Admedus (ASX: AHZ) should trade higher after revealing that 6 years post implantation, its lead regenerative tissue product CardioCel® continues to show no level of calcification or other complications.
The first patient from the Phase II study has had their 6 year follow up and the results show there is still no detectable calcification of CardioCel® and no "re-do" surgery required.
"This is great progress for patients in not having to have additional surgeries and it represents huge potential for the future treatment of congenital heart disease and other cardiac defects" said Admedus chief executive officer Lee Rodne.
"All other patients in the study continue to show no signs of calcification or follow up surgeries after 3 to 5 years. The company anticipates continued data from the ongoing monitoring of these patients.
"We have always believed that CardioCel® has enormous potential in the future of cardiac surgery and this data highlights the longer term benefits of using CardioCel® and its superiority over alternatives"
Patients from the Phase II study are examined for calcification and overall patient health annually.
Earlier this year, Admedus received Food and Drug Administration clearance for CardioCel, allowing it to be marketed in the U.S. It was approved in Europe under a CE Mark last year.
CardioCel® is a regenerative tissue product engineered by the group's ADAPT® tissue engineering process to be a durable, pure collagen scaffold 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.
The first patient in its Phase II study was initially implanted at 3 weeks of age and has successfully reached their sixth birthday with no implant issues.
The lack of calcification addresses one of the key issues with other existing tissue products.
Admedus had early this year completed the acquisition of an established manufacturing site in Western Australia to facilitate scaled-up production of CardioCel®.
The site also provides additional facilities to support the development and commercial manufacture of additional regenerative tissue products currently in the Admedus pipeline that use the ADAPT® tissue engineering process.
Broker says Buy
Last month, Admedus received a buy recommendation from Baillieu Holst, with a share price target of $0.25 - a 100% premium to its last traded price of $0.125.
It noted that CardioCel® was something new in soft tissue repair, offering favourable long-term clinical data on its acceptability, functionality and durability.
Baillieu Holst added the company was also seeking to be a player in the emerging field of DNA vaccines, being the largest shareholder in Admedus Vaccines (formerly Coridon), which is developing DNA vaccine technology from the lab of Professor Ian Frazer at the University of Queensland.
The 57%-owned Admedus Vaccines has created a DNA vaccine for HSV-2 infection with both prophylactic and therapeutic potential in genital herpes.
This has worked well on an interim analysis of Phase I, with a therapeutic T cell response in HSV-2 naïve healthy subjects reported in February 2014
There is also a therapeutic vaccine to treat HPV infection.
"We value Admedus at $0.25 per share base case and $0.56 per share optimistic case. Our target price of $0.25 sits in the low point of our valuation range.
"We expect the market to re-rate Admedus as further clinical and pre-clinical data emerges and CardioCel gains commercial traction."
Shares in Admedus are likely to trade higher on today's positive findings.
Given CardioCel®'s advantages compared to other cardiac repair products - namely its ability to be used off-the shelf and the lack of calcification, there is strong potential for the company to secure sales in the U.S.
In addition to the expected increase in CardioCel® sales, there is much to look forward to in the coming year.
This includes the full results of the Phase 1 trial for its Herpes Simplex Virus (HSV-2) therapeutic vaccine, which has already proven to be safe for use.
We believe that Admedus will move back onto investor radars after a hiatus with these milestones as price catalysts ahead.
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