Imricor Medical Systems (IMR: $0.115) listed on the ASX in 2019 at $0.83 per share raising $13 million. The company was formed in 2006 in the US and is pioneering cardiac ablation treated specifically through the guidance of MRI. Traditional ablation procedures are conducted using fluoroscopy and x-ray imaging.
There are multiple advantages in using MRI to help guide the procedure, most notably the better imaging quality that can be achieved compared to x-ray. This results in arguably better ablation outcomes, less repeat procedures and shorter treatment periods. Efficacy of the ablation procedures involves inserting an ablation catheter through the veins or arteries to correct irregular electrical signals in the heart. Other safety benefits for patients and surgeons come from not using x-ray images.
In January 2020 the company gained European clearance for its system to be used in the treatment of atrial flutter (type 1). The first commercial procedure using the technology was conducted the following month. Currently 15 sites across Europe (in Germany, Greece, Italy, Switzerland, Hungary, the Netherlands and France) have signed up to use the technology with six sites actively conducting procedures.
In the March quarter Imricor generated revenue from consumables totalling just US$93,000, up 7% from the preceding quarter. Like many healthcare companies that sell products used in elective medical procedures, Imricor has also been significantly restricted during the pandemic. However, conditions in Europe are returning to normal with respect to elective procedures which should result in an acceleration in sales from this point.
There are around 1,000 ablation centres in Europe. During the pandemic, Imricor has made good use of its time in additional product development (for use in other cardiac ablation procedures), progressing regulatory approvals in other regions, and in building sales leads (over 50 currently).
Imricor is the only company that sells catheter ablation products that can be used with MRI. The company has an extensive IP portfolio with 18 issued US patents and 58 issued patents in other regions. Siemens has taken a 5.9% stake in the company and in July 2020 the company executed a sales agreement with Philips. Philips is a major MRI manufacturer and will sell the hardware used with Imricor's technology (specifically the recorder/stimulator system).
Imricor will sell the catheter consumables, which are around US$3,500 per procedure.
An important indication for expansion will be for the condition called Ventricular Tachycardia (VT). Whilst this accounts for only 8% of all cardiac ablations, the procedure is more difficult to perform and would benefit considerably from visualisation using MRI. A clinical trial in VT is expected to start this year in Europe. The company believes approval for VT ablation will drive significant site adoption. It is scheduling VT approval in Europe next year.
The growth for Imricor will come from expansion into additional sites in Europe, from regional expansion to the US, and from expansion of indications. Imricor is planning the commencement of a US pivotal study, with market approval in the US expected in 2024. The company believes the US market will be twice that of Europe due to the higher reimbursement rates compared to Europe. Approval has also been gained in New Zealand with the Australian approval process underway.
Imricor has secured the support of key opinion leaders in Europe who are now regularly using the company's products. One of the challenges for adoption is gaining access to an MRI machine, with some of the labs using the technology building a specific iCMR (Interventional Cardiac Magnetic Resonance) facility. However, the company argues that additional use MRI procedures allows the hospital to generate additional revenue.
Imricor is capitalised at $17 million. It held cash of US$13.4 million at the end of March.
Bioshares recommendation: Speculative Buy Class B
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