Admedus’ (ASX: AHZ) investors have demonstrated their support for the growth aspirations of its CardioCel® product and ongoing research for the HSV-2 therapeutic vaccine by oversubscribing for its $8 million placement.
Funds from the placement of 80 million shares to sophisticated and professionals investors will be used for:
- Expanding the sales teams in Europe and the U.S. to build the marketing efforts for CardioCel®;
- Post-market studies and further product development to expand the use of CardioCel® in cardiovascular surgical applications; and
- Progress the HSV-2 therapeutic vaccine into a Phase II study to be initiated before the end of 2014.
Further funds will come from a Share Purchase Plan to existing shareholders who will be offered an opportunity to subscribe for up to $15,000 of shares priced at $0.10 each.
“We appreciate the support of the new and existing investors that participated in the placement and encourage shareholders to participate in the SPP,” chief executive officer Lee Rodne said.
“The next 12 to 36 months are important for Admedus as we continue to leverage off the recent marketing approvals of CardioCel® and grow our revenues.
“Admedus is entering an exciting phase with CardioCel® on market in the US and Europe, the Herpes vaccine progressing to Phase II and the HPV therapeutic vaccine also heading into clinical trials.”
Admedus had earlier this month hit a key milestone after making the first sale of its lead regenerative tissue product CardioCel® in the U.S. ahead of the expected mid-year timing it had previously forecast.
This follows further promising data from its previous Phase II study with the first patient showing no detectable calcification or need for “re-do” surgery 6 years after implantation.
Other patients in the study also continue to show no signs of calcification or follow up surgeries after 3 to 5 years.
Expanding the sales team in Europe and the U.S. will allow Admedus to expand the use of CardioCel® in those areas. It is targeting to have the product used in 15 key centres in each of these areas.
This offers significant potential given that in the U.S. alone, there are 120,000 cases in coronary heart disease and valve repair per year.
Europe offers a market of similar size with CardioCel® already in use at 8 key centres.
It is also used in Australia under the Authorised Prescriber Scheme with over 100 patients implanted.
Potential also exists to extend its applications beyond intra-cardiac repair and reconstruction into carotid endarterectomy and aortic arch uses.
CardioCel® is a regenerative tissue product engineered by the group’s ADAPT® tissue engineering process to be a durable, pure collagen scaffold used to repair heart deformities including repairing and reconstructing heart valves.
It offers strong regeneration of normal heart tissue around tissue ‘scaffold’, allows blood flow through and around facilitating tissue regeneration and notably avoids calcification.
HSV-2 and HPV therapeutic vaccines
Initial data from Admedus Vaccines’ (formerly Coridon) Phase 1 study for its Herpes Simplex Virus (HSV-2) vaccine has shown that it is safe in study subjects and can generate a T-cell response, an early indicator of an effective immune response.
This supports pre-clinical data and analysis is ongoing.
The therapeutic vaccine was developed by Professor Ian Frazer and his science team at Coridon is designed to prevent transmission of as well as treat herpes simplex virus 2 (HSV-2) by stimulating the immune response to enable a patient to fight against the disease.
Work is underway to progress the HSV-2 therapeutic vaccine into a Phase II study to be initiated before the end of 2014.
Genital herpes affects more than 1 in 6 Americans between ages 14 and 49 according to the Centers for Disease Control in the U.S. while the World Health Organisation estimates the number of people aged 15–49 years who are living with HSV-2 worldwide exceeds half a billion.
Notably, there is currently no cure for HSV-2.
The high infection rates make for a large market, which is estimated to be worth up to $6 billion.
Admedus is also planning to initiate within the next 12 months, a Phase I study for its HPV vaccine.
Preclinical data has showed T-cell responses, cessation of tumour progression and viral antigen clearance.
Current HPV vaccines do not treat the disease and there is an estimated $1 billion market for a therapeutic vaccine.
With the $8 million placement and upcoming share purchase plan, Admedus is well funded to make further growth.
Notably, expanding the sales teams in Europe and the U.S. for CardioCel® will help the company grow its revenue ($1.7 million in the quarter ended 31 March 2014).
It also sets the stage for the company to develop a portfolio of regenerative tissue products for a range of surgical applications, including cardiovascular, hernia and pelvic floor repair.
Given its proven use in the cardiac market, this has the potential to further increase the company’s revenue stream.
Blue sky opportunities will come from its ongoing work with Professor Ian Frazer to develop therapeutic vaccine programs based on its platform technology.
Initial data from the Phase I study for the HSV-2 vaccine has been promising and the company is moving to begin a Phase II study.
It also plans to begin a Phase I study for its HPV vaccine.
Share price catalysts in the next 12 months include:
- Growing revenues in Europe;
- Further U.S. CardioCel® sales;
- Initial Asian market approval for CardioCel®;
- Submission of the Canadian marketing application for CardioCel®;
- Initiation of CardioCel® market expansion studies;
- Progression of CardioCel® with cellular therapies program
- Complete preclinical HPV data
- Initiation of HSV-2 Phase II
- Initiation of HPV Phase I
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