8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

August 12, 2019

Date of report (Date of earliest event reported)

Surmodics, Inc.

(Exact Name of Registrant as Specified in its Charter)

Minnesota	0-23837	41-1356149
(State of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

9924 West 74th Street Eden Prairie, Minnesota	55344
(Address of Principal Executive Offices)	(Zip Code)

(952) 500-7000

(Registrant’s Telephone Number, Including Area Code)

Check the appropriate box below if the Form 8‑K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2):

☐  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐  Soliciting material pursuant to Rule 14a‑12 under the Exchange Act (17 CFR 240.14a‑12)

☐  Pre‑commencement communications pursuant to Rule 14d‑2(b) under the Exchange Act (17 CFR 240.14d‑2(b))

☐  Pre‑commencement communications pursuant to Rule 13e‑4(c) under the Exchange Act (17 CFR 240.13e‑4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.	☐

 

Item 8.01         Other Events.

On August 12, 2019, Surmodics, Inc. (the “Company”) updated its investor presentation, which is available under the “Investors” section of the Company’s website at www.surmodics.com.  Representatives of the Company will use the updated presentation in various meetings with analysts and investors from time to time.  A copy of the presentation is attached to this report as Exhibit 99.1.

The information in this Item 8.01 shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to liabilities under Section 18, nor shall such information be deemed incorporated by reference into any filings of the Company under the Securities Act of 1933, as amended, or the Exchange Act.

Item 9.01         Financial Statements and Exhibits.

(d)Exhibits.

Exhibit Number	Description
99.1	Investor Presentation Materials.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

	SURMODICS, INC.
Date:  August 12, 2019	/s/ Bryan K. Phillips
	Bryan K. Phillips
	Sr. Vice President, Legal and Human Resources,
	General Counsel and Secretary

EXHIBIT INDEX

Exhibit Number	Description
99.1	Investor Presentation Materials.

EX-99.1

Exhibit 99.1

 Gary MaharajPresident and CEOTim ArensVice President of Finance and CFOAugust 2019  1 

 Safe Harbor  Some of the statements made during this presentation may be considered forward-looking statements. Statements that are not historical or current facts, including statements about beliefs and expectations regarding our performance in the near- and long-term, including our revenue and earnings expectations for fiscal 2019, our SurVeil™ drug-coated balloon (DCB) and other proprietary products, and the TRANSCEND clinical trial, are forward-looking statements. Forward-looking statements involve inherent risks and uncertainties, and important factors could cause actual results to differ materially from those anticipated, including (1) our ability to successfully develop, timely complete clinical trials for, obtain regulatory approval for and, if approved, commercialize our SurVeil DCB product (including realization of the full potential benefits of our agreement with Abbott) and other proprietary products; (2) our reliance on third parties (including our customers and licensees) and their failure to successfully develop, obtain regulatory approval for, market and sell products incorporating our technologies; (3) possible adverse market conditions and possible adverse impacts on our cash flows, and (4) the factors identified under “Risk Factors” in Part I, Item 1A of our Annual Report on Form 10-K for the fiscal year ended September 30, 2018, and updated in our subsequent reports filed with the SEC. These reports are available in the Investors section of our website at www.surmodics.com.  2 

   Focused on product innovation  VISION3 of the Top 10 InnovationsFocused on PAD and designed to be: safe, clinically effective & improve healthcare economics  IMPACT TO PATIENTSGrowing incidence of peripheral artery disease (PAD)  IMPACT TO INVESTORSInvesting to build long-term sustainable growth and profitability    ROIC  INVESTMENT  3 

 4 

 DESIRED OUTCOMESGoal of improving clinical outcomes while reducing healthcare costs  PATIENTS202 million patients worldwide living with Peripheral Artery Disease (PAD)  5 

 Impact to patients  Product innovations aimed at making significant improvements in patient outcomes and quality of life (QOL)  PATIENTS  DESIRED OUTCOMES  Superficial Femoral Artery (SFA)> 500K procedures annuallyPain on ambulation – reduced QOL  Reduction in reintervention ratesImproved QOL by reduction in pain and increase in mobility  Below-the-knee disease (BTK)More than 3.5 million patients with critical limb ischemia (CLI) by 202033% amputation; 20% die in 1 year  Reduction in reintervention ratesImproved QOL as a result  AV access for End Stage Renal Disease (AV for ESRD) More than 5 million patients with ESRD WWAV access 1% of procedures but 7% of Medicare CostsImpacts QOL for ESRD patients  Healthcare economic benefits across the board in all indications above  IMPACT TO PATIENTS  6 

 7  Our whole product solutions strategy is focused on creating innovative, differentiated product platforms that solve clinically meaningful problems in treating peripheral vascular disease  Desired OutcomesImprove Clinical OutcomesReduce Healthcare Costs  Initial PlatformsDrug Coated BalloonsSurVeil™ DCBAvess™ DCBSundance™ DCBThrombectomyPounce™ mechanical thrombectomy Sublime™ Radial Access PlatformGuide sheath.014” PTA balloon catheter 

 SurVeil™ DCB 12-Month Data    Uniform drug topcoatPaclitaxel + proprietary excipient2.0 µg/mm² drug load360°coating coverage  0.035” OTW PTA platform4–7 mm x 40–150 mm  Shaft coatingSerene® hydrophilic coating  Proprietary PhotoLink® basecoat    “The ongoing positive results from this study demonstrate that the SurVeil DCB has the potential to be a next-generation DCB with improved efficacy of drug transfer. These 12-month data continue to support the functionality and safety of the device.” — Kenneth Rosenfield, MD, Nov. 2018  PREVEIL 12-Month Study Results:First-in-human trial conducted in the U.S. (13 patients / 3 sites)12 month data results:Acute success measures of safety achieved in 100% of subjects100% freedom from CD-TLR and CD-TVRContinued significant improvement in Rutherford classification, resting ankle brachial index (ABI), and walking impairment questionnaire (WIQ) including walking distance, walking speed and stair-climbing scores Median paclitaxel plasma concentration peaked immediately post-procedure (Cmax 1.07 ng/mL) and was undetectable at 30 days (reported in six-month results)Device met secondary performance criteriaKey secondary safety endpoints included freedom from major vascular complications, evidence of paclitaxel toxicity, or thrombolysis in myocardial infarction (TIMI)  VISION  8  CAUTION: SurVeil™ Drug-Coated Balloon is an investigational device. Limited by Federal (or United States) law to investigational use. 

 CURRENT DEBATE ON PACLITAXEL-coated DEVICES TO TREAT PAD  9  RECAP OF RECENTS EVENTS  JANUARY 17FDA CommunicationBenefits outweigh risks    2018  DECEMBER 8  Katsanos Meta-Analysispublished in JAHA  SRDX DISCUSSIONS with FDA  MARCH 2-3VIVA ForumIn-depth review  JUNE 19-20FDA PanelMeeting  2019  DEC  JAN  FEB  MAR  APR  MAY  JUN  JUL  AUG  SEP  MARCH 15FDA CommunicationPotentially concerning safety signal detected  JANUARY 22LINC 2019   MARCH 5CRT 2019DCB Town Hall  UPDATED INFORMED CONSENT FORM   ENROLLMENT RESUMES  APRIL 16CX 2019Paclitaxel Debate  MAY 21PCR 2019Paclitaxel Position Stmt.  AUGUST 7FDA CommunicationPotentially associated with increased mortality 

 FDA PANEL Advisory Committee Meeting  MEETING HIGHLIGHTS – JUNE 19-20, 2019Signal present from meta-analysis, no plausible cause identifiedTotality of data should include large well-constructed observational studies where no signal has been foundBenefits of paclitaxel-coated devices are significant, must be considered when balancing risk/benefit ratioPatient advocates stressed need to give patients ability to choose paclitaxel treatment; Quality of life is as important as quantity of lifePanel supports continued use and marketing of paclitaxel-coated devicesBroad support for the continuation of existing paclitaxel device trials Increased emphasis on high quality data and adherence to follow-up through 5 years 

 December 8: Katsanos meta-analysis  Meta-Analysis Limitations:No access to patient-level dataNo plausible mechanism of action notedQuestions regarding statistical model usedSelection bias due to lack of complete follow upLost to follow up and withdrawals are not accurately or completely accountedPTA group is likely not paclitaxel-naïve for entirety of analysis (prior disease in contralateral limb and potential post-treatment follow-up with paclitaxel-coated device)  11  Information represents a recap of key points and takeaways captured during the VIVA Leadership Forum meeting, March 1-2, 2019 in Washington DC. https://vascularnews.com/live-updates-vascular-leaders-forum-drug-eluting-devices  Katsanos, Konstantinos & Spiliopoulos, Stavros & Kitrou, Panagiotis & Krokidis, Miltiadis & Karnabatidis, Dimitrios. (2018). Risk of Death Following Application of Paclitaxel‐Coated Balloons and Stents in the Femoropopliteal Artery of the Leg: A Systematic Review and Meta‐Analysis of Randomized Controlled Trials. Journal of the American Heart Association. 7. 10.1161/JAHA.118.011245. 

 AUGUST 7 – UPDATE: FDA Communication to Health Care Providers   Update to January 17 and March 15 FDA notificationsFDA is taking additional steps to address the safety signal, including working with manufacturers on updates to device labeling and clinical trial informed consent documentsFDA is also continuing to actively work with the manufacturers and investigators on additional clinical evidence development for assessment of the long-term safety of paclitaxel-coated devices FDA believes clinical studies of these devices may continue and should collect long-term safety (including mortality) and effectiveness data Studies require appropriate informed consent and close safety monitoring to protect enrolled patients  12  https://www.fda.gov/medical-devices/letters-health-care-providers/august-7-2019-update-treatment-peripheral-arterial-disease-paclitaxel-coated-balloons-and-paclitaxel 

 FDA Recommendations to US Health Care Providers (March 15 and August 7 Letters)   13  March 15, 2019 Letter  August 7, 2019 Letter  Continue diligent monitoring of patients  Continue diligent monitoring of patients  Evaluate and inform of potential risks  Evaluate and inform of potential risks  Consider there may be an increased rate of long-term mortality with paclitaxel-coated devices when recommending treatment or consenting patients  Consider there may be an increased rate of long-term mortality with paclitaxel-coated devices when recommending treatment or consenting patients  Discuss the risks and benefits of all available PAD treatment options with patientsFor most patients, alternative treatment options should generally be used until additional analysis of the safety signal has been performed  Discuss the risks and benefits of all available PAD treatment options with patientsFor many patients, alternative treatment options to paclitaxel-coated balloons and paclitaxel-eluting stents provide a more favorable benefit-risk profile based on currently available information    In discussing treatment options, physicians should explore their patients' expectations, concerns and treatment preferences  For some patients at particularly high risk for restenosis, clinicians may determine the benefits may outweigh the risks  For individual patients judged to be at particularly high risk for restenosis and repeat femoropopliteal interventions, clinicians may determine the benefits may outweigh the risk of late mortality  Ensure patients receive optimal medical therapy and guidance for healthy lifestyle  Ensure patients receive optimal medical therapy and guidance for healthy lifestyle  Report any adverse events or suspected adverse events experienced with the use of paclitaxel-coated balloons and paclitaxel-eluting stents  Report any adverse events or suspected adverse events experienced with the use of paclitaxel-coated balloons and paclitaxel-eluting stents 

   TRANSCEND: SURVEIL™ DCB PIVOTAL TRIAL  PRINCIPAL INVESTIGATORSWilliam (Bill) Gray, MD, FACC, FSCAIClinical Advisor —  Main Line Health, Inc., Wynnewood, PAKenneth Rosenfield, MD Chair Advisory Board — Interventional Cardiology, Mass. General HospitalMarianne Brodmann MD, PhD Clinical Advisor — Interventional Cardiology, Division of Angiology Medical University, Graz  Received IDE approval from the U.S. FDA to begin pivotal trial for SurVeil DCB  STUDY DESIGNSummaryRandomized control pivotal trial evaluates SurVeil drug-coated balloon for treatment of peripheral artery disease in the upper leg compared to the Medtronic IN.PACT® Admiral® drug-coated balloon. Number of Subjects and SitesUp to 446 subjectsUp to 60 sites in U.S. and 18 outside U.S.Study Duration60 months post procedure  PRIMARY ENDPOINTSEffectivenessPrimary patency, defined as a composite of freedom from clinically-driven target lesion revascularization (TLR) and binary restenosis (restenosis defined as duplex ultrasound [DUS] peak systolic velocity ratio [PSVR] ≥2.4 or >50% stenosis as assessed by independent angiographic and DUS core labs) through 12 months post-index procedure.SafetyComposite of freedom from device- and procedure-related death through 30 days post-index procedure and freedom from major target limb amputation (above the ankle) and clinically-driven target vessel revascularization (TVR) through 12 months post-index procedure.  VISION  TRANSCEND ENROLLMENT PROGRESSCurrently >90% enrollmentCE MARK PROGRESSCurrently anticipate obtaining CE mark by December 2019  10/20/17  14 

 Strategic Agreement with Abbott  Demonstrates value of whole-product solutions strategyLeverages Surmodics’ leadership in drug-delivery technologies, design, development capabilities, and manufacturing capacityCombines with Abbott’s deep experience in vascular care products and worldwide strength in the market  15  CAUTION: SurVeil™ Drug-Coated Balloon is an investigational device. Limited by Federal (or United States) law to investigational use.  February 27, 2018 – Abbott and Surmodics Announce Agreement for Next-Generation Drug-Coated Balloon Development and Commercialization 

   Terms of Agreement  CAUTION: SurVeil™ Drug-Coated Balloon is an investigational device. Limited by Federal (or United States) law to investigational use.  16  Exclusive worldwide commercialization rights for SurVeil™ drug-coated balloon (DCB) for superficial femoral artery (SFA)$25 million upfront payment$67 million for milestones associated with product developmentAll milestones are pre-commercializationOptions to negotiate agreements for Sundance™ below-the-knee (BTK) and Avess™ arteriovenous (AV) fistula drug-coated balloon productsRevenue realized from product sales to AbbottShare of profits resulting from Abbott sales 

 DCB platform extension  Surmodics .014” PTA platform2 – 4 mm diameter20 – 220 mm lengths  Uniform sirolimus drug coatingSirolimus + Proprietary Excipient360° uniform coating coverage  Avess™ AV Fistula DCB  VISION  Surmodics .035” PTA platform4 – 12 mm diameter40 – 80 mm lengths  Uniform paclitaxel drug coatingPacliltaxel + Proprietary Excipient360° uniform coating coverage  Sundance™ Below-The-Knee DCB  Treated initial patient in FIH study Q1 FY 2019Target completion of FIH in FY 2019  Hydrophilic shaft coatingSurmodics PRISTYNE™ hydrophilic coating  Successfully completed preclinical studiesCompleted selection of drug dose and coating formulationInitiate FIH filing process in FY 2019  17  CAUTION: Sundance™ and Avess™ Drug-Coated Balloons are investigational devices. Limited by Federal (or United States) law to investigational use. 

   Q1  Q2  Q3  Q4  Q1  Q2  Q3  Q4  Q1  Q2  Q3  Q4  JANUARY  510 (K) Clearance for Telemark™ Coronary / Peripheral Support Catheter   We Are Making Progress On Our Whole-Product Solutions Strategy  18  Drug-Coated Balloons (DCB)  510 (K) / CE Mark  FY2017  SEPTEMBER  Global Clearance of .014” Low-Profile PTA Balloon Catheter  APRIL  FDA Clearance for .018” Low-Profile PTA Balloon Dilation Catheter  IDE Approval to Initiate Pivotal Trial for SurVeil™ DCB  JULY  FEBRUARY  Abbott & Surmodics Announce Agreement for SurVeil™ DCB   First Patient Enrolled in TRANSCEND Clinical Trial for SurVeil™ DCB   OCTOBER  May  Surmodics Announces Acquisition of Embolitech Thrombectomy Technology & IP    Initial patient treated in First-in-Human Study for Avess™ AV Access DCB  DECEMBER  FY2019  FY2018  APRIL  510 (K) Clearance for Sublime™ Guide Sheath  Commercialization agreement signed for Telemark™ Coronary Support Catheter  JULY 

 POUNCE™ Thrombectomy Platform Technology  Game-changing technology designed for removal of organized thrombi and emboli, in an approximately $400M growing global marketSimple stand-alone intervention, eliminates need for capital equipment and may reduce the need for thrombolytics and complex proceduresDevelopment is on schedule with successful early pre-clinical results and positive hands-on physician feedbackExpect to submit for our first regulatory clearance in Q1 FY 2020  19  Mesh trumpet designed to entrain clot and compress fluid during removal    Two self-expanding cages designed to break up clot and capture within mesh trumpet 

 Radial Access Platform Technology  20    Radial artery access offers many benefits relative to femoral artery access including reduced bleeding complications, early ambulation, reduced length of stay and costsWidely adopted in coronary procedures where devices existInitial radial-based products in development include:Sublime™ Guide Sheath (FDA Cleared):Surmodics Xtreme™ braided technology offers the ability to treat peripheral procedures, including below-the-knee applicationsFull-length hydrophilic coating for Guide Sheaths5 Fr and 6 Fr:120 cm and 150 cm working lengths.018” and .035” Guidewire compatibleTherapeutic Devices to Treat Lesions:.014” Radial BTK PTA Balloon Catheter Q4 FY 2019 submission for 510 (K) clearance2 mm - 4 mm, up to 220 mm long150 cm working length   .014 Radial BTK PTA Balloon Catheter  Braided Peripheral Radial Guide Sheath 

 Product Milestones  CAUTION: SurVeil™, Avess™ and Sundance™ Drug-Coated Balloons are investigational devices. Limited by Federal (or United States) law to investigational use.  IMPACT TO INVESTORS  CY 2019 GOALS  FY 2019 – FY 2021 GOALS  Enroll the TRANSCEND trial as fast as reasonable: complete enrollment by Q4 FY 2019Attain CE marking for SurVeil™ by December 2019Initiate and complete first-in-human trial for AV DCB and initiate first-in-human trial for BTK DCB Submit for 510(k) regulatory clearance on three to four devices Complete design freeze for initial thrombectomy device by end of fiscal 2019Secure commercialization agreements for approved devices  Secure PMA of SurVeil™ DCBComplete pivotal trial of Avess™ AV DCBInitiate pivotal trial for Sundance™ BTK DCBObtain regulatory clearance on the initial device for vascular thrombosis and on at least seven other new-to-the-world vascular devices in areas of unmet clinical needs  21 

   PIPELINE PRODUCTSSurVeil™ DCBSundance™ Below-the-knee DCBAvess™ AV DCBMultiple 510(k)’s   Financial Performance Targets>10% revenue growth (achieved fiscal 2018 – on track for fiscal 2019)>30% EBITDA margin by 2021  22  The agreement with Abbott has a meaningful positive impact on our commitment to deliver the returns described above within the targeted time frame given the potential for pre-commercialization revenue within the next 5 yearsIn addition, successful US and OUS commercialization of the SurVeil DCB contributes in a meaningful way to the long-term consistency of revenue and EBITDA growth at the targeted levelsWe continue to assess the impact of regulatory actions and any effect on our fiscal 2019 financial and long-term guidance  Achieving SurVeil DCB milestone successes (positive clinical results and regulatory approvals) enables the business to reach the financial performance targets 

   MANAGEMENT TEAM  Gary R. MaharajPresident and Chief Executive Officer (2010)  Timothy J. ArensVice President of Finance and Chief Financial Officer (2007)  Joseph J. Stich Vice President and General Manager of In Vitro Diagnostics (2010)  Thomas GreaneyChief Operating Officer of Medical Devices (2015)  Gregg S. SuttonVice President of Research and Development (2016)  Bryan K. PhillipsSenior Vice President of Legal and Human Resources, General Counsel and Secretary (2005)  23  Teryl L.W. Sides Senior Vice President and Chief Marketing Officer (2018) 

 Clinical & scientific ADVISORS  Ken Rosenfield, MD Chair Advisory Board — Interventional CardiologyMassachusetts General Hospital  Gary Ansel, MD, FACC Clinical Advisor —  Interventional CardiologyOhio Health Research  Marianne Brodmann MD, PhD Clinical Advisor— Interventional CardiologyDivision of Angiology Medical University Graz  Michael Jaff, DO Clinical Advisor — Vascular MedicineNewton Wellesley Hospital  Mike Dake, MDClinical Advisor — Interventional RadiologyStanford Health Care  Renu Virmani, MD, FACCClinical Research Advisor — Cardiovascular PathologistCVPath    Peter Schneider, MDClinical Advisor — Vascular SurgeryUniversity California San Francisco  24  Prof. Ramon VarcoeClinical Research Advisor — Vascular SurgeonPrince of Wales Hospital 

 Surmodicsbusiness segments  For the nine months ended June 30, 2019  BUSINESSSEGMENTREVENUE  IVDBUSINESS23%   MEDICAL DEVICES77%   25 

 Surmodics CORE Offerings  vascular access sheath  coronary guidewire  peripheral clad guidewire  coronary stent delivery catheter  coronary balloon dilatation catheter  peripheral balloon dilatation catheter  diagnostic guide catheter  vascular access and support catheter  MEDICAL DEVICE COATINGS  IN VITRO DIAGNOSTICS  Leveraging science and expertise to offer world-class coatings and drug delivery  Providing critical components for in vitro diagnostic tests and microarrays  Creating sustainable margins for long-term growth and profitabilityTechnologyDesign capabilityAgility of a start-upOperational excellenceManufacturingProcess Engineering    26 

 FINANCIAL PERFORMANCE  27 

 FINANCIALS BY SEGMENT  MISSION: To improve the treatment and detection of diseaseStrong balance sheet and attractive cash flows to fund growth strategy$45.0 million of cash/investments as of June 30, 2019Operating cash flow of $34.1 million and adjusted EBITDA of $7.3 million in fiscal 2018  MEDICAL DEVICES77%   BUSINESSSEGMENTREVENUE‡  IVDBUSINESS23%   MEDICAL DEVICE    Growth  2%  16%  12%  IN VITRO DIAGNOSTICS    Growth  5%  14%  9%  28  ‡For the nine months ended June 30, 2019 

     2019 Guidance  2019 Financial Guidance  Long Term Objectives  Total Revenue: $92.0 million to $94.0 million (includes $7.5 million to $8.0 million of SurVeil™ DCB revenue)(1) GAAP Earnings per Share(2): $0.24 to $0.32Non-GAAP Earnings per Share(2): $0.41 to $0.49  Continue consistent double-digit top line revenue growth and generate EBITDA margins at or above 30% by 2021  29  Our fiscal 2019 SurVeil DCB revenue is driven by the recognition of a portion of the $25 million up front license fee received following the execution of the distribution agreement in late February 2018.GAAP earnings per share is the estimated fiscal 2019 diluted earnings per share as determined by U.S. generally accepted accounting principles. Non-GAAP earnings per share adjusts GAAP earnings per share for estimated fiscal 2019 contingent consideration adjustment, acquired intangible amortization, foreign exchange gain on contingent consideration, claim settlement and acquired in-process research and development of $0.01, $0.16, $(0.01), $(0.04) and $0.05 per share, respectively. 

 INVESTOR RELATIONSFor additional inquiries, please contact:Tim Arens • 952-500-7056  30