In a July 14 research note, analyst Yi Chen reported that H.C. Wainwright & Co. initiated coverage on Carmat SA (ALCAR:PA; CKMTF:OTCMKTS), the France-based developer of a total artificial heart, with a Buy rating and a €38 per share price target. The current share price is around €22.40.
Chen discussed the highlights of this commercial-stage medical device company. Its product Aeson is a total artificial heart, for patients with advanced biventricular heart failure and who have exhausted all other treatment options and are ineligible or waiting for a heart transplant.
Aeson differs from other total artificial hearts on the market in that it combines three critical features, Chen noted. They are hemocompatibility, which reduces the risk of developing a thromboembolism; self-regulation in that it automatically adapts to patients' metabolic needs and (3) pulsatility, meaning it produces blood flow and pressure like a natural heart does.
"These features make Aeson a genuine physiologic heart replacement therapy that allows patients to live with almost normal quality of life," wrote Chen.
Significantly, Carmat's Aeson is at the commercialization stage in Europe, and the company has begun rolling it out in Germany. As such, sales are expected to start sometime in H2/21. Carmat plans to market Aeson in the five countries in the European Union via a direct sales team.
Carmat has a CE mark for Aeson in the bridge to transplant indication, which it received in December 2020. The CE mark was granted based on results of the 15-patient pivotal study. They showed a six-month survival rate among patients treated with Aeson and a better safety profile than other total artificial heart products.
"Aeson has clearly demonstrated its ability to replicate the function of a human heart and meet the physiological needs of patients in various daily situations," Chen wrote.
In France, Carmat plans to start the 52-patient EFICAS clinical study this quarter "to generate safety, performance and health economics data to support value proposition and obtain French reimbursement," Chen noted. Commercialization would then follow in France, likely starting in 2023.
Carmat also plans to conduct a broad postmarketing surveillance study of the first 95 patients treated in a commercial setting. These data would help support reimbursement in France and drive market adoption.
The company could use longer term results from this study, greater than one year, to be granted a second indication for Aeson: destination treatment. This would expand the potential Aeson market to include patients ineligible for a heart transplant.
"Carmat's approach to clinical development and commercialization targets an increasing total addressable market, which may drive topline growth," Chen wrote.
Another positive element of the Carmat story is the "attractive" potential market for Aeson," Chen noted. Heart failure affects about 15 million people in Europe and about 6 million in the U.S. Terminal chronic heart failure with reduced ejection fraction, a target market for Carmat, affects about 4.1 million people in both Europe and the U.S. Of those, only 5,000 receive a heart transplant per year, and about 5,700 are on a heart transplant waiting list.
As for the cost of Aeson, H.C. Wainwright estimates it could be about €200,000 in the European Union and €240,000 in the U.S., with peak sales reaching close to €700M in just the bridge to transplant indication.
In the U.S., Carmat is currently screening patients for a 10-patient, bridge to transplant feasibility study, to start in late 2021-early 2022.
"We project potential entry into the U.S. market in 2025," Chen wrote.
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