Hi Guys - sorry about the tardiness. WP has been travelling a bit. Aust - China - US. Said he composed these answers in his jet lag hours at 4am. Hope they fill in some of the blanks for all. Some interesting info below. Some of the later questions I didn't add. Regardless - thanks to all who contributed. I hope next year you can make it to the AGM as this board is really interactive and will give better feedback face to face.
Wazza - Here is the thread where you can read sensible feedback from WP rather than go around in circles discussing SP and WP... ))
Cardiocel Family Questions
Question 1
Can we get a breakdown of the September quarter by product and by market. Would be a great to have a data point between the FY17 AR and the FY18 HR to see how individual products/markets are tracking See AGM data - generally medical companies dont break out individual SKU’s (ie tissue franchise) as it gives the competitors too much info as to our traction - in our case this is particularly relevant as we are “new” to the market in the US and making ground. Our reps have already been “harassed” by the competition - this is an indication that we are taking market share.
Question 2
Provide a breakdown of cc, vc, neo and 3d in terms of market size and growth in each market. A baseline moving forward would be appreciated. See AGM data (6 billion dollar potential across current product areas)
Question 3
VC was in breakout but little feedback since David st Denis and reintroduction of Baxter vascuguard creates minor uncertainty. Is AHZ still taking market share from Baxter? Sales announced in Sept 4c were lower than expected and hinting at not being in breakout status. It was in fact a “break out” by definition we were up 100% July on July (not a bad set of numbers considering the restructure). We have been slow to get traction in this market as another company (Lematire) with over 50 reps got in quickly - however we are now taking back market share (they have terrible issues with calcification ) so its only a matter of time and scale. As mentioned at the AGM we are considering a new 3 D product in the vascular space at the moment.
Question 4
Provide update on the shaped multi-thickness tissue in terms of market size and projected market share. How many additional curved products do you envisage bringing to market over calendar years 2018 and 2019. This relates to clever technology developed by Scott , Tony and the team. The application of this is very important (and novel/unique) with regards to our 3D single piece valve franchise. We are moving up the value chain to 3D products - I forsee 3-4 by end of 2019 (including stented SAVR valves)
Question 5
Provide an updated 3d full release date and real numbers. Can you provide sales projections based on feedback received so far. From an investor perspective - this appears the key product for AHZ's future. Data at AGM - however , this is the start of the 3D franchise, (the user evaluation period has already led to new product development in vascular repair). We have learned a lot from this exercise, and whilst the aortic arch repair market is important , the broader value comes from our positioning in the 3D space based on what we have learned with new products including both TAVR and SAVR - we will be unique and unmatched in this area due to the unique properties that ADAPT gives with regards to our 3D capability.
Question 6
Is there any partnership movement or research towards using Adapt as a stem cell supportive super structure or looking at MSC doped Adapt 2.0? Has been research done into using MSCs for their anti-inflammatory properties to prevent IH either through doping of Adapt or even doping of a suture material. No our dance card is full at the moment- although this has been flagged for future discussion once we have the resources to work on it - the current priorities are developing products that give us near term revenue opportunities
Question 7
Update on Germany and Europe. During webinar this was a bad. What is being done and is the trend improving, positive, good or excellent. AGM
Question 8
https://clinicaltrials.gov/ct2/show/study/NCT02681341?term=Admedus&rank=2&show_desc=Y&view=record A work in progress
Can you confirm if the results from this study are available and what are the implications for Cardiocel.
Further study details as provided by Baylor Research Institute:
Primary Outcome Measures:
6 Month Duplex US Report to Measure Material Quality
The 6 month duplex US report will measure peak velocity and flow through the repaired carotid artery, caliber, and occlusion/lesion status as per normal parameters used in post-CEA scans.
Secondary Outcome Measures:
OR Data and Surgeon Feedback During the Procedure
The OR data from the procedure including blood loss and how long it took to achieve hemostasis in addition to surgeon feedback on bleeding, handling, and suturing of the material will be collected on a source worksheet.
Enrolment:
10
Actual Study Start Date:
February 2016
Study Completion Date:
September 21, 2017
Primary Completion Date:
April 24, 2017 (Final data collection date for primary outcome measure)
Question 9
https://academic.oup.com/icvts/article/doi/10.1093/icvts/ivx295/4563646
From the Discussions part of the article:
"Our 2-year experience showed a good handling characteristic of the material by the surgeons for implantation during the procedure, and no infections were related to it. The patch had a good behaviour in low-pressure areas without creating any stenosis because of calcification or thickness. However, we experienced early graft failure under high pressures because of a tremendous intimal reaction, which has not been previously reported for this type of patch. Our findings show that the patch becomes mainly stenotic in infants after enlarging the aortic arch, which we believe is a result of the mismatch between the elasticity of the native aorta and the CardioCel patch under systemic pressure. The blood flow creates shear stress against the aortic wall and can cause this intimal hypertrophy reaction leading to severe aortic stenosis."
Out of 101 procedures they had 5 failures related to Cardiocel. Many of the failed procedures used plain old patches for aortic arch repair (not 3D). The above research indicated that the patches in the failed ops did not handle aortic pressures well.
Are there any similar problems in 3D patches due to intimal hypertrophy leading to aortic stenosis? In 3D, have they been able to overcome the differences in elasticity in the higher pressure environment? If yes is this achieved using the new “thicknessing” techniques or by replacing more of the arch in the higher pressure places?
This does not relate to 3D - and “flat patches” are not ideal in aortic arch repair (hence the enthusiasm by our surgeons with regards to 3D). Intimal hyperplasia is a common issue in this patient group , we have so far not seen this with 3D (but caution is always required with new medical products/techniques) So far 3D has performed very well (as you saw in the video at the AGM) , no doubt we will learn more as the product becomes widely used.
Question 10
Within $5 million what is your best guess at ADAPT revenue for 2018? As per AGM
Question 11
Will the ADAPT process will be used to develop an alternative to the 'mesh' used to treat prolapse? The product leader in this area of use is the subject of current litigation regarding serious side effects. We are certainly looking at it , although our priorities are on the TAVR and 3D opportunities at the moment - as always we have to direct our resources to near term development projects.
Question 12
Why is Europe lagging behind USA? Its an equal market and we have general approval. How long should it take ? Its already picking up again, it was the final bastion in Code Red and is being addressed at the moment , this month (November) they exceeded target by 27% (off a small base) so the new reps are kicking in well ! I am interviewing a new Head of EU at the moment so in 2018 they will be up to speed.
Question 13
Is AHZ still considering the other options such as Dura Mater Repair, Stem Cell delivery and Abdominal Surgery. There has been no mention of them in recent announcements. Below is an old (2015) timetable - This timetable is redundant as per comments on near term revenue priorities - in fact I cannot see in our project lists any actual work (historically) on this list, even at Code Red I dont think any of this was commenced in a structured or meaningful way - we have since cleared up the development portfolio.
REGENERATIVE TISSUE PRODUCT PORTFOLIO -
Congenital Heart Disease (CHD) - Launched in EU & US
Cardiovascular Applications Heart valve repairs & reconstructions*- On market in US & Asia Vascular tissue Carotid Endarterectomy (CEA) - On market in 2016
Dura mater repair Spinal and cranial repair - File 2017
Whole vascular tissue CABG, AV fistula - File 2018
Stem Cell or stem cell factor delivery ADAPT tissue with stem cells - File/partner 2019
Abdominal surgery Hernia repairs -File 2020 ADAPT® *
A real and updated CC family product development pipeline and road map would be good. Next webinar !
Question 14
India as a market for CC was on the horizon and expectations were it should be perhaps done by now or the near future? When? AGM
Question 15
Provide Feedback on IDN's and tenders - seemed to be several possibilities mentioned during webinar. What is status? AGM
TAVR Questions
Question 16
Will the wet sterile catheter package cut prep enough that more of the same operation could be performed in the same day by a surgical team? AGM
Question 17
How does this tech fit in with the Australian Govt's desire for this operation to be done by a surgeon (without a cardiologist present)? It fits - its more cost effective from a DRG perspective
Question 18
Will this hydrobath tech be offered to 4C Med Tech?....part of an enticement for the M&A perhaps ;o) Possibly - I cant comment further at this point
Question 19
While Adapt tissue doesn't calcify, does the introduction of nitinol cage, fixation and suture material introduce sites where calcification can occur? Yes its possible in this setting, although all current products have the same issue, we need to understand how differentiated we are once we have done the animal models - its the opinion of the team that we will perform well in this regard.
Question 20
update on TAVR progress. Recent announcement was appreciated. 'What does the path to commercialization of TAVR look like' Ie: what are the relevant stages, and the timeframe associated with each. For example: I cant comment at this point
Partnership: 6-12 months
Trials: 24-36 months
FDA approvals: 6-12 months
Etc etc
General Business Questions
Question 21
Does the appointment of Mr. Zirsen to the board of SMA have any relevance to AHZ or is it entirely a personal matter for Mr. Zirsen? personal
Question 22
When the company talks about $500 million opportunity or Billion $ opportunity are they talking about the value of the product only or surgery and hospital fees included? Assuming you mean the TAVR market its product sales only (10% of USD $5 BILLION)
Question 23
What is the current thinking on the value of conferences? Noticed we're not participating in as many as we used to and have not participated in some big ones e.g.
http://www.crf.org/tct
I wanted to finish the new campaigns and get the reps up to speed - we had been locked out of a lot of institutions pre code red, we also had no real sense of strategy or implementation so I believe the money was not well spent. We will start to reappear at more conferences again in 2018. The value of attendance is indisputable - however it needs to be connected to a broader strategy (which it wasn’t in the past) and as such in my opinion was a waste of resources.
HSV and HPV Questions
Question 24
How does the recent article regarding improvements in Gardasil vax affect AHZ. It doesnt - this is private work with Ian Frazer not related to AHZ
Question 25
- There appears to have been several patent updates to the patent "Therapeutic compositions and methods for inducing an immune response to herpes simplex virus type 2 (HSV-2)". It looks like these are adding new target sequences. Is there anything new here you can tell us? Its usual to continue to build our IP portfolio around the research - the strategy is to file as many value added patents as possible in the event of a collaboration it adds more value to the platform.
Question 26
There has been discussion by some whether the vax should be spun off. Intent would be to create capital for core business as it appears a lengthy horizon that distracts from CC. If CC is to be as successful as stated, then why focus on non-core activities? What is the business case and expected value.
As per my comments to the market on numerous occasions I had stopped funding Immunotherapies some time ago. This doesnt mean they stopped working as the company had cash on the balance sheet to fund ongoing operations and research. As per the AGM we are in discussions that may or may not come to fruition with regards to the strategic direction of Immunotherapies. My Investment thesis presentation at the AGM highlighted company A and company B. Immunotherapies is company A - hence my decision to seek out alternatives - it takes 10 years and usd $1 BILLION to bring a drug to market. With regards to “ spin off” we Immunotherapies is not actually part of AHZ per se, we are a major shareholder (73% ) but it is a private company ( I am chairman of the board).
Infusion Questions
Question 27
What other hospital tenders are in play. Are you looking outside of Australia for infusion or are the products for distribution in Australia only at this stage. AGM
Question 28
What are our regional limitations to sales of infusion equipment? Can our reach be expanded? We are well covered, the issue is the length of the deal cycle which can be very long (tenders come up every 3-5 years ) but we are entering a new phase where more tenders should become available in 2018-2019
Question 29
Confirm the status of the QLD infusion tender? The QLD one is apparently overdue so would really like to know what is going on there. Not sure if there is a major tender in QLD, although I believe there are some on the horizon next year.
Question 30
Does AHZ have any intent to develop their own infusion or similar products? As mentioned in my “strategic pillars” slide we are currently working with some engineers on potentially complimentary products.
(20min delay)