MCC Board of Directors Letter
CEO and Chairman’s Letter:
To our shareholders and friends;
On behalf of our team at MyoCardioCare, I am pleased to provide you with updated information about the company. If you’ve reviewed our materials in the recent past, or if you’ve been in contact with any of our corporate officers, advisers or directors, you may already be “up to speed” on what we’re doing. To ensure that you have the latest information, I’d like to summarize several key points.
Sudden cardiac arrest in a hospital setting continues to challenge physicians. Despite the substantial advances in preventive medicine, the ever-growing arsenal of pharmaceuticals and various medical devices, in-hospital sudden cardiac arrest results in death in about 80% of all cases. Only a small minority of the 20 percent that do survive are able to participate in their former lives without some amount of physical or mental impairment. Unfortunately, survivors frequently become long-term users of numerous medications, consumers of costly out-patient medical services, and a burden to their family members because of their debilitation.
Sadly, the statistics for in-hospital cardiac arrest have not changed significantly over the past 35 plus years because treatment options, in our view, remain both limited and ineffective. Treatment choices include closed-chest compressions, combined with drugs and defibrillation. Other medical devices simply take too long to install; our device can be installed by a trained emergency room physician in less than five minutes, well in advance of substantial oxygen loss to the brain which become an irreversible condition.
MyoCardioCare’s MCC-3000 cardiac support system for in-hospital cardiac arrest is the only medical device with a chance to change the treatment paradigm in a significant way, giving hope to increase the percentage of survivors, while decreasing their debilitation. To put this in perspective, CPR (cardiopulmonary resuscitation, or chest compressions) provides roughly one liter per minute of blood flow at best if performed properly; this is about 20 percent of the typical output in a healthy heart. In contrast, the MCC-3000 is able to return blood flow to five liters per minute, ensuring that the body and all its essential organs are optimally perfused, keeping the patient alive and reducing chances for post-cardiac arrest problems, complications, and debilitation.
So what have we done, and, more important, where are we today? These are fair questions and worthy of comment.
Upon our founding a decade ago, we sought substantial funding to begin our development, testing and commercialization activities in the United States. We had a few things going for us. For instance, a predecessor of our device, the rights to which we acquired, was successfully used at Duke University Medical Center (DUMC) many years beforehand, and both the technology and cost curve had improved dramatically in the intervening years. Of note, when the predecessor device was used at DUMC, five patients were implanted and all five were successfully supported. One of them, Bonnie, is featured elsewhere on this web site and shares her compelling story. But, despite this history, we were still considered a new company with new a new management team and no revenues. We also were operating in a very narrow niche within the medical device field and were faced with a less than hospitable market environment for “start-ups,” which caused us to encounter significant difficulty in obtaining anything but a few modest government grants to enable us to keep moving forward, though at a less than ideal pace.
We had to make a change. Along the early pathway, one venture capitalist with whom we had several cordial discussions, suggested that our quest might be easier and the market more receptive were we to seek funding outside the U.S. We followed those suggestions and, after more than a year of numerous calls and meetings, in November 2014, we engaged and have been working closely with Brussels-based A-Medica, a financial advisory firm in Belgium specializing in advancing medical technology projects from conceptual phase to commercialization. We established an MCCI development budget in the European Union and thereafter worked to align with key business partners who would assist our efforts.
Our initial plan was to acquire “off-the-shelf” cup and console components for our MCC3000 cardiac arrest medical device which would have three benefits: immediate availability, system compatibility and lower costs. We met with Maastricht University Medical Center (MUMC) in The Netherlands who eagerly embraced our mission and offered their facilities and personnel for required animal testing and clinical trials for our device to treat cardiac arrest. Our physician partners at MUMC stated that our device, in their professional opinion, offered an additional indicated solution for congestive heart failure, an even larger market than cardiac arrest (which, as you know was, and still is, our original indication). They even went so far as to create a second budget for a heart failure study. We also established business relationships with a required Contract Research Organization to perform independent device validation, as well as with patent attorneys, banking, accounting and insurance entities. We even found an ideal person to become CEO of MCCI in the EU contingent upon securing funding.
Where we fell short was in finding the necessary off-the-shelf console and cup components. Large entities with whom we had promising discussions backed away because, we believe, they feared being held ultimately responsible for any liability issues that might occur while we used their equipment as part of our device. Our response was to engage with original equipment manufacturers and seek bids for both a console and cup solution, the two key components of our three part device, the third component is a connecting tube. As these discussions evolved, our costs to produce EACH of the cup and console components approximately equaled our entire project budget, AND each of these two critical “build from scratch” steps would take well over a year to complete. The budget for the entire project would have increased to as much as five times the original estimate, making the EU market cost prohibitive at that time.
Faced with these facts, we engaged in further extensive discussions with A-Medica regarding our options.
So, where does that leave us? After much discussion with A-Medica, we have made the following decision: We believe that there exist opportunities to move forward in the United States through funding by entities such as the Department of Defense (DoD) or the National Institutes of Health (NIH), or both, or other U.S. Governmental agencies. Earlier this year, we have begun to seek funding through the NIH. We have internally named this pathway The U.S. Project. We cannot give you any assurances that The U.S. Project will be successful but we have engaged a Principal Investigator in January of this year, the key person needed to put us in a position to apply for and receive what we hope will be a series of funding rounds from the NIH.
Importantly, our current closing date for a submission for NIH funding is January 5, 2020 and we are working to meet that deadline. To that end, a number of tasks are currently ongoing and we feel optimistic about our chances to receive the necessary funding to move forward. At the same time, we continue to pursue funding from other sources as the NIH pathway is but one avenue open to us and we are not prohibited from seeking one or more additional partners to move our project forward. We have not ruled out going back to the EU should an investment source becomes available to renew the many relationships we already have in that region.
We appreciate the support, encouragement and involvement of our many shareholders who have been with us on this road. Never once through this journey have we ever wavered in the belief that the MCC3000 device is a highly worthy project, one that will meet a critical unmet medical need….and one for which the requisite funding will be found.
It has been an interesting venture with lots of paths traversed. We remain determined to continue to push for adoption of what we still believe is a much-needed device that can help hearts and save lives. There can be nothing better than to see a human life saved. If we can help in that regard, that will be sufficient enough reward.
Frank W. Terrizzi
CEO & Chairman
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