Over the next 12-24 months a number of companies in the sector may receive acquisition bids. The last company to be acquired was ResApp Health for $180 million by Pfizer in 2022. Three companies viewed as potential targets by Bioshares are discussed below.

Anteris Technologies

Anteris Technologies (AVR: $20.50) is developing the next generation transcatheter aortic heart valve. The company's product is currently undergoing an early feasibility study (EFS) in 15 patients, with results expected in this month.

If approved, the product will have two main competitors, Edward Lifesciences and Medtronic, that manufacture and sell aortic heart valves delivered by catheter rather than through open chest surgery. Anteris CEO Wayne Paterson said that the company's product is outperforming current competing products on the market, including even the aortic heart valves implanted through open chest surgery. The company expects the global market for these products to reach US$15 billion a year by 2028, with 80% expected to be implanted via catheter.

There are two key measures in assessing the function of the aortic heart valve. The first is the pressure change across the valve (lower is better) and the second is the effective orifice area of the valve (the larger the better).

In the first cohort of treated patients (N = 13), the mean pressure gradient was 8.6 mmHg after six months, and similarly 8.8 mmHg in the five patients who have since passed the one year mark. The normal range for the pressure gradient is between 5 - 10 mmHg. Patients who are considered very ill have a pressure gradient of between 40 - 50 mmHg, and as high as 90 mmHg in some cases.

 

Valve-in-Valve Procedures

Paterson said that competing products achieve a mean pressure gradient of between 10 - 15 mmHg. However calcification occurs after a number of years, with the pressure returning to the 40 mmHg level, at which point a 'valve-in-valve' procedure is required to place a new valve in the aorta.

Anteris has recently completed three valve-in-valve implants where a very impressive pressure gradient of just 5 - 7 mmHg has been achieved. Paterson believes this salvage procedure represents a US$3.5 billion market on its own. Paterson said the interest in the technology has been accelerating, particularly since the valve-in-valve data has emerged.

Implant efficiency and results have been improving with the Anteris valve according to Paterson. Recent procedures are taking just 20 mins for the valve-in-valve implants, compared to 45 minutes for the Medtronic valve.

Paterson said that what the company has been achieving in valve-in-valve procedures is "off the charts!". It's an area where panic levels are rising from failing implants according to Paterson.

The company also has the best long-term accelerated lab test data with its valve, which has been tested out to 15 years without failing stated Paterson. The competing valves fail after 5 - 6 years on accelerated testing. Paterson believes this is because the Anteris valve has less sutures (50 compared to 600 for the competition), and also because of the anti-calcification properties of Anteris's proprietary pericardial processed tissue which has been used in 55,000 patients.

 

Pivotal Study

The company is expecting to be reimbursed US$25,000 for each of the valves used in its EFS study, as well as its pivotal study. The pivotal study is expected to involve between 500 - 1,000 patients and take one year to recruit. Recruitment is not expected to be a challenge, with the studies likely to be conducted at the 21 centres at which its Clinical Advisory Board members operate. The company's Chief Medical Officer, Chris Meduri, conducts 300 - 400 implants a year.

The pivotal study trial protocol is expected to be finalised in Q4 of next year. The study is expected to cost US$60 million plus around US$25 million in revenue expected from product reimbursement from the study.

Paterson said a major upcoming milestone for the company will be when it reaches 50 implants, with around 30 completed to date.

If the high quality results continue, one of the two majors in the transcatheter aortic heart valve market can be expected to make a bid for the company. That time will likely be once the company is funded for its pivotal study.

 

Bioshares recommendation (Anteris): Speculative Buy Class A

 

Disclaimer:
Information contained in this newsletter is not a complete analysis of every material fact respecting any company, industry or security. The opinions and estimates herein expressed represent the current judgement of the publisher and are subject to change. Blake Industry and Market Analysis Pty Ltd (BIMA) and any of their associates, officers or staff may have interests in securities referred to herein (Corporations Law s.849). Details contained herein have been prepared for general circulation and do not have regard to any person’s or company’s investment objectives, financial situation and particular needs. Accordingly, no recipients should rely on any recommendation (whether express or implied) contained in this document without consulting their investment adviser (Corporations Law s.851). The persons involved in or responsible for the preparation and publication of this report believe the information herein is accurate but no warranty of accuracy is given and persons seeking to rely on information provided herein should make their own independent enquiries. Details contained herein have been issued on the basis they are only for the particular person or company to whom they have been provided by Blake Industry and Market Analysis Pty Ltd. The Directors and/or associates declare interests in the following ASX Healthcare and Biotechnology sector securities: Analyst MP: 1AD, ACR, AVR, CGS, CUV, CYC, DXB, IMM, LBT, MX1, OPT, NEU, PAB, PXS,RNO,SOM. These interests can change at any time and are not additional recommendations. Holdings in stocks valued at less than $100 are not disclosed.