Carmat: Why analysts from Degroof Petercam are now betting on Carmat

(BFM Bourse) – Even taking into account the financial needs that Carmat will continue for several years, Degroof Petercam estimates that in the absence of serious competition, the commercial prospects for the artificial heart Aeson justify a target price of 25.40 euros, leading analysts at the Belgian bank to establish a buy recommendation.

With its Aeson heart prosthesis, now in the commercial stage, the French company Carmat has taken the development of an artificial heart to an unprecedented level, underlines a new research from analysts on Monday. The idea of ​​replacing the failing human organ with a manufactured device is far from new (theorized as early as the 1800s), but it has been a long journey. It was not until 1982 that the first “total artificial heart” was implanted -TAH for Total Artificial Heart, that is, a prosthesis that replaces the two ventricles, as opposed to the left or right ventricular devices. Despite the drawbacks inherent in its technology (noisy and brutal pneumatic heart for circulation), it subsequently led to the first total artificial heart to be commercially approved by Syncardia from 1999 (the latter is currently suspended again in Europe due to quality problems).

The hypothesis of the arrival of xenografts (transplants of animal species) does not seem to be able to change the situation for at least 10 to 15 years, according to the surgeon who succeeded in the first implantation of a genetically modified pig heart in January 2022, Dr. Bartley Griffith himself. Note that unfortunately the operated patient died two months later, for reasons not fully disclosed.

In a study by Christophe Dombu and Laura Roba, Degroof Petercam emphasizes the unique competitive advantages that make Aeson the most advanced artificial heart in the world. First of all, it is a fully bioprosthetic heart, where the surface that comes into contact with the blood is made of a hemocompatible material – which significantly reduces the risk of hemolysis, ie damage and destruction of red blood cells. The prosthesis also reproduces the pulsating rhythm of the human heart (the pump changes direction every 2 milliseconds, allowing the activating fluid to move the membranes back and forth, mimicking the movement of the two ventricles), again to prevent anomalies and potentially serious prevent pathologies. The liquid-based system has the added advantage of being quiet. Finally, the Carmat product includes sensors capable of determining physiological needs based on the patient’s activity, to adjust the heart rate accordingly thanks to an algorithm.

Exploding needs

Analysts say Aeson could provide a solution for thousands of patients with end-stage heart failure each year, knowing that today only 3% of patients waiting for a transplant receive a donor graft, while the remaining number of grafts has remained stable worldwide in recent years. as needs explode. A market without real competition for years, given the fledgling level of other ongoing projects: ReinHeart in Germany, Realheart in Sweden or Smartheart in the US, Degroof Petercam believes. While sales have already started and are expected to resume in October, the design firm estimates annual sales peak at €750 million once Aeson is prescribed as a definitive prosthesis (Destination Therapy) alongside a solution pending human transplantation (Bridge To Transplant). And while the company’s development has so far been marred by clinical, regulatory and manufacturing delays, the analyst notes that these issues are common in the industry, including many larger medical device players. “We believe that Carmat is able to overcome these obstacles, as he has shown on several occasions”.

In financial terms, Degroof Petercam warns that clinical efforts will continue to be intensive over the next three years, requiring approximately EUR 120 million in investment (before deduction of any grants), and that the company is still refinancing, the next one by March 2023. presumably. However, the profitability horizon is expected for 2027.

Based on its main assumptions, Degroof Petercam calculates that the fair value of the security is 25.40 euros, which prompted the research bureau of the Belgian investment bank to adopt a purchase recommendation on its value. An opinion that finds some resonance on the stock market on Monday, the title climbs by 9.03% to 12.44 euros around 4:15 pm.

Guillaume Bayre – ©2022 BFM Bourse

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