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Admedus Ltd: New York's Maxim Group Maintains A$2.00 Price Target

Admedus Ltd (ASX:AHZ) has received updated research from the New York based Maxim Group, which maintains its Buy rating and A$2.00 12-month target price.

Admedus last traded at $0.34. The following is an extract from the report.

Half-year Update: Stay Focused on CardioCel

Summary

- Admedus held an investor webinar yesterday and provided an update on the company's product portfolio.

CardioCel.

The CardioCel heart valve patch is commercially available in multiple regions including the U.S., EU, Asia-Pacific, Middle East and North Africa.

KOL engagement remains key to driving early adoption. CardioCel's anti-calcification feature (phase II follow-up data showed no signs of calcification at seven years post-implantation, thus reducing the need for follow-on surgeries) is attracting KOL interest globally.

The company is continuing to build commercial infrastructure, which over time should increase physician uptake.

Immunotherapy programs.

The ongoing phase II study (n=44) evaluating the safety of the glycoprotein D (gD2)-based DNA vaccine as an HSV-2 (herpes simplex virus) immunotherapy remains on track to produce data in 4Q16.

A phase Ib study of the HPV (human papillomavirus) vaccine should initiate this year.

Corporate updates.

Admedus continues to improve its manufacturing capability and maintain effective cost management.

The company is now conducting a global search for a new CEO following the recent departure of now-former CEO Lee Rodne.

Conclusion.

Our focus remains on CardioCel. Admedus continues to focus on building commercial volume through physician engagement and early adoption.

As KOL awareness increases over time, we expect sales to increase accordingly.

Details

CardioCel is a bio-implant sourced from bovine pericardium that is engineered via Admedus' ADAPTĀ® platform, resulting in a durable, collagen-based scaffold with strong mechanical properties and resistance to calcification, while supporting native cell infiltration, growth, and differentiation for repairing cardiac and vascular defects.

It is processed by a proper decellularization regime, optimized crosslinking, and adequate detoxification to avoid any immunological response that could potentially trigger a calcification cascade, thus rendering calcific degeneration postimplantation.

In July 2015, Admedus announced positive long-term data from the CardioCel phase II study, which showed no follow-on heart procedures related to CardioCel, nor were there any signs of calcification seen.

HSV-2 immunotherapy.

Admedus' HSV-2 glycoprotein D (gD2)-based DNA vaccine uses codon optimization DNA technology, which enhances protein expression in the cell or tissue targeted, and results in an improved immune response.

Another component of the technology is to use a combination of DNA encoding ubiquitin and non-ubiquitin proteins to enhance the degradation of the protein and optimize Tcell responses, while preserving structural epitopes necessary for B-cell responses, achieving both prophylactic and therapeutic results from the vaccine.

An HSV-2 phase II study (n=44), which is evaluating the safety of the vaccine, impact on viral load and shedding, and viral flare frequency, is ongoing. Interim data showed a favorable safety profile, with a reduction in viral lesions.

Valuation.

Our model only includes CardioCel in CHD and heart valve repair for conservatism.

We use a risk rate of 30%, equally weighted and averaged, across FCFF, SOP and dEPS to derive our $2.00 price target.

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