At this year's AGM held recently, the chairman of Anteris Technologies (AVR: $19.05) John Seaberg said that after 45 years of working in the cardiovascular field, he has never seen a device with as much potential as the DurAVR aortic valve.
Seaberg said that the Dur AVR device has the potential to grab a majority share of the aortic heart valve market delivered via catheter (TransAortic Valve Replacement or TAVR) rather than by open chest surgery (estimated to reach US$13.5 billion in the US in 2028). "The world needs this product because it has the potential to save thousands of lives." The condition can not be treated with a pharmaceutical, only a device.
Anteris' valve has now been implanted in 64 patients with aortic stenosis with no patient deaths. An early feasibility study (effectively a Phase II trial) has completed enrolment. The results have been excellent, with a small consistent improvement over the first study across the key measures, delivering approximately a 30% improvement over existing devices in the market.
CEO Wayne Paterson reinforced that the DurAVR device delivers across all of the major KPIs in terms of valve performance. It reintroduces normal, laminar flow across the device where competing valves generate turbulent blood flow. It is a single piece design which requires substantially less sutures that competition. And it delivers a greater cross-sectional area and lower blood pressure across the device compared to incumbent products in use.
Aortic Stenosis
Aortic stenosis occurs when the leaflets in the native aortic valve deteriorate, becoming heavy and the opening becomes restricted, increasing the pressure across the valve. One in eight elderly patients are affected by the condition.
A patient with a pressure gradient across the valve of 40-50mmHg is considered sick, with Anteris having successfully treated some patients with a pressure build-up of 80-100mmHg. Overall it has achieved a mean pressure gradient outcome of 8.7mmHg in the first three cohorts of patients (n=20) and 8.4mmHg in the subsequent next two patient groups (n=21).
Anteris' CMO Dr Chris Meduri, who conducts around 300 procedures each year, said the Anteris device provides the most superior quality-of-life.
Balloon or Self-Expanding Device
There are two types of replacement aortic valves in the market; one that is a self-expander, which relies on the radial strength of the frame, and a balloon-expanded device. The self-expanding device is more difficult to use and is used in smaller valve replacement procedures including valve-in-valve implants. They have limited future 'coronary access' which makes subsequent implants less effective. .
Around 75% of the market use is with balloon expanding devices. These have poor hemodynamics in smaller-sized valves. When designing the DurAVR, Anteris consulted with its Medical Advisory Board which advised to proceed with a balloon-expander system, which it has.
Paterson said that ease-of-use was very important when the device was designed four years ago. If the company made a self-expanding device it would not be used believes Paterson.
The DurAVR can be used without additional training said Paterson. The controlled alignment of the implant within the native valve, called commissural alignment, is not available with most devices, but has been incorporated into the Anteris device with its Comasur Delivery System. With most devices "they just let it go and hope it sticks" said Paterson.
Next 12 Months
In the year ahead, the company expects to have 80 - 100 patients implanted with its valve (currently 64) outside of the registration (Phase III) study. The timing of the registration study is dependent on the outcome of discussions with the FDA and additional work that needs to be completed before trial commencement.
The tissue used in the DurAVR valve is processed in Perth using the ADAPT technology (following acquisition of bioMD in 2011). Over 55,000 patients have been treated with this biologic product including for use as a cardio-patch, with earlier data showing no calcification after 10 years. Paterson said that the Perth facility could produce sufficient quantity of processed tissue for the first two years of commercial product from existing capacity.
The valve is then constructed in Minneapolis by hand. The time to manufacture each valve is less than competition because of the lower number of sutures. Paterson said that this is the first aortic valve that has been designed by physicians who will be implanting the device.
The company has assembled an extensive medical advisory board who work at the specialty centres where the device will be commercially used and sold.
Registration Study
The size of the registration study has yet to be finalised, with FDA discussions ongoing. To reach the headline result will cost around US$35 million, which will follow patients for one year after implant. It will be a head-to-head study comparing the performance of the DurAVR device with the standard-of-care device. Paterson expects rapid recruitment into the study.
Patients will be followed for 10 years, with a total cost over 10 years of around US$70 million.
The current plan is to gain European and US approval around the same time from the one pivotal study based on one year data. That study is likely to involve over 60 US centres and 20 centres outside of the US. However 10 - 15 are expected to enrol the majority of the patients into the study.
The registration trial is expected to be an allcomers study that will include 'valve-in-valve' procedures, where patients have previously received a valve implant which is failing. There are no good products for valve-in-valve procedures according to Paterson. Anteris has successfully completed six valve-in-valve implants due to requests from doctors. These procedures are the most challenging.
The primary endpoints in the registration study are expected to be mortality, stroke and hospitalisation, with the bar set low with a non-inferiority comparison. Secondary endpoints will include measuring improvements in blood flow at day 30 and at one year over the control. Whilst the trial size has not been set with the FDA, Paterson said he is pleased with the likely size of the study at this point.
World Leading Surgeons to Chair Registration Study
Anteris has two of the world's leading experts in aortic valve replacement to co-chair the pivotal study. They are Professor Martin Leon and Professor Michael Reardon.
"DurAVR is a new technology that we all think has great promise to take transcatheter heart valve approaches to a new level," stated Professor Leon. "To think we can treat younger people with bioprosthetic valves, with a hope it might be the only valve they'll ever need, with hemodynamics that emulate a normal valve…it's pretty mind-boggling!"
Professor Reardon stated: "The hemodynamics of DurAVR in the first human study are absolutely stunning. The safety and implantability are absolutely stunning."
Professor Rebacca Hahn is Director of Interventional Echocardiography at The New York Presbyterian/Columbia Campus Structural & Valve Center. Professsor Hahn stated: "Our goal is to perhaps limit that young patient (under 65) to only one surgical procedure. It's (the DurAVR) a slam-dunk for older patients."
"The hemodynamics of the DurAVR are so fantastic, yet it has the ease, reliability and accuracy of the balloon expandable device," according to Professor Hahn.
Professor Leon was the co-principal investigator of the Sapien 3 pivotal study in 1,000 patients. It took 18 months to complete recruitment across 71 sites. Paterson said that these surgeons do not make these comments lightly.
M&A/Partnering
Paterson said that the company is in constant discussions with the four leading medical device majors active in the field. A deal could be conducted with one of those groups or with another major company that is seeking to enter the field.
Revenue
Anteris is entitled to be reimbursed US$25,000 per device installed from the feasibility and pivotal studies, although reimbursement has yet to be received from the feasibility study. It may also receive reimbursement from devices supplied from a continuous access scheme that the company is likely to apply for prior to FDA approval.
Results to Date
DVI (Doppler Velocity Index) is a measure of disruption to blood flow through the valve and is irrespective of valve size. A DVI value of less than 0.23 indicates significant stenosis (narrowing) of the implanted valve, so the closer the ratio is to 1.0 the better. Anteris has achieved a mean DVI of 0.71 so far from its implants, compared to 0.44 for the Sapien 3 (Edwards Lifesciences) and 0.61 with the Evolut (16%-61% lower).
On the measure of cross-sectional area (larger also being obviously better), the DurAVR valve has achieved a mean opening size of 2.36cm2, compared to 1.58cm2 for the Sapien 3 and 1.82cm2 for the Evolut in similar sized valves (30% - 49% lower).
Recent Patient Outcome
Paterson gave an example of a recent 77 year old patient treated with an Anteris device for a serial valve-in-valve procedure. The first valve was implanted surgically with a mean pressure gradient across the valve of 23 mmHg after the implant which was a mediocre outcome (compared to a mean pressure gradient of 8.4 mmHg from last 21 Anteris devices implanted).
In 2018 the patient underwent a valve-in-valve procedure with the Evolute valve from Medtronic. The pressure across the valve achieved following implant was 31 mmHg which increased to 41 mmHg in 2024, when the Anteris valve was implanted. The outcome was 'stunning' said Paterson with the pressure reduced to 18mmHg with the Anteris valve.
Operations
Anteris currently has 96 staff. The company raised $79 million in the last year. Key milestones for the year were completion of recruitment into the Early Feasibility Study in October last year and the first valve-in-valve procedure conducted in July.
Nasdaq Listing
The company is 45% owned by institutions, which includes the physician led funds of Perceptive Advisors and Sio Capital Management in New York, and L1 Capital in Australia. The current shareholding in Australia is 63%.
The TAVR market (aortic valves delivered by catheter) is dominated by Edwards Lifesciences which holds a 65% market share. Its TAVR sales make up 65% of its total revenue. The company trades on a price-sales ratio of 8.7.
Paterson provided some scope for the future value for Anteris. If it could obtain 5%-10% of the US TAVR market (worth around $15 billion), then its own indicative market capitalisation could be between $6.5 - $13 billion, compared to its current market value of $366 million.
An example Paterson referred to was that of Shockwave Medical, which listed on the Nasdaq in March 2019 at US$17 a share. Last month Johnson & Johnson announced a bid for the company at US$335 per share (a 19-fold increase to its listing price). Shockwave is also in the cardiovascular device field. It sells the leading IVL device (Intravascular Lithotherapy) that is used, via catheter, to disrupt difficult-to-remove, calcified plaque using sonic pressure. The company's sales are tracking at US$880 million a year. J&J has bid US$13 billion for the business, which equates to a price-sales ratio of 15.
Anteris is anticipating a Nasdaq listing in the second half of this year, alongside its current Australian listing, with a capital raise to fund the forthcoming US registration study for DurAVR.
Summary
Anteris is capitalised at $366 million. The company held cash of $10 million at the end of March and has since raised $23 million giving it a Survival Index of just 0.4.
Additional funding may come from a partnering deal and via a Nasdaq listing in the second half of this year.
Bioshares recommendation: Speculative Buy Class B
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