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Admedus to add revenue as heart disease tech distribution grows

Admedus has made a cost-effective improvement to its sales capacity and revenue potential by signing a European distribution deal for a range of heart reconstruction technologies that will be managed by existing in-house resources.

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Diversified healthcare technology company Admedus (ASX:AHZ) has consolidated its presence in the US$1 billion European heart valve market by signing an exclusive distribution agreement for specialised surgical instruments.

The deal with Canadian company CORONEO will complement Admedus' CardioCel heart reconstruction technology initially in Germany and the UK.

CORONEO’s Extra-Aortic Ring will be sold alongside CardioCel in heart valve repair and reconstruction space and will be managed by Admedus’ existing sales and marketing infrastructure.

The launch of CORONEO products in the UK and Germany will take place in April 2016, with sales expected to contribute to Admedus’ revenue this financial year.

The UK and Germany represent two of the largest heart valve markets in Europe and expansion of the agreement into other regions remains an option.

CardioCel was initially launched in Europe at the end of 2013 and has been implanted in over 3000 patients.

“We believe the CORONEO range is synergistic with CardioCel and Admedus’ work in this space, as we both provide surgeons with specialised implantable devices and instruments to facilitate the repair and reconstruction of dysfunctional heart valves,” CORONEO President & CEO Anthony Paolitto said.

The distribution deal with CORONEO builds Admedus' marketing momentum in Europe on the back of a new approvals milestone for CardioCel.

Late last year, the company received notification from the European Medicines Agency (EMA) that CardioCel has been granted a broader label indication for its use in Europe.

The new, expanded indication for CardioCel means the product is approved for use in the repair and reconstruction of heart valves and is more in line with the U.S. label.
 
The label expansion is part of the global strategy to position CardioCel as the leading bio-scaffold and establishes the product in more than 120 centres globally.


Compelling momentum

Growth of the company’s sales portfolio in early 2016 builds on a strong finish to 2015 with a number of key milestones achieved throughout the year.

These included the closing of a Herpes Simplex Virus (HSV) vaccine study, CardioCel being used in over 135 centres globally and the initiation of a Aortic Heart Valve reconstruction study at leading heart centres.

Over calendar 2105, the company focused on the ongoing global launch of CardioCel which has resulted in continued quarter-on-quarter revenue growth and an additional 80 new centres using CardioCel to treat cardiovascular diseases.

Admedus’ broader portfolio, however, has made strides in developing a technology platform focused on therapeutic vaccines and immunotherapies for infectious disease and oncology.

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.

This adds value to Admedus 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

The agreement with CORONEO expands Admedus’ product portfolio in the cardiovascular space and adds to its ongoing sales growth allowing for the generation of increased revenue from existing in-house resources.

CORONEO’s Extra-Aortic Ring is a valuable addition to this sales and revenue platform as it represents the first annuloplasty device on the market specifically-designed to surgically repair the aortic valve with a proven, standardised technique.

By preserving the patient’s native valve, the CORONEO product avoids complications attributed to prosthetic valve replacement and compromises to patient’s quality of life such as the need for lifelong anticoagulation.

The CORONEO deal also cements Admedus’ foothold in the key European heart valve market, which is estimated to value $1 billion.

Within this sector, Germany and the UK are considered two of the largest heart valve markets – and will be the initial focus of the Admedus-CORONEO partnership.

The distribution agreement also adds value by complimenting CardioCel as it expands its implementation in Europe to more than 3000 patients.

CardioCel marketing advantages as a bio-scaffold include its durability, elasticity, anti-calcification properties, better haemodynamics and the capacity to be a life-long solution by enabling repair earlier in the valve disease process.

Admedus is expected to add value by further increasing its range of products in its sales and marketing portfolio.


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