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  • Allied Healthcare Makes Milestone Sale Of CardioCel® In Europe 0 comments
    Nov 7, 2013 7:04 PM

    Allied Healthcare (ASX: AHZ) has hit a major milestone with the receipt of its first European orders for its CardioCel® regenerative tissue repair product for repairing and reconstructing heart defects.

    The sale marks its first sale outside of Australia and paves the way for it to grow its revenue.

    "Today we can announce we have made the first sale of CardioCel® into Europe and shipping has commenced - a milestone development for both the Company and our lead regenerative tissue product," managing director Lee Rodne said.

    "Allied is seeking to have CardioCel® used by cardiothoracic surgeon teams across Europe for the repair and reconstruction of cardiac defects in both adults and children.

    "We will initially focus our European sales team on the major centres across Europe as we aim to build our market penetration over the next 12 to 36 months."

    CardioCel®

    The company had received European CE mark approval for CardioCel® in August, clearing it for launch and marketing in a key market.

    CardioCel® is a regenerative tissue product currently used to repair heart deformities including repairing and reconstructing heart valves.

    It offers key benefits for patients and surgeons including showing strong levels of regeneration of self-tissue without needing external stem cells or growth factors; no cytotoxicity at the site of repair; and availability off the shelf.

    Importantly, its ongoing Phase II extension study has confirmed no signs of calcification, a major issue with other existing tissue products, in all five patients monitored over a five year period post-surgery.

    Supporting this, no signs of calcification have been seen in a further six patients monitored over four years and eight beyond three years.

    CardioCel® is available for use by surgeons in Australia via an authorized prescriber scheme.

    Allied's earnings are expected to rise over the coming 12 months to 3 years as it continues to grow revenue from its infusion product portfolio and its regenerative tissue programs.

    It also has plans to expand its regenerative tissue portfolio with additional tissue products for cardiovascular repair and reconstruction, vessel repair & conduits; as well as other applications like cellular therapies, hernia and pelvic floor repair.

    The company is progressing its 510(NYSE:K) application for CardioCel® with the U.S. Food and Drug Administration with U.S. marketing approval anticipated in 2014.

    Analysis

    Shares in Allied should rise today on the milestone sale of CardioCel® in Europe, which validates the value of the regenerative tissue repair product.

    It also points the way for Allied Healthcare to build on its revenue of $2.2 million generated in the September 2013 quarter.

    Further sales in Europe are likely as the company's sales and marketing efforts continue and this is likely to receive a further boost once U.S. approval is received.

    To top it off, there is further blue sky upside if Professor Ian Frazer and his Coridon team return a success with Phase 1 herpes therapeutic vaccine trial, an outcome that seems likely in our opinion.

    Already, the trial looks set to achieve its key objective, which is to determine the safety of the vaccine. Interim results are anticipated towards the end of 2013 / early 2014 with full results in mid-2014.

    This will be key to validating the vaccine and would present an opportunity to progress the program into a Phase II trial or into a partner collaboration.

    Success will open up a massive market given that no cure currently exists for herpes with current antiviral drugs only reducing, but not eliminating outbreaks.

    In addition, Professor Frazer - whose groundbreaking research led to Merck & Co.'s highly successful cervical cancer vaccine, Gardasil® and Cervarix - has already developed next generation DNA vaccines.

    Allied has a 50.1% share in Coridon.

    Results from the herpes trial, further sales in Europe and U.S. approval for CardioCel® are the key catalysts in the near future.

    Proactive Investors has re-worked our model and believes there is ample scope for Allied to grow its revenues and gain market share and have upped our share price target to $0.24 to $0.28 over the next six months.

    Notably, Allied has twice surpassed our guidance, breaking past our first target of $0.07 on 19 August just two months after it was made when prices ranged from $0.04 to $0.059 and more recently, our second target of $0.14 made in August.

    Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.

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