EBR Systems (EBR: $0.60) is a relatively new biotech on the ASX, having listed in November 2021 at $1.08 per share, raising $110 million. It is developing the world's first and only wireless electronic heart pacing system for the left ventricular, called WiSE. It is being trialled with commercially available right ventricle pacers (both with leads and wireless) to offer a novel cardiac resynchronisation therapy (CRT).

 

Three Types of Cardiac Synchronisation
CRT is required in patients with heart failure who develop an enlarged left ventricle. This can delay its contraction which means the left and right ventricles become unsynchronised and function inefficiently.

Pacemakers, by comparison, are implanted to correct a slowing of the heart (bradycardia) and involve electrical activation (pacing) of the right ventricle or right atrium.

The third type of cardiac synchronisation intervention is implantable defibrillators to correct abnormal heart rhythms.

Whilst wireless pacemakers were introduced in 2016 for regulation of the right ventricle and atrium, EBR is the only company developing a wireless system for the left ventricle. Used in conjunction with the wireless pacemakers for the right side of the heart, it offers the potential for completely wireless synchronisation of both sides of the heart, removing the necessity for leads, which are one of the main points of failure for such devices.

The device is implanted by an electrophysiologist, with it taking around half a day to train the staff according to CEO John McCutcheon. The company has a simulator to assist with training for the implant procedure.

Unique Features of the WiSE Device
What makes EBR's device unique is the small size of the stimulating electrode implanted inside the left ventricle, which is just 5% of the size of electrodes used by competitors for wireless pacemakers for regulating the right ventricle and atrium. Another benefit from implanting the electrode into the ventricle is that more natural replication of the heart function can be achieved rather than attachment to a blood vessel on the outside of the left ventricle.

The company believes the market for this product, for initial indications, to be valued at US$2.5 billion in major markets of the US, Australia and much of Europe. There are four initial market segments the company will seek to enter. These are: (1) to replace a failed leaded pacemaker for the left ventricle; (2) for patients where a wired pacemaker system is not suitable; (3) high risk patients who need to upgrade to CRT, and (4) in patients who do not respond to current CRT implants (around 30% of cases).

Results from Pivotal Study Due
EBR is currently conducting a registration study in the US with interim recruitment completed in June last year with 183 patients. That study is combining EBR's WiSE device with wired or wireless pacemakers. Results are due in Q2*.

If those results are positive, the company expects to file the product for approval in the US this year and launch the product in that market next year. It will also then seek reimbursement for the product in Germany and France. Approval in Europe was received in 2015.

Initial focus in the US will be the 45 sites that have been involved in clinical studies. Between 200 - 250 sites in the US represent about half of the market for CRT devices.

Performance Hurdles
There are two metrics that will be assessed by the regulator in EBR's pivotal study. These are:

1. Achievement of a 9.3% improvement in heart function (as measured by a reduction in left ventricular end systolic volume), and
2. Less than 30% device or implant procedure complications.

However, around 450 patients have been previously treated with the WiSE device in previous studies where these thresholds have been well exceeded. The reduction in left ventricular end systolic volume has been between 18.5% - 20.9%. And the 31 patient SOLVE-CRT Roll-in study (published in 2021) achieved clearance of complications in 90.3% of cases (complications in only three cases).

Battery Depletion Issue
In October last year, EBR announced that an issue had be found within a small number of devices resulting in rapid depletion of battery life in the implanted transmitter. The issue was confirmed in one device and suspected to have surfaced in seven other devices, which equates to a failure rate of 6.3%. There are no reported complications other than the device ceasing to operate.

The company is seeking to rectify the design issue prior to submitting its marketing application in the second half of this year. The company does not expect that it will impact the headline data which is due to be reported shortly.

A risk for investors is that regulatory approval could be delayed if the FDA requests additional patient data following rectification of the issue. However, the hurdle is only for clearance from device or procedural complications in 70% of implants, perhaps recognising the challenges involved.

Funding
EBR held cash assets of US$64.5 million at the end of last year. In June last year the company arranged a US$50 million debt facility. US$20 million has already been accessed. A further US$20 million can be accessed pending positive pivotal trial data, and the balance when FDA approval is received.

Summary
EBR Systems is capitalised at $163 million. The company has an extensive IP portfolio with at least 53 granted US patents covering 20 different patent families. The company has received Breakthrough Designation Therapy from the FDA highlighting the need for this advance in cardiac synchronisation therapy.

Positive data has already been achieved with studies in over 450 patients. In one of those studies, 94% success was achieved as measured by effective cardiac resynchronisation in previous non-responders or high-risk upgrades to existing wired systems.

With a key milestone approaching in the result from its pivotal study, EBR will be a stock of interest in coming weeks.

Bioshares recommendation: Speculative Buy Class A

* Results due Q2, not Q1 as in original article

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