Admedus Ltd (ASX:AHZ) has received updated research from the New York based Maxim Group.
Maxim has a Buy rating on Admedus, with a $2.00 12-month target price. The target is four-times higher than Admedus' $0.50 last trading price.
The following is an extract from the report.
CardioCel Demonstrates Close Profile to Native Aortic Valve
- Admedus presented a poster titled "Cusp Interventions in Aortic Valve Repair: Are All Pericardial Patches Created Equal?" at the Heart Valve Society Scientific Meeting 2016 in NYC from Mar. 17-19.
- From the poster presentation, CardioCel for aortic valve repair has demonstrated the closest profile to native aortic valves when compared to two other commercially available bovine pericardial patches St-Jude MedicalTM from St. Jude Medical (STJ-$54.47-NR) and Peri-Guard from Baxter (BAX- $40.28-NR).
- As a reminder, an early clinical study has demonstrated CardioCel in the complete reconstruction of an aortic heart valve with superior durability, anti-calcification properties, and functionality with better hemodynamics. Following the positive data from the pre-clinical study, the company initiated a clinical study in CardioCel for aortic tri-leaflet heart valve reconstruction in October 2015.
- Admedus is currently selling CardioCel®, a bio-engineered tissue scaffold to repair congenital heart defects, and expanding into the heart valve market. It is made of biocompatible bovine tissue; is off-the-shelf available, stentless, durable, and flexible; and shows resistance to calcification.
- Conclusion: We believe the positive result continues to show CardioCel's potential of being the most suited and preferred biomaterial for aortic valve repair.
CardioCel is a bio-implant sourced from bovine pericardium that is engineered via Admedus' ADAPT® 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.
Admedus' focus is first and foremost on regenerative tissue for heart valve repair and replacement in pediatric and adult patients with congenital heart defects.
Supported by strong clinical data (no signs of calcification reported in seven years post-implantation), CardioCel appears to be what we believe is a next-generation xenograft tissue product, a biocompatible bio-scaffold that elicits minimal immune response, has durable flexibility and elasticity, and has a long shelf life (two years).
One other trait that makes CardioCel a distinguishing competitor, in our view, is its strong resistance to calcification, while still providing sustainable mechanical properties.
This is the key to CardioCel’s success, because it eliminates the need for patients to undergo frequent post-implantation surgeries for replacement due to tissue degeneration.
We believe CardioCel has the potential to reduce the number of future surgeries required and open up more market opportunities in other clinical indications.
CardioCel also targets the large aortic and mitral valve market, and the company worked with KOLs to generate preclinical data.
Our model only includes CardioCel in CHD and heart valve repair for conservatism.
We use free-cash-flow-to-the-firm (FCFF), discounted-EPS, and sum of-the-parts models, with a risk rate of 30%, equally weighted and averaged, to derive our $2.00 price target.
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