Anteris Technologies (AVR: $21.50) is commercialising the DurAVR aortic heart valve which is implanted by catheter rather than open chest surgery. It is seeking to launch its product in coming years in a market estimated to be worth US$10 billion in 2028, based on only a 15%-20% penetration base of the current patients, according to CEO Wayne Paterson.
Patients have been implanted with the company's device with superiority already shown against existing products in the market. Anteris will be competing with two main products which are around 20 years old in their design said Paterson.
The native heart valves need to be replaced due to aortic stenosis (stiffening), whereby calcification creates a narrowing of the valve and increase operating pressures across the valve. One of the key differentiators with the Anteris valve is that the tissue used has shown zero calcification after 10 years of implant in other applications (heart tissue repair in children). The tissue has been used in around 35,000 patients and is FDA approved.
Anteris only commenced development of the aortic heart valve program in 2020. Around one in eight people over the age of 75 have aortic stenosis with no pharmaceutical treatments available. Valve replacement is the only treatment option with half of patients not living past two years from diagnosis.
Paterson said that one of the limitations with existing valves delivered by catheter is that they are not anatomically correct, unlike the company's DurAVR valve.
The opportunity for Anteris is that the percentage of catheter delivered aortic valves is expected to increase from 39% in 2021 to 87% in 2028. However, the issue is that the current valves were designed for older patients (around 85 years of age) where a long valve life was not required. But as younger patients are implanted, longer valve function, and specifically low calcification and mechanical durability, is becoming a necessity. In 2019 the FDA approved the catheter delivered valves for younger patients. The mean age for recipients of these valves has reduced to 73 years.
The Anteris valve has been implanted into 13 patients, with between 30 - 40 expected to be implanted by the end of 2023 in total.
Results from First 13 Patients
There are two main technical measures when assessing the function of these valves. One is the pressure across the valve once implanted, and the second is the cross-sectional opening area achieved, called EOA (effective orifice area).
The normal pressure gradient in a healthy patient should be between 5mmHg - 10mmHg, with 40mmHg - 50mmHg characterising severe disease. In the 13 patients treated so far, at 30 days post implant, the mean pressure gradient dropped from 49 mmHg to 9 mmHg. This included one patient whose pressure was reduced from an extreme level of 90 mmHg to 9 mmHg after 30 days and that was sustained after a year, at 8.5 mmHg.
Looking at the area improvement, the mean EOA increased from 0.5cm2 to 2.0mm2. In terms of quality of life (using the six-minute walk test), this was improved by a mean 32% after 12 months in the 13 patients implanted, which Paterson said is (clinically) significant.
In terms of hemodynamic function, Paterson said that the DurAVR is the first mechanical valve that has been able to restore normal aortic blood flow. This compares to the two main products in the market (the Sapien 3 from Edwards Lifesciences and the Evolut R from Medtronic), which have compromised blood flow, as well as achieving more normal blood flow characteristics than even surgically (non-catheter) implanted valves (CEP Magna Ease from Edwards Lifesciences).
Early Feasibility Study to proceed
Anteris received full regulatory approvals to proceed with its next trial, the early feasibility study, in February. It will seek to enrol 15 patients. Ethics approvals are currently being secured at seven sites, with all patients expected to be implanted in May and June, and 30-day follow-up data towards the end of July. Data is expected to be presented in September this year at the TCT conference. Product used in the trial is expected to be reimbursed in the US, pending a decision from CMS in the US. This will reduce the cost of this study and the pivotal trial which is expected to follow.
Many of the sites being used in this feasibility study will be where the company's Scientific Advisory Board members are based. Several sites have already been approved, including Cleveland Clinic and Columbia Presbyterian said Paterson.
Aside from the standard performance metrics and safety, Anteris will also be measuring any remodelling of the left ventricle, which if achieved, will be a major outcome believes Paterson.
US$250 - US$300 Million in Early Sales Expected
If Anteris is successful in getting its device to market, Paterson believes the company could achieve at least 5% of the market in the first year, which would equate to US$250 - US$300 million in sales. Having clinical superiority to existing products would be a key driver of sales. Paterson stressed that transcatheter aortic valve replacement (TAVR) procedures are very concentrated in specialised centres. Anteris has a highly respected and extensive SAB which operates from many of the key TAVR implant centres.
Paterson said that many of the specialists the company has talked to have said that they will use the Anteris valve in 50% - 100% of patients from day one. Achieving 50% penetration in the top 10 centres in the US would achieve the company's early sales estimates.
With respect to funding, Paterson believes that with the reimbursement of the product used in trials, the company can fund the pivotal study and market launch from current funds and future capital raises. A large sales team may not be required with good awareness already of the company's technology at many of the key hospitals.
Anteris now has its US manufacturing facility on line. The pivotal study to follow the feasibility study is expected to require around 1,000 patients, with enrolment expected to be achieved within a 12-month period.
Anteris expects to be reimbursed for product used in the trial (around U$25,000 per device) and also for the procedure, which will see revenue generated this year and also in 2024 and 2025 believes Paterson.
The first application for the product may be for what's termed 'valve-in-valve replacement' where the DurAVR is used to replace failed valve implants, for which the device is particularly well suited and could see earlier approval. However, discussions with the FDA need to be completed. Around 20%-30% of implants are valve-in-valve replacements. Earliest broader approval for the device could occur in 2026 believes Paterson.
Anteris is capitalised at $330 million. It held cash reserves of $13.8 million at the end of last year and raised $35 million at $24 per share in February.
Bioshares recommendation: Speculative Buy Class A
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