NASDAQ:ICU
David Bautz, PhD: Hi, and welcome to another edition of our CEO Chats. My name is David Bautz, Senior Biotech Analyst with Zacks Small Cap Research. Joining me today is Mr. Eric Schlorff. He's the CEO of SeaStar Medical Holding Corp, which trades on the NASDAQ under the ticker symbol ICU. SeaStar is a commercial-stage healthcare company focused on treatments for critically ill patients facing organ failure and potential loss of life. We recently initiated coverage of SeaStar with a $12 valuation. Welcome, Eric, and thanks for joining me today.
Eric Schlorff: Thanks, David, and thanks, Zacks, for covering us as well as having us on today.
David Bautz: Let's start with the overview of the company's Selective Cytopheretic Device, or SCD. Why don't you tell us what that is, how it came to be, and maybe the mechanism by which it works?
Eric Schlorff: Let's start with the problem. The problem that we face in medicine and many of these disease states is really inflammation, right? Where inflammation's out of control. We found this with COVID, but it exists, though not just viruses, but bacteria, surgery, trauma. What's interesting is that the current things that are out there to treat these really try to treat the cytokine storm, but at various levels, usually downstream.
What the Selective Cytopheretic Device really is is that we go after certain unique immune cells called neutrophils and monocytes. They're really the first responders to an insult. We've been able to show that we can reduce that cytokine storm and actually reverse it in such a way through an existing continuous renal replacement therapy circuit. It's already in the ICUs today, the pumps, etc. We're able to kind of reprogram these neutrophils and monocytes from a pro-inflammatory, so an angry, hyper-inflamed state, to a reparative state. It's doing this all in real time. It really is a very novel therapy. I can say that we are FDA approved in children, which I'm sure we'll talk about. The pediatric indication has really validated that platform, and we're doing things now in adults as well.
David Bautz: So what would you say are the biggest differences between the SCD and other treatments for those who are suffering from this kind of exaggerated inflammatory response?
Eric Schlorff: The point of attack is really what it comes down to. If you think about the biologics or the pharma approaches to the way cytokine storm is, they go after the cytokines themselves or the mediators. Those are all downstream. If you look at the way a cytokine storm works or is generated, it's usually the insult that starts it; the monocytes and neutrophils, the most activated ones, go and hit the site of wherever the injury is.
They then send out messengers. So they send out these other cytokines like IL-6, TNF-α, which are probably targets that all of your followers know very well. They go after all of these, and they are really signaling that, hey, we need more troops on the front line. That's really kind of how it starts, and so the pharma companies and biologic companies go after the IL-6s or the TNF-α. So very much downstream.
What we know about the immune system is that it has a lot of redundancy. Thank God it has a lot of redundancy. We need that redundancy for our own longevity. That's the biggest difference, that they're targeting very downstream. But what if you could actually quell the immune system by going and addressing the most highly activated neutrophils and monocytes? What we're really doing is, through our circuit, these neutrophils and monocytes that are the most active, they present different types of cell surface proteins, called integrins. As these cells come in that present a high level of these integrins, they actually stick to the inside of the SCD or Selective Cytopheretic Device, just like Velcro. Then, in a low calcium environment, they're driven into apoptosis and then go back into the body in a deactivated state, signaling that the storm is over.
The big difference, for us, is that we're doing this all in real time and really reprogramming that entire body, versus a pharmaceutical or a biologic approach, which tries to take out all of them and hope to God that you've hit the right one. Unfortunately, what we’ve seen in a lot of these ICU studies is that by doing that, you actually don't achieve the clinical results that you were hoping for.
David Bautz: You mentioned earlier that the device is already approved for the pediatric patient population suffering from acute kidney injury, or AKI. Can you give us an overview of the pediatric market and the company’s sales strategy for that population?
Eric Schlorff: Of course. The Selective Cytopheretic Device in children or pediatrics was approved under a humanitarian device exemption, or HDE, in about February 2024. It's branded QUELIMMUNE™, which is essentially what it does: it quells the immune system, which we're excited to have that brand name. The sales strategy in the market size is, it’s kind of an ultra-rare or ultra-small market, so it's about 4,000 children. For your audience: to receive an HDE, it has to be under 8,000 patients, so it, by definition, has to be a small. It's about 4,000 patients in the United States annually who will have acute kidney injury requiring continuous renal replacement therapy, which is what our label is. Our label also says with sepsis or septic condition, which, obviously, there's not a lot of labels out there in any of medicine that can tout that. It's about a $100 million annual market in the United States for this small patient population.
Our commercial strategy is actually quite clear and quite targeted, which is that there are about 220 children's hospitals in the United States. About 50% of them have about 50% of the patients who will go through it. These are your bigger centers out there in the United States. If you go to clinicaltrials.gov, you'll actually be able to see all the sites that we have participating in this. It's the likes of Cincinnati Children's, it's the likes of Texas Children's, Stanford, University of California, San Francisco, University of Alabama, Birmingham, and Lurie, which is the Northwestern Chicago Hospital. The strategy is to get into each one of these institutions on a case-by-case basis. We go through an investigational Institutional Review Board or IRB, so it really is just kind of knocking and doing the blocking and tackling at each of these institutions. Our goal is to have around 25 sites by the end of 2026. We closed 2025 with about 10 sites, and then in 2024, we closed it with two sites. You can start to see that we're bringing on more and more sites as we move along.
David Bautz: Turning to the adult population, the company is currently conducting the pivotal neutralized AKI study in adult ICU patients suffering from AKI and also receiving continuous renal replacement therapy. Can you give us an overview of those trials and where they currently stand, and then when we can expect top-line results?
Eric Schlorff: This is a 339-patient study. It is a randomized controlled study. So we are going against the standard of care. The primary endpoint of that is a 90-day composite endpoint of mortality or dialysis dependency. What that means is that at 90 days, we will assess whether the patient is alive or dead and whether the patient is on dialysis or not. That's how the of the construct of the study is. We currently have about 17 sites that are active, and you can go out again to our website, onto our presentation, and see the quality of many of those sites. They're a mix of academic as well as community hospitals and military sites. We did it because AKI actually occurs at all of these sites, so when you think about a commercial strategy and launch in the future, you really want to have a broad array of folks that show that it is not just relegated to those high academic sites, but it can be used at really any site where AKI actually is occurring, where they require CRT.
The top line, the goal for having the study enrolled, fully enrolled to 339, is around the end of 2026. So, it's a 90-day endpoint, which puts us, let's say, end of year, it's enrolled. We wait 90 days for the last patient, so by the end of Q1, we have the last patient, and then it takes about 45 to 60 days, most likely, to get top-line data. So you're looking at some time in probably the end of that first half of 2027.
David Bautz: Let's talk about the potential market opportunity for the adult patient population. How many patients per year does the company estimate would be eligible for treatment with the SCD? And then, assuming you get approval in the adult population, is the company planning to continue commercializing the device on its own?
Eric Schlorff: Great question. The adult patient population is much larger than the pediatric population. It's actually 50 times larger. So about 200,000 patients in the United States alone will have acute kidney injury that meets our target. What's interesting about it is that while it's about a $100M opportunity in children, this is about a $4.5B market opportunity in adults. So obviously, a much larger market potential than you see from pediatrics versus adults.
Our commercial strategy currently is that we would take it forward. What we're learning a lot about is the go-to market in pediatrics, which has been really insightful to be able to see how you would size a sales force. What are the real assets and people that you actually need on the ground? We're able to do a lot of that heavy lifting and then be able to test and retest different types of concepts with pediatrics, which we'll be able to leverage. Our current strategy right now is to be able to take it going forward all the way to commercial. But again, we always look at different types of partnerships if they make sense from a strategic and from a shareholder value standpoint.
David Bautz: Yeah, absolutely. So obviously, the focus is on finishing the trial that's ongoing, but the SCD also has additional potential applications. Could you go over what some of those applications could be in the future?
Eric Schlorff: Yeah, so one of those additional applications is a study that we're running called neutralized CRS or cardiorenal syndrome. That one's a very interesting one because it's actually funded by NIH through one of our partners. It's a fully funded study, which really is focused on cardiorenal syndrome and bridging to what they call LVAD, or Left Ventricular Assist Device, or transplant. This is a key study for us because while we have initially focused on the kidneys, this brings us into the cardiac space, which is a very large market potential.
The other aspect that's really important to note is that it's a dosing difference. If you think about the neutralized AKI, it's 24 hours, and it's changed every day like a disposable, and it's up to 10 days. That's in contrast to this neutralized CRS, which is up to six hours, usually four to six, for six days. So now you're looking at a different type of dosing strategy. The reason it's really important is that it allows us to potentially get into more of an outpatient setting, which then bridges you into things like what if you could go out to chronic dialysis, which is a four-hour session, three times a week. What if we were able to put the SCD into that regimen at the dialysis clinics or in the hospital? What if you're able to do that and improve things like quality of life or reduce inflammation? There's a lot to be done. It opens us up to a lot of other applications that we don't have today because they're not occurring in the intensive care unit.
David Bautz: Yeah, definitely. This has been great. Thank you, Eric, for joining me today. I appreciate your time and all the info on SeaStar.
Eric Schlorff: Thank you, David, for allowing me to present your audience with the story of SeaStar, and we're excited about our future.
David Bautz: Sure thing. Thanks to everyone for watching today. And if you want any more information on SeaStar, investors can go to scr.zacks.com. Have a great day.
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