Carmat: Why Degroof Petercam analysts are actually betting on Carmat

(BFM Bourse) – Taking into account the financial needs that will persist for Carmat over several years, Degroof Petercam estimates that in the absence of serious competition, Aeson’s artificial heart’s commercial prospects justify a target price of € 25.40, leading Belgian analysts accept recommendation to buy.

The French company Carmat, with its Aeson cardiac prosthesis, which is now in the commercial phase, has taken the development of the artificial heart to an unprecedented level, a new study by analysts on Monday emphasizes. The idea of ​​replacing a faulty human organ with a manufactured device is far from new (theorized in the 19th century), but it has been a long way. It was not until 1982 that the first “Total Artificial Heart” was implanted for the Total Artificial Heart, ie a prosthesis replacing two chambers as opposed to left or right ventricular auxiliaries. Despite the disadvantages associated with its technology (noisy and brutal pneumatic heart for the circulatory system), it gave rise to the first total artificial heart commercially approved by Syncardia since 1999 (the second is currently suspended again in Europe due to quality problems).

The hypothesis of the arrival of xenografts (grafts from 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 January 2022 the first implantation of a genetically modified pig heart. Bartley Griffith himself. Note that the operated patient, unfortunately, died two months later for reasons that are not fully disclosed.

In a study by Christoph Domba and Laura Rob, Degroof Petercam emphasizes the unique competitive advantages that make Aeson the most advanced artificial heart in the world. First of all, it is a completely bioprosthetic heart, the surface in contact with the blood is made of 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 two chambers), again, to prevent anomalies. potentially serious pathologies. The fluid-based system has the additional advantage of being quiet. Finally, Carmat contains sensors capable of determining physiological needs according to the patient’s activity and adjusting 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 will receive a donor graft, with the remaining number of grafts stable worldwide in recent years as needs explode. Degroof Petercam believes a market without real competition for years, given the still early level of other ongoing projects: ReinHeart in Germany, Realheart in Sweden or Smartheart in the USA. While sales have already begun and are expected to resume in October, the design office estimates annual sales at € 750 million when Aeson is prescribed as a Destination Therapy alongside a Bridge To Transplant. And although the company’s development has so far been marked by clinical, regulatory and manufacturing delays, the analyst notes that these problems are common in the sector, even among the much larger players in the medical device industry. “We believe that Carmat has the ability to overcome these obstacles, as he has shown on several occasions.”

From a financial point of view, Degroof Petercam warns that clinical efforts will continue to intensify over the next three years, which will require investments of around € 120 million (before deducting any subsidies), and that the company will still have to refinance. another probably by March 2023. However, the horizon of profitability is not expected until 2027.

Based on its main assumptions, Degroof Petercam has calculated that the fair value of the security is EUR 25.40, leading the Belgian Investment Bank’s research firm to adopt a recommendation to purchase the security. The opinion, which has a certain response on the stock exchange on Monday, rose 9.03% to 12.44 euros around 16:15.

Guillaume Bayre – © 2022 BFM Bourse

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