I thought the JP Morgan analyst was simply trying to ascertain how much of a delay the questions from FDA, the subsequent responses from Nanosonics, and then the consideration of those responses by FDA might add to the eventual approval process for Coris.
While Michael Kavanagh played a fairly straight bat, what he did say that provided some insight was that De Novo applications can take up to 12 months, which means in a worst case scenario, approval for Coris may not come about until the end of April 2025. As if to reinforce the plausibility of that scenario, Michael Kavanagh went on to say that the company was not expecting any revenue from Coris in FY25.
I thought Michael Kavanagh's above noted insights may have been a case of managing expectations to provide a bit of wriggle room for over-delivering later in the financial year, but his comment that all submissions to the FDA for device approval raise questions seemed just a bit simplistic to me. In that regard, I have no doubt that many submissions to the FDA generate questions which delay approval processes but I'm not sure why the FDA would have a policy objective of delivering decisions on De Novo applications within 5 months if there weren't some applications (albeit, possibly a small minority of applications) which sail through the process in that timeframe without follow up questions needing to be asked.
I think the underlying problem that arises for Coris is that it was accepted into the STEP program as a "novel and innovative" device warranting priority engagement by the FDA (second only in order of priority to what are considered by the FDA to be "breakthrough devices"). However, even though this was no doubt a good thing, the trade-off, as section III C of the STEP program guidance actually notes is that:
"FDA's past experience with priority review programs indicates that innovative products may raise additional scientific and regulatory issues that warrant more in depth review during FDA's review of the marketing submission. Therefore, the timeframe for review of the marketing submission may take longer for devices in STEP than for other less novel devices."
In any case, while I am revising my expectations for when Coris will be approved by the FDA, to some time early in CY25, I have to say that I'm pleased that all Coris costs for FY25, including regulatory engagement with FDA, marketing and other commercialisation activities and Coris inventory accumulation are all accounted for within the company's projected expenditure profile and don't appear to place a material burden on expected growth in profit for this financial year.
zeno9
NAN Price at posting:
$3.20 Sentiment: Buy Disclosure: Held
(20min delay)