who have been implanted with Barostim.
This led to the FDA approval of expanded labeling with these results and a simplification and clarification of the following indications for use. ​ Barostim is indicated for patients who are NYHA Class III or Class II (with a recent history of Class III) despite treatment with guideline-directed medical therapies (medications and devices), have a LVEF ≤ 35% and a NT-proBNP ​ The safety and effectiveness of Barostim Therapy have been published in more than 65 peer-reviewed publications, approximately 25 of which relate to the treatment of HF, including, among others, the publications on the pivotal trial results in the Journal of the American College of Cardiology and the European Journal of Heart Failure. ​ We have established a U.S. patient registry to evaluate and assess real world patient outcomes from patients who have been implanted with Barostim.
We continue to seek to broaden and strengthen our supply chain through additional sourcing channels. 27 Table of Contents ​ We select our suppliers to ensure that Barostim and its components are safe and effective, adhere to all applicable standards and regulations, are high quality and meet our supply needs.
We continue to seek to broaden and strengthen our supply chain through additional sourcing channels. ​ We select our suppliers to ensure that Barostim and its components are safe and effective, adhere to all applicable standards and regulations, are high quality and meet our supply needs.
The totality of the 6, 12 and 24-month data demonstrated symptomatic improvements for HF patients who are NYHA Class III or Class II (who had a recent history of Class III) despite treatment with guideline-directed therapies and who have a left ventricular ejection fraction ≤ 35% and a NT-proBNP ​ • Widely accepted mechanism of action.
The totality of the 6, 12 and 24-month data demonstrated symptomatic improvements for HF patients who are NYHA Class III or Class II (who had a recent history of Class III) despite treatment with guideline-directed therapies and who have a LVEF ≤ 35% and a NT-proBNP ​ • Widely accepted mechanism of action.
The Notified Body also reviews the Technical File that includes the Biological Evaluation, Clinical Evaluation and Risk Management reports and Post Market Clinical Follow-Up (PMCF), among other items, submitted for approval of the CE Mark. If the quality management system audit and the technical file review are successful, the Notified Body issues certificates of conformity.
The Notified Body also reviews the Technical File that includes the Biological Evaluation, Clinical Evaluation and Risk Management reports and Post Market Clinical Follow-Up (“PMCF”), among other items, submitted for approval of the CE 33 Table of Contents Mark. If the quality management system audit and the technical file review are successful, the Notified Body issues certificates of conformity.
The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants and directors through the granting of stock-based compensation awards. ​ As of December 31, 2023, we had approximately 200 employees worldwide, all of which were employed on a full-time basis.
The principal purposes of our equity incentive plans are to attract, retain and motivate selected employees, consultants, and directors through the granting of stock-based compensation awards. ​ As of December 31, 2024, we had 206 employees worldwide, all of which were employed on a full-time basis.
A 5-point improvement is considered clinically meaningful. • Functional status (determined by New York Heart Association (“NYHA”) classification): Our therapy demonstrated the following improvements in NYHA functional status versus the Control group at the specific points in time, meaning Barostim demonstrated greater and sustained improvement: at 6 months, 67% in the BAT+ group and 37% in the Control group, favoring the BAT+ group by 30 percentage points; at 1 year, 73% in the BAT+ group and 41% in the Control group, favoring the BAT+ group by 32 percentage points; and, at 2 years, 68% in the BAT+ group and 41% in the Control group, favoring the BAT+ group by 27 percentage points. • Freedom from All-Cause Death, LVAD, or Transplant.
A 5-point improvement in the MLWHF questionnaire is considered clinically meaningful. ​ • Functional status (determined by New York Heart Association (“NYHA”) classification): Our therapy demonstrated the following improvements in NYHA functional status versus the control group at the specific points in time, meaning Barostim demonstrated greater and sustained improvement: at six months, 67% in the Barostim group and 37% in the control group, favoring the Barostim group by 30 percentage points; at one year, 73% in the Barostim group and 41% in the control group, favoring the Barostim group by 32 percentage points; and, at two years, 68% in the Barostim group and 41% in the control group, favoring the Barostim group by 27 percentage points. • Freedom from All-Cause Death, LVAD, or Transplant.
These improvements between the groups are not only statistically significant, but they are approximately twice the clinically significant value of 25 meters. ​ • Quality of life (measured by MLWHF): The BAT+ group showed a decrease (improvement) in quality of life points ranging from 17 to 20 points from baseline across the follow-up visits.
These improvements between the groups are not only statistically significant, but they are approximately twice the clinically significant value of 25 meters. ​ • Quality of life (measured by MLWHF questionnaire): The Barostim group showed an improvement in quality of life points ranging from 17 to 20 points from baseline across the follow-up visits.
A 5-point improvement is considered clinically meaningful. • Functional status (determined by NYHA classification): Our therapy demonstrated the following improvements in NYHA functional status versus the Control group at the specific points in time, meaning Barostim demonstrated greater and sustained improvement: at 6 months, 67% in the BAT+ group and 37% in the Control group, favoring the BAT+ group by 30 percentage points; at 1 year, 73% in the BAT+ group and 41% in the Control group, favoring the BAT+ group by 32 percentage points; and, at 2 years, 68% in the BAT+ group and 41% in the Control group, favoring the BAT+ group by 27 percentage points. • Freedom from All-Cause Death, LVAD, or Transplant.
A 5-point improvement in the MLWHF questionnaire is considered clinically meaningful. • Functional status (determined by NYHA classification): Our therapy demonstrated the following improvements in NYHA functional status versus the control group at the specific points in time, meaning Barostim demonstrated greater and sustained improvement: at six months, 67% in the Barostim group and 37% in the control group, favoring the Barostim group by 30 percentage points; at one year, 73% in the Barostim group and 41% in the control group, favoring the Barostim group by 32 percentage points; and, at two years, 68% in the Barostim group and 41% in the control group, favoring the Barostim group by 27 percentage points. • Freedom from All-Cause Death, LVAD, or Transplant.
There is no known prevention for HF other than the treatment of the common risk factors associated with the disease, such as hypertension, diabetes and obesity. ​ HF is a debilitating, progressive and potentially life-threatening condition where the heart does not pump enough blood throughout the body.
HF is associated with a five-fold increase in sudden cardiac death. There is no known prevention for HF other than the treatment of the common risk factors associated with the disease, such as hypertension, diabetes, and obesity. ​ HF is a debilitating, progressive and potentially life-threatening condition where the heart does not pump enough blood throughout the body.
We believe Barostim offers meaningful benefits for patients, physicians and payors that will continue to drive adoption of our therapy. Overview of Barostim Therapy Our integrated platform technology, Barostim, leverages the power of the brain and nervous system to address the primary cause of HFrEF and other cardiovascular diseases.
We believe Barostim offers meaningful benefits for patients, physicians and payers that will continue to drive adoption of our therapy. Overview of Barostim Therapy Our integrated platform technology, Barostim, leverages the power of the brain and its ANS to address the primary cause of HFrEF and other cardiovascular diseases.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeOur competitors may allege breaches of and seek to enforce such non-compete agreements or initiate litigation based on such confidentiality agreements. 49 Table of Contents Such litigation, whether or not meritorious, may impede our ability to attract or use executive officers and other key employees who have been employed by our competitors and may result in claims against us.
Biggest changeSuch litigation, whether or not meritorious, may impede our ability to attract or use executive officers and other key employees who have been employed by our competitors and may result in claims against us. 49 Table of Contents Failure to protect our information technology infrastructure against cyber-based attacks, network security breaches, service interruptions, or data corruption could significantly disrupt our operations and adversely affect our business and operating results.
These risks include, among others: ​ • difficulties in enforcing our intellectual property rights and in defending against third-party threats and intellectual property enforcement actions against us, our distributors, or any of our third-party suppliers; • reduced or varied protection for intellectual property rights in some countries; • potential pricing pressure; 46 Table of Contents • a shortage of high-quality sales representatives and distributors; • competitive disadvantage to competition with established business and customer relationships; • foreign currency exchange rate fluctuations; • the imposition of additional U.S. and foreign governmental controls or regulations; • economic instability; • changes in duties and tariffs, license obligations and other non-tariff barriers to trade; • the imposition of restrictions on the activities of foreign agents, representatives and distributors; • scrutiny of U.S. and foreign tax authorities, which could result in significant fines, penalties and additional taxes being imposed on us; • laws and business practices favoring local companies; • longer payment cycles; • difficulties in maintaining consistency with our internal guidelines; • difficulties in enforcing agreements and collecting receivables through certain foreign legal systems; • the imposition of costly and lengthy new export licensing requirements; • the imposition of U.S. or international sanctions against a country, company, person or entity; and • the imposition of new trade restrictions.
These risks include, among others: ​ • difficulties in enforcing our intellectual property rights and in defending against third-party threats and intellectual property enforcement actions against us, our distributors, or any of our third-party suppliers; • reduced or varied protection for intellectual property rights in some countries; • potential pricing pressure; • a shortage of high-quality sales representatives and distributors; • competitive disadvantage to competition with established business and customer relationships; • foreign currency exchange rate fluctuations; • the imposition of additional U.S. and foreign governmental controls or regulations; • economic instability; • changes in duties and tariffs, license obligations and other non-tariff barriers to trade; • the imposition of restrictions on the activities of foreign agents, representatives, and distributors; • scrutiny of U.S. and foreign tax authorities, which could result in significant fines, penalties and additional taxes being imposed on us; • laws and business practices favoring local companies; • longer payment cycles; • difficulties in maintaining consistency with our internal guidelines; • difficulties in enforcing agreements and collecting receivables through certain foreign legal systems; 46 Table of Contents • the imposition of costly and lengthy new export licensing requirements; • the imposition of U.S. or international sanctions against a country, company, person, or entity; and • the imposition of new trade restrictions.
The Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business and financial condition. ​ In addition, patent reform legislation may pass in the future that could lead to additional uncertainties and increased costs surrounding the prosecution, enforcement and defense of our patents and applications. ​ 54 Table of Contents Furthermore, the U.S. and foreign courts are continually interpreting various aspects of patent law.
The Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, all of which could have a material adverse effect on our business and financial condition. 54 Table of Contents ​ In addition, patent reform legislation may pass in the future that could lead to additional uncertainties and increased costs surrounding the prosecution, enforcement and defense of our patents and applications. ​ Furthermore, the U.S. and foreign courts are continually interpreting various aspects of patent law.
It is also possible that other federal, state or foreign enforcement authorities might take action if 62 Table of Contents they consider our business activities to constitute inappropriate promotion, including promotion of an off-label use, which could result in significant penalties, including, but not limited to, criminal, civil and/or administrative penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs and the curtailment of our operations.
It is also possible that other federal, state or foreign enforcement authorities might take action if they consider our business activities to constitute inappropriate promotion, including promotion of an off-label use, which could result in significant penalties, including, but not limited to, criminal, civil and/or administrative 62 Table of Contents penalties, damages, fines, disgorgement, exclusion from participation in government healthcare programs and the curtailment of our operations.
A person or entity does not need to have actual knowledge of this statute or specific intent to violate it; • federal civil and criminal false claims laws and civil monetary penalty laws, including civil whistleblower or qui tam actions, that prohibit, among other things, knowingly presenting, or causing to be presented, claims for payment or approval to the federal government that are false or fraudulent, knowingly making a false statement material to an obligation to pay or transmit money or property to the federal government or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay or transmit money or property to the federal government; 64 Table of Contents • the federal Civil Monetary Penalties Law, which prohibits, among other things, offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier; • the federal HIPAA, which created federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters.
A person or entity does not need to have actual knowledge of this statute or specific intent to violate it; • federal civil and criminal false claims laws and civil monetary penalty laws, including civil whistleblower or qui tam actions, that prohibit, among other things, knowingly presenting, or causing to be presented, claims for payment or approval to the federal government that are false or fraudulent, knowingly making a false statement material to an obligation to pay or transmit money or property to the federal government or knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay or transmit money or property to the federal government; • the federal Civil Monetary Penalties Law, which prohibits, among other things, offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence 64 Table of Contents the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier; • the federal HIPAA, which created federal criminal laws that prohibit executing a scheme to defraud any healthcare benefit program or making false statements relating to healthcare matters.
Our reliance on these third-party suppliers also subjects us to other risks that could harm our business, including, among others: ​ • we are not a major customer of many of our suppliers, and these suppliers may therefore give other customers’ needs higher priority than ours; 44 Table of Contents • third parties may threaten or enforce their intellectual property rights against our suppliers, which may cause disruptions or delays in shipment, or may force our suppliers to cease conducting business with us; • we may not be able to obtain an adequate supply of components in a timely manner or on commercially reasonable terms; • our suppliers, especially new suppliers, may make errors in manufacturing that could negatively affect the effectiveness or safety of Barostim or cause delays in shipment; • we may have difficulty locating and qualifying alternative suppliers; • switching components or suppliers may require product redesign and possibly submission to the FDA, EEA or other foreign regulatory bodies, which could significantly impede or delay our commercial activities; one or more of our limited source suppliers may be unwilling or unable to supply components of Barostim; • other customers may use fair or unfair negotiation tactics and/or pressures to impede our use of the supplier; • we do not conduct rigorous, formal environmental, social or governance due diligence on our supply chain and thus may not be aware if our suppliers pose such risks; • the occurrence of a fire, natural disaster or other catastrophe impacting one or more of our suppliers may affect their ability to deliver products to us in a timely manner; and • our suppliers may encounter financial or other business hardships unrelated to our demand, which could inhibit their ability to fulfill our orders and meet our requirements.
Our reliance on these third-party suppliers also subjects us to other risks that could harm our business, including, among others: ​ • we are not a major customer of many of our suppliers, and these suppliers may therefore give other customers’ needs higher priority than ours; • third parties may threaten or enforce their intellectual property rights against our suppliers, which may cause disruptions or delays in shipment, or may force our suppliers to cease conducting business with us; • we may not be able to obtain an adequate supply of components in a timely manner or on commercially reasonable terms; • our suppliers, especially new suppliers, may make errors in manufacturing that could negatively affect the effectiveness or safety of Barostim or cause delays in shipment; • we may have difficulty locating and qualifying alternative suppliers; • switching components or suppliers may require product redesign and possibly submission to the FDA, EEA, or other foreign regulatory bodies, which could significantly impede or delay our commercial activities; • one or more of our limited source suppliers may be unwilling or unable to supply components of Barostim; 44 Table of Contents • other customers may use fair or unfair negotiation tactics and/or pressures to impede our use of the supplier; • we do not conduct rigorous, formal environmental, social or governance due diligence on our supply chain and thus may not be aware if our suppliers pose such risks; • the occurrence of a fire, natural disaster or other catastrophe impacting one or more of our suppliers may affect their ability to deliver products to us in a timely manner; and • our suppliers may encounter financial, geopolitical, or other business hardships unrelated to our demand, which could inhibit their ability to fulfill our orders and meet our requirements.
The market price of our common stock has been and may continue to be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control or are related in complex ways, including: ​ • results from, or any delays in, clinical trial programs relating to our product candidates, including the ongoing and future U.S. clinical trials for Barostim; • announcements of new products by us or our competitors; • adverse actions taken by regulatory agencies with respect to our clinical trials, manufacturing supply chain or sales and marketing activities; • our operating results; • changes or developments in laws or regulations applicable to our products; • any adverse changes in our relationship with any manufacturers or suppliers; • the success of our efforts to acquire or develop additional products; • any intellectual property infringement actions in which we may become involved; • announcements concerning our competitors or the medical device industry in general; • achievement of expected product sales and profitability; • manufacture, supply or distribution shortages; • actual or anticipated fluctuations in our operating results; • FDA or other U.S. or foreign regulatory actions affecting us or our industry or other healthcare reform measures in the U.S.; • changes in financial estimates or recommendations by securities analysts; • trading volume of our common stock; • sales of our common stock by us, our executive officers and directors or our stockholders in the future; • general economic and market conditions and overall fluctuations in the U.S. equity markets; and • the loss of any of our key scientific or management personnel.
The market price of our common stock has been and may continue to be highly volatile and may fluctuate or decline substantially as a result of a variety of factors, some of which are beyond our control or are related in complex ways, including: ​ • results from, or any delays in, clinical trial programs relating to our product candidates, including the ongoing and future U.S. clinical trials for Barostim; • announcements of new products by us or our competitors; • adverse actions taken by regulatory agencies with respect to our clinical trials, manufacturing supply chain or sales and marketing activities; • our operating results; • changes or developments in laws or regulations applicable to our products; • any adverse changes in our relationship with any manufacturers or suppliers; • the success of our efforts to acquire or develop additional products; • any intellectual property infringement actions in which we may become involved; • announcements concerning our competitors or the medical device industry in general; • achievement of expected product sales and profitability; • manufacturing, supply or distribution shortages; • actual or anticipated fluctuations in our operating results; • FDA or other U.S. or foreign regulatory actions affecting us or our industry or other healthcare reform measures in the U.S.; • changes in financial estimates or recommendations by securities analysts; • trading volume of our common stock; • sales of our common stock by us, our executive officers and directors or our stockholders in the future; • general economic and market conditions and overall fluctuations in the U.S. equity markets; and • the loss of any of our key scientific or management personnel.
Similar to the Anti-Kickback Statute, a person or entity does not need to have actual knowledge of these statutes or specific intent to violate them; • HIPAA, as amended by HITECH, and their respective implementing regulations, which impose requirements on certain covered healthcare providers, health plans and healthcare clearinghouses as well as their business associates that perform services for them that involve individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization, including mandatory contractual terms as well as directly applicable privacy and security standards and requirements; • the federal physician payments sunshine requirements under the Affordable Care Act, which require certain manufacturers of drugs, devices, biologics and medical supplies to report annually to HHS information related to payments and other transfers of value to certain healthcare providers and teaching hospitals; • state and foreign law analogs of each of the above federal laws, such as state anti-kickback and false claims laws that may apply to items or services reimbursed by any third-party payor, including commercial insurers; state laws that require device companies to comply with the industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require device manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of personal and health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA.
Similar to the Anti-Kickback Statute, a person or entity does not need to have actual knowledge of these statutes or specific intent to violate them; • HIPAA, as amended by HITECH, and their respective implementing regulations, which impose requirements on certain covered healthcare providers, health plans and healthcare clearinghouses as well as their business associates that perform services for them that involve individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization, including mandatory contractual terms as well as directly applicable privacy and security standards and requirements; • the federal physician payments sunshine requirements under the Affordable Care Act, which require certain manufacturers of drugs, devices, biologics, and medical supplies to report annually to HHS information related to payments and other transfers of value to certain healthcare providers and teaching hospitals; • state and foreign law analogs of each of the above federal laws, such as state anti-kickback and false claims laws that may apply to items or services reimbursed by any third-party payer, including commercial insurers; state laws that require device companies to comply with the industry’s voluntary compliance guidelines and the relevant compliance guidance promulgated by the federal government, or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require device manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; and state and foreign laws governing the privacy and security of personal and health information in certain circumstances, many of which differ from each other in significant ways and often are not preempted by HIPAA.
The initiation and completion of studies may be prevented, delayed, or halted for numerous reasons, including, but not limited to, the following: • the FDA, IRBs, ethics committees, EU competent authorities or other regulatory authorities do not approve a clinical study protocol, force us to modify a previously approved protocol, or place a clinical study on hold; • patients do not enroll in, or enroll at a lower rate than we expect, or do not complete a clinical study; • patients or investigators do not comply with study protocols; • patients do not return for post-treatment follow-up at the expected rate; • patients experience serious or unexpected adverse side effects for a variety of reasons that may or may not be related to our products, such as the advanced stage of co-morbidities that may exist at the time of treatment, causing a clinical study to be put on hold; • sites participating in an ongoing clinical study withdraw, requiring us to engage new sites; • difficulties or delays associated with establishing additional clinical sites; • third-party clinical investigators decline to participate in our clinical studies, do not perform the clinical studies on the anticipated schedule, or perform in a manner inconsistent with the investigator agreement, clinical study protocol, good clinical practices, other FDA, IRB or ethics committee requirements and EEA member state or other foreign regulations governing clinical trials; • third-party organizations do not perform data collection and analysis in a timely or accurate manner; • regulatory inspections of our clinical studies or manufacturing facilities require us to undertake corrective action or suspend or terminate our clinical studies; • changes in federal, state, or foreign governmental statutes, regulations or policies; • interim results are inconclusive or unfavorable as to immediate and long-term safety or effectiveness; • regional or worldwide conditions, like an infectious disease or pandemic, precluding or interfering with execution; • the study design is inadequate to demonstrate safety and effectiveness; or • the statistical endpoints are not met.
The initiation and completion of studies may be prevented, delayed, or halted for numerous reasons, including, but not limited to, the following: 47 Table of Contents • the FDA, IRBs, ethics committees, EU competent authorities, or other regulatory authorities do not approve a clinical study protocol, force us to modify a previously approved protocol, or place a clinical study on hold; • patients do not enroll in, or enroll at a lower rate than we expect, or do not complete a clinical study; • patients or investigators do not comply with study protocols; • patients do not return for post-treatment follow-up at the expected rate; • patients experience serious or unexpected adverse side effects for a variety of reasons that may or may not be related to our products, such as the advanced stage of co-morbidities that may exist at the time of treatment, causing a clinical study to be put on hold; • sites participating in an ongoing clinical study withdraw, requiring us to engage new sites; • difficulties or delays associated with establishing additional clinical sites; • third-party clinical investigators decline to participate in our clinical studies, do not perform the clinical studies on the anticipated schedule, or perform in a manner inconsistent with the investigator agreement, clinical study protocol, good clinical practices, other FDA, IRB or ethics committee requirements, and EEA member state or other foreign regulations governing clinical trials; • third-party organizations do not perform data collection and analysis in a timely or accurate manner; • regulatory inspections of our clinical studies or manufacturing facilities require us to undertake corrective action or suspend or terminate our clinical studies; • changes in federal, state, or foreign governmental statutes, regulations, or policies; • interim results are inconclusive or unfavorable as to immediate and long-term safety or effectiveness; • regional or worldwide conditions, like an infectious disease or pandemic, precluding or interfering with execution; • the study design is inadequate to demonstrate safety and effectiveness; or • the statistical endpoints are not met.
The expansion in the government’s role in the U.S. healthcare industry may result in decreased profits to us, lower reimbursement by payors for Barostim and any future products and/or reduced medical procedure volumes, all of which may have a material adverse effect on our business, financial condition and results of operations. ​ We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services. ​ Additionally, on April 5, 2017, the European Parliament passed the MDR, which repeals and replaces the MDD and the AIMDD.
The expansion in the government’s role in the U.S. healthcare industry may result in decreased profits to us, lower reimbursement by payers for Barostim and any future products and/or reduced medical procedure volumes, all of which may have a material adverse effect on our business, financial condition, and results of operations. ​ We expect that additional state and federal healthcare reform measures will be adopted in the future, any of which could limit the amounts that federal and state governments will pay for healthcare products and services. ​ Additionally, on April 5, 2017, the European Parliament passed the MDR, which repeals and replaces the MDD and the AIMDD.
Many of the companies developing or marketing competing products enjoy several advantages over us, including, among others: ​ • more experienced sales forces; • greater name recognition; • more established sales and marketing programs and distribution networks; • earlier regulatory approval; • long established relationships with physicians and hospitals; • significant patent portfolios, including issued U.S. and foreign patents and pending patent applications, as well as the resources to enforce patents against us or any of our third-party suppliers and distributors; • the ability to acquire and integrate our competitors and/or their technology; • demonstrated ability to develop product enhancements and new product offerings; • established history of product reliability, safety and durability; 43 Table of Contents • the ability to offer rebates or bundle multiple product offerings to offer greater discounts or incentives; • greater financial and human resources for product development, sales and marketing; and • greater experience in and resources for conducting research and development, clinical studies, manufacturing, preparing regulatory submissions, obtaining regulatory clearance or approval for products and marketing approved products.
Many of the companies developing or marketing competing products enjoy several advantages over us, including, among others: ​ • more experienced sales forces; • greater name recognition; • more established sales and marketing programs and distribution networks; • earlier regulatory approval; • long established relationships with physicians and hospitals; • significant patent portfolios, including issued U.S. and foreign patents and pending patent applications, as well as the resources to enforce patents against us or any of our third-party suppliers and distributors; • the ability to acquire and integrate our competitors and/or their technology; • demonstrated ability to develop product enhancements and new product offerings; • established history of product reliability, safety, and durability; • the ability to offer rebates or bundle multiple product offerings to offer greater discounts or incentives; • greater financial and human resources for product development, sales, and marketing; and • greater experience in and resources for conducting research and development, clinical studies, manufacturing, preparing regulatory submissions, obtaining regulatory clearance or approval for products and marketing approved products.
We are subject to numerous risks relating to our manufacturing capabilities, including: • quality or reliability defects in product components that we source from third-party suppliers, including manufacturing compliance with federal and state regulations; • our inability to secure product components in a timely manner, in sufficient quantities or on commercially reasonable terms; • our failure to increase production of products to meet demand; • our inability to modify production lines to enable us to efficiently produce future products or implement changes in current products in response to regulatory requirements; and • potential damage to or destruction of our manufacturing equipment or manufacturing facility. ​ 45 Table of Contents As demand for Barostim increases, we have invested, and expect to continue to invest, additional resources to purchase components, hire and train employees and enhance our manufacturing processes.
We are subject to numerous risks relating to our manufacturing capabilities, including: • quality or reliability defects in product components that we source from third-party suppliers, including manufacturing compliance with federal and state regulations; • our inability to secure product components in a timely manner, in sufficient quantities or on commercially reasonable terms; • our failure to increase production of products to meet demand; • our inability to modify production lines to enable us to efficiently produce future products or implement changes in current products in response to regulatory requirements; and • potential damage to or destruction of our manufacturing equipment or manufacturing facility. ​ As demand for Barostim increases, we have invested, and expect to continue to invest, additional resources to purchase components, hire and train employees and enhance our manufacturing processes.
We expect that market demand, government regulation, third-party coverage and reimbursement policies and societal pressures will continue to change the healthcare industry worldwide, resulting in further business consolidations and alliances among our future customers, which may exert further downward pressure on the prices of Barostim. If we fail to properly manage our growth effectively, our business could suffer.
We expect that market demand, government regulation, third-party coverage, provider constraints, reimbursement policies and societal pressures will continue to change the healthcare industry worldwide, resulting in further business consolidations and alliances among our future customers, which may exert further downward pressure on the prices of Barostim. If we fail to properly manage our growth effectively, our business could suffer.
In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock. ​ 53 Table of Contents Finally, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations. ​ If any of the foregoing occurs, we may have to withdraw existing products from the market or may be unable to commercialize one or more of our products, all of which could have a material adverse effect on our business, results of operations and financial condition.
In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock. ​ Finally, any uncertainties resulting from the initiation and continuation of any litigation could have a material adverse effect on our ability to raise the funds necessary to continue our operations. ​ If any of the foregoing occurs, we may have to withdraw existing products from the market or may be unable to commercialize one or more of our products, all of which could have a material adverse effect on our business, results of operations and financial condition.
Healthcare costs have risen significantly over the past decade, which has resulted in or led to numerous cost reform initiatives by legislators, regulators and third-party payors. Cost reform has triggered a consolidation trend in the healthcare industry to aggregate purchasing power, which may create more requests for price concessions in the future.
Healthcare costs have risen significantly over the past decade, which has resulted in or led to numerous cost reform initiatives by legislators, regulators and third-party payers. Cost reform has triggered a consolidation trend in the healthcare industry to aggregate purchasing power, which may create more requests for price concessions in the future.
Although we have procedures in place that seek to prevent our employees and consultants from using the intellectual property, proprietary information, know-how or trade secrets of others in their work for us, we may in the future be subject to claims that we caused an employee to breach the terms of his or her non-disclosure or confidentiality agreement, or that we or these individuals have, inadvertently or otherwise, used or disclosed the alleged trade secrets or other proprietary information of a former employer or competitor, resulting in litigation.
Although we have procedures in place that seek to prevent our employees and consultants from using the intellectual property, proprietary information, know-how or trade secrets of others in their work for us, we may 55 Table of Contents in the future be subject to claims that we caused an employee to breach the terms of his or her non-disclosure or confidentiality agreement, or that we or these individuals have, inadvertently or otherwise, used or disclosed the alleged trade secrets or other proprietary information of a former employer or competitor, resulting in litigation.
Many of our current and potential competitors that are addressing other HF indications are publicly traded, or are divisions of publicly-traded, established medical device companies that have substantially greater financial, technical, sales and marketing resources than we do, such as Medtronic plc, Boston Scientific Corporation, Abbott Laboratories and LivaNova PLC.
Many of our current and potential competitors that are addressing other HF indications are publicly traded, or are divisions of publicly-traded, established medical device companies that have substantially greater financial, technical, sales and marketing resources than we do, such as Medtronic plc, Boston Scientific Corporation, Abbott Laboratories and Johnson & Johnson.
Legislative or regulatory changes could result in restrictions on our ability to carry on or expand our operations, higher than anticipated costs or lower than anticipated sales. ​ 60 Table of Contents Our failure to comply with U.S. federal and state regulations or EEA or other foreign regulations applicable in the countries where we operate could lead to the issuance of warning letters or untitled letters, fines, injunctions, suspensions or loss of regulatory clearance or approvals, recalls or seizures of products, termination of distribution, or civil penalties.
Legislative or regulatory changes could result in restrictions on our ability to carry on or expand our operations, higher than anticipated costs or lower than anticipated sales. ​ Our failure to comply with U.S. federal and state regulations or EEA or other foreign regulations applicable in the countries where we operate could lead to the issuance of warning letters or untitled letters, fines, injunctions, suspensions or loss of regulatory clearance or approvals, recalls or seizures of products, termination of distribution, or civil penalties.
The MDR, among other things, is intended to establish a uniform, transparent, predictable and sustainable regulatory framework across the EEA for medical devices and ensure a high level of safety and health while supporting innovation. ​ The MDR became effective in May 2021 and, among other things is designed to: ​ • strengthen the rules on placing devices on the market and reinforce surveillance once they are available; • establish explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety of devices placed on the market; • improve the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number; • set up a central database to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU; and • strengthen rules for the assessment of certain high-risk devices, such as implants, which may have to undergo an additional check by experts before they are placed on the market.
The MDR, among other things, is intended to establish a uniform, transparent, predictable, and sustainable regulatory framework across the EEA for medical devices and ensure a high level of safety and health while supporting innovation. ​ The MDR is set to become effective in January 2028 and, among other things is designed to: ​ • strengthen the rules on placing devices on the market and reinforce surveillance once they are available; • establish explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety of devices placed on the market; • improve the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number; • set up a central database to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU; and • strengthen rules for the assessment of certain high-risk devices, such as implants, which may have to undergo an additional check by experts before they are placed on the market.
Our revenue and results of operations may fluctuate annually or from quarter to quarter due to, among others, the following reasons: ​ • physician and payor acceptance of Barostim and Barostim Therapy; • the timing, expense and results of research and development activities, clinical trials and regulatory approvals; • fluctuations in our expenses associated with expanding our commercial operations and operating as a public company; • the introduction of new products and technologies by our competitors; • the productivity of our sales representatives; • supplier, manufacturing or quality problems with our products; • the timing of stocking orders from our distributors; • changes in our pricing policies or in the pricing policies of our competitors or suppliers; and • changes in coverage amounts or government and third-party payors’ reimbursement policies.
Our revenue and results of operations may fluctuate annually or from quarter to quarter due to, among others, the following reasons: ​ • physician and payer acceptance of Barostim and Barostim Therapy; • the timing, expense and results of research and development activities, clinical trials, and regulatory approvals; • fluctuations in our expenses associated with expanding our commercial operations and operating as a public company; • the introduction of new products and technologies by our competitors; • the productivity of our sales representatives; • supplier, manufacturing, or quality problems with our products; • the timing of stocking orders from our distributors; • changes in our pricing policies or in the pricing policies of our competitors or suppliers; and • changes in coverage amounts or government and third-party payers’ reimbursement policies.
In the most extreme cases, criminal sanctions or closure of our manufacturing facilities are possible. If any of these risks materialize, our business would be adversely affected. Barostim is also subject to extensive governmental regulation in foreign jurisdictions, such as Europe, and our failure to comply with applicable requirements could cause our business to suffer.
In the most extreme cases, criminal sanctions or closure of our 60 Table of Contents manufacturing facilities are possible. If any of these risks materialize, our business would be adversely affected. Barostim is also subject to extensive governmental regulation in foreign jurisdictions, such as Europe, and our failure to comply with applicable requirements could cause our business to suffer.
Our competitors in both the U.S. and abroad, many of which 52 Table of Contents have substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make, use, sell, or export our products.
Our competitors in both the U.S. and abroad, many of which have substantially greater resources and have made substantial investments in patent portfolios and competing technologies, may have applied for or obtained or may in the future apply for and obtain, patents that will prevent, limit or otherwise interfere with our ability to make, use, sell, or export our products.
If the Internal Revenue Service or any other tax authorities were successful in challenging our positions, we may be liable for additional tax and penalties and interest related thereto or other taxes, as applicable, in excess of any reserves established therefor, which may have a significant impact on our results, operations and future cash flow.
If the Internal Revenue Service or any other tax authorities were successful in challenging our positions, we may be liable for additional tax and penalties and interest related 59 Table of Contents thereto or other taxes, as applicable, in excess of any reserves established therefor, which may have a significant impact on our results, operations and future cash flow.
If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent them, or those with whom they share it, from using that technology or information to compete with us and our competitive position could be adversely affected.
If any of our trade secrets were to be lawfully obtained or independently developed by a competitor, we would have no right to prevent them, or those with whom they share it, from using that technology or information to compete with us and our competitive position could 56 Table of Contents be adversely affected.
Specifically, Barostim is indicated for patients with NYHA Class III or II (with recent history of III) despite treatment with guideline-directed medical therapies (medications and devices), have a LVEF ≤ 35% 42 Table of Contents and a NT-proBNP ​ In addition, physicians typically need to perform several procedures to become comfortable using Barostim.
Specifically, Barostim is indicated for patients with NYHA Class III or II (with recent history of III) despite treatment with guideline-directed medical therapies (medications and devices), have a LVEF ≤ 35% and a NT-proBNP ​ In addition, physicians typically need to perform several procedures to become comfortable using Barostim.
From time to time, physicians and hospitals have in the past experienced, and others may experience, delays in Medicare reimbursement, which have delayed or may delay their willingness to schedule additional Barostim procedures. A pandemic, epidemic or outbreak of an infectious disease in the U.S. or worldwide could adversely affect our business.
From time to time, physicians and hospitals have in the past experienced, and others may experience, denials in Medicare and commercial reimbursement, which have delayed or may delay their willingness to schedule additional Barostim procedures. A pandemic, epidemic or outbreak of an infectious disease in the U.S. or worldwide could adversely affect our business.
The application of such transfer pricing rules, as well as of withholding taxes, goods and services taxes, sales taxes and other taxes is not always clear, and we may be subject to tax audits relating to such rules or taxes. ​ 59 Table of Contents We believe that our tax positions are reasonable, and our tax provisions and reserves are adequate to cover any potential liability.
The application of such transfer pricing rules, as well as of withholding taxes, goods and services taxes, sales taxes and other taxes is not always clear, and we may be subject to tax audits relating to such rules or taxes. ​ We believe that our tax positions are reasonable, and our tax provisions and reserves are adequate to cover any potential liability.
As a result, changes in the exchange rates between such foreign currencies, particularly the Euro and the U.S. dollar, could materially impact our reported results of operations and distort period to period comparisons. Fluctuations in foreign currency exchange rates also impact the reporting of our receivables and payables in non-U.S. currencies.
As a result, changes in the exchange rates between such foreign currencies, particularly the Euro and the U.S. dollar, could materially impact our reported results of operations and distort period to period 58 Table of Contents comparisons. Fluctuations in foreign currency exchange rates also impact the reporting of our receivables and payables in non-U.S. currencies.
In addition, if the FDA determines for any reason, including safety or their risk-benefit analysis, that the results of a trial are negative, the FDA may decide to modify or revoke our existing 48 Table of Contents approval or such data may impact the adoption of Barostim.
In addition, if the FDA determines for any reason, including safety or their risk-benefit analysis, that the results of a trial are negative, the FDA may decide to modify or revoke our existing approval or such data may impact the adoption of Barostim.
If these physicians do not try and subsequently adopt our product, then our revenue growth will slow or decline. If we fail to receive access to hospitals, our sales may decrease. In the U.S., in order for physicians to use Barostim, hospitals where these physicians treat patients typically require us to enter into purchasing contracts.
If these physicians do not try and subsequently adopt our product, then our revenue growth will slow or decline. 43 Table of Contents If we fail to receive access to hospitals, our sales may decrease. In the U.S., in order for physicians to use Barostim, hospitals where these physicians treat patients typically require us to enter into purchasing contracts.
If our intellectual property is not adequately protected to protect our market against competitors’ products and methods, our competitive position and business could be adversely affected. ​ 56 Table of Contents Risks related to our financial and operating results We may be required to obtain additional funds in the future, and these funds may not be available on acceptable terms or at all.
If our intellectual property is not adequately protected to protect our market against competitors’ products and methods, our competitive position and business could be adversely affected. ​ Risks related to our financial and operating results We may be required to obtain additional funds in the future, and these funds may not be available on acceptable terms or at all.
Any corrective action, whether voluntary or involuntary, as well as defending ourselves in a lawsuit, will require the dedication of our time and capital, distract management from operating our business and may harm our reputation and financial results.
Any corrective action, whether voluntary or involuntary, as well as defending 63 Table of Contents ourselves in a lawsuit, will require the dedication of our time and capital, distract management from operating our business and may harm our reputation and financial results.
An economic downturn could result in a 50 Table of Contents variety of risks to our business, including weakened demand for Barostim and our ability to raise additional capital when needed on acceptable terms, if at all.
An economic downturn could result in a variety of risks to our business, including weakened demand for Barostim and our ability to raise additional capital when needed on acceptable terms, if at all.
Any such delay or increased expense could adversely affect our ability to generate revenue. ​ 47 Table of Contents Future growth will continue to impose significant added responsibilities on management, including the need to identify, recruit, train and integrate additional employees.
Any such delay or increased expense could adversely affect our ability to generate revenue. ​ Future growth will continue to impose significant added responsibilities on management, including the need to identify, recruit, train and integrate additional employees.
Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our technical and management personnel from their normal responsibilities.
Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses and could distract our technical and management personnel from their 53 Table of Contents normal responsibilities.
If we do not achieve and sustain profitability, our financial condition could suffer. We have experienced significant net losses since our inception and we expect to continue to incur losses for the foreseeable future. We incurred net losses of $41.2 million and $41.4 million for the years ended December 31, 2023 and 2022, respectively.
If we do not achieve and sustain profitability, our financial condition could suffer. We have experienced significant net losses since our inception and we expect to continue to incur losses for the foreseeable future. We incurred net losses of $60.0 million and $41.2 million for the years ended December 31, 2024 and 2023, respectively.
If we cannot obtain all necessary licenses on commercially reasonable terms, our customers may be forced to stop using our products, or our suppliers may be forced to stop providing us with products. ​ Similarly, interference or derivation proceedings provoked by third parties or brought by the USPTO or any foreign patent authority may be necessary to determine the priority of inventions or other matters of inventorship with respect to our patents or patent applications.
If we cannot obtain all necessary licenses on commercially reasonable terms, our customers may be forced to stop using our products, or our suppliers may be forced to stop providing us with products. ​ Similarly, interference or derivation proceedings provoked by third parties or brought by the United States Patent and Trademark Office (the “USPTO”) or any foreign patent authority may be necessary to determine the priority of inventions or other matters of inventorship with respect to our patents or patent applications.
In such circumstances, our results of operations would be materially adversely affected. ​ Patients may not choose or be able to receive Barostim if, among other potential reasons, they are reluctant to receive an implantable device as opposed to an alternative, non-implantable treatment, they are worried about potential adverse effects of Barostim, or they are unable to obtain adequate third-party coverage or reimbursement.
In such circumstances, our results of operations would be materially adversely affected. ​ Patients may not choose or be able to receive Barostim if, among other potential reasons, they are reluctant to receive an implantable device as opposed to an alternative, non-implantable treatment, they are worried about potential adverse effects of Barostim, or they are unable to obtain adequate third-party coverage or reimbursement. 42 Table of Contents Our industry is highly competitive.
Our principal stockholders, management and directors (two of whom are affiliated with our principal stockholders) own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.
Our principal stockholders, management, and directors (one of whom is affiliated with one of our principal stockholders) own a significant percentage of our stock and will be able to exert significant control over matters subject to stockholder approval.
Additionally, the EU did approve an amendment to the MDR which allows qualifying AIMDD CE certificates to be accepted through December of 2027. We have already met the qualifications identified within this amendment to allow continued distribution of Barostim through this time.
Additionally, the EU approved an amendment to the MDR that allows qualifying AIMDD CE certificates to be accepted through December of 2027. We have already met the qualifications identified within this amendment to allow continued distribution of Barostim through this time.
A weak or declining economy could also strain our manufacturers or suppliers, resulting in supply disruption, or causing our customers to delay making payments for our services.
A weak or declining economy could also strain our manufacturers or suppliers, resulting in supply disruption, or causing our customers to delay making 50 Table of Contents payments for our services.
We may have previously experienced, and may in the future experience, one or more “ownership changes” for purposes of the rules under Section 382 and 383 of the Code, including in connection with our IPO.
We may have previously experienced, and may in the future experience, one or more “ownership changes” for purposes of the rules under Section 382 and 383 of the Code, including in connection with our initial public offering (the “IPO”).
We may also face competition from other competitors, such as Impulse Dynamics, which is a private company with a medical device indicated for a subset of our target patient population, or companies with active system development programs that may emerge in the future.
We may also face competition from other competitors, such as Impulse Dynamics, which is a private company with a medical device indicated for a subset of our target patient population, or companies with active system development programs that may emerge in the future, such as Johnson & Johnson’s interatrial shunt system (formerly V-Wave).
A future recall 63 Table of Contents announcement could harm our reputation with customers, potentially lead to product liability claims against us and negatively affect our sales.
A future recall announcement could harm our reputation with customers, potentially lead to product liability claims against us and negatively affect our sales.
Even if we are successful in defending against these claims, the litigation could be costly 55 Table of Contents and a distraction to management.
Even if we are successful in defending against these claims, the litigation could be costly and a distraction to management.
We have generated and expect to continue to generate significant federal and state net operating loss (“NOLs”) and tax credit carryforwards. As of December 31, 2023, we had federal and state NOL carryforwards of approximately $389.9 million and $7.3 million, respectively. The federal NOLs began expiring in 2021 and state NOLs began expiring in 2020.
We have generated and expect to continue to generate significant federal and state net operating loss (“NOLs”) and tax credit carryforwards. As of December 31, 2024, we had federal and state NOL carryforwards of approximately $429.7 million and $8.1 million, respectively. The federal NOLs began expiring in 2021 and state NOLs began expiring in 2020.
As of December 31, 2023, we had federal and state tax credit carryforwards of approximately $9.8 million and $2.0 million, respectively. The federal and state tax credit carryforwards began expiring in 2021 and begin expiring in 2028, respectively. These NOL and tax credit carryforwards could expire unused and be unavailable to offset future income tax liabilities.
As of December 31, 2024, we had federal and state tax credit carryforwards of approximately $10.2 million and $1.7 million, respectively. The federal and state tax credit carryforwards began expiring in 2021 and begin expiring in 2028, respectively. These NOL and tax credit carryforwards could expire unused and be unavailable to offset future income tax liabilities.
For the fiscal years ended December 31, 2023 and 2022, net cash used in operating activities was $39.0 million and $42.7 million, respectively.
For the fiscal years ended December 31, 2024 and 2023, net cash used in operating activities was $39.1 million and $39.0 million, respectively.
Whether merited or not, it is possible that third parties controlling U.S. and foreign patents allege such patents cover our products, or we may decide to initiate infringement claims or litigation to protect our patents or other intellectual property rights.
Significant litigation regarding patent rights occurs in the medical device industry. Whether merited or not, it is possible that third parties controlling U.S. and foreign patents allege such patents cover our products, or we may decide to initiate infringement claims or litigation to protect our patents or other intellectual property rights.
Because we do not yet have other products currently in development, if we are unsuccessful in commercializing Barostim or are unable to market Barostim as a result of a quality problem, failure to maintain regulatory approvals, unexpected or serious complications or other unforeseen negative effects related to Barostim or the other factors discussed in these risk factors, we would lose our main source of revenue, and our business, reputation, liquidity and results of operations will be materially and adversely affected.
Because we do not yet have other products currently in development, if we are unsuccessful in commercializing Barostim or are unable to market Barostim as a result of a quality problem, failure to maintain regulatory approvals, unexpected or serious complications or other unforeseen negative effects related to Barostim or the other factors discussed in these risk factors, we would lose our main source of revenue, and our business, reputation, liquidity and results of operations will be materially and adversely affected. 41 Table of Contents We have limited commercial sales experience marketing and selling Barostim, and if we are unable to continue to maintain and grow sales and marketing capabilities, we will be unable to generate sustained and increasing product revenue.
We may experience difficulties with manufacturing yields, quality control, component supply and shortages of qualified personnel, among other problems. Any of these problems could result in delays in product availability and increases in expenses.
We may experience difficulties with manufacturing yields, quality control, component supply and shortages of qualified personnel, such as skilled operators who can assemble our product, among other problems. Any of these problems could result in delays in product availability and increases in expenses.
Our success depends in part on obtaining, maintaining and enforcing patents and other intellectual property rights and not infringing the patents or violating the other proprietary rights of others. Intellectual property disputes can be costly to defend and may cause our business, operating results and financial condition to suffer. Significant litigation regarding patent rights occurs in the medical device industry.
Our success depends in part on obtaining, maintaining, and enforcing patents and other intellectual property rights and not infringing the patents or violating the other proprietary rights of others. Intellectual property disputes can be costly to defend and may cause our business, operating results, and financial condition to 52 Table of Contents suffer.
As of December 31, 2023, our executive officers, directors, holders of 5% or more of our capital stock and their respective affiliates beneficially owned approximately 52% of our outstanding voting stock. Two of our non-employee directors are also affiliated with certain of our principal stockholders.
As of December 31, 2024, our executive officers, directors, holders of 5% or more of our capital stock and their respective affiliates beneficially owned approximately 43% of our outstanding voting stock. One of our non-employee directors is also affiliated with one of our principal stockholders.
As compared to direct manufacturers, our dependence on third-party manufacturers for our component parts exposes us to greater lead times. The seasonality of our business creates variance in our quarterly revenue, which makes it difficult to compare or forecast our financial results. We expect that revenue could fluctuate from quarter to quarter as a result of timing and seasonality.
As compared to direct manufacturers, our dependence on third-party manufacturers for our component parts exposes us to greater lead times. The seasonality of our business creates variance in our quarterly revenue, which makes it difficult to compare or forecast our financial results.
In addition, demand for Barostim may decline or may not continue to increase as quickly as we expect. If we are unable to achieve significant market acceptance in the U.S. for Barostim, our results of operations will be adversely affected.
Although increasing as our commercial sales grow, Barostim still has limited product and brand recognition. In addition, demand for Barostim may decline or may not continue to increase as quickly as we expect. If we are unable to achieve significant market acceptance in the U.S. for Barostim, our results of operations will be adversely affected.
We may face product liability claims that could be costly, divert management’s attention and harm our reputation. Manufacturing and marketing of Barostim and clinical testing of Barostim Therapy may expose us to product liability claims.
Any of these occurrences may harm our business, financial condition, and prospects significantly. 48 Table of Contents We may face product liability claims that could be costly, divert management’s attention and harm our reputation. Manufacturing and marketing of Barostim and clinical testing of Barostim Therapy may expose us to product liability claims.
Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and greater than, those in the U.S. or the EEA, including additional preclinical studies or clinical trials. Any of these occurrences may harm our business, financial condition and prospects significantly.
Approval procedures vary among jurisdictions and can involve requirements and administrative review periods different from, and greater than, those in the U.S. or the EEA, including additional preclinical studies or clinical trials.
As of December 31, 2023 and 2022, our accumulated deficit was $477.4 million and $436.2 million, respectively.
As of December 31, 2024 and 2023, our accumulated deficit was $537.3 million and $477.4 million, respectively.
It often takes several years to satisfy these requirements, depending on the complexity and novelty of the product. We also are subject to numerous additional licensing and regulatory requirements relating to safe working conditions, manufacturing practices, environmental protection, fire hazard control and disposal of hazardous or potentially hazardous substances.
We also are subject to numerous additional licensing and regulatory requirements relating to safe working conditions, manufacturing practices, environmental protection, fire hazard control and disposal of hazardous or potentially hazardous substances.
Failing to continue to comply with applicable foreign regulatory requirements, including those administered by authorities of the EEA countries, could result in enforcement actions against us, including refusal, suspension or withdrawal of our CE Certificates of Conformity by our Notified Body (the National Standards Authority of Ireland, or NSAI), which could impair our ability to market products in the EEA in the future. 61 Table of Contents Our business is subject to extensive governmental regulation that could make it more expensive and time consuming for us to market Barostim in the U.S. and introduce new or improved products.
Failing to continue to comply with applicable foreign regulatory requirements, including those administered by authorities of the EEA countries, could result in enforcement actions against us, including refusal, suspension or withdrawal of our CE Certificates of Conformity by our Notified Body (the National Standards Authority of Ireland, or NSAI), which could impair our ability to market products in the EEA in the future.
The failure to increase market acceptance in the U.S. for Barostim would negatively impact our business, liquidity and results of operations. We first commercialized Barostim in the EEA in 2012 and in the U.S. in 2020 and therefore do not have a long history operating as a commercial company.
We have a limited history operating as a commercial company and are highly dependent on a single product, Barostim. The failure to increase market acceptance in the U.S. for Barostim would negatively impact our business, liquidity, and results of operations.
Any product we develop that achieves regulatory clearance or approval, including Barostim, will have to compete for market acceptance and market share. We believe that the primary competitive factors in the market are demonstrated clinical effectiveness, product safety, reliability and durability, ease of use, product support and service, minimal side effects and salesforce experience.
We believe that the primary competitive factors in the market are demonstrated clinical effectiveness, product safety, reliability and durability, ease of use, product support and service, minimal side effects and salesforce experience.
Our manufacturing facility in Minneapolis, Minnesota is our only manufacturing facility, and if it is damaged or rendered inoperable or inaccessible due to political, social or economic upheaval or due to natural or other disasters, it would be difficult or impossible for us to manufacture our product for a period of time, which may lead to a loss of customers and significant impairment of our financial condition and operating results. ​ We take precautions to safeguard this facility, including acquiring insurance, employing back-up generators, adopting health and safety protocols and utilizing off-site storage of computer data.
In addition, regardless of the level of insurance coverage, damage to our facility may harm our business, financial condition, and operating results. ​ Our manufacturing facility in Minneapolis, Minnesota is our only manufacturing facility, and if it is damaged or rendered inoperable or inaccessible due to political, social or economic upheaval or due to natural or other disasters, it would be difficult or impossible for us to manufacture our product for a period of time, which may lead to a loss of customers and significant impairment of our financial condition and operating results.
If we do not receive access to hospitals via these contracting processes or otherwise, or if we are unable to secure contracts or tender successful bids, our sales may decrease and our operating results may be harmed. Furthermore, we may expend significant effort in these time-consuming processes and still may not obtain a purchase contract from such hospitals.
These processes are only open at certain periods of time, and we may not be successful in the bidding process. If we do not receive access to hospitals via these contracting processes or otherwise, or if we are unable to secure contracts or tender successful bids, our sales may decrease and our operating results may be harmed.
Any future decline in the amount Medicare is willing to reimburse our customers for procedures using Barostim could make it difficult for new customers to adopt Barostim and could create additional pricing pressure for us, which could adversely affect our ability to invest in and grow our business.
Additionally, the American Medical Association's CPT Editorial Panel approved new Category I codes for Barostim therapy, expected to take effect January 1, 2026. ​ Any future decline in the amount Medicare is willing to reimburse our customers for procedures using Barostim could make it difficult for new customers to adopt Barostim and could create additional pricing pressure for us, which could adversely affect our ability to invest in and grow our business, or establish Barostim as the standard of care.
We operate at a facility in one location and any disruption at this facility could harm our business. Our principal offices and our only manufacturing facility are located in Minneapolis, Minnesota. Substantially all of our operations are conducted at this location, including our manufacturing processes, research, development and engineering activities, customer and technical support and management and administrative functions.
We operate at a facility in one location and any disruption at this facility could harm our business. Our principal offices and our only manufacturing facility are located in Minneapolis, Minnesota.
In the EEA, from time to time certain institutions require us to engage in a contract bidding process in the event that such institutions are considering making purchase commitments that exceed specified cost thresholds, which vary by jurisdiction. These processes are only open at certain periods of time, and we may not be successful in the bidding process.
This process can be lengthy, time-consuming and require extensive negotiations and management time, which could include an approval by a customer’s value analysis committee. In the EEA, from time-to-time certain institutions require us to engage in a contract bidding process in the event that such institutions are considering making purchase commitments that exceed specified cost thresholds, which vary by jurisdiction.
We expect substantially all of our revenue to continue to be derived from sales of Barostim for the foreseeable future, the majority of which will be generated in the U.S. Although increasing as our commercial sales grow, Barostim still has limited product and brand recognition.
We first commercialized Barostim in the EEA in 2012 and in the U.S. in 2020 and therefore do not have a long history operating as a commercial company. We expect substantially all of our revenue to continue to be derived from sales of Barostim for the foreseeable future, the majority of which will be generated in the U.S.
In addition, some of our existing and future employees are subject to confidentiality agreements with previous employers.
In addition, some of our existing and future employees are subject to confidentiality agreements with previous employers. Our competitors may allege breaches of and seek to enforce such non-compete agreements or initiate litigation based on such confidentiality agreements.
We expect to continue to incur significant sales and marketing, research and development, regulatory and other expenses as we grow our U.S. commercial sales force and expand our marketing efforts to increase adoption of Barostim, add new features to Barostim, obtain regulatory clearances or approvals for our planned or future products and conduct clinical trials on our existing and planned or future products. ​ Until our IPO, we financed our operations primarily through convertible preferred stock financings and amounts borrowed under our previous loan and security agreement (“Horizon loan agreement”) with Horizon 41 Table of Contents Technology Finance Corporation.
We expect to continue to incur significant sales and marketing, research and development, regulatory, and other expenses as we grow our U.S. commercial sales force and expand our marketing efforts to increase adoption of Barostim, add new features to Barostim, obtain regulatory clearances or approvals for our planned or future products and conduct clinical trials on our existing and planned or future products. ​ We will need to continue to generate significant additional revenue in order to achieve and sustain profitability.
Such government regulation also could delay our marketing of new products for a considerable period of time and impose costly procedures on our activities. ​ Our products remain subject to strict regulatory controls on manufacturing, marketing and use.
Current or evolving government regulation may impede our ability to conduct clinical studies and to manufacture and sell our existing and future products. Such government regulation also could delay our marketing of new products for a considerable period of time and impose costly procedures on our activities.
Our inability to integrate any acquired products or technologies effectively could impair our 51 Table of Contents ability to execute our business strategies. In addition, any amortization or charges resulting from the costs of acquisitions could increase our expenses .
Our inability to integrate any acquired products or technologies effectively could impair our ability to execute our business strategies.
Our expected future operating losses, combined with our prior operating losses, may adversely affect the market price of our common stock and our ability to raise capital and continue operations. We have a limited history operating as a commercial company and are highly dependent on a single product, Barostim.
Even if we achieve profitability in the future, we may not be able to sustain profitability in subsequent periods. Our expected future operating losses, combined with our prior operating losses, may adversely affect the market price of our common stock and our ability to raise capital and continue operations.
Our insurance may not cover our losses in any particular case. In addition, regardless of the level of insurance coverage, damage to our facility may harm our business, financial condition and operating results. Our international operations subject us to certain operating risks, which could adversely impact our results of operations and financial condition.
Our international operations subject us to certain operating risks, which could adversely impact our results of operations and financial condition.
In addition, we believe our limited history commercializing our products has, in part, made our seasonal patterns more difficult to discern and therefore predict. 58 Table of Contents We are subject to risks associated with currency fluctuations, and changes in foreign currency exchange rates could impact our results of operations.
Otherwise, mild seasonal variations are difficult to predict accurately and may vary among different markets. We are subject to risks associated with currency fluctuations, and changes in foreign currency exchange rates could impact our results of operations.
In addition, substantially all of our inventory of component supplies and finished goods is held at the manufacturing facility.
Substantially all of our operations are conducted at this location, including our manufacturing processes, research, 45 Table of Contents development and engineering activities, customer and technical support and management and administrative functions. In addition, substantially all of our inventory of component supplies and finished goods is held at the manufacturing facility.
Our products must comply with regulatory requirements imposed by the FDA in the U.S. and similar agencies in foreign jurisdictions. These requirements involve lengthy and detailed laboratory and clinical testing procedures, sampling activities, extensive agency review processes and other costly and time-consuming procedures.
These requirements involve lengthy and detailed laboratory and clinical testing 61 Table of Contents procedures, sampling activities, extensive agency review processes and other costly and time-consuming procedures. It often takes several years to satisfy these requirements, depending on the complexity and novelty of the product.
If third-party payors do not provide adequate coverage and reimbursement for the use of Barostim, our revenue will be negatively impacted. Medicare reimbursement levels are important to increasing adoption of Barostim because nearly two-thirds of the target patient population for Barostim is over the age of 65.
Medicare reimbursement levels are important to increasing adoption of Barostim and establishing Barostim as the standard of care because nearly two-thirds of the target patient population for Barostim is over the age of 65. On January 1, 2024, Barostim was reassigned to New Technology APC 1580, which carries an average payment amount of $45,000.
In addition, we do not carry any “key person” insurance policies that could offset potential loss of service under applicable circumstances. ​ In addition, many of our employees have become vested in a substantial amount of stock or number of stock options.
In addition, we do not carry any “key person” insurance policies that could offset potential loss of service under applicable circumstances. ​ Transitions in executive leadership can adversely affect relationships with our customers, suppliers, and employees, make it difficult to attract and retain talent, and disrupt execution of our strategy, sales growth, and our efforts to enhance our operations.
Removed
We had devoted substantially all of our financial resources to research and development activities as well as general and administrative expenses associated with our operations, including clinical and regulatory initiatives to obtain marketing approval. Since our IPO, we have invested substantially in sales and marketing efforts to support commercialization of Barostim.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeWe engage in ongoing monitoring of all third-party providers to ensure compliance with our cybersecurity standards. ​ We have not encountered cybersecurity threats or incidents that have had a material impact on our business. Governance ​ Our Board of Directors recently assigned specific oversight responsibility for cybersecurity to our Audit Committee, which also oversees our general risk management.
Biggest changeWe engage in ongoing monitoring of all third-party providers to ensure compliance with our cybersecurity standards. ​ We have not encountered cybersecurity threats or incidents that have had a material impact on our business. Governance ​ Our Board of Directors assigned specific oversight responsibility for cybersecurity to our Audit Committee, which also oversees our general risk management.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeItem 5. Market for Registrant’s Common Equity , Related Stockholder Matters and Issuer Purchases of Equity Securities ​ Market Information ​ Our common stock trades on the Nasdaq Global Select Market under the symbol “CVRX.” ​ Holders ​ As of February 2, 2024, there were approximately 68 holders of record of our common stock.
Biggest changeItem 5. Market for Registrant’s Common Equity , Related Stockholder Matters and Issuer Purchases of Equity Securities ​ Market Information ​ Our common stock trades on the Nasdaq Global Select Market under the symbol “CVRX.” ​ Holders ​ As of February 11, 2025, there were approximately 62 holders of record of our common stock.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeItem 6. ​ [Reserved] ​ 73 ​ ​ ​ ​ ​ ​ ​ Item 7. ​ Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ 73 ​ ​ ​ ​ ​ ​ ​ Item 7A. ​ Quantitative and Qualitative Disclosures About Market Risk ​ 82 ​ ​ ​ ​ ​ ​ ​ Item 8. ​ Financial Statements and Supplementary Data ​ 84 ​ ​ ​ ​ ​ ​ ​ Item 9. ​ Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ​ 101 ​ ​ ​ ​ ​ ​ ​ Item 9A. ​ Controls and Procedures ​ 101 ​ ​ ​ ​ ​ ​ ​ Item 9B. ​ Other Information ​ 102 ​ ​ ​ ​ ​ ​ ​
Biggest changeItem 6. ​ [Reserved] ​ 73 ​ ​ ​ ​ ​ ​ ​ Item 7. ​ Management’s Discussion and Analysis of Financial Condition and Results of Operations ​ 73 ​ ​ ​ ​ ​ ​ ​ Item 7A. ​ Quantitative and Qualitative Disclosures About Market Risk ​ 82 ​ ​ ​ ​ ​ ​ ​ Item 8. ​ Financial Statements and Supplementary Data ​ 83 ​ ​ ​ ​ ​ ​ ​ Item 9. ​ Changes in and Disagreements with Accountants on Accounting and Financial Disclosure ​ 100 ​ ​ ​ ​ ​ ​ ​ Item 9A. ​ Controls and Procedures ​ 100 ​ ​ ​ ​ ​ ​ ​ Item 9B. ​ Other Information ​ 101 ​ ​ ​ ​ ​ ​ ​

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeWe maintain a full valuation allowance for deferred tax assets including NOL carryforwards, R&D credits and other tax credits. 76 Table of Contents Results of operations Consolidated results of operations for the year ended December 31, 2023, compared to the year ended December 31, 2022 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ ​ December 31, ​ Change ​ (in thousands) ​ 2023 2022 ​ $ % Revenue ​ $ 39,295 ​ $ 22,469 ​ $ 16,826 75 % Cost of goods sold ​ 6,256 ​ 4,999 ​ 1,257 25 % Gross profit ​ 33,039 ​ 17,470 ​ 15,569 89 % Gross margin ​ 84 % 78 % ​ Operating Expenses: ​ ​ ​ ​ Research and development ​ 11,633 ​ 9,952 ​ 1,681 17 % Selling, general and administrative ​ 64,509 ​ 50,045 ​ 14,464 29 % Total operating expenses ​ 76,142 ​ 59,997 ​ 16,145 27 % Loss from operations ​ (43,103) ​ (42,527) ​ (576) 1 % Interest expense ​ (1,799) ​ (165) ​ (1,634) NM ​ Other income, net ​ 3,850 ​ 1,373 ​ 2,477 180 % Loss before income taxes ​ (41,052) ​ (41,319) ​ 267 (1) % Provision for income taxes ​ (147) ​ (109) ​ (38) 35 % Net loss ​ $ (41,199) ​ $ (41,428) ​ $ 229 (1) % ​ NM – Not meaningful Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue by Geography ​ ​ Year ended ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ Change ​ (in thousands) ​ 2023 2022 ​ $ % United States ​ $ 35,111 ​ $ 18,021 ​ $ 17,090 95 % Europe ​ 4,184 ​ 4,448 ​ (264) (6) % Total Revenue ​ $ 39,295 ​ $ 22,469 ​ $ 16,826 75 % ​ Revenue was $39.3 million for the year ended December 31, 2023, an increase of $16.8 million, or 75%, over the year ended December 31, 2022.
Biggest changeResults of operations Consolidated results of operations for the year ended December 31, 2024, compared to the year ended December 31, 2023 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ ​ ​ ​ ​ December 31, ​ Change ​ (in thousands) ​ 2024 2023 ​ $ % Revenue ​ $ 51,292 ​ $ 39,295 ​ $ 11,997 31 % Cost of goods sold ​ 8,334 ​ 6,256 ​ 2,078 33 % Gross profit ​ 42,958 ​ 33,039 ​ 9,919 30 % Gross margin ​ 84 % 84 % ​ Operating Expenses: ​ ​ ​ ​ Research and development ​ 11,131 ​ 11,633 ​ (502) (4) % Selling, general and administrative ​ 91,317 ​ 64,509 ​ 26,808 42 % Total operating expenses ​ 102,448 ​ 76,142 ​ 26,306 35 % Loss from operations ​ (59,490) ​ (43,103) ​ (16,387) 38 % Interest expense ​ (4,397) ​ (1,799) ​ (2,598) 144 % Other income, net ​ 3,977 ​ 3,850 ​ 127 3 % Loss before income taxes ​ (59,910) ​ (41,052) ​ (18,858) 46 % Provision for income taxes ​ (55) ​ (147) ​ 92 (63) % Net loss ​ $ (59,965) ​ $ (41,199) ​ $ (18,766) 46 % 76 Table of Contents ​ Revenue ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Revenue by Geography ​ ​ Year ended ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ Change ​ (in thousands) ​ 2024 2023 ​ $ % United States ​ $ 47,167 ​ $ 35,111 ​ $ 12,056 34 % Europe ​ 4,125 ​ 4,184 ​ (59) (1) % Total Revenue ​ $ 51,292 ​ $ 39,295 ​ $ 11,997 31 % ​ Revenue was $51.3 million for the year ended December 31, 2024, an increase of $12.0 million, or 31%, over the year ended December 31, 2023.
ASC 718 requires all equity-based compensation awards to employees and non-employee directors, including grants of restricted shares and stock options, to be recognized as expense in the statements of operations and comprehensive loss based on their grant date fair values. We estimate the grant date fair value of stock options using the Black-Scholes option pricing model.
ASC 718 requires all equity-based compensation awards to employees and non-employee directors, including grants of restricted shares and stock options, to be recognized as expense in the consolidated statements of operations and comprehensive loss based on their grant date fair values. We estimate the grant date fair value of stock options using the Black-Scholes option pricing model.
We expect to derive future revenue by continuing to both expand our own dedicated salesforce and increase awareness of Barostim among payors, physicians and patients. 73 Table of Contents Our sales and marketing efforts are directed at EPs, HF specialists, interventional and general cardiologists and vascular surgeons because they are the primary users of our technology.
We expect to derive future revenue by continuing to both expand our own dedicated salesforce and increase awareness of Barostim among payers, physicians, and patients. 73 Table of Contents Our sales and marketing efforts are directed at EPs, HF specialists, interventional and general cardiologists, and vascular surgeons because they are the primary users of our technology.
While we expect our gross margin to be positively affected over time to the extent we are successful in selling more product through our direct sales force and by increasing our production volumes, it will likely fluctuate from period to period as we continue to introduce new products and adopt new manufacturing processes and technologies.
While we expect our gross margin to be positively affected over time to the extent we are successful in selling more product through our direct sales force and by increasing our production volumes, it will likely fluctuate from period to period as we continue to introduce new or modified products and adopt new manufacturing processes and technologies.
We expect to continue to drive increases in revenue through our efforts to increase awareness of Barostim among physicians, patients and payors, and by the expansion of our U.S. sales force, as well as by seeking expanded labeling for Barostim. As a result, we expect that U.S. sales will continue to account for the majority of our revenue going forward.
We expect to continue to drive increases in revenue through our efforts to increase awareness of Barostim among physicians, patients and payers, and by the expansion of our U.S. sales force, as well as by seeking expanded labeling for Barostim. As a result, we expect that U.S. sales will continue to account for the majority of our revenue going forward.
In the U.S., we estimate that 67% of our target patient population is Medicare-eligible based on the age demographic of the HFrEF patient population indicated for Barostim. As a result, we have prioritized coverage by the CMS while simultaneously developing processes to engage commercial payors.
In the U.S., we estimate that 67% of our target patient population is Medicare-eligible based on the age demographic of the HFrEF patient population indicated for Barostim. As a result, we have prioritized coverage by the CMS while simultaneously developing processes to engage commercial payers.
We have dedicated significant resources to educate physicians who treat HFrEF about the advantages of Barostim and train them on the implant procedure. The costs for the device and implantation procedure are reimbursed through various third-party payors, such as government agencies and commercial payors.
We have dedicated significant resources to educate physicians who treat HFrEF about the advantages of Barostim and train them on the implant procedure. The costs for the device and implantation procedure are reimbursed through various third-party payers, such as government agencies and commercial payers.
We expect cost of goods sold to increase in absolute dollars primarily as, and to the extent, our revenue grows. Gross margin may also vary based on regional differences in rebates and incentives negotiated with certain customers. 75 Table of Contents We calculate gross margin as revenue less cost of goods sold divided by revenue.
We expect cost of goods sold to increase in absolute dollars primarily as, and to the extent, our revenue grows. Gross margin may also vary based on regional differences in rebates and incentives negotiated with certain customers. We calculate gross margin as revenue less cost of goods sold divided by revenue.
We expense R&D costs as they are incurred. We expect R&D expenses to increase in absolute dollars as we continue to develop enhancements to Barostim. Our R&D expenses may fluctuate from period to period due to the timing and extent of our product development and clinical trial expenses.
We expense R&D costs as they are incurred. We expect R&D expenses to increase in absolute dollars as we continue to develop enhancements to Barostim. Our 75 Table of Contents R&D expenses may fluctuate from period to period due to the timing and extent of our product development and clinical trial expenses.
Stock-based compensation We maintain an equity incentive plan that was adopted in 2001 to provide long-term incentives for employees, consultants and members of the Board of Directors. The plan allows for the issuance of non-statutory and incentive stock options to employees and non-statutory stock options to consultants and non-employee directors.
Stock-based compensation We maintain an equity incentive plan that was adopted in 2001 to provide long-term incentives for employees, consultants, and members of the Board of Directors. The plan allows for the issuance of non-statutory and 80 Table of Contents incentive stock options to employees and non-statutory stock options to consultants and non-employee directors.
Cash provided by financing activities: Net cash provided by financing activities for the year ended December 31, 2023 was $24.0 million and consisted of $22.5 million related to proceeds from debt financing, $0.9 million related to proceeds from the Employee Stock Purchase Plan and $0.7 million related to proceeds from the exercise of common stock options, partially offset by debt financing costs of $0.2 million.
Net cash provided by financing activities for the year ended December 31, 2023 was $24.0 million and consisted of $22.5 million related to proceeds from debt financing, $0.9 million related to proceeds from the ESPP and $0.7 million related to proceeds from the exercise of common stock options, partially offset by debt financing costs of $0.2 million.
A performance covenant takes effect at the earlier of September 30, 2025 or the third tranche funding requiring that we achieve 50% of the trailing twelve months revenue target set in the Board-approved revenue plan in effect for such period. ​ Critical accounting policies and estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires our management to make estimates and judgments that affect the amounts reported in our consolidated financial statements and accompanying notes included elsewhere in this Annual Report on Form 10-K.
A performance covenant took effect upon the third tranche funding, requiring that we achieve 50% of the trailing twelve months revenue target set in the Board-approved revenue plan in effect for such period. ​ Critical accounting policies and estimates The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires our management to make estimates and judgments that affect the amounts reported in our consolidated financial statements and accompanying notes included elsewhere in this Annual Report on Form 10-K.
Barostim provides Baroreflex Activation Therapy by sending imperceptible and persistent electrical pulses to baroreceptors located in the wall of the carotid artery to signal the brain to modulate cardiovascular function.
Barostim provides BAT by sending imperceptible and persistent electrical pulses to baroreceptors located in the wall of the carotid artery to signal the brain to modulate cardiovascular function.
As of December 31, 2023, we had a total of 178 active implanting centers, as compared to 106 as of December 31, 2022. Active implanting centers are customers that have completed at least one commercial HF implant in the last 12 months.
As of December 31, 2024, we had a total of 223 active implanting centers in the U.S., as compared to 178 as of December 31, 2023. Active implanting centers are customers that have completed at least one commercial HF implant in the last 12 months.
We believe that our existing cash resources and Loan Agreement for Term Loans together with revenue will be sufficient to meet our forecasted requirements for operating liquidity, capital expenditures and debt services for at least the next three years.
We believe that our existing cash resources together with cash from operations will be sufficient to meet our forecasted requirements for operating liquidity, capital expenditures and debt services for at least the next three years.
Interest expense Interest expense increased $1.6 million, to $1.8 million for the year ended December 31, 2023, compared to the year ended December 31, 2022. This increase was driven by the interest expense on borrowings under the Loan Agreement entered into on October 31, 2022.
Interest expense Interest expense increased $2.6 million to $4.4 million for the year ended December 31, 2024, compared to the year ended December 31, 2023. This increase was driven by the interest expense on higher levels of borrowings under the Loan Agreement entered into on October 31, 2022.
As of December 31, 2023, no shares have been sold. ​ Our future liquidity and capital funding requirements will depend on numerous factors, including: ● our investment in our U.S. commercial infrastructure and sales forces; ● the degree and rate of market acceptance of Barostim and the ability for our customers to obtain appropriate levels of reimbursement; ● the costs of commercialization activities, including product sales, marketing, manufacturing and distribution; ● our R&D activities for product enhancements and to expand our indications; ● the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; ● our need to implement additional infrastructure and internal systems; ● our ability to hire additional personnel to support our operations as a public company; and ● the emergence of competing technologies or other adverse market developments.
We have remaining capacity to issue and sell up to $16.2 million of additional shares of common stock under this ATM offering. ​ Our future liquidity and capital funding requirements will depend on numerous factors, including: ● our investment in our U.S. commercial infrastructure and sales forces; ● the degree and rate of market acceptance of Barostim and the ability for our customers to obtain appropriate levels of reimbursement; ● the costs of commercialization activities, including product sales, marketing, manufacturing, and distribution; ● our R&D activities for product enhancements and to expand our indications; 78 Table of Contents ● the costs of filing, prosecuting, defending, and enforcing any patent claims and other intellectual property rights; ● our need to implement additional infrastructure and internal systems; ● our ability to hire additional personnel to support our operations as a public company; and ● the emergence of competing technologies or other adverse market developments.
The increase was primarily driven by continued growth as a result of the expansion into new sales territories and new accounts, as well as increased physician and patient awareness of Barostim. Total HF revenue units in the U.S. totaled 1,123 and 587 for the years ended December 31, 2023 and 2022, respectively.
HF revenue in the U.S. totaled $46.8 million and $34.6 million for the years ended December 31, 2024 and 2023, respectively. The increase was primarily driven by continued growth as a result of the expansion into new sales territories and new accounts, as well as increased physician and patient awareness of Barostim.
Net cash used in operating activities for the year ended December 31, 2022 was $42.7 million and consisted primarily of a net loss of $41.4 million and a decrease in net operating assets of $5.6 million, partially offset by $3.9 million from non-cash stock-based compensation expense and $0.4 million from the depreciation of property and equipment.
Net cash used in operating activities for the year ended December 31, 2023 was $39.0 million and consisted primarily of a net loss of $41.2 million and a decrease in net operating assets of $4.8 million, partially offset by $6.3 million from non-cash stock-based compensation expense, $0.5 million from the depreciation of property and equipment and $0.2 million from amortization of deferred financing costs and loan discount.
These factors include: ● Growing and supporting our U.S. commercial organization; ● Seeking expanded labeling for Barostim and promoting awareness among physicians, hospitals and patients to accelerate adoption of Barostim; ● Raising awareness among payors to build upon reimbursement for Barostim; ● Investing in research and development to foster innovation and further simplify the Barostim procedure; and ● Leveraging our manufacturing capacity to further improve our gross margins.
These factors include: ● Growing and supporting our U.S. commercial organization; ● Promoting awareness among physicians, hospitals, and patients to accelerate adoption of Barostim; ● Continuing to develop and disseminate clinical evidence supporting the benefits of Barostim; 74 Table of Contents ● Raising awareness among payers to build upon reimbursement for Barostim; ● Investing in research and development to foster innovation; and ● Leveraging our manufacturing capacity to further improve our gross margins.
Net cash provided by financing activities for the year ended December 31, 2022 was $7.5 million and consisted of $7.5 million related to proceeds from debt financing, $0.6 million related to proceeds from the Employee Stock Purchase Plan and $0.2 million related to proceeds from the exercise of common stock options, partially offset by debt financing costs of $0.8 million.
Cash provided by financing activities: Net cash provided by financing activities for the year ended December 31, 2024 was $55.9 million and consisted of $32.5 million related to proceeds from the issuance of common stock through the ATM offering, $20.0 million related to proceeds under the Loan Agreement, $2.7 million related to proceeds from the exercise of common stock options, and $0.8 million related to proceeds from the Employee Stock Purchase Plan (“ESPP”), partially offset by $0.2 million related to debt financing costs.
The Loan Agreement provides for an additional tranche of up to $20.0 million, based on the timing and other conditions set forth in the Loan Agreement. ​ On November 4, 2022, we entered into an Equity Distribution Agreement with Piper Sandler & Co., as agent, under which we may offer and sell, from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to $50.0 million in an “at-the-market” or ATM offering, to or through the agent.
We had $50.0 million in outstanding Term Loans under the Loan Agreement at December 31, 2024. ​ On November 4, 2022, we entered into an Equity Distribution Agreement with Piper Sandler & Co., as agent, under which we may offer and sell, from time to time at our sole discretion, shares of our common stock having an aggregate offering price of up to $50.0 million in an “at-the-market” (“ATM”) offering, to or through the agent.
Revenue generated in the U.S. was $35.1 million for the year ended December 31, 2023, an increase of $17.1 million, or 95%, over the year ended December 31, 2022. HF revenue in the U.S. totaled $34.6 million and $17.6 million for the years ended December 31, 2023 and 2022, respectively.
Revenue generated in the U.S. was $47.2 million for the year ended December 31, 2024, an increase of $12.1 million, or 34%, over the year ended December 31, 2023. HF revenue units in the U.S. totaled 1,506 and 1,123 for the years ended December 31, 2024 and 2023, respectively.
Provision for income taxes Provision for income taxes was nominal for the years ended December 31, 2023 and 2022. Liquidity, capital resources and plan of operations We have incurred significant operating losses and negative cash flows from operations since our inception, and we anticipate that we will incur significant losses for at least the next several years.
Liquidity, capital resources and plan of operations We have incurred significant operating losses and negative cash flows from operations since our inception, and we anticipate that we will incur significant losses for at least the next several years. As of December 31, 2024 and 2023, we had cash and cash equivalents of $105.9 million and $90.6 million, respectively.
As a result, our financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make comparison of our financials to those of other public companies more difficult.
As a result, our financial statements may not be comparable to the financial statements of issuers who are required to comply with the effective dates for new or revised accounting standards that are applicable to public companies, which may make comparison of our financials to those of other public companies more difficult. 81 Table of Contents Recent accounting pronouncements A discussion of recent accounting pronouncements is included in Note 2 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Longer term, we plan to explore Barostim’s potential to expand its indications for use to other cardiovascular diseases. ​ On October 31, 2022, we entered into the Loan Agreement under which we may borrow, subject to our achievement of certain milestones, up to a total of $50.0 million in a series of Term Loans described in Note 4 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, and we borrowed $7.5 million of such total on that date to fund our commercial and investment efforts.
On October 31, 2022, we entered into the Loan Agreement under which we may borrow, subject to our achievement of certain milestones, up to a total of $50.0 million in a series of Term Loans described in Note 4 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
This increase was primarily due to higher sales of Barostim. Gross profit was $33.0 million for the year ended December 31, 2023, an increase of $15.6 million, or 89%, over the year ended December 31, 2022. Gross margin increased to 84% for the year ended December 31, 2023, compared to 78% for the year ended December 31, 2022.
This increase was primarily due to higher sales of Barostim. Gross profit was $43.0 million for the year ended December 31, 2024, an increase of $9.9 million, or 30%, over the year ended December 31, 2023. Gross margin was 84% for both the years ended December 31, 2024 and 2023.
Selling, general and administrative expenses SG&A expenses increased $14.5 million, or 29%, to $64.5 million for the year ended December 31, 2023, compared to the year ended December 31, 2022.
Selling, general and administrative expenses SG&A expenses increased $26.8 million, or 42%, to $91.3 million for the year ended December 31, 2024, compared to the year ended December 31, 2023.
This change was primarily driven by a $1.7 million increase in compensation expenses, mainly as a result of increased headcount and a $0.6 million increase in non-cash stock-based compensation expense, partially offset by a $0.8 million decrease in clinical study expenses.
This change was driven by a $12.7 million increase in non-cash stock-based compensation expense, an $11.0 million increase in compensation expenses, mainly as a result of increased headcount, a $1.3 million increase in travel expenses, a $0.6 million increase in bad debt expenses, and a $0.5 million increase in consulting expenses.
Our net cash used in operating activities for the years ended December 31, 2023 and 2022, was $39.0 million and $42.7 million, respectively. 78 Table of Contents On October 31, 2022, we entered into the Loan Agreement under which we may borrow, subject to our achievement of certain milestones, up to a total of $50.0 million in a series of Term Loans described in Note 4 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K, and we borrowed $7.5 million of such total on that date to fund our commercial and investment efforts.
On October 31, 2022, we entered into the Loan Agreement under which we may borrow, subject to our achievement of certain milestones, up to a total of $50.0 million in a series of Term Loans described in Note 4 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
The new payment took effect January 1, 2024. ​ Factors affecting our performance We believe there are several important factors that have impacted and that we expect will continue to impact our business and results of operations.
The APC payment of approximately $45,000 will continue in 2025, as published in the 2025 OPPS final rule. Factors affecting our performance We believe there are several important factors that have impacted and that we expect will continue to impact our business and results of operations.
If we are unable to obtain additional financing when needed to satisfy our liquidity requirements, we may be required to delay the commercialization and marketing of Barostim. 79 Table of Contents Cash flows The following table sets forth the primary sources and uses of cash for each of the periods presented below: ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ December 31 (in thousands) ​ 2023 2022 Net cash (used in) provided by: ​ ​ Operating activities ​ $ (39,021) $ (42,677) Investing activities ​ (591) (685) Financing activities ​ 23,984 7,493 Effect of exchange rate changes on cash and cash equivalents ​ 3 (9) Net change in cash and cash equivalents ​ $ (15,625) $ (35,878) ​ Cash used in operating activities Net cash used in operating activities for the year ended December 31, 2023 was $39.0 million and consisted primarily of a net loss of $41.2 million and a decrease in net operating assets of $4.8 million, partially offset by $6.3 million from non-cash stock-based compensation expense, $0.5 million from the depreciation of property and equipment and $0.2 million from amortization of deferred financing costs and loan discount.
Cash flows The following table sets forth the primary sources and uses of cash for each of the periods presented below: ​ ​ ​ ​ ​ ​ ​ ​ Year ended ​ ​ December 31 (in thousands) ​ 2024 2023 Net cash (used in) provided by: ​ ​ Operating activities ​ $ (39,144) $ (39,021) Investing activities ​ (1,361) (591) Financing activities ​ 55,870 23,984 Effect of currency exchange on cash and cash equivalents ​ (1) 3 Net change in cash and cash equivalents ​ $ 15,364 $ (15,625) ​ Cash used in operating activities Net cash used in operating activities for the year ended December 31, 2024 was $39.1 million and consisted primarily of a net loss of $60.0 million, partially offset by $19.1 million from non-cash stock-based compensation expense, an increase in net operating assets of $0.9 million, $0.6 million from the depreciation of property and equipment, and $0.2 million from amortization of deferred financing costs and loan discount.
The number of sales territories in Europe remained consistent at six during the year ended December 31, 2023. 77 Table of Contents ​ Cost of goods sold and gross margin Cost of goods sold increased $1.3 million, or 25%, to $6.3 million for the year ended December 31, 2023, compared to the year ended December 31, 2022.
As of December 31, 2024, we had five sales territories in Europe as compared to six sales territories as of December 31, 2023. ​ Cost of goods sold and gross margin Cost of goods sold increased $2.1 million, or 33%, to $8.3 million for the year ended December 31, 2024, compared to the year ended December 31, 2023.
Other income, net Other income, net was $3.9 million for the year ended December 31, 2023, compared to $1.4 million for the year ended December 31, 2022. This increase was primarily driven by higher interest rates on interest-bearing accounts partially offset by a lower cash balance.
Other income, net Other income, net was $4.0 million for the year ended December 31, 2024, compared to $3.9 million for the year ended December 31, 2023. This increase was primarily driven by greater interest income on our interest-bearing accounts. Provision for income taxes Provision for income taxes was nominal for the years ended December 31, 2024 and 2023.
The term loans advanced pursuant to the Loan Agreement (collectively, the “Term 80 Table of Contents Loans”) bear interest at a floating rate per annum equal to the sum of (a) the greater of (i) the prime rate and (ii) 5.50% plus (b) 2.65%. The Term Loans mature on January 31, 2028 and require interest-only payments until November 1, 2027.
On September 30, 2024, we borrowed the remaining $20.0 million under the third and final tranche of the Loan Agreement. The term loans advanced pursuant to the Loan Agreement (collectively, the “Term Loans”) bear interest at a floating rate per annum equal to the sum of (a) the greater of (i) the prime rate and (ii) 5.50% plus (b) 2.65%.
Additional financing may not be available at all or may only be available in amounts or on terms that we do not deem to be favorable.
Additional financing may not be available at all or may only be available in amounts or on terms that we do not deem to be favorable. If we are unable to obtain additional financing when needed to satisfy our liquidity requirements, we may be required to delay the commercialization and marketing of Barostim.
On March 10, 2023, we borrowed the $7.5 million remaining under the first tranche of the Loan Agreement. On December 15, 2023, we borrowed $15.0 million under the second tranche of the Loan Agreement. We had $30.0 million in outstanding Term Loans under the Loan Agreement at December 31, 2023.
We had $50.0 million in outstanding Term Loans under the Loan Agreement at December 31, 2024.
Cash used in investing activities: Cash used in investing activities was $0.6 million and $0.7 million for the years ended December 31, 2023 and 2022, respectively, and consisted of purchases of property and equipment.
Net operating assets consisted primarily of inventory, accounts receivable, prepaid expenses and other current assets, accrued expenses to support the growth of our operations and accounts payable. 79 Table of Contents Cash used in investing activities: Cash used in investing activities was $1.4 million and $0.6 million for the years ended December 31, 2024 and 2023, respectively, and consisted of purchases of property and equipment.
Revenue generated in Europe was $4.2 million for the year ended December 31, 2023, a decrease of $0.3 million, or 6%, over the year ended December 31, 2022. Total revenue units in Europe decreased to 207 for the year ended December 31, 2023, from 231 for the prior year period.
As of December 31, 2024, we had 48 sales territories in the U.S. as compared to 38 sales territories as of December 31, 2023. Revenue generated in Europe was $4.1 million for the year ended December 31, 2024, a decrease of $0.1 million, or 1%, over the year ended December 31, 2023.
As of December 31, 2023 and 2022, we had cash and cash equivalents of $90.6 million and $106.2 million, respectively. For the years ended December 31, 2023 and 2022, our net losses were $41.2 million and $41.4 million, respectively.
For the years ended December 31, 2024 and 2023, our net losses were $60.0 million and $41.2 million, respectively. Our net cash used in operating activities for the years ended December 31, 2024 and 2023 was $39.1 million and $39.0 million, respectively.
Future expense amounts for any particular period could be affected by changes in our assumptions or market conditions. 81 Table of Contents ● Expected share price volatility — Due to the lack of company-specific historical and implied volatility data, we have based our estimate of expected volatility on the historical volatility of a group of similar (guideline) companies that are publicly traded.
Future expense amounts for any particular period could be affected by changes in our assumptions or market conditions. ● Expected share price volatility — We make assumptions with respect to expected stock price volatility based upon the historical volatility of our stock price. ● Expected term of an award — Determined based on our analysis of historical exercise behavior while taking into consideration various participant demographics and option characteristics.
Gross margin for the year ended December 31, 2023 was higher due to a decrease in the cost per unit and an increase in the average selling price. Research and development expenses R&D expenses increased $1.7 million, or 17%, to $11.6 million for the year ended December 31, 2023, compared to the year ended December 31, 2022.
Research and development expenses R&D expenses decreased $0.5 million, or 4%, to $11.1 million for the year ended December 31, 2024, compared to the year ended December 31, 2023.
As a result of these investments and our commercialization efforts, we expect to continue to incur net losses for the next several years, which may require additional funding and could include future equity and debt financing. ​ 74 Table of Contents Recent developments In December 2023, the FDA approved expanded labeling for Barostim based on the BeAT-HF trial data, resulting in simplification and clarification of the indications for use as well as inclusion of the primary endpoint results, the 6, 12 and 24 month symptomatic data, the Win Ratio and the all-cause mortality data in the “Clinical Summary” discussion included in Barostim’s indications for use.
As a result of these investments and our commercialization efforts, we expect to continue to incur net losses for the next several years, which may require additional funding and could include future equity and debt financing. ​ Recent developments On November 4, 2024, we announced that CMS assigned the Barostim procedure to New Technology APC 1580.
This change was driven by a $8.6 million increase in compensation expenses, mainly as a result of increased headcount, a $2.3 million increase in marketing and advertising expenses, primarily related to the commercialization of Barostim in the U.S., a $1.8 million increase in non-cash stock-based compensation expense, a $1.5 million increase in travel expenses and a $1.0 million increase in consulting expenses, partially offset by a $0.3 million decrease related to D&O insurance costs and a $0.2 million decrease in professional fees.
This change was primarily driven by a $0.5 million decrease in consulting expenses, a $0.3 million decrease in compensation expenses, and a $0.2 million decrease in travel expenses, partially offset by a $0.5 million increase in clinical study expenses.
Removed
From our inception until the IPO, we financed our operations primarily through preferred stock financings, and additionally, from sales of our Barostim products and amounts borrowed under our credit facilities.
Added
We maintain a full valuation allowance for deferred tax assets including NOL carryforwards, R&D credits, and other tax credits.
Removed
We then devoted substantially all of our resources to research and development activities related to Barostim Therapy, including clinical and regulatory initiatives to obtain marketing approval and sales and marketing activities. We used a portion of the IPO proceeds to continue funding the expansion of our direct sales force and commercial organization related to Barostim in the U.S.
Added
Total revenue units in Europe decreased to 204 for the year ended December 31, 2024, from 207 for the prior year.
Removed
We have continued investing in research and development to improve clinical outcomes, optimize patient adoption and comfort, increase patient access, and enhance the physician and patient experience.
Added
Approximately $8.4 million of the increase in non-cash stock-based compensation expense is related to the modification of stock options held by our 77 Table of Contents former Chief Executive Officer in connection with his retirement in the first quarter of 2024 described in Note 7 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.
Removed
The Loan Agreement provides for an additional tranche of up to $20.0 million, based on the timing and other conditions set forth in the Loan Agreement .
Added
In January 2024, we commenced this ATM offering and issued 3,251,198 shares of common stock for gross proceeds of $33.8 million under the ATM offering during the year ended December 31, 2024.
Removed
We currently believe this would increase our annual market opportunity in the U.S. to an estimated $2.2 billion, or 76,000 patients, based on this new long-term safety and effectiveness data as well as our commercial experience and, as discussed below, the new reimbursement assignment for Barostim in 2024. ​ In the 2024 OPPS final rule issued in November 2023, Barostim was reassigned to New Technology APC 1580, which carries an average payment amount of $45,000.
Added
The Term Loans mature on January 31, 2028 and require interest-only payments until November 1, 2027. The Term Loans are secured by substantially all of our personal property.
Removed
The number of sales territories in the U.S. increased by 12 to a total of 38 during the year ended December 31, 2023. A sales territory is an established regional area held by an account manager, typically after six to nine months of employment.
Removed
On March 10, 2023, we borrowed the $7.5 million remaining under the first tranche of the Loan Agreement. On December 15, 2023, we borrowed $15.0 million under the second tranche of the Loan Agreement. We had $30.0 million in outstanding Term Loans under the Loan Agreement at December 31, 2023.
Removed
Net operating assets consisted primarily of inventory, accounts receivable, prepaid expenses and other current assets, accounts payable and accrued expenses to support the growth of our operations.
Removed
The Term Loans are secured by substantially all of our personal property. We have the option to draw down up to $20.0 million between September 1, 2024 and December 15, 2024 if we achieve trailing three months revenue of $9.0 million prior to June 30, 2024.
Removed
The historical volatility is calculated based on a period of time commensurate with the expected term assumption.
Removed
The group of guideline companies have characteristics similar to us, including stage of product development and focus on the life science industry. ● Expected term of an award — Determined based on our analysis of historical exercise behavior while taking into consideration various participant demographics and option characteristics.
Removed
Recent accounting pronouncements A discussion of recent accounting pronouncements is included in Note 2 to our consolidated financial statements included elsewhere in this Annual Report on Form 10-K.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

2 edited+0 added−0 removed4 unchanged
Biggest changeWe do not currently use or plan to use financial derivatives in our investment portfolio. ​ 82 Table of Contents Foreign currency exchange rate risk Portions of our revenue and operating expenses that are incurred outside the U.S. are denominated in foreign currencies and subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Euro.
Biggest changeWe do not currently use or plan to use financial derivatives in our investment portfolio. ​ Foreign currency exchange rate risk Portions of our revenue and operating expenses that are incurred outside the U.S. are denominated in foreign currencies and subject to fluctuations due to changes in foreign currency exchange rates, particularly changes in the Euro.
Credit risk As of December 31, 2023 and 2022, our cash and cash equivalents were maintained with financial institutions which we believe have sufficient assets and liquidity to conduct their operations in the ordinary course of business with little or no credit risk to us; however, our cash balances were in excess of insured limits. ​ 83 Table of Contents
Credit risk As of December 31, 2024 and 2023, our cash and cash equivalents were maintained with financial institutions which we believe have sufficient assets and liquidity to conduct their operations in the ordinary course of business with little or no credit risk to us; however, our cash balances were in excess of insured limits. ​ 82 Table of Contents

Other CVRX 10-K year-over-year comparisons