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Admedus To Add Revenue As Global CardioCel Rollout Enters Malaysia

Admedus (ASX:AHZ) has taken a major step in building a global franchise for its unique CardioCel heart reconstruction technology by launching the product in Malaysia.

With a population of over 30 million people and regional patient needs in treating cardiovascular disease, Malaysia has a strong record for cardiothoracic surgery and therefore plays an important strategic market for Admedus.

Expansion into the country has already registered its first sales, bringing the number of patients now using CardioCel to more than 3000.

Growth in the treatment's availability throughout Malaysia in the coming quarters is expected to add to CardioCel revenue in the current financial year.

CardioCel is now on market in Europe, the U.S., Canada, Hong Kong, Singapore, and Malaysia and continues to be accessed in the Australian market through early access programs.

Admedus is also working with its partner Genpharm in the Middle Eastern and Northern Africa (MENA) region for additional regulatory approvals as well as exploring new markets in Asia.

About CardioCel

CardioCel is a bio-scaffold used to repair and treat cardiovascular defects, including reconstructing and repairing heart valves to retain their native function.

Admedus is currently undertaking a post-market clinical study with leading heart centres to show improved patient outcomes in reconstructing the aortic heart valve with CardioCel versus replacement bioprosthetic valves that are on the market today.

Strong preclinical data for the product has demonstrated durability and anti-calcification properties that facilitate host tissue remodelling as well as the delivery of better functioning valves with better haemodynamics.

Its ability to repair earlier in the valve disease process and bodes well for longer-term patient outcomes, potentially avoiding the need for replacement valves.

CardioCel does not require anticoagulants.

The aortic heart valve replacement market is estimated to be worth more than US$2 billion.

CardioCel is the first commercialised product from Admedus' ADAPT tissue engineering platform and helps de-risk this intellectual property.

ADAPT tissue benefits include safe bio-compatibility, physical durability and the ability to promote site-specific tissue regrowth without calcification in an off-the-shelf application with no special or technical training required.

Products using this tissue technology will also target conditions outside of heart disease in the near future, including spinal and cranial repair needs.

Second proprietary platform

In addition to the ADAPT portfolio, Admedus is developing a second, differentiated platform technology in therapeutic vaccines and immunotherapies for infectious disease and oncology.

The company's next-generation vaccine technology builds on the novel scientific information discovered, published and patented from Professor Ian Frazer's work that led to the development of Gardasil - the first prophylactic cervical cancer vaccine.

Admedus technology is particularly effective in stimulating cellular immune responses that have an enhanced ability to destroy infected or cancerous cells.

The company is currently developing a suite of vaccines that treat and prevent infectious diseases and cancers caused by Herpes Simplex Virus and Human Papillomavirus.

Admedus' unique delivery mechanism ensures that there is a stronger and more effective immune response, creating both a therapeutic (treat) and prophylactic (prevent) effect.

This adds value to the company given that 1 in 6 people aged between 14 and 49 in the U.S. are estimated to be infected with Herpes Simplex Virus, which has no present cure.

Analysis

CardioCel is expected to be available in additional Malaysian centres in the coming quarters, which will add to the growing sources of revenue in FY16.

The global rollout of CardioCel positions Admedus to benefit from the US$2 billion aortic valve market as surgeons look for better tissues to repair and reconstruct valves.

Momentum for this rollout has been substantial, with CardioCel already in use across Europe, North America and Southeast Asia. CardioCel studies for Chinese market approval have been initiated and a MENA region approvals process is underway.

The CardioCel rollout has had a major impact on Admedus income figures, with sales up 42.5% year-on-year in the September quarter to A$3.03 million.

The commercialisation of CardioCel de-risks the upcoming marketing of other ADAPT products, including a carotid endarterectomy treatment planned to be available in 2016.

Other applications expected to roll out of the ADAPT pipeline in coming years include spinal and cranial repair products, treatments for CABG and AV fistula as well as hernia repairs and a stem cell or stem cell factor delivery.

Admedus is in a strong financial position, with a cash balance as of the end of September totalling A$16.7 million.

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