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These excerpts taken from the NXTM 10-K filed Mar 16, 2009. Overview
We are a medical device company that develops, manufactures and
markets innovative products for the treatment of kidney failure,
fluid overload and related blood treatments and procedures. Our
primary product, the NxStage System One, or System One, was
designed to satisfy an unmet clinical need for a system that can
deliver the therapeutic flexibility and clinical benefits
associated with traditional dialysis machines in a smaller,
portable, easy-to-use form that can be used by healthcare
professionals and trained lay users alike in a variety of
settings, including patient homes, as well as more traditional
care settings such as hospitals and dialysis clinics. Given its
design, the System One is particularly well-suited for home
hemodialysis and a range of dialysis therapies including more
frequent, or “daily,” dialysis, which clinical
literature suggests provides patients better clinical outcomes
and improved quality of life. The System One is cleared by the
United States Food and Drug Administration, or FDA, for home
hemodialysis as well as hospital and clinic-based dialysis.
Following our acquisition of Medisystems Corporation and certain
of its affiliated entities, collectively the MDS Entities, we
also sell needles and blood tubing sets primarily to dialysis
clinics for the treatment of End Stage Renal Disease, or ESRD,
which we refer to as the in-center market. We believe our
largest future product market opportunity is for our System One
used in the home hemodialysis market, or home market, for the
treatment of ESRD, which we previously referred to as the
chronic care market.
ESRD, which affects nearly 500,000 people in the United
States, is an irreversible, life-threatening loss of kidney
function that is treated predominantly with dialysis. Dialysis
is a kidney replacement therapy that removes toxins and excess
fluids from the bloodstream and, unless the patient receives a
kidney transplant, is required for the remainder of the
patient’s life. Approximately, 70% of ESRD patients in the
United States rely on life-sustaining dialysis treatment.
Hemodialysis, the most widely prescribed type of dialysis,
typically consists of treatments in a dialysis clinic three
times per week, with each session lasting three to five hours.
Approximately 8% of U.S. ESRD dialysis patients receive
some form of dialysis treatment at home, most of whom treat
themselves with peritoneal dialysis, or PD, although surveys of
physicians and healthcare professionals suggest that a larger
proportion of patients could take responsibility for their own
care. We believe there is an unmet need for a hemodialysis
system that allows more frequent and easily administered therapy
at home and have designed our system to address this and other
kidney replacement markets.
Measuring 15x15x18 inches, the System One is the smallest,
commercially available hemodialysis system. It consists of a
compact, portable and easy-to-use cycler, disposable drop-in
cartridge and high purity premixed fluid. The System One has a
self-contained design and simple user interface making it easy
to operate by a trained patient and his or her trained partner
in any setting prescribed by the patient’s physician.
Unlike traditional dialysis systems, our System One does not
require any special disinfection and its operation does not
require specialized electrical or plumbing infrastructure or
modifications to the home. Patients can bring the System One
home, plug it in to a conventional electrical outlet and operate
it, thereby eliminating what can be expensive plumbing and
electrical household modifications required by other traditional
dialysis systems. Given its compact size and lack of
infrastructure requirements, the System One is portable,
allowing patients freedom to travel. We believe these features
provide patients and their physicians new treatment options for
ESRD.
We market the System One to dialysis clinics for chronic
hemodialysis treatment, providing clinics with improved access
to a developing market, the home hemodialysis market, and the
ability to expand their patient base by adding home-based
patients without adding clinic infrastructure. The clinics in
turn provide the System One to ESRD patients. For each month
that a patient is treated with the System One, we bill the
clinic for the purchase of the related disposable cartridges and
treatment fluids necessary to perform treatment. Typically, our
customers rent the System One equipment on a month to month
basis, although early in 2007, two of our dialysis chain
customers elected to purchase rather than rent System One
equipment. DaVita, our
Table of Contents
largest customer in the home market, purchases rather than rents
a significant percentage of its System One equipment. Clinics
receive reimbursement from Medicare, private insurance and
patients for dialysis treatments. We commenced marketing the
System One for chronic hemodialysis treatment in September 2004.
We are not responsible for, and do not provide, patient
training. We provide training to dialysis clinic staff, who, in
turn, train home hemodialysis patients. Training takes place at
the clinic primarily during the patient’s prescribed, often
daily, two to three hour treatment sessions. Patient training,
which typically takes two to three weeks, includes basic
instruction on ESRD, operation of the System One and insertion
by the patient or their partner of needles into the
patient’s vascular access site. Clinics provide testing to
patients and their partners at the conclusion of training to
verify skills and an understanding of System One operation.
Training sessions are reimbursed by Medicare, and there may be a
co-payment requirement to the patient associated with this
training.
Medicare reimburses the same amount per treatment for home and
in-center hemodialysis treatments, up to three treatments per
week. Payment for more than three treatments per week is
available with appropriate medical justification. The adoption
of our System One for more frequent therapy for ESRD would
likely be slowed if Medicare is reluctant or refuses to pay for
these additional treatments.
We also market the System One in the critical care market to
hospitals for treatment of acute kidney failure and fluid
overload. It is estimated that there are over 200,000 cases of
acute kidney failure in the United States each year. The System
One provides an effective, simple-to-operate alternative to
dialysis systems currently used in the hospital to treat these
acute conditions. We commenced marketing the System One to the
critical care market in February 2003.
In addition to the System One, we also sell a line of
extracorporeal disposable products for use primarily in
in-center dialysis treatments for patients with ESRD. These
products, which we obtained in connection with our acquisition
of the MDS Entities, include hemodialysis blood tubing sets,
A.V. fistula needles and apheresis needles. The MDS Entities
have been selling products to dialysis centers for the treatment
of ESRD since 1981, and have achieved leading positions in the
U.S. market for both hemodialysis blood tubing sets and
AV fistula needles. Our blood tubing set products include
the ReadySet High Performance Blood Tubing set, or ReadySet,,
and the Streamline Airless Blood Tubing set, or Streamline.
ReadySet has been on the market since 1993. Streamline is our
next generation product designed to provide improved patient
outcomes and lower costs to dialysis clinics. Our next
generation Streamline product was introduced to the market in
2007. Our needle products line includes AV fistula needle sets
incorporating safety features, first introduced in 1995,
including PointGuard Anti-Stick Needle Protectors and
MasterGuard technology, and ButtonHole needle sets first
introduced in 2002.
We report the results of our operations in two segments: the
System One segment and the In-Center segment. The business we
acquired in connection with our acquisition of the MDS Entities
constitutes the operations of the In-Center segment. This
acquisition was not completed until October 1, 2007, and
therefore, we did not realize In-Center segment revenues until
the fourth quarter of 2007. We distribute our products in three
markets: the home, critical care and in-center. In the System
One segment we derive our revenues from the sale and rental of
equipment and the sale of disposable products in the home and
critical care markets. We define the home market as the market
devoted to the treatment of ESRD patients in the home and the
critical care market as the market devoted to the treatment of
hospital-based patients with acute kidney failure or fluid
overload. In the In-Center segment, we derive our revenues from
the sale of needles and blood tubing sets primarily used for
in-center dialysis treatments.
For the year ended December 31, 2008, our revenues were
$128.8 million and we incurred a net loss of
$51.2 million. As of December 31, 2008, we had cash
and cash equivalents of $26.6 million, total assets of
$212.1 million, long term liabilities of $52.6 million
and total stockholders’ equity of $122.4 million.
Since inception, we have incurred losses every quarter and at
December 31, 2008, we had an accumulated deficit of
approximately $233.2 million. We expect our operating
expenses to continue to increase as we grow our business but
decrease as a percentage of revenue as we leverage our existing
infrastructure. While we have achieved positive gross margins
for our products, in aggregate, since the fourth quarter of
2007, we cannot
Table of Contents
provide assurance that our gross margins will improve or, if
they do improve, the rate at which they will improve. We cannot
provide assurance that we will achieve profitability, when we
will become profitable, the sustainability of profitability,
should it occur, or the extent to which we will be profitable.
Our ability to become profitable is dependent principally upon
implementing design and process improvements to lower the costs
of manufacturing our products, obtaining better purchasing terms
and prices, accessing lower labor cost markets for the
manufacture of our products, growing revenue, increasing
reliability of our products, improving our field equipment
utilization, achieving efficiencies in manufacturing and supply
chain overhead costs, achieving efficiencies in the distribution
of our products and achieving a sufficient scale of operations.
We have experienced negative operating margins and cash flows
from operations and expect to continue to incur net losses in
the foreseeable future based on our projections. On
March 16, 2009, we amended certain terms under our current
credit and security agreement with GE. We believe, based on
current projections, that we have the required resources to fund
operating requirements beyond 2009 provided that we further
restructure our repayment schedule on our current credit and
security agreement with GE. Future capital requirements will
depend on many factors, including the availability of credit,
rate of revenue growth, continued progress on improving gross
margins, the expansion of selling and marketing and research and
development activities, the timing and extent of expansion into
new geographies or territories, the timing of new product
introductions and enhancement to existing products, the
continuing market acceptance of products, and potential
investments in, or acquisitions, of complementary businesses,
services or technologies. There is no assurance that additional
debt or equity capital will be available to us on favorable
terms, if at all.
We were incorporated in Delaware in 1998 under the name QB
Medical, Inc., and later changed our name to NxStage Medical,
Inc. Our principal executive offices are located at 439 South
Union Street, Fifth Floor, Lawrence, Massachusetts 01843.
Additional financial information regarding our business segments
and geographic data about our assets is contained in
Management’s Discussion and Analysis of Financial Condition
and Results of Operations in Item 7 of Part II, and in
our notes to Consolidated Financial Statements included in
Item 8 of Part II of this Annual Report on
Form 10-K.
Overview We are a medical device company that develops, manufactures and markets innovative products for the treatment of kidney failure, fluid overload and related blood treatments and procedures. Our primary product, the NxStage System One, or System One, was designed to satisfy an unmet clinical need for a system that can deliver the therapeutic flexibility and clinical benefits associated with traditional dialysis machines in a smaller, portable, easy-to-use form that can be used by healthcare professionals and trained lay users alike in a variety of settings, including patient homes, as well as more traditional care settings such as hospitals and dialysis clinics. Given its design, the System One is particularly well-suited for home hemodialysis and a range of dialysis therapies including more frequent, or “daily,” dialysis, which clinical literature suggests provides patients better clinical outcomes and improved quality of life. The System One is cleared by the United States Food and Drug Administration, or FDA, for home hemodialysis as well as hospital and clinic-based dialysis. Following our acquisition of Medisystems Corporation and certain of its affiliated entities, collectively the MDS Entities, we also sell needles and blood tubing sets primarily to dialysis clinics for the treatment of End Stage Renal Disease, or ESRD, which we refer to as the in-center market. We believe our largest future product market opportunity is for our System One used in the home hemodialysis market, or home market, for the treatment of ESRD, which we previously referred to as the chronic care market. ESRD, which affects nearly 500,000 people in the United States, is an irreversible, life-threatening loss of kidney function that is treated predominantly with dialysis. Dialysis is a kidney replacement therapy that removes toxins and excess fluids from the bloodstream and, unless the patient receives a kidney transplant, is required for the remainder of the patient’s life. Approximately, 70% of ESRD patients in the United States rely on life-sustaining dialysis treatment. Hemodialysis, the most widely prescribed type of dialysis, typically consists of treatments in a dialysis clinic three times per week, with each session lasting three to five hours. Approximately 8% of U.S. ESRD dialysis patients receive some form of dialysis treatment at home, most of whom treat themselves with peritoneal dialysis, or PD, although surveys of physicians and healthcare professionals suggest that a larger proportion of patients could take responsibility for their own care. We believe there is an unmet need for a hemodialysis system that allows more frequent and easily administered therapy at home and have designed our system to address this and other kidney replacement markets. Measuring 15x15x18 inches, the System One is the smallest, commercially available hemodialysis system. It consists of a compact, portable and easy-to-use cycler, disposable drop-in cartridge and high purity premixed fluid. The System One has a self-contained design and simple user interface making it easy to operate by a trained patient and his or her trained partner in any setting prescribed by the patient’s physician. Unlike traditional dialysis systems, our System One does not require any special disinfection and its operation does not require specialized electrical or plumbing infrastructure or modifications to the home. Patients can bring the System One home, plug it in to a conventional electrical outlet and operate it, thereby eliminating what can be expensive plumbing and electrical household modifications required by other traditional dialysis systems. Given its compact size and lack of infrastructure requirements, the System One is portable, allowing patients freedom to travel. We believe these features provide patients and their physicians new treatment options for ESRD. We market the System One to dialysis clinics for chronic hemodialysis treatment, providing clinics with improved access to a developing market, the home hemodialysis market, and the ability to expand their patient base by adding home-based patients without adding clinic infrastructure. The clinics in turn provide the System One to ESRD patients. For each month that a patient is treated with the System One, we bill the clinic for the purchase of the related disposable cartridges and treatment fluids necessary to perform treatment. Typically, our customers rent the System One equipment on a month to month basis, although early in 2007, two of our dialysis chain customers elected to purchase rather than rent System One equipment. DaVita, our
Table of Contentslargest customer in the home market, purchases rather than rents a significant percentage of its System One equipment. Clinics receive reimbursement from Medicare, private insurance and patients for dialysis treatments. We commenced marketing the System One for chronic hemodialysis treatment in September 2004. We are not responsible for, and do not provide, patient training. We provide training to dialysis clinic staff, who, in turn, train home hemodialysis patients. Training takes place at the clinic primarily during the patient’s prescribed, often daily, two to three hour treatment sessions. Patient training, which typically takes two to three weeks, includes basic instruction on ESRD, operation of the System One and insertion by the patient or their partner of needles into the patient’s vascular access site. Clinics provide testing to patients and their partners at the conclusion of training to verify skills and an understanding of System One operation. Training sessions are reimbursed by Medicare, and there may be a co-payment requirement to the patient associated with this training. Medicare reimburses the same amount per treatment for home and in-center hemodialysis treatments, up to three treatments per week. Payment for more than three treatments per week is available with appropriate medical justification. The adoption of our System One for more frequent therapy for ESRD would likely be slowed if Medicare is reluctant or refuses to pay for these additional treatments. We also market the System One in the critical care market to hospitals for treatment of acute kidney failure and fluid overload. It is estimated that there are over 200,000 cases of acute kidney failure in the United States each year. The System One provides an effective, simple-to-operate alternative to dialysis systems currently used in the hospital to treat these acute conditions. We commenced marketing the System One to the critical care market in February 2003. In addition to the System One, we also sell a line of extracorporeal disposable products for use primarily in in-center dialysis treatments for patients with ESRD. These products, which we obtained in connection with our acquisition of the MDS Entities, include hemodialysis blood tubing sets, A.V. fistula needles and apheresis needles. The MDS Entities have been selling products to dialysis centers for the treatment of ESRD since 1981, and have achieved leading positions in the U.S. market for both hemodialysis blood tubing sets and AV fistula needles. Our blood tubing set products include the ReadySet High Performance Blood Tubing set, or ReadySet,, and the Streamline Airless Blood Tubing set, or Streamline. ReadySet has been on the market since 1993. Streamline is our next generation product designed to provide improved patient outcomes and lower costs to dialysis clinics. Our next generation Streamline product was introduced to the market in 2007. Our needle products line includes AV fistula needle sets incorporating safety features, first introduced in 1995, including PointGuard Anti-Stick Needle Protectors and MasterGuard technology, and ButtonHole needle sets first introduced in 2002. We report the results of our operations in two segments: the System One segment and the In-Center segment. The business we acquired in connection with our acquisition of the MDS Entities constitutes the operations of the In-Center segment. This acquisition was not completed until October 1, 2007, and therefore, we did not realize In-Center segment revenues until the fourth quarter of 2007. We distribute our products in three markets: the home, critical care and in-center. In the System One segment we derive our revenues from the sale and rental of equipment and the sale of disposable products in the home and critical care markets. We define the home market as the market devoted to the treatment of ESRD patients in the home and the critical care market as the market devoted to the treatment of hospital-based patients with acute kidney failure or fluid overload. In the In-Center segment, we derive our revenues from the sale of needles and blood tubing sets primarily used for in-center dialysis treatments. For the year ended December 31, 2008, our revenues were $128.8 million and we incurred a net loss of $51.2 million. As of December 31, 2008, we had cash and cash equivalents of $26.6 million, total assets of $212.1 million, long term liabilities of $52.6 million and total stockholders’ equity of $122.4 million. Since inception, we have incurred losses every quarter and at December 31, 2008, we had an accumulated deficit of approximately $233.2 million. We expect our operating expenses to continue to increase as we grow our business but decrease as a percentage of revenue as we leverage our existing infrastructure. While we have achieved positive gross margins for our products, in aggregate, since the fourth quarter of 2007, we cannot
Table of Contentsprovide assurance that our gross margins will improve or, if they do improve, the rate at which they will improve. We cannot provide assurance that we will achieve profitability, when we will become profitable, the sustainability of profitability, should it occur, or the extent to which we will be profitable. Our ability to become profitable is dependent principally upon implementing design and process improvements to lower the costs of manufacturing our products, obtaining better purchasing terms and prices, accessing lower labor cost markets for the manufacture of our products, growing revenue, increasing reliability of our products, improving our field equipment utilization, achieving efficiencies in manufacturing and supply chain overhead costs, achieving efficiencies in the distribution of our products and achieving a sufficient scale of operations. We have experienced negative operating margins and cash flows from operations and expect to continue to incur net losses in the foreseeable future based on our projections. On March 16, 2009, we amended certain terms under our current credit and security agreement with GE. We believe, based on current projections, that we have the required resources to fund operating requirements beyond 2009 provided that we further restructure our repayment schedule on our current credit and security agreement with GE. Future capital requirements will depend on many factors, including the availability of credit, rate of revenue growth, continued progress on improving gross margins, the expansion of selling and marketing and research and development activities, the timing and extent of expansion into new geographies or territories, the timing of new product introductions and enhancement to existing products, the continuing market acceptance of products, and potential investments in, or acquisitions, of complementary businesses, services or technologies. There is no assurance that additional debt or equity capital will be available to us on favorable terms, if at all. We were incorporated in Delaware in 1998 under the name QB Medical, Inc., and later changed our name to NxStage Medical, Inc. Our principal executive offices are located at 439 South Union Street, Fifth Floor, Lawrence, Massachusetts 01843. Additional financial information regarding our business segments and geographic data about our assets is contained in Management’s Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of Part II, and in our notes to Consolidated Financial Statements included in Item 8 of Part II of this Annual Report on Form 10-K. Overview
We are a medical device company that develops, manufactures and
markets innovative products for the treatment of kidney failure,
fluid overload and related blood treatments and procedures. Our
primary product, the System One, was designed to satisfy an
unmet clinical need for a system that can deliver the
therapeutic flexibility and clinical benefits associated with
traditional dialysis machines in a smaller, portable,
easy-to-use form that can be used by healthcare professionals
and trained lay users alike in a variety of settings, including
patient homes, as well as more traditional care settings such as
hospitals and dialysis clinics. Given its design, the System One
is particularly well-suited for home hemodialysis and more
frequent, or “daily,” dialysis, which clinical
literature suggests provides patients better clinical outcomes
and improved quality of life. The System One is cleared by the
United States Food and Drug Administration, or FDA, for home
hemodialysis as well as hospital and clinic-based dialysis.
Following our acquisition of Medisystems Corporation and certain
of its affiliated entities, we also sell needles and blood
tubing sets primarily to dialysis clinics for the treatment of
ESRD, which we refer to as the in-center market. We believe our
largest future product market opportunity is for our System One
used in the home hemodialysis market, or home market, for the
treatment of ESRD, which we previously referred to as the
chronic market.
We report the results of our operations in two segments: the
System One segment and the In-Center segment. The business we
acquired in connection with our Medisystems Acquisition
constitutes the operations of the In-Center segment. This
acquisition was not completed until October 1, 2007, and
therefore, we did not realize In-Center segment revenues until
the fourth quarter of 2007.
We distribute our products in three markets: the home, critical
care and in-center. In the System One segment we derive our
revenues from the sale and rental of equipment and the sale of
disposable products in the home and critical care markets. We
define the home market as the market devoted to the treatment of
ESRD patients in the home and the critical care market as the
market devoted to the treatment of hospital-based patients with
acute kidney failure or fluid overload. In the In-Center
segment, we derive our revenues from the sale of needles and
blood tubing sets primarily used for in-center dialysis
treatments.
Within the System One segment, we offer a similar technology
platform of the System One for the home and critical care
markets with different features. The FDA has cleared the System
One for hemodialysis, hemofiltration and ultrafiltration. We
offer primarily needles and blood tubing sets in the In-Center
segment. Our products are predominantly used by our customers to
treat patients suffering from ESRD or acute kidney failure and
we have marketing and sales efforts dedicated to each market,
although nearly all sales in the In-Center segment are made
through distributors.
We received clearance from the FDA in July 2003 to market the
System One for treatment of renal failure and fluid overload
using hemodialysis as well as hemofiltration and
ultrafiltration. In the first quarter of 2003, we initiated
sales of the System One in the critical care market to hospitals
and medical centers in the
Table of Contents
United States. In late 2003, we initiated sales of the System
One for the treatment of patients with ESRD. At the time of
these early marketing efforts, our System One was cleared by the
FDA under a general indication statement, allowing physicians to
prescribe the System One for hemofiltration, hemodialysis
and/or
ultrafiltration at the location, time and frequency they
considered in the best interests of their patients. Our original
indication did not include a specific home clearance, and we
were not able to promote the System One for home use at that
time. The FDA cleared the System One in June 2005 for
hemodialysis in the home. We are presently pursuing a nocturnal
indication for the System One under an FDA-approved
investigational device exemption, or IDE, study started in the
first quarter of 2008.
Our business expanded significantly in late 2007 in connection
with the acquisition of Medisystems Corporation and certain
affiliated entities, collectively the MDS Entities. With that
acquisition, we acquired our needle and blood tubing set product
lines for use predominantly in hemodialysis performed in-center
as well as apheresis. The In-Center segment is significantly
more mature than our System One segment. Our MDS Entities have
been selling products to dialysis centers for the treatment of
ESRD since 1981, and they have achieved leading positions in the
United States market for both blood tubing sets and needles. Our
blood tubing set products include the ReadySet High Performance
Blood Tubing set and the Streamline Airless Blood Tubing sets.
ReadySet has been on the market since 1993. Streamline is our
next generation blood tubing product designed to provide
improved patient outcomes and lower costs to dialysis clinics.
This product is early in its market launch and adoption has been
limited to date. Our needle product line includes AV fistula
needle sets incorporating safety features including PointGuard
Anti-Stick Needle Protectors and MasterGuard technology and
ButtonHole needle sets. Our AV Fistula Needle Sets with
MasterGuard Anti-Stick Needle Protector were introduced in 1995
and our ButtonHole needle sets were introduced in 2002.
Our customers receive reimbursement for the dialysis treatments
provided with our products typically from Medicare, and to a
lesser degree from private insurers. Medicare provides
comprehensive and well-established reimbursement in the United
States for ESRD. Reimbursement claims for dialysis therapy using
the System One or our blood tubing sets and needles are
typically submitted by the dialysis clinic or hospital to
Medicare and other third-party payors using established billing
codes for dialysis treatment or, in the critical care setting,
based on the patient’s primary diagnosis. Medicare
presently limits reimbursement for chronic hemodialysis to three
treatments per week, absent a finding of medical justification.
Because most of our System One home dialysis patients are
treated more than three times a week, expanding Medicare
reimbursement over time to cover more frequent therapy may be
critical to the market penetration of the System One in the home
market and to our revenue growth in the future.
The manufacture of our products is accomplished through a
complementary combination of outsourcing and internal
production. Specifically, we manufacture our System One Cycler
and some PureFlow SL hardware, and assemble, package and label
our PureFlow SL disposables within our Fresnillo, Mexico
facility. We manufacture components used in our System One
cartridge assembly, and assemble the System One disposable
cartridge and some blood tubing sets, Medics and transducer
protectors in Tijuana, Mexico. We manufacture our dialyzers in
Rosdorf, Germany. We outsource the manufacture of premixed
dialysate, needles, some blood tubing sets and some PureFlow SL
hardware.
In our System One segment, we market the System One in the home
and critical care markets through a direct sales force in the
United States primarily to dialysis clinics and hospitals. In
our In-Center segment, we market our blood tubing and needle
products primarily through distributors, although we also have a
small dedicated sales force for that business. At present, we
believe we have an appropriately sized sales force, although
this may change as market conditions warrant.
Since inception, we have incurred losses every quarter and at
December 31, 2008, we had an accumulated deficit of
approximately $233.2 million. We expect our operating
expenses to continue to increase as we grow our business. While
we have achieved positive gross margins for our products, in
aggregate, since the fourth quarter of 2007, we cannot provide
assurance that our gross margins will improve or, if they do
improve, the rate at which they will improve. We cannot provide
assurance that we will achieve profitability, when we will
become profitable, the sustainability of profitability, should
it occur, or the extent to which we will be profitable. Our
ability to become profitable is dependent principally upon
implementing design and process
Table of Contents
improvements to lower the costs of manufacturing our products,
obtaining better purchasing terms and prices, accessing lower
labor cost markets for the manufacture of our products, growing
revenue, increasing reliability of our products, improving our
field equipment utilization, achieving efficiencies in
manufacturing and supply chain overhead costs, achieving
efficiencies in the distribution of our products and achieving a
sufficient scale of operations.
We have experienced negative operating margins and cash flows
from operations and expect to continue to incur net losses in
the foreseeable future based on our projections. On
March 16, 2009, we amended certain terms under our current
credit and security with GE. We believe, based on current
projections, that we have the required resources to fund
operating requirements beyond 2009 provided that we further
restructure our repayment schedule on our current credit and
security agreement with GE. Future capital requirements will
depend on many factors, including the availability of credit,
rate of revenue growth, continued progress on improving gross
margins, the expansion of selling and marketing and research and
development activities, the timing and extent of expansion into
new geographies or territories, the timing of new product
introductions and enhancement to existing products, the
continuing market acceptance of products, and potential
investments in, or acquisitions, of complementary businesses,
services or technologies. There is no assurance that additional
debt or equity capital will be available to us on favorable
terms, if at all.
Overview We are a medical device company that develops, manufactures and markets innovative products for the treatment of kidney failure, fluid overload and related blood treatments and procedures. Our primary product, the System One, was designed to satisfy an unmet clinical need for a system that can deliver the therapeutic flexibility and clinical benefits associated with traditional dialysis machines in a smaller, portable, easy-to-use form that can be used by healthcare professionals and trained lay users alike in a variety of settings, including patient homes, as well as more traditional care settings such as hospitals and dialysis clinics. Given its design, the System One is particularly well-suited for home hemodialysis and more frequent, or “daily,” dialysis, which clinical literature suggests provides patients better clinical outcomes and improved quality of life. The System One is cleared by the United States Food and Drug Administration, or FDA, for home hemodialysis as well as hospital and clinic-based dialysis. Following our acquisition of Medisystems Corporation and certain of its affiliated entities, we also sell needles and blood tubing sets primarily to dialysis clinics for the treatment of ESRD, which we refer to as the in-center market. We believe our largest future product market opportunity is for our System One used in the home hemodialysis market, or home market, for the treatment of ESRD, which we previously referred to as the chronic market. We report the results of our operations in two segments: the System One segment and the In-Center segment. The business we acquired in connection with our Medisystems Acquisition constitutes the operations of the In-Center segment. This acquisition was not completed until October 1, 2007, and therefore, we did not realize In-Center segment revenues until the fourth quarter of 2007. We distribute our products in three markets: the home, critical care and in-center. In the System One segment we derive our revenues from the sale and rental of equipment and the sale of disposable products in the home and critical care markets. We define the home market as the market devoted to the treatment of ESRD patients in the home and the critical care market as the market devoted to the treatment of hospital-based patients with acute kidney failure or fluid overload. In the In-Center segment, we derive our revenues from the sale of needles and blood tubing sets primarily used for in-center dialysis treatments. Within the System One segment, we offer a similar technology platform of the System One for the home and critical care markets with different features. The FDA has cleared the System One for hemodialysis, hemofiltration and ultrafiltration. We offer primarily needles and blood tubing sets in the In-Center segment. Our products are predominantly used by our customers to treat patients suffering from ESRD or acute kidney failure and we have marketing and sales efforts dedicated to each market, although nearly all sales in the In-Center segment are made through distributors. We received clearance from the FDA in July 2003 to market the System One for treatment of renal failure and fluid overload using hemodialysis as well as hemofiltration and ultrafiltration. In the first quarter of 2003, we initiated sales of the System One in the critical care market to hospitals and medical centers in the
Table of ContentsUnited States. In late 2003, we initiated sales of the System One for the treatment of patients with ESRD. At the time of these early marketing efforts, our System One was cleared by the FDA under a general indication statement, allowing physicians to prescribe the System One for hemofiltration, hemodialysis and/or ultrafiltration at the location, time and frequency they considered in the best interests of their patients. Our original indication did not include a specific home clearance, and we were not able to promote the System One for home use at that time. The FDA cleared the System One in June 2005 for hemodialysis in the home. We are presently pursuing a nocturnal indication for the System One under an FDA-approved investigational device exemption, or IDE, study started in the first quarter of 2008. Our business expanded significantly in late 2007 in connection with the acquisition of Medisystems Corporation and certain affiliated entities, collectively the MDS Entities. With that acquisition, we acquired our needle and blood tubing set product lines for use predominantly in hemodialysis performed in-center as well as apheresis. The In-Center segment is significantly more mature than our System One segment. Our MDS Entities have been selling products to dialysis centers for the treatment of ESRD since 1981, and they have achieved leading positions in the United States market for both blood tubing sets and needles. Our blood tubing set products include the ReadySet High Performance Blood Tubing set and the Streamline Airless Blood Tubing sets. ReadySet has been on the market since 1993. Streamline is our next generation blood tubing product designed to provide improved patient outcomes and lower costs to dialysis clinics. This product is early in its market launch and adoption has been limited to date. Our needle product line includes AV fistula needle sets incorporating safety features including PointGuard Anti-Stick Needle Protectors and MasterGuard technology and ButtonHole needle sets. Our AV Fistula Needle Sets with MasterGuard Anti-Stick Needle Protector were introduced in 1995 and our ButtonHole needle sets were introduced in 2002. Our customers receive reimbursement for the dialysis treatments provided with our products typically from Medicare, and to a lesser degree from private insurers. Medicare provides comprehensive and well-established reimbursement in the United States for ESRD. Reimbursement claims for dialysis therapy using the System One or our blood tubing sets and needles are typically submitted by the dialysis clinic or hospital to Medicare and other third-party payors using established billing codes for dialysis treatment or, in the critical care setting, based on the patient’s primary diagnosis. Medicare presently limits reimbursement for chronic hemodialysis to three treatments per week, absent a finding of medical justification. Because most of our System One home dialysis patients are treated more than three times a week, expanding Medicare reimbursement over time to cover more frequent therapy may be critical to the market penetration of the System One in the home market and to our revenue growth in the future. The manufacture of our products is accomplished through a complementary combination of outsourcing and internal production. Specifically, we manufacture our System One Cycler and some PureFlow SL hardware, and assemble, package and label our PureFlow SL disposables within our Fresnillo, Mexico facility. We manufacture components used in our System One cartridge assembly, and assemble the System One disposable cartridge and some blood tubing sets, Medics and transducer protectors in Tijuana, Mexico. We manufacture our dialyzers in Rosdorf, Germany. We outsource the manufacture of premixed dialysate, needles, some blood tubing sets and some PureFlow SL hardware. In our System One segment, we market the System One in the home and critical care markets through a direct sales force in the United States primarily to dialysis clinics and hospitals. In our In-Center segment, we market our blood tubing and needle products primarily through distributors, although we also have a small dedicated sales force for that business. At present, we believe we have an appropriately sized sales force, although this may change as market conditions warrant. Since inception, we have incurred losses every quarter and at December 31, 2008, we had an accumulated deficit of approximately $233.2 million. We expect our operating expenses to continue to increase as we grow our business. While we have achieved positive gross margins for our products, in aggregate, since the fourth quarter of 2007, we cannot provide assurance that our gross margins will improve or, if they do improve, the rate at which they will improve. We cannot provide assurance that we will achieve profitability, when we will become profitable, the sustainability of profitability, should it occur, or the extent to which we will be profitable. Our ability to become profitable is dependent principally upon implementing design and process
Table of Contentsimprovements to lower the costs of manufacturing our products, obtaining better purchasing terms and prices, accessing lower labor cost markets for the manufacture of our products, growing revenue, increasing reliability of our products, improving our field equipment utilization, achieving efficiencies in manufacturing and supply chain overhead costs, achieving efficiencies in the distribution of our products and achieving a sufficient scale of operations. We have experienced negative operating margins and cash flows from operations and expect to continue to incur net losses in the foreseeable future based on our projections. On March 16, 2009, we amended certain terms under our current credit and security with GE. We believe, based on current projections, that we have the required resources to fund operating requirements beyond 2009 provided that we further restructure our repayment schedule on our current credit and security agreement with GE. Future capital requirements will depend on many factors, including the availability of credit, rate of revenue growth, continued progress on improving gross margins, the expansion of selling and marketing and research and development activities, the timing and extent of expansion into new geographies or territories, the timing of new product introductions and enhancement to existing products, the continuing market acceptance of products, and potential investments in, or acquisitions, of complementary businesses, services or technologies. There is no assurance that additional debt or equity capital will be available to us on favorable terms, if at all. These excerpts taken from the NXTM 10-K filed Mar 7, 2008. Overview
We are a medical device company that develops, manufactures and
markets innovative products for the treatment of end-stage renal
disease, or ESRD, and acute kidney failure. Our primary product,
the NxStage System One TM , is a small, portable, easy-to-use
hemodialysis system designed to provide physicians and patients
improved flexibility in how hemodialysis therapy is prescribed
and delivered. Given its design, the System One is particularly
well-suited for home hemodialysis and more frequent, or
“daily,” dialysis, which clinical literature suggests
provides patients better clinical outcomes and improved quality
of life. The System One is specifically cleared by the United
States Food and Drug Administration, or FDA, for home
hemodialysis as well as hospital and clinic-based dialysis.
Following our recent acquisition of Medisystems Corporation and
certain of its affiliated entities, we also sell needles and
blood tubing sets primarily to dialysis clinics for the
treatment of ESRD, which we refer to as the in-center market. We
believe our largest future product market opportunity is for our
System One used in the home hemodialysis market, or home market,
for the treatment of ESRD, which we previously referred to as
the chronic market.
ESRD, which affects nearly 500,000 people in the United
States, is an irreversible, life-threatening loss of kidney
function that is treated predominantly with dialysis. Dialysis
is a kidney replacement therapy that removes toxins and excess
fluids from the bloodstream and, unless the patient receives a
kidney transplant, is required for the remainder of the
patient’s life. Approximately, 70% of ESRD patients in the
United States rely on life-sustaining dialysis treatment.
Hemodialysis, the most widely prescribed type of dialysis,
typically consists of treatments in a dialysis clinic three
times per week, with each session lasting three to five hours.
Approximately 8% of U.S. ESRD dialysis patients receive
some form of dialysis treatment at home, most of whom treat
themselves with peritoneal dialysis, or PD, although surveys of
physicians and healthcare professionals suggest that a larger
proportion of patients could take responsibility for their own
care. We believe there is an unmet need for a hemodialysis
system that allows more frequent and easily administered therapy
at home and have designed our system to address this and other
kidney replacement markets.
Measuring 15x15x18 inches, the System One is the smallest,
commercially available hemodialysis system. It consists of a
compact, portable and easy-to-use cycler, disposable drop-in
cartridge and high purity premixed fluid. The System One has a
self-contained design and simple user interface making it easy
to operate by a trained patient and his or her trained partner
in any setting prescribed by the patient’s physician.
Unlike traditional dialysis systems, our System One does not
require any special disinfection and its operation does not
require specialized electrical or plumbing infrastructure or
modifications to the home. Patients can bring the System One
home, plug it in to a conventional electrical outlet and operate
it, thereby eliminating what can be expensive plumbing and
electrical household modifications required by other traditional
dialysis systems. Given its compact size and lack of
infrastructure requirements, the System One is portable,
allowing patients freedom to travel. We believe these features
provide patients and their physicians new treatment options for
ESRD.
We market the System One to dialysis clinics for chronic
hemodialysis treatment, providing clinics with improved access
to a developing market, the home hemodialysis market, and the
ability to expand their patient base by adding home-based
patients without adding clinic infrastructure. The clinics in
turn provide the System One to ESRD patients. For each month
that a patient is treated with the System One, we bill the
clinic for the purchase of the related disposable cartridges and
treatment fluids necessary to perform treatment. Typically, our
customers rent the System One equipment on a month to month
basis, although early in 2007, two of our dialysis chain
customers elected to purchase rather than rent System One
equipment. DaVita, our largest customer in the home market,
purchases rather than rents a significant percentage of its
System One equipment. Clinics receive reimbursement from
Medicare, private insurance and patients for dialysis
treatments. We commenced marketing the System One for chronic
hemodialysis treatment in September 2004. As
Table of Contents
of December 31, 2007, 2,223 ESRD patients were prescribed
to receive therapy using the System One at 334 different
dialysis clinics. Substantially all of these patients are
treated at home or are in training to treat themselves at home;
the remaining patients are doing therapy in a clinic.
We are not responsible for, and do not provide, patient
training. We provide training to dialysis clinic staff, who, in
turn, train home hemodialysis patients. Training takes place at
the clinic primarily during the patient’s prescribed, often
daily, two to three hour treatment sessions. Patient training,
which typically takes two to three weeks, includes basic
instruction on ESRD, operation of the System One and insertion
by the patient or their partner of needles into the
patient’s vascular access site. Clinics provide testing to
patients and their partners at the conclusion of training to
verify skills and an understanding of System One operation.
Training sessions are reimbursed by Medicare, and there may be a
co-payment requirement to the patient associated with this
training.
Medicare reimburses the same amount per treatment for home and
in-center hemodialysis treatments, up to three treatments per
week. Payment for more than three treatments per week is
available with appropriate medical justification. The adoption
of our System One for more frequent therapy for ESRD would
likely be slowed if Medicare is reluctant or refuses to pay for
these additional treatments.
We also market the System One in the critical care market to
hospitals for treatment of acute kidney failure and fluid
overload. It is estimated that there are over 200,000 cases of
acute kidney failure in the United States each year. The System
One provides an effective, simple-to-operate alternative to
dialysis systems currently used in the hospital to treat these
acute conditions. We commenced marketing the System One to the
critical care market in February 2003. As of December 31,
2007, 115 hospitals were using the System One to deliver acute
kidney failure and fluid overload therapy.
In addition to the System One, we also sell a line of
extracorporeal disposable products for use primarily in
in-center dialysis treatments for patients with ESRD. These
products, which we obtained in connection with our recently
completed acquisition of Medisystems Corporation, or
Medisystems, and certain of its affiliated entities, include
hemodialysis blood tubing sets, A.V. fistula needles and
apheresis needles. Medisystems has been selling products to
dialysis centers for the treatment of ESRD since 1981, and it
has achieved leading positions in the U.S. market for both
hemodialysis blood tubing sets and A.V. fistula needles. Our
blood tubing set products include the ReadySet High Performance
Blood Tubing set, and the Streamline. ReadySet has been on the
market since 1993. Streamline is our next generation product
designed to provide improved patient outcomes and lower costs to
dialysis clinics. Our next generation Streamline product was
introduced to the market in 2007 and adoption has been limited
to date. Our needle products line includes AV fistula needle
sets incorporating safety features, first introduced in 1995,
including PointGuard Anti-Stick Needle Protectors and
MasterGuard technology, and ButtonHole needle sets first
introduced in 2002.
For the year ended December 31, 2007, our revenues were
$60.0 million and we incurred a net loss of
$58.4 million. As of December 31, 2007, we had total
assets of $210.4 million, long term liabilities of
$46.1 million and total stockholders’ equity of
$129.7 million.
Since inception, we have incurred losses every quarter and at
December 31, 2007, we had an accumulated deficit of
approximately $182.0 million. We expect to incur increasing
operating expenses as we continue to grow our business.
Additionally, although we have recently achieved positive gross
margins for our products, in aggregate, as of December 31,
2007 we can not provide assurance that our gross margins will
continue to improve or, if they do improve, the rate at which
they will improve. We cannot provide assurance that we will
achieve profitability, when we will become profitable, the
sustainability of profitability should it occur, or the extent
to which we will be profitable. Our ability to become profitable
is dependent principally upon implementing design and process
improvements to lower our costs of manufacturing our products,
accessing lower labor cost markets for the manufacture of our
products, increasing our reliability, improving our field
equipment utilization, achieving efficiencies in manufacturing
and supply chain overhead costs, achieving efficient
distribution of our products, achieving a sufficient scale of
operations, and obtaining better purchasing terms, and prices.
Table of Contents
We will need to sell additional equity or issue debt securities
to fund our capital requirements beyond 2008. Any sale of
additional equity or issuance of debt securities will likely
result in dilution to our stockholders, and we cannot be certain
that additional public or private financing will be available in
amounts or on terms acceptable to us, or at all. If we are
unable to obtain this additional financing when needed, we may
be required to delay, reduce the scope of, or eliminate one or
more aspects of our business development activities, which would
likely harm our business. Additionally, beginning in February
2009, we will need to begin paying down the principal of the
debt we borrowed from Merrill Lynch. To the extent we are unable
to obtain additional financing, this obligation to repay debt
will only further increase the need to further delay, reduce the
scope of, or eliminate one or more aspects of our business,
which would likely harm our business.
We were incorporated in Delaware in 1998 under the name QB
Medical, Inc., and later changed our name to NxStage Medical,
Inc. Our principal executive offices are located at 439 South
Union Street, Fifth Floor, Lawrence, Massachusetts 01843.
Overview We are a medical device company that develops, manufactures and markets innovative products for the treatment of end-stage renal disease, or ESRD, and acute kidney failure. Our primary product, the NxStage System One TM , is a small, portable, easy-to-use hemodialysis system designed to provide physicians and patients improved flexibility in how hemodialysis therapy is prescribed and delivered. Given its design, the System One is particularly well-suited for home hemodialysis and more frequent, or “daily,” dialysis, which clinical literature suggests provides patients better clinical outcomes and improved quality of life. The System One is specifically cleared by the United States Food and Drug Administration, or FDA, for home hemodialysis as well as hospital and clinic-based dialysis. Following our recent acquisition of Medisystems Corporation and certain of its affiliated entities, we also sell needles and blood tubing sets primarily to dialysis clinics for the treatment of ESRD, which we refer to as the in-center market. We believe our largest future product market opportunity is for our System One used in the home hemodialysis market, or home market, for the treatment of ESRD, which we previously referred to as the chronic market. ESRD, which affects nearly 500,000 people in the United States, is an irreversible, life-threatening loss of kidney function that is treated predominantly with dialysis. Dialysis is a kidney replacement therapy that removes toxins and excess fluids from the bloodstream and, unless the patient receives a kidney transplant, is required for the remainder of the patient’s life. Approximately, 70% of ESRD patients in the United States rely on life-sustaining dialysis treatment. Hemodialysis, the most widely prescribed type of dialysis, typically consists of treatments in a dialysis clinic three times per week, with each session lasting three to five hours. Approximately 8% of U.S. ESRD dialysis patients receive some form of dialysis treatment at home, most of whom treat themselves with peritoneal dialysis, or PD, although surveys of physicians and healthcare professionals suggest that a larger proportion of patients could take responsibility for their own care. We believe there is an unmet need for a hemodialysis system that allows more frequent and easily administered therapy at home and have designed our system to address this and other kidney replacement markets. Measuring 15x15x18 inches, the System One is the smallest, commercially available hemodialysis system. It consists of a compact, portable and easy-to-use cycler, disposable drop-in cartridge and high purity premixed fluid. The System One has a self-contained design and simple user interface making it easy to operate by a trained patient and his or her trained partner in any setting prescribed by the patient’s physician. Unlike traditional dialysis systems, our System One does not require any special disinfection and its operation does not require specialized electrical or plumbing infrastructure or modifications to the home. Patients can bring the System One home, plug it in to a conventional electrical outlet and operate it, thereby eliminating what can be expensive plumbing and electrical household modifications required by other traditional dialysis systems. Given its compact size and lack of infrastructure requirements, the System One is portable, allowing patients freedom to travel. We believe these features provide patients and their physicians new treatment options for ESRD. We market the System One to dialysis clinics for chronic hemodialysis treatment, providing clinics with improved access to a developing market, the home hemodialysis market, and the ability to expand their patient base by adding home-based patients without adding clinic infrastructure. The clinics in turn provide the System One to ESRD patients. For each month that a patient is treated with the System One, we bill the clinic for the purchase of the related disposable cartridges and treatment fluids necessary to perform treatment. Typically, our customers rent the System One equipment on a month to month basis, although early in 2007, two of our dialysis chain customers elected to purchase rather than rent System One equipment. DaVita, our largest customer in the home market, purchases rather than rents a significant percentage of its System One equipment. Clinics receive reimbursement from Medicare, private insurance and patients for dialysis treatments. We commenced marketing the System One for chronic hemodialysis treatment in September 2004. As
Table of Contentsof December 31, 2007, 2,223 ESRD patients were prescribed to receive therapy using the System One at 334 different dialysis clinics. Substantially all of these patients are treated at home or are in training to treat themselves at home; the remaining patients are doing therapy in a clinic. We are not responsible for, and do not provide, patient training. We provide training to dialysis clinic staff, who, in turn, train home hemodialysis patients. Training takes place at the clinic primarily during the patient’s prescribed, often daily, two to three hour treatment sessions. Patient training, which typically takes two to three weeks, includes basic instruction on ESRD, operation of the System One and insertion by the patient or their partner of needles into the patient’s vascular access site. Clinics provide testing to patients and their partners at the conclusion of training to verify skills and an understanding of System One operation. Training sessions are reimbursed by Medicare, and there may be a co-payment requirement to the patient associated with this training. Medicare reimburses the same amount per treatment for home and in-center hemodialysis treatments, up to three treatments per week. Payment for more than three treatments per week is available with appropriate medical justification. The adoption of our System One for more frequent therapy for ESRD would likely be slowed if Medicare is reluctant or refuses to pay for these additional treatments. We also market the System One in the critical care market to hospitals for treatment of acute kidney failure and fluid overload. It is estimated that there are over 200,000 cases of acute kidney failure in the United States each year. The System One provides an effective, simple-to-operate alternative to dialysis systems currently used in the hospital to treat these acute conditions. We commenced marketing the System One to the critical care market in February 2003. As of December 31, 2007, 115 hospitals were using the System One to deliver acute kidney failure and fluid overload therapy. In addition to the System One, we also sell a line of extracorporeal disposable products for use primarily in in-center dialysis treatments for patients with ESRD. These products, which we obtained in connection with our recently completed acquisition of Medisystems Corporation, or Medisystems, and certain of its affiliated entities, include hemodialysis blood tubing sets, A.V. fistula needles and apheresis needles. Medisystems has been selling products to dialysis centers for the treatment of ESRD since 1981, and it has achieved leading positions in the U.S. market for both hemodialysis blood tubing sets and A.V. fistula needles. Our blood tubing set products include the ReadySet High Performance Blood Tubing set, and the Streamline. ReadySet has been on the market since 1993. Streamline is our next generation product designed to provide improved patient outcomes and lower costs to dialysis clinics. Our next generation Streamline product was introduced to the market in 2007 and adoption has been limited to date. Our needle products line includes AV fistula needle sets incorporating safety features, first introduced in 1995, including PointGuard Anti-Stick Needle Protectors and MasterGuard technology, and ButtonHole needle sets first introduced in 2002. For the year ended December 31, 2007, our revenues were $60.0 million and we incurred a net loss of $58.4 million. As of December 31, 2007, we had total assets of $210.4 million, long term liabilities of $46.1 million and total stockholders’ equity of $129.7 million. Since inception, we have incurred losses every quarter and at December 31, 2007, we had an accumulated deficit of approximately $182.0 million. We expect to incur increasing operating expenses as we continue to grow our business. Additionally, although we have recently achieved positive gross margins for our products, in aggregate, as of December 31, 2007 we can not provide assurance that our gross margins will continue to improve or, if they do improve, the rate at which they will improve. We cannot provide assurance that we will achieve profitability, when we will become profitable, the sustainability of profitability should it occur, or the extent to which we will be profitable. Our ability to become profitable is dependent principally upon implementing design and process improvements to lower our costs of manufacturing our products, accessing lower labor cost markets for the manufacture of our products, increasing our reliability, improving our field equipment utilization, achieving efficiencies in manufacturing and supply chain overhead costs, achieving efficient distribution of our products, achieving a sufficient scale of operations, and obtaining better purchasing terms, and prices.
Table of ContentsWe will need to sell additional equity or issue debt securities to fund our capital requirements beyond 2008. Any sale of additional equity or issuance of debt securities will likely result in dilution to our stockholders, and we cannot be certain that additional public or private financing will be available in amounts or on terms acceptable to us, or at all. If we are unable to obtain this additional financing when needed, we may be required to delay, reduce the scope of, or eliminate one or more aspects of our business development activities, which would likely harm our business. Additionally, beginning in February 2009, we will need to begin paying down the principal of the debt we borrowed from Merrill Lynch. To the extent we are unable to obtain additional financing, this obligation to repay debt will only further increase the need to further delay, reduce the scope of, or eliminate one or more aspects of our business, which would likely harm our business. We were incorporated in Delaware in 1998 under the name QB Medical, Inc., and later changed our name to NxStage Medical, Inc. Our principal executive offices are located at 439 South Union Street, Fifth Floor, Lawrence, Massachusetts 01843. | EXCERPTS ON THIS PAGE:
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