vital sign monitoring concept. 3d rendering. abstract mixed media.

alfapump and DSR for fluid overload disorders

Sequana Medical 21 June 2021 Initiation
Download PDF

Sequana Medical

alfapump and DSR for fluid overload disorders

Initiation of coverage

Pharma & biotech

21 June 2021

Price

€9.62

Market cap

€179m

$1.21/€

Net cash (€m) at 31 December 2020
(excluding €0.4m lease liabilities)

3.6

Shares in issue

18.58m

Free float

50%

Code

SEQUA

Primary exchange

Euronext

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

14.0

14.5

50.3

Rel to TA-100

12.2

8.6

24.0

52-week high/low

€11.8

€6.0

Business description

Based in Belgium, Sequana Medical develops devices based on its alfapump platform for the treatment of diuretic-resistant fluid overload in liver disease, malignant ascites and heart failure. Alfapump is CE marked for refractory ascites and is in a pivotal North American study for this indication.

Next events

Interim data for POSEIDON alfapump pivotal study

Q421

Interim data for SAHARA DESERT alfapump DSR study

Q421

Analysts

Pooya Hemami, CFA

+1 646 653 7026

Maxim Jacobs, CFA

+1 646 653 7027

Sequana Medical is a research client of Edison Investment Research Limited

Sequana’s proprietary alfapump and Direct Sodium Removal (DSR) platforms are being advanced as long-term treatments for diuretic-resistant fluid overload related to liver disease, malignant ascites and heart failure (HF). The alfapump is commercialised in parts of Europe for liver disease and is undergoing a pivotal North American registration study (POSEIDON), with primary endpoint data expected in Q222. This device removes localised excess fluid build-up in the peritoneal cavity, and aims to provide significant improvements in quality-of-life and patient independence. DSR technology adds a complementary method for removing excess fluid that is spread all over the body and the combined approach, alfapump DSR, is being advanced as a therapy for HF patients affected by congestion (fluid overload). Sequana is funded through the POSEIDON data inflection point and we derive an rNPV valuation of €249m.

Year end

Revenue (€m)

PBT*
(€m)

EPS*
(€)

DPS
(€)

P/E
(x)

Yield
(%)

12/19

1.0

(14.9)

(1.22)

0.0

N/A

N/A

12/20

1.0

(19.0)

(1.25)

0.0

N/A

N/A

12/21e

1.1

(17.9)

(0.96)

0.0

N/A

N/A

12/22e

1.2

(17.0)

(0.91)

0.0

N/A

N/A

Note: *PBT and EPS are normalised, excluding amortisation of acquired intangibles, exceptional items and share-based payments.

Liver disease fluid overload is an area of unmet need

Fluid overload in the abdomen (ascites) is a painful and potentially debilitating complication of liver disease including NASH. While diuretic drugs are the standard of care, resistance often develops (affecting c 16,600 Americans per year) and the default subsequent treatment option, paracentesis, requires frequent and recurring time-consuming drainages in hospital settings, leading to significant patient burden and high cost. The alfapump automatically pumps fluid from the abdomen into the bladder and presents an alternative to frequent paracentesis in such patients. We estimate US launch in H223 with peak 2032 sales of c €180m in North America.

Alfapump DSR targets larger HF market

HF can lead to congestion and 90% of the c 1m US HF hospitalisations are driven by fluid overload. Diuretics are the mainstay treatment but as with ascites, resistance often develops. The alfapump DSR system combines the alfapump platform with a zero-sodium infusate therapeutic solution (ie DSR infusate) and has recently been shown in the RED DESERT feasibility study to sustainably improve diuretic response and cardio-renal status. Further studies and refinement of the infusate solution are planned, leading to a potential launch in H226, and we estimate end-user sales of over €1.4bn in 2032.

Valuation: rNPV of €249m

Our Sequana valuation applies a risk-adjusted net present value (nNPV) model primarily valuing the North American prospects for alfapump and the EU and US prospects for alfapump DSR. We obtain an rNPV of €248.7m. After including €22.2m in Q121e net cash, we obtain an equity valuation of €271m or €14.58 per share (€13.33 fully diluted). We model that Sequana’s cash should last into Q222 and that it will need to raise €85m between 2022 and 2026 before reaching profitability.

Investment summary

Company description: alfapump and DSR for fluid overload

Sequana Medical is a commercial-stage medical device company based in Belgium that first listed in 2019 on the Euronext exchange. It is developing a proprietary alfapump platform for the treatment of fluid overload related to liver disease, malignant ascites and HF. Fluid overload is a painful and potentially debilitating complication of such diseases and while diuretic drugs are the standard of care, resistance often develops and remaining alternative treatment options present risks and/or significant patient burden. The fully implanted, wirelessly charged alfapump automatically pumps fluid from the abdomen into the bladder and is positioned as a convenient and effective chronic treatment.

The initial commercial opportunity, primarily targeting North American markets, is advancing alfapump for fluid overload (ascites) resulting from liver disease. The alfapump is undergoing a pivotal US registration study, POSEIDON, with primary endpoint data expected in Q222 (potential US launch in H223). It is also CE marked and commercialised in parts of Europe for this indication. The larger opportunity combines alfapump with the DSR approach (alfapump DSR), which is being advanced as a potential chronic therapy for HF patients affected by congestion. The RED DESERT feasibility study, reported in May 2021, showed a sustainable improvement in diuretic response for alfapump DSR, as well as improvements in cardio-renal status.

Valuation: Pipeline rNPV of €249m reflects upside potential

Our Sequana valuation applies a risk-adjusted NPV model primarily valuing the North American prospects for alfapump (60% probability of success) and the EU and US prospects for alfapump DSR (25% probability of success, given the earlier development stage), both using a 12.5% discount rate. We obtain an rNPV of €248.7m. After including €22.2m in Q121e net cash, we obtain an equity valuation of €271m or €14.58 per share (€13.33 fully diluted).

Financials: Funded into Q222 by our estimates

Sequana’s FY20 net operating cash burn rate was €17m and it finished FY20 with €3.6m net cash excluding €0.4m in lease liabilities. It has since raised €22.5m (gross) and converted €0.6m of debt to equity. We estimate pro forma end-Q121 net cash of €22.2m. We expect it will continue to have a negative operating cash burn rate until H226, at which point we anticipate alfapump sales will exceed R&D costs and other opex costs. We model that Sequana’s current cash should last into Q222 and that it will need to raise €85m between 2022 and 2026 before reaching profitability. As per our usual policy, we model these financing requirements as illustrative debt.

Sensitivities: Development, partnership, financing risks

In addition to the usual regulatory and development risks, Sequana will need to demonstrate clear benefits of the alfapump over alternate ascites treatments and effectively promote the product to the medical community and hepatologists to optimise penetration. The company must also develop its own US salesforce and it has no existing experience in this region. While alfapump uptake in Europe have been slow, North American prospects could be stronger given the rising prevalence of non-alcoholic steatohepatitis (NASH). For alfapump DSR, Sequana will depend on the commercialisation efforts and capabilities of a potential sales and distribution partner, as well as on securing a transaction at satisfactory terms and in a timely manner. Sequana will also need to have access to further capital to advance its programmes, and if its expenditures are higher than forecast and/or if revenue is below our expectations, its capital needs may be higher than we project. While our model accounts for the financing(s) as long-term debt, the company may need to issue equity instead, at pricing that may not be favourable for current shareholders and could lead to significant dilution. Finally, the success of Sequana’s products may depend on its ability to defend the IP assets surrounding them.

Ascites: Area of increasing medical need

Ascites is the accumulation of protein-containing fluid within the abdomen, a complication of late-stage liver disease and associated with poor prognosis. The condition results in loss of appetite, shortness of breath, mobility and sleeping difficulties, and can predispose patients to develop bacterial peritonitis.1 Ascites is predominantly caused by high blood pressure in the hepatic portal veins (portal hypertension), often due to liver cirrhosis (scarring). Cirrhosis is often caused by alcohol, hepatitis and increasingly by NASH. There are currently over 240,000 cases of ascites due to cirrhosis in the seven major markets,2 and cirrhotic patients with ascites have mortality rates estimated at between 50% within two years3 and around 44% within five years.4

  Gerbes AL (ed): Ascites, Hyponatremia and Hepatorenal Syndrome: Progress in Treatment. Front Gastrointest Res. Basel, Karger, 2011, vol 28, pp 23–31

  Mirza MS, Aithal GP. Portal hypertension and ascites. Surgery. 2007;25(1):28–33

  Planas R, Montoliu S, Balleste B, et al: Natural history of patients hospitalized for management of cirrhotic ascites. Clin Gastroenterol Hepatol 2006;4: 1385–1394.

Often, a low-sodium diet and diuretic medications (eg spironolactone with or without furosemide) can help eliminate the excess ascetic fluid, but in c 5–20% of ascites cases,5,6 diuretic resistance develops where fluid accumulation persists despite medication use (or diuretic-induced complications occur), resulting in refractory ascites (RA). RA patients have a one-year survival rate at under 50%.7 Remaining treatments for RA are repeated paracentesis, which is burdensome, costly, and time-consuming, and/or transjugular intrahepatic portosystemic shunt (TIPS), which is associated with hepatic encephalopathy (HE). The alfapump offers a convenient and unobstructive long-term therapy that aims to improve patient independence and quality of life (QoL).

  Santos J, Planas R, Pardo A, et al. Journal of Hepatology. 2003;39(2):187–192.

  Fede G, D'Amico G, Arvaniti V, et al. J Hepatol. 2012 Apr;56(4):810-8. doi: 10.1016/j.jhep.2011.10.016. Epub 2011 Dec 13. PMID: 22173162 Review.

Ascites can also be a common complication of certain cancers (termed malignant ascites) resulting from fluid accumulation in the peritoneal cavity. Malignant ascites accounts for c 10% of ascites cases.8

  Saif MW, Siddiqui IAP, Sohail MA. Ann Saudi Med. 2009 Sep-Oct; 29(5): 369–377. doi: 10.4103/0256-4947.55167 PMID: 19700895

RA patients are often candidates for liver transplant but, given the lack of available supply and other intervention risks, the common treatment at this stage is ascites drainage (paracentesis), with paracentesis in excess of five litres referred to as large volume paracentesis (LVP). The duration of paracentesis varies from 30 minutes to 24 hours. Medical costs for paracentesis are estimated by the company at around $1,500–1,800 per treatment, which can occur 2–3x per month in patients with RA. LVP requires patients to stay in hospital for up to 48 hours and only provides temporary relief, as often a cycle develops where patients undergo LVP, feel much improved for up to a week but then ascites accumulates with symptom worsening before another LVP is needed.

Exhibit 1: Paracentesis treatment cycle for RA patients

Source: Sequana Medical

The remaining FDA-approved therapeutic option for RA is TIPS, which involves the creation of a tract or shunt between the higher-pressure portal vein and the lower-pressure hepatic vein, effectively bypassing the normal flow of blood through the liver’s functional tissue. As TIPS causes much of the blood flow to evade the liver’s detoxification processes, it can often increase the risk of HE, particularly in older patients, as neurotoxins and ammonia can then accumulate in the general blood circulation. Altogether, TIPS is contraindicated in many RA patients, particularly in those over age 65, those with advanced liver disease (mostly Child-Pugh C classification), and those with HF and/or pulmonary hypertension.9 It has been estimated that in about 30% of cases, TIPS will be ineffective and/or result in moderate-severe HE.10 11 The only curative treatment for late-stage liver disease is a transplant but availability is minimal, healthcare costs are high and patients will require lifelong immunosuppression drugs post-implantation to prevent organ rejection. In 2019, 8896 liver transplants were performed in the US, up 7.8% y-o-y and more than in any previous year.12

  Bellot P, Welker MW, Soriano G, et al. J Hepatol. 2013 May;58(5):922-7. doi: 10.1016/j.jhep.2012.12.020. Epub 2013 Jan 11.PMID: 23318604

  Boyer TD, Haskal ZJ. Hepatology 2005;41(2):386-400. doi:10.1002/hep.20559.

  Riggio O, Angeloni S, Salvatori FM, et al. Am. J. Gastroenterol. 2008;103(11):2738-2746. doi:10.1111/j.1572-0241.2008.02102.x.

  US Organ Procurement and Transplantation Network 2019 Annual Report. https://srtr.transplant.hrsa.gov/annual_reports/2019/Liver.aspx

Alfapump presents novel platform to treat liver ascites

The primary goal of the alfapump is to significantly improve patients’ QoL and reduce their need to frequent healthcare facilities for time consuming and uncomfortable paracentesis and avoid the immobility and discomfort that occur as ascites accumulate. The alfapump can pump up to 4 litres of ascites-containing fluid per day from the abdomen into the bladder, where it is eliminated via urination. During charging (once daily, through induction), device information is also communicated via mobile networks wirelessly (via DirectLink system) to secure servers for analysis, allowing physicians to monitor performance and effectively manage patients.

Exhibit 2: Diagram of alfapump system and placement

Exhibit 3: alfapump charging cycle and DirectLink system

Source: Sequana Medical. Note: 1) Automatic and continuous removal of fluid from the abdomen; 2) Fluid is pumped into bladder; 3) Fluid leaves the body through normal urination; 4) Wireless charging and communication for monitoring.

Source: Sequana Medical


Exhibit 2: Diagram of alfapump system and placement

Source: Sequana Medical. Note: 1) Automatic and continuous removal of fluid from the abdomen; 2) Fluid is pumped into bladder; 3) Fluid leaves the body through normal urination; 4) Wireless charging and communication for monitoring.

Exhibit 3: alfapump charging cycle and DirectLink system

Source: Sequana Medical


While some of the existing c 90 alfapump-related patents expire before 2030, others extend into the 2030s, such as the ‘Apparatus and methods for treating intracorporeal fluid accumulation’, which expires in 203313, although the above expiration dates do not include potential patent term extensions, which could add three to five years of additional exclusivity. In 2011, the alfapump was CE mark approved in Europe for the management of RA due to liver cirrhosis and malignant ascites, and is marketed in Germany and France. The device was granted breakthrough device designation by the FDA in 2019 for treatment of recurrent or refractory ascites (RRA)14 due to liver cirrhosis. Devices that receive this designation are eligible for more frequent interactions with FDA representatives and are eligible for prioritised review. In addition, should alfapump receive premarket approval (PMA), under the Medicare Coverage of Innovative Technology (MCIT) initiative, the breakthrough status is proposed to provide a facilitated means to obtain reimbursement through the Centers for Medicare & Medicaid Services (CMS), potentially enabling provisional CMS reimbursement starting on the day of US approval. However, the Biden administration has delayed the implementation of the MCIT breakthrough device payment provision until at least 15 December 2021, although breakthrough products are eligible for the alternative New Technology Add-On Payment (NTAP) reimbursement eligibility pathway.

  Refractory ascites is defined by the International Club of Ascites (ICA) as an ascites that recurs within 4 weeks after LVP and cannot be prevented with current drug therapy. Recurrent ascites is defined by the ICA as an ascites that recurs at least 3 times within 12 months. Tonon et al. (2019) https://doi.org/10.1016/j.dld.2018.11.117

Ascites growth rate influenced by increasing NASH prevalence

The US CDC estimates that in 2018 more than 4.5m US adults were diagnosed with chronic liver disease.15 While alcohol abuse and hepatitis are the most common causes of liver ascites, the emergence of non-alcoholic fatty liver disease (NAFLD) (and consequently NASH) is a more recent contributor and is attributed to lifestyle-related disorders including obesity and type 2 Diabetes. NAFLD is already one of the most common causes of chronic liver disease with an estimated global prevalence approaching one billion people.16 Between 21%17 and 26%18 of the US population have NAFLD. Between 20% to 30% of NAFLD patients are expected to progress to NASH within about 10 years19 and once NASH develops, c 10% should progress towards cirrhosis within c 10 years.

  US Centers for Disease Control. www.cdc.gov/nchs/fastats/liver-disease.htm

  Loomba R, et al. (2013) The Global NAFLD Epidemic. Nat Rev Gastroenterol Hepatol 10, 686-690.

  Younossi Z, et al. (2017) Global Burden of NAFLD and NASH: Trends, Predictions, Risk Factors and Prevention. Nat Rev Gastroenterol Hepatol 109, 1-10.

  Estes C, Razavi H, Loomba R, Younossi Z, Sanyal AJ. Hepatology. 2018 Jan;67(1):123-133. doi: 10.1002/hep.29466. Epub 2017 Dec 1.

  Loomba R, et al. (2019) The 20% Rule of NASH Progression: The Natural History of Advanced Fibrosis and Cirrhosis Caused by NASH. Hepatology 70, 1913.

In 2015, there were an estimated 1.16m compensated cirrhosis cases and 134,400 decompensated cirrhosis cases in the US.20 Patients with decompensated cirrhosis have at least one complication, very often ascites, and have a median survival time of two years.21 Once ascites develops, between 5% and 20% of these patients will develop RA.22 23

  Estes C, Razavi H, Loomba R, Younossi Z, Sanyal AJ. Hepatology. 2018 Jan;67(1):123-133. doi: 10.1002/hep.29466. Epub 2017 Dec 1.

  US Department of Veterans Affairs. Viral Hepatitis and Liver Disease. www.hepatitis.va.gov/cirrhosis/background/stages.asp

  Ginès P, Cárdenas A, Arroyo V, et al. N Engl J Med. 2004 Apr 15;350(16):1646-54. doi: 10.1056/NEJMra035021. PMID: 15084697 Review.

With NASH prevalence expected to grow ~60% by 2030,24 we expect the profile of the typical ascites patient to shift from mostly alcohol and hepatitis-related cases towards an older, NASH-driven demographic with potentially greater access to the healthcare system and/or compliance to recommended treatments. Further, largely because of the increased risk of HE, TIPS is generally less suitable for the older population demographic that NASH ascites is more likely to affect. There are no drugs approved for NASH and while NASH remains an area of continued active development (see Edison initiation report on Hepion Pharmaceuticals for pipeline discussion), we expect NASH complications such as cirrhosis and RRA to continue to increase.

  Estes C, Razavi H, Loomba R, Younossi Z, Sanyal AJ. Hepatology. 2018 Jan;67(1):123-133. doi: 10.1002/hep.29466. Epub 2017 Dec 1.

Clinical alfapump studies to date

The open-label PIONEER study (2010–2013) was the first human trial assessing alfapump. Pump implantation was offered to patients with RA who were not candidates for TIPS. An independent Data Safety Monitoring Board (DSMB) recommended midway through the study that changes be implemented to reduce serious adverse events (SAEs) and patients were subsequently divided into cohorts I and II, reflecting whether they received the implant before or after the DSMB's recommendations.25

  Bellot P, Welker MW, Soriano G, et al. J Hepatol. 2013 May;58(5):922-7. doi: 10.1016/j.jhep.2012.12.020. Epub 2013 Jan 11.PMID: 23318604

Exhibit 4: Completed alfapump clinical studies

Study name

Description

Number of patients

Year of completion

Recurrent or refractory ascites due to liver cirrhosis

PIONEER study

Prospective, multi-centre, open-label, uncontrolled study to assess the safety and performance of the alfapump in patients with refractory liver ascites and diuretic resistance

40

2013

Gines study

Prospective, single-centre, uncontrolled study to assess the effects on renal and circulatory function in patients with liver cirrhosis and refractory ascites

10

2014

European randomised controlled trial

Six-month open-label, randomised and controlled study in Europe on alfapump vs LVP for the treatment of refractory liver ascites

58

2016

Post marketing surveillance registry

Multi-centre, open-label observational European study designed to follow patients implanted with an alfapump for up to 24 months

100

2018

Retrospective trial at Hannover Medical school

Retrospective, single-centre study to investigate the alfapump as an alternative for LVP in real-world setting

21

2018

MOSAIC (North American IDE feasibility) study

12 month open-label, single-arm study in the US and Canada to assess safety and efficacy of alfapump in patients with recurrent or refractory liver ascites

30

2018

Malignant ascites

Retrospective Malignant Ascites study

Retrospective open-label European study to assess the performance and safety of the alfapump for the treatment of malignant ascites

17

2017

Source: Sequana Medical. Note: All of the above studies, other than the retrospective trial at Hannover Medical school, were conducted by Sequana.

The number of cirrhosis-related SAEs markedly decreased in the second part of the study following implementation of the DSMB recommendations, which included a modification of the bladder catheter implant procedure, the use of norfloxacin antibiotic prophylaxis, the avoidance of NSAIDs, and the use of albumin supplementation when LVP were performed pre- or perioperatively. In cohort II (n=19), 58% of subjects had no treatment-related infections at six months versus only 24% in cohort I (n=21). The median number of paracentesis procedures performed in the month preceding alfapump implantation was 3.4, which dropped to 0.24 per month after implant (p<0.01), with 40% of patients requiring no paracentesis after receiving their pump over the six-month study period. The alfapump removed a mean of 0.99l of fluid per day.

Following PIONEER, a European randomised controlled trial (RCT) was undertaken (2012–16) to directly compare the alfapump (n=27) to standard of care (SoC, n=31), which comprised a therapy regimen of diuretics and the removal of ascites (LVP) according to patient need, for six months.

Exhibit 5: Proportion of patients with LVP in alfapump arm vs SoC in European RCT

Source: Bureau C et al. J Hepatol. 2017 Nov; 67(5):940–949

Time to first LVP was significantly longer in the alfapump group compared with SoC (p<0.001, see Exhibit 5).26 The median number of LVPs was significantly higher in the SoC group compared with the alfapump group, wherein median time to first LVP was not reached after six months (p<0.001), and the mean number of LVP events per 28 days per patient was 0.2 in the alfapump arm vs 1.4 in the SoC arm (p<0.001). Altogether, the alfapump showed a substantial reduction in the need for LVP, the ultimate goal of this therapy. The Chronic Liver Disease Questionnaire (CLDQ) was used to measure QoL, and the abdominal symptoms and activity scores improved significantly in RA patients treated with alfapump, but not in the SoC arm. There was also a trend to improved nutritional status in the alfapump group compared with SoC. Although the frequency of SAEs (and by inference hospitalizations) was significantly higher in the alfapump group, this can be partly explained by the fact that alfapump implantation requires more intervention by the physician than LVP. Altogether, SAEs were generally limited and did not have an impact on survival. The most common SAEs were renal and urinary disorders (51.9% on alfapump arm versus 9.7% on SoC), most of which were acute kidney injury (AKI). 41% (12) of the 29 total AKI events in the alfapump group occurred within seven days of implantation and were transient, and of those 10 fully recovered and two improved. If the first seven post-op days were excluded, the levels of AKI events in each group were more similar (17 for alfapump versus 11 for SoC; p=0.28). The study authors believe that the AKI events occurring within the first seven days following implantation may have been related to sterile inflammation induced by the surgical procedure or related to abdominal wall manipulation (and changing abdominal pressures), or a combination of these factors. Therefore the AKI events appear to be related to the procedure or intervention involving the insertion of a device, rather than the alfapump itself.

  Bureau C, Thabut D, Oberti F et al. J Hepatol. 2017 Nov;67(5):940-949. doi: 10.1016/j.jhep.2017.06.010. Epub 2017 Jun 21. PMID: 28645737

The number of infections were comparable between both arms and there was no significant difference in overall survival between the alfapump and SoC groups (p=0.355), which is not surprising as the alfapump is not designed to treat the underlying severe liver disease. Causes of death in this trial were consistent with advanced liver disease.

Post-marketing experience with 24-month PMSR study

A prospective European Post-Marketing surveillance registry (PMSR) study started in 2013 to monitor alfapump performance for up to 24 months in a real world setting in 100 RA patients. Interim results of the first 57 patients was reported in 2017 and showed that post-implantation, the alfapump led to a significant reduction in paracentesis frequency, as the median frequency of paracentesis dropped by over 90%, from 2.17 (pre-implantation) to 0.17 per month after implantation.27 Most patients treated with alfapump remained free of LVP.

  Stirnimann G, Berg T, Spahr L, Zeuzem S, et al. Aliment Pharmacol Ther. 2017 Nov;46(10):981-991. doi: 10.1111/apt.14331. Epub 2017 Sep 21. PMID: 28940225

Study authors (Stirnimann et al., 2017) reported several SAEs with 17 patients (21.4%) requiring at least one re-intervention and 17 patients (30.3%) requiring explantation of the device due to an SAE, including two pump-pocket infections. The most common technical problem in the PMSR was blockage/obstruction of the peritoneal catheter, which occurred in 13 patients (23.2%). Bacterial infections occurred in roughly one-third of patients, although authors concluded that this is similar to infection rates in hospitalised cirrhotic patients (25–35%28). In total, 23 patients (41.1%) of the 56 evaluated patients died during the study, but study authors concluded the survival rates at six and 12 months were similar to those for RA patients undergoing LVP. The study authors recommended technical and procedural improvements to be made to reduce the rate of SAE and re-interventions. The authors emphasised that increased protein intake (eg albumin) post implantation would likely help reduce the risk of kidney injury, and we note that subsequent alfapump trials (including POSEIDON) strongly encourage the use of albumin supplementation.

  Jalan R, Fernandez J, Wiest R, et al. Bacterial infections in cirrhosis: a position statement based on the EASL Special Conference 2013.J Hepatol. 2014;60:1310-1324

Catheter design change reduces blockage risks

In parallel with the interim PMSR data, a new peritoneal catheter design (Medionics PSNA-100, from Medionics International) was found to reduce alfapump blockage risks in a retrospective study at Hannover Medical School. The previous standard catheter resulted in a 50% blockage rate in 10 patients at the Hannover site, whereas the Medionics catheter only had a single clogging event in 11 implantations, thus reducing the need for reoperation/re-implantation.29 Compared to the previous catheter, the Medionics product has a pigtail end, a larger diameter and larger-sized lateral vents (ie it has more ‘pores’ and these are located at the pigtail end rather than at the catheter shaft).

  Solbach P, Höner Zu Siederdissen C, Wellhöner F, et al. Eur J Gastroenterol Hepatol. 2018 Sep;30(9):1082-1089. doi: 10.1097/MEG.0000000000001149 PMID: 29738325

Exhibit 6: Original catheter employed in earlier alfapump studies

Exhibit 7: Medionics catheter

Source: Sequana Medical

Source: Sequana Medical

Exhibit 6: Original catheter employed in earlier alfapump studies

Source: Sequana Medical

Exhibit 7: Medionics catheter

Source: Sequana Medical

All alfapump implantations since approximately mid-2016 have been made using the Medionics catheter rather than the prior one and this has already been shown to reduce the risk of clogging events in subsequent studies (as compared to the interim PMSR data cited above).

The North American alfapump experience

The MOSAIC North American open-label feasibility study (2015–17) comprised 30 alfapump-implanted cirrhotic patients with RRA not eligible for TIPS. MOSAIC showed that the alfapump reduced the mean LVP frequency from 2.4 per patient/month before pump implantation to 0.2 per patient/month after pump implantation.30 Only 17 patients required an LVP during the course of the trial. QoL was measured using the CLDQ (higher is better) and Ascites Questionnaire (Ascites Q; lower is better). All surviving patients had improved QoL (Baseline CLDQ of 3.9 and Ascites Q of 51.7 versus 3-month values of 5.0 and 26.7, respectively; p < 0.001 for both) as well as improved index of nutritional status (prealbumin of 87.8 at baseline versus 102.9 at 3 months, p=0.04). At 12 months, four patients died from cirrhosis complications (unrelated to pump), and one additional patient who had withdrawn from the trial had died. None of the deaths were attributed to pump implantation or therapy. Study authors (Wong et al, 2020) indicated that the shown overall survival rate was good, and concluded that alfapump may be a definitive treatment for RA in cirrhosis, especially in patients who are not TIPS candidates. We note that the MOSAIC study used the standard catheter, not the Medionics catheter and we believe the SAE profile could have been even better had the latter catheter type been used.

  Wong F, Bendel E, Sniderman K et al. Liver Transpl. 2020 May;26(5):651-661. doi: 10.1002/lt.25724. Epub 2020 Mar 22. PMID: 31999044

The POSEIDON study is the key to potential US launch

Sequana started the POSEIDON pivotal study in 2019 in patients with RRA due to liver cirrhosis. The trial is designed to support alfapump approval and reimbursement in the US and Canada. The study is single arm and open label, within subject crossover study, whereby patients will serve as their own controls. Patients will enter a three-month pre-implant observation period in which they will receive SoC therapy, consisting of paracentesis, before the alfapump is implanted. Eligible patients will be implanted with the alfapump (used in conjunction with the Medionics catheter) and during the three-month stabilisation period their alfapump settings will be adjusted as needed and patients will be fully trained. After the stabilization period, a three-month post-implant observation period will begin. The primary effectiveness outcomes include:

the proportion of patients with a 50% reduction in the overall average frequency of therapeutic paracentesis (TP) per month in the post-implant observation period (reflecting month four to month six after implantation) as compared to the pre-implant observation period; and

whether at least 50% of patients receive a 50% reduction in their monthly frequency of required TP post-implantation compared to the average monthly number of TP required pre-implantation.

The primary safety endpoint is the rate of alfapump related re-interventions as determined by the Clinical Events Committee, at six months post implantation. Albumin supplementation is also highly recommended (given that this may support renal health). The study allows for up to 30 patients to be enrolled in a training (or ‘roll in’) cohort (which will be excluded from primary efficacy analysis), to ensure centres are experienced with the alfapump before the actual study cohort is enrolled. The study cohort will consist of up to 50 patients who will be implanted with the alfapump. The company expects primary endpoint data in Q222, with an FDA PMA application possible in H222, resulting in a potential 2023 US launch. In November 2020, interim POSEIDON study analysis was reported, which provides us confidence the study is on track to meet the primary efficacy endpoint. Data from the first 13 implanted patients, all part of the training or ‘roll-in’ cohort, showed a greater than 90% reduction in TP frequency post-implantation and 100% of reportable patients had a >50% reduction in average frequency of TP per month. The company stated the safety profile of alfapump was consistent with previously reported data and that two alfapump explantations had occurred with an adjudication process underway.

Exhibit 8: alfapump for RRA upcoming milestones

Event

Timing

POSEIDON PMA-enabling study last patient enrolment

Q221

POSEIDON PMA-enabling study interim analysis of larger roll-in cohort

Q221

POSEIDON PMA-enabling study primary endpoint

Q222

US regulatory filing

H222

Potential US launch

H223

Event

POSEIDON PMA-enabling study last patient enrolment

POSEIDON PMA-enabling study interim analysis of larger roll-in cohort

POSEIDON PMA-enabling study primary endpoint

US regulatory filing

Potential US launch

Timing

Q221

Q221

Q222

H222

H223

Source: Sequana Medical

Improving average duration of alfapump therapy in RRA

While complications can occur after implantation (notably AKI, infection, blockages), we recognise the target population (decompensated cirrhosis) is in a very diseased state and generally has a low life expectancy. Further, much experience has been gained in the trials to date and there have been improvements in alfapump implantation protocols and device parameters (namely the use of the Medionics catheter, refinements to the implantation procedure and post-implantation control algorithms, use of antibiotic prophylaxis, and recommendations for albumin supplementation post-implantation) that have led to lengthened average alfapump treatment duration times across all ongoing studies (this reflects an indirect measure of treatment success). The average duration of alfapump therapy has increased to over 400 days per patient, up from 150–200 in 2013–14 when the product was first being used, which we view as impressive given the mortality rate of the treatment population. All said, the decision to use the alfapump for each patient will depend on the individual risk-benefit scenarios decided between the patients and their physician(s), where the potential benefit of improved QoL and independence (from a reduced need to spend potentially several days per month undergoing paracentesis drainage) is weighted against the SAE risks described above (namely blockages), although we note that RRA patients are prone to SAEs (including AKI events and infections) due to their underlying disease.

Exhibit 9: Average duration of alfapump therapy

Source: Sequana Medical

Sequana has commercialised alfapump in European markets since 2013 but product uptake has been relatively limited (sales of c €1m annually in 2018–20), which may be related to most of the RA populations in these regions being attributed to alcoholism or hepatitis, the treatment of which may not be as effectively integrated into the healthcare systems. The company is focusing its sales efforts on Germany and France. In North America, NASH-related cirrhosis is expected to account for a larger proportion of RRA cases and as stated above, these patients are generally older (and thus more likely to be contraindicated for TIPS), insured (those aged over 65 have government-run Medicare insurance in the US) and well integrated into the healthcare system. Albeit a small sample size, Sequana indicated that of the first 13 patients in the POSEIDON study, 23% had NASH, supporting management’s outlook that NASH will account for a meaningful and growing proportion of the North American RRA population. Further, it is also possible that compared to Europe, alcoholism/hepatitis causes of RRA may receive greater access to care in North America (given regulatory expectations and the higher risks of malpractice in these markets). Sequana plans to directly commercialise the alfapump in the US by establishing its own specialty salesforce, aiming to form a team of c 35 sales representatives at launch (scaling up to c 70 afterwards). Sequana believes this structure can effectively target the US liver disease market, which is concentrated across c 140 US liver transplant centres.

Pipeline competitors exist but appear further to market

BioVie is developing BIV201, a continuous infusion formulation of terlipressin, a vasopressin-analogue drug approved in Europe and Australia often used to treat related complications of cirrhosis such as hepatorenal syndrome. BIV201 acts as a vasoconstrictor and is intended to reduce portal hypertension by restoring blood flow through the kidney and liver, and thereby impede the cycle of accelerating fluid generation in ascites patients. In 2019 BioVie completed a Phase IIa (n=6) trial of BIV201 in patients with RA due to advanced liver cirrhosis, where patients received study drug via continuous infusion for up to 28 days. It reported that four of the six treated patients experienced an increase in the number of days between paracenteses between 71% to 414% compared to before initiating therapy. The company recently opened enrolment (Q121) for a subsequent 30-patient Phase II study, where patients will receive the drug via continuous infusion for two 28-day cycles. The need for prolonged continuous infusion cycles may limit the attractiveness of this treatment modality. Noorik Biopharmaceuticals is developing a ‘micro-dose’ formulation of ambrisentan, an endothelin receptor antagonist approved (in the US and Europe) for forms of pulmonary arterial hypertension. Noorik is advancing the candidate for portal hypertension and believes the lower dose of its formulation would selectively exert inhibitory action on one endothelin receptor (ETA) rather than both (ETA and ETB), and thereby provide a better therapeutic profile for this ascites-predisposing condition. Noorik recently terminated a Phase II study on this portal pressure indication due to poor enrolment as a result of COVID-19 and recently began a study of its ambrisentan formulation for respiratory insufficiency due to COVID-19.

HF and alfapump DSR/DSR therapy

Sequana has combined the alfapump with its proprietary DSR therapy (described below) to develop alfapump DSR as a therapeutic solution for chronic HF. HF is a progressive chronic disease affecting 6.2 million US adults31 that leads to the heart being unable to pump sufficient blood and thereby supply oxygen to support other bodily organs, leading to shortness of breath and fatigue. HF can also lead to sodium retention and resulting fluid retention and accumulation. HF healthcare costs have been estimated at over $30bn annually in the US,32 including cost of healthcare services and missed days from work. There are over one million hospitalisations for HF per year in the US33 and in Europe and of such admissions, c 90% is due to fluid overload.34 Fluid overload (or ‘congestion’) is generally treated with diuretics in the first line, most commonly loop diuretics (eg, furosemide, bumetanide and torsemide), which work by inhibiting the sodium-potassium-chloride co-transporter in the ascending limb of the kidney’s Loop of Henle, thus preventing re-absorption of these ions, leading to fluid outflow.35 However, the use of diuretics can result in significant variability between patients in terms of the amount of sodium that is also excreted in the urine; if inadequate sodium is excreted, then bodily fluids will become relatively hypertonic (higher salt concentration) and thirst reflex and fluid retention will inevitably resume. Altogether, in a study of HF patients hospitalised and requiring IV loop diuretics, 40% were found to have a poor post-diuretic natriuretic response (meaning suboptimal sodium output in diuretic urine),36 or effectively diuretic resistance. Nearly 50% of hospitalised patients with HF and fluid overload are discharged with residual fluid excess after receiving conventional diuretic treatments.37 Altogether, up to 24% of HF patients hospitalised for fluid overload are readmitted within 30 days and up to 50% within six months38. Generally, diuretics become increasingly less effective with HF disease progression.39

  Centers for Disease Control and Prevention. https://www.cdc.gov/heartdisease/heart_failure.htm

  Benjamin EJ, Muntner P, Alonso A, Bittencourt MS, Callaway CW, Carson AP, et al. Heart disease and stroke statistics—2019 update: a report from the American Heart Association. Circulation. 2019;139(10):e56–528.

  Jackson SL, Tong X, King RJ et al. Circ Heart Fail. 2018 Dec;11(12):e004873. doi: 10.1161/CIRCHEARTFAILURE.117.004873. PMID: 30562099

  Costanzo MR, Ronco C, Abraham WT et al. J Am Coll Cardiol. 2017 May 16; 69(19): 2428–2445. doi: 10.1016/j.jacc.2017.03.528

  Pellicori P, Kaur K, and Clark AL. Card Fail Rev. 2015 Oct; 1(2): 90–95. doi: 10.15420/cfr.2015.1.2.90

  Testani JM, Hanberg JS, Cheng S, et al. Circulation Heart failure. 2016;9(1):e002370. doi:10.1161/CIRCHEARTFAILURE.115.002370.

  Gheorghiade M, Filippatos G. Reassessing treatment of acute heart failure syndromes: the ADHERE registry. Eur Heart J Suppl. 2005;7:B13–9

  Costanzo MR, Ronco C, Abraham WT et al. J Am Coll Cardiol. 2017 May 16; 69(19): 2428–2445. doi: 10.1016/j.jacc.2017.03.528

  Singh D, Shrestha K, Testani JM, et al. J Card Fail. 2014 Jun;20(6):392-9. doi: 10.1016/j.cardfail.2014.03.006. Epub 2014 Apr 2.

One therapy for those resistant or intolerant to diuretics is extracorporeal ultrafiltration, which is the extraction of plasma water from the whole blood across a semipermeable membrane (haemofilter) following a transmembrane pressure gradient, with the objective being to remove water and sodium from the blood. Results are mixed, with some studies suggesting fixed-rate ultrafiltration was not superior to SoC care, whereas other data suggest ultrafiltration rates adjusted based on patients’ vital signs and renal function may provide more effective decongestion and fewer HF events.40

  Costanzo MR, Ronco C, Abraham WT et al. J Am Coll Cardiol. 2017 May 16; 69(19): 2428–2445. doi: 10.1016/j.jacc.2017.03.528

Given the limitations of diuretics and ultrafiltration, alfapump DSR seeks to fit this void. The alfapump DSR approach leverages the alfapump’s fluid removal approach with the introduction of a zero-sodium infusate solution. The introduction of this infusate (the ‘DSR approach’) is designed to remove excess sodium in patients, which would then lead to more controlled and sustained fluid release into the kidneys and excretion based on natural physiological mechanisms. DSR therapy uses the highly vascularized peritoneal cavity for the removal of sodium via diffusion. A sodium-free infusate (DSR infusate) is introduced to the peritoneal cavity and allowed to dwell for a pre-defined period. During this time, bodily sodium diffuses down a steep diffusion gradient into the DSR infusate. The DSR infusate and the extracted sodium are then pumped into the bladder by the implanted alfapump system, resulting in a removal of sodium from the body. Given reduced bodily sodium, the body is expected to respond by eliminating the associated fluid (oedema) through urination.

Exhibit 10: alfapump DSR approach

Source: Sequana Medical

The alfapump DSR system consists of three elements: the alfapump system, DSR infusate and a surgically implanted port (whereby controlled quantities of DSR infusate is administered externally and reaches the peritoneal cavity). The intended approach would be for diuretic-resistant HF patients to be implanted with the alfapump device and port and then periodically be admitted to an outpatient healthcare facility and undergo DSR infusion and treatment in a procedure lasting no more than 30–40 minutes. This maintenance-based approach would be expected to reduce the need for diuretic therapy. The business case provides for the sale of capital product (alfapump DSR system with port) and a recurring revenue stream from the consumable (DSR infusate).

Alfapump DSR development strategy

In May 2021 Sequana reported positive top-line results from RED DESERT, the first in-human study of repeated-dose alfapump DSR in chronic HF patients taking high doses of oral diuretics. The prospective single-arm study assessed eight HF patients. Following implantation, patients underwent a standardised diuretic challenge (40mg IV furosemide) to quantify their response to diuretics (ie, to determine how much sodium would be excreted in a six-hour period). Subsequently, at the start of the study treatment (day 14 post implant), patients were admitted to the study hospital for a 14-day in-patient period whereby (loop) diuretics were withheld and patients were treated with DSR infusate (a 10% dextrose solution) for three days per week. At each DSR administration, the infusate remained in the peritoneal cavity for a two-hour dwell time, then all fluid was removed from the peritoneal cavity to the bladder using the alfapump DSR system. Following the 14-day in-patient period, patients were discharged from hospital, diuretics continued to be withheld and patients came into the clinic for their individually tailored DSR treatment over the subsequent four weeks. After the completion of the 28 day out-patient period (or 42 days since start of therapy), the alfapump DSR therapy was halted and the subject underwent a diuretic challenge to quantify diuretic response compared to pre-treatment period.

Exhibit 11: Improvement in diuretic response in RED DESERT

Exhibit 12: Cardio-renal improvements shown in RED DESERT

Source: Sequana Medical. Note: *In follow-up extension with DSR; † subject 101-009 died at D3. **Excluding DSR treatment in follow-up extension. ***Loop diuretics in furosemide equivalents (mg). E3D: every third day; BIW: two times per week; TIW: three times per week.

Source: Sequana Medical. Note: *Paired statistical analysis of patients with baseline and D42 value (N=7). NT-proBNP: N-terminal-pro hormone B-type Natriuretic Peptide (analysed in local lab); eGFR: estimated glomerular filtration rate.

Exhibit 11: Improvement in diuretic response in RED DESERT

Source: Sequana Medical. Note: *In follow-up extension with DSR; † subject 101-009 died at D3. **Excluding DSR treatment in follow-up extension. ***Loop diuretics in furosemide equivalents (mg). E3D: every third day; BIW: two times per week; TIW: three times per week.

Exhibit 12: Cardio-renal improvements shown in RED DESERT

Source: Sequana Medical. Note: *Paired statistical analysis of patients with baseline and D42 value (N=7). NT-proBNP: N-terminal-pro hormone B-type Natriuretic Peptide (analysed in local lab); eGFR: estimated glomerular filtration rate.

During the six-week therapy, none of the patients required any loop diuretics, demonstrating the ability of repeated periodic alfapump DSR therapy to manage their fluid and sodium balance. Further, after the six-week study, the mean response to a standard diuretic challenge (40mg IV furosemide) improved by more than 150% (p<0.001 vs baseline, n=7) as measured by the six-hour excretion of sodium compared to pre-treatment. This is indicative of a sustained treatment effect whereby the patient’s physiological ability to excrete sodium was improved after the DSR treatment period compared to before treatment. The effect was sustained as shown in Exhibit 11, as the seven evaluable patients had significant reductions in the required dosing of diuretic after the six weeks of treatment, lasting up to 12.5 months after the last DSR treatment. There was a 79% average reduction of average loop diuretic dose at a median of 10 months post-study completion versus baseline and all patients were receiving less than or equal to 50% of their baseline diuretic dose (the maximum follow-up post-study is 12.5 months). A controlled DSR administration over the six-week period led to persistent reduction in the needed diuretic dose over nearly a year, on average. There were also improvements in cardio-renal parameters, including a 22% mean improvement in estimated glomerular filtration rate (p<0.001 vs baseline), a mean 22% reduction in creatinine (p<0.001 vs baseline) and a mean 30% reduction in NT-proBNP (p<0.001 versus baseline). This could potentially imply a lower risk of renal failure or HF complications (although further studies would be required to confirm). Dr Jeffrey Testani, Associate Professor at Yale University and one of Sequana’s HF scientific advisors, commented that: ‘The simultaneous normalisation of diuretic response and improvement in cardio-renal status of the RED DESERT patients is a never before seen treatment effect and could translate into important long-term clinical benefits in heart failure patients.’

On the safety side, there were two SAEs in two of the last three patients; one had a transient ischemic attack (fully recovered) and one had a sudden cardiac death three days after implantation. The relevant site’s principal investigator assessed that neither event was related to the study therapy, procedure or device.

Next step: SAHARA DESERT study

The company’s next step is to study alfapump DSR in a more severely diseased HF population, namely those with decompensated HF with persistent congestion. Whereas patients in RED DESERT could manage their fluid overload with loop diuretics, the SAHARA DESERT study will enrol 20–24 patients in the Republic of Georgia, who even despite taking high dose loop diuretics, still suffer from persistent congestion or fluid volume overload. Initial enrolment was announced in early June, and the open label randomised study will consist of two arms (10–12 subjects each); where each arm uses alfapump DSR therapy but one arm will also add the use of SGLT2 inhibitor dapagliflozin (orally) to see if the drug provides added benefit.41

  While SGLT2 inhibitors are primarily used to treat diabetes, dapagliflozin was approved by the FDA in 2020 for the treatment of HF with reduced ejection fraction after the DAPA-HF study (ClinicalTrials.gov number, NCT03036124) found that the risk of worsening heart failure or death from cardiovascular causes was lower in patients who took this drug versus those who took placebo, regardless of diabetes status.

Once subjects are implanted with the alfapump DSR system they will first undergo an IV diuretic challenge to measure their ‘baseline’ diuretic responsiveness and sodium content in urine output (similar to RED DESERT). Subsequently, they will discontinue all loop diuretics and undergo DSR therapy in two phases: an intensive treatment phase, followed by maintenance treatment and follow-up phase of 16 weeks.

The intensive treatment phase (Phase I) lasts between two and six weeks (depending on patient response). In Phase I, DSR treatment will be performed for each subject with the baseline treatment regimen being 1L DSR infusate with a two-hour dwell time. Patients will then receive daily titrated DSR treatments for the remainder of Phase I. At the end of two weeks, if certain criteria are met including normalisation in fluid volume, the patient can move on to Phase II. If not Phase I can be repeated two more times up to a maximum of three two-week sessions lasting six weeks in total. During Phase II, all subjects will receive DSR in a monthly maintenance treatment session for four months. At the end of Phase II, each subject undergoes a diuretic challenge to evaluate diuretic response compared to baseline. Effectively SAHARA DESERT seeks to establish whether the alfapump DSR treatment, particularly if conducted once-monthly after an initial intense round, can result in improved control of fluid overload in HF patients with persistent congestion despite SoC therapy. This study is also intended to provide insight as to how rapidly the intensive DSR therapy can resolve persistent congestion and improve diuretic response and cardio-renal function, and how long these effects last while a patient is on maintenance DSR therapy. Sequana expects the study results to be available in H222 (interim data in Q421).

DSR strategy involves short-term therapy and DSR infusate 2.0

The DSR opportunity in HF could be substantially larger than alfapump for RRA, but involves a longer potential time to market. As part of the DSR strategy, Sequana is developing a second-generation infusate solution, DSR Infusate 2.0. Sequana believes a solution involving larger sugars could provide an improved therapeutic profile and potentially provide a higher margin recurring revenue stream than the current infusate formulation (Dextrose 10% solution). The infusate solution is a vital part of the DSR treatment approach and will need to be administered repeatedly (providing revenue per infusion). A simple 10% dextrose solution would not carry the premium pricing potential of a more specialised formulation. DSR infusate 2.0 is a proprietary formulation of the sugars dextrose and icodextrin. Pre-clinical development work and chemistry, manufacturing and control (CMC) activities on DSR Infusate 2.0 is ongoing and Sequana expects to complete the process in or around mid-2022. We expect all human DSR studies after SAHARA DESERT will employ DSR Infusate 2.0 (as will the commercial products assuming eventual approval). DSR Infusate 2.0 will be regulated as a drug through FDA’s Center for Drug Evaluation and Research (CDER) division.

In May 2021, the company announced that it will be investigating a short- term DSR therapy approach whereby DSR Infusate 2.0 can be applied through a peritoneal catheter (ie the approach would not require an alfapump implantation). Short-term DSR therapy will involve repeated DSR treatment for c 2 weeks, using DSR Infusate 2.0 in combination with a peritoneal catheter (instead of the alfapump). Similar to alfapump DSR, the goal of short-term DSR therapy would be to treat fluid overload by allowing the renal system to itself excrete excess sodium more effectively with diuretics (improving the patient’s diuretic response) and improve cardio-renal parameters. The short-term DSR approach would require insertion or usage of a peritoneal catheter each time DSR therapy is applied, whereas the implantation of the alfapump (‘alfapump DSR’, also referred to as ‘long-term DSR approach’) avoids the need for repeated catheter insertion.

We believe that the company’s rationale for advancing short-term DSR (without alfapump) therapy is primarily to provide clinicians with the option of a ‘gateway’ or one-off treatment for HF patients with persistent congestion, with the goal of transitioning them to alfapump DSR as the DSR interventions become required more often. Adding a short-term DSR approach (ie as a ‘gateway product’) may not increase the potential market for HF patients suffering from congestion, in our view, but could help accelerate DSR product adoption among clinicians by providing them with one-off DSR treatment options. Further, the regulatory approval pathway for short-term DSR could be simpler than alfapump DSR since DSR Infusate 2.0 will be regulated as a drug by CDER, whereas alfapump DSR will be regulated as a drug-device combination. MOJAVE DESERT, a US proof-of-concept (PoC) Phase IIa study of short-term DSR therapy, is scheduled to start in H222. Short-term animal toxicity studies are also needed.

Exhibit 13: DSR therapy and alfapump DSR for fluid overload in HF milestones and timelines

Event

Start date

Approximate completion

SAHARA feasibility study in decompensated HF patients

Q221

H222

Formulation and manufacturing of DSR Infusate 2.0

Ongoing

Mid-2022

GLP animal study for short-term DSR (w/o alfapump)

Mid-2022

H222

MOJAVE proof-of-concept short-term DSR US study

H222

Mid-2023

Phase IIb study for short-term DSR

Mid-2023

Mid-2024

GLP animal study for alfapump DSR

Mid-2022

Mid-2023

SONORAN alfapump DSR US study

Mid-2023

H224

Registration-enabling alfapump DSR and short-term DSR studies

Late 2024*

H126*

Sales & distribution negotiations for alfapump DSR and short-term DSR

Mid-2023*

Mid-2026*

Potential US launch

H226*

Potential European launch

2028*

Source: Sequana Medical guidance and *Edison Investment Research estimates

Before starting US trials for alfapump DSR, the company needs to complete long-term (six-month) GLP animal safety studies, which should start in 2022 and be completed before the first anticipated North American-based alfapump DSR trial, SONORAN (not a registration study). SONORAN is due to start in mid-2023 and lead to completion by H224. For alfapump DSR and short-term DSR, we expect Sequana to enter into a sales and distribution partnership or agreement with an established medical device marketer with experience in the cardiovascular markets.42 We expect the company to enter into such discussions while the SONORAN study is ongoing.

  We believe Sequana Medical may also consider partnering the alfapump DSR and short-term DSR programmes with a pharmaceutical company, but we believe an arrangement with a medical devices company is more likely.

Commercial forecasts

Our financial forecasts are based on alfapump in RRA and malignant ascites and alfapump DSR in HF. Given the early stage of the short-term DSR therapy programme, we are not yet explicitly including this programme in our forecasts but may revisit once the MOJAVE DESERT PoC study is underway. Sequana estimates the current US RA incidence at 18,000 and given this and data from DelveInsight43 estimating 240,730 total ascites cases in the seven major markets in 2020, we conservatively model the 2020 US RRA incidence rate of c 16,600. While the US population is growing at 0.6% pa, we expect the NAFLD and NASH populations to grow at faster rates, aided in part due to an aging population as a larger proportion of the US population will be over the age of 65 (as increasing age is a risk factor for worsening NASH stages),44 with 21% in this age category in 2030 versus 15% in 2014.45 Hence, our overall US RRA market growth rate estimates are consistent with Estes et al.’s (2018) estimates for the growth in the decompensated cirrhosis population, which it expects to grow in the US from 7.1% CAGR through 2030. We model that the US RRA incidence rate will grow to c 32,760 in 2030.

  Tanaka N, Kimura T, Fujimori N et al. World J Gastroenterol. 2019 Jan 14;25(2):163-177. doi: 10.3748/wjg.v25.i2.163. PMID: 30670907

  Colby SL and Ortman JM. Projections of the Size and Composition of the U.S. Population: 2014 to 2060. March 2015. US Census Bureau. www.census.gov/content/dam/Census/library/publications/2015/demo/p25-1143.pdf

For alfapump, we model approvals and initial sales in the US and Canada in H223. We assume that alfapump will achieve US peak market share of c 15%. The company is prioritising North American markets for its commercial efforts, and while expect the US marketing efforts to raise the ascites medical community’s overall awareness of alfapump, given ex-North America alfapump sales to date (€1.3m in 2017 to c €1m in the three subsequent years) and our expectations of relatively modest promotional spend increases for ex-North American markets, we only project a mid-upper single digit long-term growth rate from current sales levels in these markets. We model fixed sales costs for North America ramping to over €10.5m per year within two years of US launch plus variable costs at 20% of sales.

We anticipate the company will enter a sales and distribution arrangement for alfapump DSR with an established medical devices marketer or distributor after the completion of SONORAN, and the sales and distribution partner will fund a portion (modelled at 33%) of the pivotal US studies in the H224 to H126 timeframe, which we model at €30m total cost (thus Sequana to fund c €20m). We model that Sequana will be responsible for manufacturing costs (alfapump DSR and DSR infusate 2.0) and the distribution partner will be responsible for all commercial and distribution costs, and that Sequana will be entitled to a 30% transfer price on net sales. We model potential US launch in H226 and a European launch in 2028. The company is confident that it can maintain an alfapump gross margin around 80% and we model similar margins for alfapump DSR and for DSR infusate 2.0 (although we believe this is conservative, as the margin on DSR infusate 2.0 could be higher). We expect that on US launch, alfapump’s unit net price will be $25,000 in the North American market (comparable to the current selling price in Europe) and the alfapump DSR unit will be priced at $27,500 (given the additional port requirement). We model that on average, annualised DSR infusate 2.0 consumable revenue will be c 20% of unit sales revenue, but we may revisit this assumption once we receive more detailed pricing guidance from the company.

Exhibit 14: Sales forecasts for alfapump and alfapump DSR

2023e

2024e

2025e

2026e

2027e

2028e

2029e

2030e

alfapump for refractory/recurrent ascites and malignant ascites

North America (US and Canada)

Estimated incidence of refractory and recurrent ascites

22,707

24,319

26,046

27,895

29,876

31,997

34,269

36,702

alfapump units sold

89

370

916

1,923

3,256

4,606

5,032

5,421

Effective penetration rate

0.4%

1.5%

3.5%

6.9%

10.9%

14.4%

14.7%

14.8%

alfapump product sales ($000)

2,226

9,484

24,377

53,181

93,582

137,432

156,137

174,910

Rest-of-world markets

alfapump product sales ($000)

1,690

1,943

2,138

2,351

2,586

2,845

3,130

3,443

alfapump DSR and DSR infusate (in US and EU markets)

HF hospitalisations linked to volume overload (000)

2,850

2,902

2,954

3,008

3,063

3,118

3,175

3,233

alfapump DSR units sold

-

-

-

543

2,153

6,014

12,492

22,053

alfapump DSR system revenue (recognised by partner) ($000)

-

-

-

16,275

66,150

187,957

403,931

733,873

DSR infusate revenue (recognised by partner) ($000)

-

-

-

3,255

13,230

37,591

80,786

146,775

Net transfer pricing revenue to Sequana Medical ($000)

-

-

-

5,859

23,814

67,664

145,415

264,194

Source: Edison Investment Research

The fluid overload to HF market is much larger than the RRA market and well recognised in both the US and Europe, so we expect the commercial partner to be able to commercialise alfapump DSR effectively in both regions. We consider that there are c 1m US hospitalisations per year due to HF and that 90% of these are due to symptoms of fluid overload. Further, as approximately 50% of the HF patients hospitalised for fluid overload are readmitted within six months, we believe this subgroup (c 450,000 Americans per year) would represent the potential US target market for DSR. Our peak market share assumptions (4% in US, 2.5% in Europe) are modest as we expect the majority of fluid overload-related HF hospitalizations to continue to be treated with current approaches. That said, the opportunity remains substantial, and we project end-user sales (units and infusate) of $1.7bn by 2032, with Sequana entitled to net transfer payments of c $516m in that year. As key alfapump patents expire in or around 2033 in the US (with alfapump DSR patents expiring in 2038),46 and after providing a partial consideration for three to five years of patent term extension, we model gradual sales erosion beginning in 2036 and in 2041 for alfapump and alfapump DSR, respectively.

Financials

Sequana raised €27.5m in its IPO in February 2019 and subsequently raised €19m (gross) in January 2020 through a private placement. The company has invested heavily in its R&D programme in recent years, with R&D spend of €7.7m in FY19 and €11.8m in FY20, respectively. Its FY20 net operating cash burn rate was €17m. The company finished FY20 with €3.6m net cash (€11.0m in cash offset by €7.5m in long-term debt) excluding €0.4m in lease liabilities. Since YE20, the company raised €22.5m (gross) in equity (2.647m shares at €8.50/share) and also converted €0.6m of debt to equity. We estimate pro forma Q121 net cash of €22.2m. We model that operating revenue growth will remain relatively limited until it launches alfapump in the US, which we model in H223. Before that, it will continue to invest in alfapump and DSR/alfapump DSR studies described earlier. We model FY21 and FY22 net operating cash burn rates of €17.6m and €18.2m, respectively. We expect the company will continue to have a negative operating cash burn rate until H226, at which point we anticipate alfapump sales in RRA will exceed R&D costs and other opex costs. We expect Sequana’s funds on hand should be sufficient for the company to maintain operations into Q222. We model the company will raise €15m in 2022, €20m in 2023, and additional €50m before FY26 before the company will reach consistent operating profitability. As per our usual policy, we model these financing requirements as illustrative debt.

Valuation

Our Sequana Medical valuation applies a risk-adjusted NPV model with a 12.5% cost of capital for alfapump in North America and alfapump DSR, and a 10% rate for alfapump in ex-North American markets (where it is commercialised). We apply a 60% probability of success for alfapump obtaining regulatory approval in North America given the existing CE mark approval and encouraging interim POSEIDON data shown to date, where trends to date are supportive of meeting the primary endpoint. We apply a 25% probability of success for alfapump DSR, as although RED DESERT has shown favourable data so far and shown proof-of-concept, many development steps remain before the product can reach commercialisation, including animal toxicity studies, safety/efficacy of DSR infusate 2.0 and further clinical trials.

Exhibit 15: Sequana Medical rNPV assumptions

Product contribution

Indication

Stage

NPV (€m)

Probability of success

rNPV (€m)

rNPV/ basic share (€)

Launch year

Sales (€m) in 2032

alfapump in North America (net of R&D and SG&A costs)

Refractory and recurrent ascites and malignant ascites

Pivotal studying ongoing

227.4

60%

132.9

7.16

H223

179.7

alfapump in Europe and ex-NA regions (net of SG&A costs)

Refractory and recurrent ascites and malignant ascites

Commercial/ marketed

2.2

100%

2.2

0.12

2013

3.4

alfapump DSR and short-term DSR

Fluid overload in HF

Human feasibility studies

695.3

25%

161.8

8.71

H226 in US

426.8*

Corporate costs

(48.3)

100%

(48.3)

(2.60)

Total

876.7

248.7

13.39

Net cash (Q121e) excluding lease liabilities

22.2

22.2

1.19

Total equity value

898.9

270.9

14.58

Basic shares outstanding (000) (30 April 2021)

18,576

Outstanding warrants and share options

1,747

FD shares outstanding (000) (30 April 2021)

20,323

Source: Edison Investment Research. Note: *Reflects estimate of projected transfer pricing revenue to Sequana Medical rather than end-market commercial sales.

Altogether, we obtain a pipeline rNPV of €248.7m. After adding Q121e net cash of €22.2m (excluding lease liabilities), we obtain an equity valuation of €270.9m or €14.58 per share (€13.33 fully diluted).

Below we show a sensitivity analysis of how the basic equity value per share could vary based on different peak US market share assumptions for both alfapump in RRA, and for the alfapump DSR/short-term DSR programme in HF.

Exhibit 16: Equity value per basic share (€) sensitivity analysis on peak US market share (alfapump DSR/Short-term DSR in HF versus alfapump in RRA)

10.00%

12.50%

15.00%

17.50%

20.00%

2.0%

6.73

8.33

9.63

11.18

12.73

3.0%

9.24

10.84

12.11

13.66

15.21

4.0%

11.76

13.03

14.58

16.13

17.68

5.0%

13.96

15.51

17.06

18.61

20.16

6.0%

16.44

17.99

19.54

21.09

22.64

Source: Edison Investment Research. Note: Leftmost column represents alfapump DSR/Short-term DSR in HF and top row reflects alfapump in RRA.

Sensitivities

Development and regulatory risk: for alfapump in RRA, if the rate of SAE/safety events in the POSEIDON study, particularly the incidence of AKI or blockage, are higher than in MOSAIC, and/or if paracentesis rates post-implantation are not sufficiently reduced, it could dampen the likelihood of approval in North America. These risks are somewhat alleviated by ‘roll in cohort’ component of this study, enabling centres and providers to gain experience with the system and to develop best practices, prior to enrolling patients that will be evaluated in analyses. Efficacy risks are also mitigated by the robust interim data reported to date where the 90% reduction in mean frequency of TP versus baseline appears to provide a strong buffer against the minimum 50% reduction needed as one of the primary endpoint parameters. Alfapump DSR has further studies and development before reaching approvability stage, so as such it carries higher risks, but the RED DESERT results show proof-of-concept in terms of demonstrating a sustained lower need for diuretics.

Commercial and competition risk: if approved in RRA, alfapump would show a clear advantage over LVP in an area of unmet medical need, but the company will need to effectively promote the product to hepatologists, interventional radiologists and the medical community at large to optimise penetration. The relatively limited traction to date in Europe could highlight possible challenges for North American adoption, but the rising prevalence of NASH as a cause of RRA and the potential for improved healthcare access for ‘traditional’ RRA causes could portend a much stronger penetration rate in this region. The company must also develop its own US salesforce and it has no existing commercial experience in this territory, although its intended strategy to target dedicated liver transplant centres appears sound. Further, while alfapump is the most advanced-stage RRA treatment candidate to our knowledge and the only one in US registration enabling trials, in the event that BIV201 or ambrisentan obtain approval, alfapump would need to compete with these alternatives and product positioning and its relative strengths in safety and efficacy versus emerging competitors will be key in sustaining a strong market position.

Partnership risk: Sequana will be dependent on the commercialisation efforts and capabilities of its potential partner for alfapump DSR and the short-term DSR programme. If Sequana is unable to secure a favourable licensing deal in a timely manner, it could weaken the eventual economics Sequana could be entitled to for these programmes and/or result in additional delays before the attainment of commercial revenues.

Financing risk: we expect Sequana will need to raise additional capital before commercialising alfapump in North America and further capital to build the required sales force needed to reach profitability in H226. We forecast €85m in financings between 2022 and 2026. Difficulties or challenges in obtaining funds could affect the timing or progression of Sequana’s programmes. If Sequana’s expenditures are higher than forecast and/or if revenue is below our expectations, it many need to raise further capital. While our model accounts for the financing(s) as long-term debt, the company may need to issue equity instead, at pricing that may not be favourable for current shareholders and could lead to significant dilution.

Intellectual property risk: the success of Sequana’s programmes will depend on its ability to defend the IP assets surrounding them.

Reimbursement risk: to obtain optimal revenue and product penetration, Sequana will need to negotiate with the CMS (likely the dominant insurer involved with payment for alfapump customers) and obtain a favourable reimbursement terms, which we believe would also have a trickle-down effect on the terms offered by other private insurers. The FDA Breakthrough Therapy status accorded to alfapump provides some assurance of provisional CMS reimbursement for up to four years post-approval, but securing longer-term reimbursement may depend on the accumulation of post-approval efficacy data in the US Medicare population.

Exhibit 17: Financial summary

€000s

2018

2019

2020

2021e

2022e

2023e

2024e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

1,029

971

963

1,056

1,214

3,236

9,444

Cost of Sales

(158)

(198)

(202)

(211)

(243)

(647)

(1,889)

Gross Profit

871

773

761

845

971

2,589

7,555

General & Administrative

(8,206)

(7,102)

(6,738)

(6,394)

(6,534)

(8,380)

(13,938)

Net Research & Development

(5,816)

(7,652)

(11,835)

(12,000)

(10,500)

(10,500)

(12,500)

Operating profit before exceptionals

(13,150)

(13,981)

(17,813)

(17,549)

(16,062)

(16,291)

(18,883)

EBITDA

 

 

(13,070)

(13,737)

(17,506)

(17,282)

(15,845)

(16,134)

(18,737)

Depreciation & other

(81)

(244)

(307)

(267)

(217)

(157)

(146)

Operating Profit (before amort. and except.)

(13,150)

(13,981)

(17,813)

(17,549)

(16,062)

(16,291)

(18,883)

Exceptionals including asset impairment

74

18

41

0

0

0

0

Operating Profit

(13,077)

(13,964)

(17,771)

(17,549)

(16,062)

(16,291)

(18,883)

Net Interest

(883)

(878)

(1,178)

(343)

(951)

(2,444)

(4,325)

Profit Before Tax (norm)

 

 

(14,033)

(14,859)

(18,991)

(17,892)

(17,013)

(18,734)

(23,208)

Profit Before Tax (FRS 3)

 

 

(13,960)

(14,841)

(18,949)

(17,892)

(17,013)

(18,734)

(23,208)

Tax

(24)

(136)

(157)

0

0

0

0

Profit After Tax and minority interests (norm)

(14,057)

(14,995)

(19,148)

(17,892)

(17,013)

(18,734)

(23,208)

Profit After Tax and minority interests (FRS 3)

(13,983)

(14,977)

(19,106)

(17,892)

(17,013)

(18,734)

(23,208)

Average Number of Shares Outstanding (m)

10.0

12.3

15.3

18.6

18.7

18.7

18.8

EPS - normalised (€)

 

 

(1.41)

(1.22)

(1.25)

(0.96)

(0.91)

(1.00)

(1.24)

EPS - normalised and fully diluted (€)

 

(1.41)

(1.22)

(1.25)

(0.96)

(0.91)

(1.00)

(1.24)

EPS - (IFRS) (€)

 

 

(1.40)

(1.22)

(1.25)

(0.96)

(0.91)

(1.00)

(1.24)

Dividend per share (€)

0.0

0.0

0.0

0.0

0.0

0.0

0.0

BALANCE SHEET

Fixed Assets

 

 

242

829

772

720

536

460

550

Tangible Assets

184

765

705

653

469

393

483

Investments in long-term financial assets

58

63

67

67

67

67

67

Current Assets

 

 

3,099

8,522

13,441

16,787

13,739

15,184

17,291

Short-term investments

0

0

0

0

0

0

0

Cash

1,318

5,586

11,016

15,680

12,466

12,959

13,855

Other

1,782

2,935

2,425

1,107

1,273

2,225

3,436

Current Liabilities

 

 

(18,727)

(5,315)

(5,966)

(4,391)

(2,906)

(2,738)

(2,865)

Creditors

(6,654)

(4,855)

(5,966)

(4,391)

(2,906)

(2,738)

(2,865)

Short term borrowings

(12,073)

(459)

0

0

0

0

0

Long Term Liabilities

 

 

(3,374)

(3,110)

(8,135)

(7,516)

(22,516)

(42,516)

(67,516)

Long term borrowings

(2,582)

(2,261)

(7,473)

(6,854)

(21,854)

(41,854)

(66,854)

Other long term liabilities

(792)

(849)

(662)

(662)

(662)

(662)

(662)

Net Assets

 

 

(18,760)

926

113

5,600

(11,146)

(29,609)

(52,540)

CASH FLOW

Operating Cash Flow

 

 

(8,987)

(17,596)

(15,791)

(17,278)

(17,230)

(16,982)

(19,543)

Net interest and financing income (expense)

(883)

(878)

(1,178)

(343)

(951)

(2,444)

(4,325)

Tax

(5)

(9)

(36)

0

0

0

0

Net Operating Cash Flow

 

 

(9,875)

(18,482)

(17,005)

(17,621)

(18,181)

(19,426)

(23,868)

Capex

(39)

(106)

(138)

(215)

(34)

(81)

(236)

Acquisitions/disposals

0

0

0

0

0

0

0

Financing

2

26,165

19,000

23,119

0

0

0

Dividends

0

0

0

0

0

0

0

Other

0

0

0

0

0

0

0

Net Cash Flow

(9,912)

7,576

1,857

5,283

(18,214)

(19,507)

(24,104)

Opening net debt/(cash)

 

 

0

13,279

(2,929)

(3,611)

(8,894)

9,320

28,827

HP finance leases initiated

0

0

0

0

0

0

0

Other

(3,367)

8,632

(1,175)

0

0

0

0

Closing net debt/(cash)

 

 

13,279

(2,929)

(3,611)

(8,894)

9,320

28,827

52,931

Lease debt

na

504

387

387

387

387

387

Closing net debt/(cash) inclusive of IFRS 16 lease debt

13,279

(2,425)

(3,224)

(8,507)

9,707

29,214

53,318

Source: Sequana Medical accounts, Edison Investment Research


Contact details

Revenue by geography

Sequana Medical NV
Technologiepark 122
9052 Zwijnaarde
Belgium
+32 9 292 8065
www.sequanamedical.com

Contact details

Sequana Medical NV
Technologiepark 122
9052 Zwijnaarde
Belgium
+32 9 292 8065
www.sequanamedical.com

Revenue by geography

Management team

Chief executive officer: Ian Crosbie

Chief financial officer: Kirsten Van Bockstaele

Ian has served as CEO since 2016 and has been a member of the board of directors since 2019. Ian has over 25 years of experience in the healthcare sector, both in-house at medical device and pharmaceutical companies, and as an investment banker at several global firms. He has significant experience in implantable medical devices as well as in capital markets, licensing and strategic transactions. Prior to joining Sequana Medical, Ian was chief financial officer of GC Aesthetics based in Dublin. Before that, Ian was senior vice president, Corporate Development at Circassia Pharmaceuticals, a late-stage biopharmaceutical company focused on allergy immunotherapy where he oversaw the execution of the company’s ₤210m IPO, as well as M&A & licensing activities. Prior to Circassia, Ian had a 20-year career in corporate finance, including managing director, healthcare investment banking at Jefferies International and director, healthcare investment banking at Deutsche Bank. He has a degree in Engineering, Economics and Management from Oxford University.

Kirsten is a seasoned finance executive with over 20 years of international experience in the healthcare industry. Before joining Sequana Medical, Kirsten was vice president of finance at Fagron, North America, where she was responsible for creating and overseeing the company’s financial strategy and policy and positioning Fagron’s North American companies for growth. Before that, Kirsten served as chief financial officer for Arseus Dental & Medical Solutions, where she held a key role in the coordination, support and control of financial activities in key European countries. Her previous roles include Financial Controller at Omega Pharma and Audit Manager at PwC. Kirsten has a degree in Business Economics from EHSAL and a degree in financial and fiscal sciences from the University of Antwerp, Belgium.

Chief medical officer: Oliver Gödje

Global vice president, QM/QA/RA: Timur Resch

Oliver is an experienced clinician and medtech industry executive with 18 years of international experience in medical and commercial roles. Prior to joining Sequana Medical, Oliver served as chief medical officer at Humedic, medical director and VP sales & marketing at Hepa Wash, chief medical officer and chief marketing officer at Tensys Medical, and medical & marketing director of PULSION Medical Systems, all medtech companies in the liver or cardiovascular field. He holds a PhD and Professorship in Human Medicine and built an extensive knowledge of cardiology during his time as a Cardiac Surgeon at leading German Universities. He was a consultant and vice chairman of the Department of Cardiac Surgery at the University Hospital of Ulm until 2002.

Timur has 10 years of experience within quality management (QM) and regulatory affairs (RA) in the regulated medical device industry. In 2010, Timur graduated as an engineer in medical technology from the University of Applied Sciences in Lübeck, Germany and began his professional career as a process and management consultant at Synspace. Thereafter, Timur continued as head of quality management & regulatory affairs at Schaerer Medical and prior to joining Sequana Medical held the position of manager & team leader regulatory affairs at Medela. His experience includes the establishment of quality management systems, auditing, international product registrations for Class I to Class III medical devices, ensuring compliance with applicable regulatory requirements as well as being the liaison to Notified Bodies and health authorities. Timur serves as member of quality and regulatory task forces and expert groups within Germany and Switzerland.

Management team

Chief executive officer: Ian Crosbie

Ian has served as CEO since 2016 and has been a member of the board of directors since 2019. Ian has over 25 years of experience in the healthcare sector, both in-house at medical device and pharmaceutical companies, and as an investment banker at several global firms. He has significant experience in implantable medical devices as well as in capital markets, licensing and strategic transactions. Prior to joining Sequana Medical, Ian was chief financial officer of GC Aesthetics based in Dublin. Before that, Ian was senior vice president, Corporate Development at Circassia Pharmaceuticals, a late-stage biopharmaceutical company focused on allergy immunotherapy where he oversaw the execution of the company’s ₤210m IPO, as well as M&A & licensing activities. Prior to Circassia, Ian had a 20-year career in corporate finance, including managing director, healthcare investment banking at Jefferies International and director, healthcare investment banking at Deutsche Bank. He has a degree in Engineering, Economics and Management from Oxford University.

Chief financial officer: Kirsten Van Bockstaele

Kirsten is a seasoned finance executive with over 20 years of international experience in the healthcare industry. Before joining Sequana Medical, Kirsten was vice president of finance at Fagron, North America, where she was responsible for creating and overseeing the company’s financial strategy and policy and positioning Fagron’s North American companies for growth. Before that, Kirsten served as chief financial officer for Arseus Dental & Medical Solutions, where she held a key role in the coordination, support and control of financial activities in key European countries. Her previous roles include Financial Controller at Omega Pharma and Audit Manager at PwC. Kirsten has a degree in Business Economics from EHSAL and a degree in financial and fiscal sciences from the University of Antwerp, Belgium.

Chief medical officer: Oliver Gödje

Oliver is an experienced clinician and medtech industry executive with 18 years of international experience in medical and commercial roles. Prior to joining Sequana Medical, Oliver served as chief medical officer at Humedic, medical director and VP sales & marketing at Hepa Wash, chief medical officer and chief marketing officer at Tensys Medical, and medical & marketing director of PULSION Medical Systems, all medtech companies in the liver or cardiovascular field. He holds a PhD and Professorship in Human Medicine and built an extensive knowledge of cardiology during his time as a Cardiac Surgeon at leading German Universities. He was a consultant and vice chairman of the Department of Cardiac Surgery at the University Hospital of Ulm until 2002.

Global vice president, QM/QA/RA: Timur Resch

Timur has 10 years of experience within quality management (QM) and regulatory affairs (RA) in the regulated medical device industry. In 2010, Timur graduated as an engineer in medical technology from the University of Applied Sciences in Lübeck, Germany and began his professional career as a process and management consultant at Synspace. Thereafter, Timur continued as head of quality management & regulatory affairs at Schaerer Medical and prior to joining Sequana Medical held the position of manager & team leader regulatory affairs at Medela. His experience includes the establishment of quality management systems, auditing, international product registrations for Class I to Class III medical devices, ensuring compliance with applicable regulatory requirements as well as being the liaison to Notified Bodies and health authorities. Timur serves as member of quality and regulatory task forces and expert groups within Germany and Switzerland.

Principal shareholders

(%)

Neomed

23

LSP Health Economics Fund

9.2

ParticipatieMaatschappij Vlaanderen NV

8.4

FPIM

7.9

Newton Biocapital

5.9


General disclaimer and copyright

This report has been commissioned by Sequana Medical and prepared and issued by Edison, in consideration of a fee payable by Sequana Medical. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for ‘wholesale clients’ within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are ‘wholesale clients’ for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a ‘personalised service’ and, to the extent that it contains any financial advice, is intended only as a ‘class service’ provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the ‘FPO’) (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the ‘publishers' exclusion’ from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

General disclaimer and copyright

This report has been commissioned by Sequana Medical and prepared and issued by Edison, in consideration of a fee payable by Sequana Medical. Edison Investment Research standard fees are £49,500 pa for the production and broad dissemination of a detailed note (Outlook) following by regular (typically quarterly) update notes. Fees are paid upfront in cash without recourse. Edison may seek additional fees for the provision of roadshows and related IR services for the client but does not get remunerated for any investment banking services. We never take payment in stock, options or warrants for any of our services.

Accuracy of content: All information used in the publication of this report has been compiled from publicly available sources that are believed to be reliable, however we do not guarantee the accuracy or completeness of this report and have not sought for this information to be independently verified. Opinions contained in this report represent those of the research department of Edison at the time of publication. Forward-looking information or statements in this report contain information that is based on assumptions, forecasts of future results, estimates of amounts not yet determinable, and therefore involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of their subject matter to be materially different from current expectations.

Exclusion of Liability: To the fullest extent allowed by law, Edison shall not be liable for any direct, indirect or consequential losses, loss of profits, damages, costs or expenses incurred or suffered by you arising out or in connection with the access to, use of or reliance on any information contained on this note.

No personalised advice: The information that we provide should not be construed in any manner whatsoever as, personalised advice. Also, the information provided by us should not be construed by any subscriber or prospective subscriber as Edison’s solicitation to effect, or attempt to effect, any transaction in a security. The securities described in the report may not be eligible for sale in all jurisdictions or to certain categories of investors.

Investment in securities mentioned: Edison has a restrictive policy relating to personal dealing and conflicts of interest. Edison Group does not conduct any investment business and, accordingly, does not itself hold any positions in the securities mentioned in this report. However, the respective directors, officers, employees and contractors of Edison may have a position in any or related securities mentioned in this report, subject to Edison's policies on personal dealing and conflicts of interest.

Copyright: Copyright 2021 Edison Investment Research Limited (Edison).

Australia

Edison Investment Research Pty Ltd (Edison AU) is the Australian subsidiary of Edison. Edison AU is a Corporate Authorised Representative (1252501) of Crown Wealth Group Pty Ltd who holds an Australian Financial Services Licence (Number: 494274). This research is issued in Australia by Edison AU and any access to it, is intended only for ‘wholesale clients’ within the meaning of the Corporations Act 2001 of Australia. Any advice given by Edison AU is general advice only and does not take into account your personal circumstances, needs or objectives. You should, before acting on this advice, consider the appropriateness of the advice, having regard to your objectives, financial situation and needs. If our advice relates to the acquisition, or possible acquisition, of a particular financial product you should read any relevant Product Disclosure Statement or like instrument.

New Zealand

The research in this document is intended for New Zealand resident professional financial advisers or brokers (for use in their roles as financial advisers or brokers) and habitual investors who are ‘wholesale clients’ for the purpose of the Financial Advisers Act 2008 (FAA) (as described in sections 5(c) (1)(a), (b) and (c) of the FAA). This is not a solicitation or inducement to buy, sell, subscribe, or underwrite any securities mentioned or in the topic of this document. For the purpose of the FAA, the content of this report is of a general nature, is intended as a source of general information only and is not intended to constitute a recommendation or opinion in relation to acquiring or disposing (including refraining from acquiring or disposing) of securities. The distribution of this document is not a ‘personalised service’ and, to the extent that it contains any financial advice, is intended only as a ‘class service’ provided by Edison within the meaning of the FAA (i.e. without taking into account the particular financial situation or goals of any person). As such, it should not be relied upon in making an investment decision.

United Kingdom

This document is prepared and provided by Edison for information purposes only and should not be construed as an offer or solicitation for investment in any securities mentioned or in the topic of this document. A marketing communication under FCA Rules, this document has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and is not subject to any prohibition on dealing ahead of the dissemination of investment research.

This Communication is being distributed in the United Kingdom and is directed only at (i) persons having professional experience in matters relating to investments, i.e. investment professionals within the meaning of Article 19(5) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005, as amended (the ‘FPO’) (ii) high net-worth companies, unincorporated associations or other bodies within the meaning of Article 49 of the FPO and (iii) persons to whom it is otherwise lawful to distribute it. The investment or investment activity to which this document relates is available only to such persons. It is not intended that this document be distributed or passed on, directly or indirectly, to any other class of persons and in any event and under no circumstances should persons of any other description rely on or act upon the contents of this document.

This Communication is being supplied to you solely for your information and may not be reproduced by, further distributed to or published in whole or in part by, any other person.

United States

Edison relies upon the ‘publishers' exclusion’ from the definition of investment adviser under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. This report is a bona fide publication of general and regular circulation offering impersonal investment-related advice, not tailored to a specific investment portfolio or the needs of current and/or prospective subscribers. As such, Edison does not offer or provide personal advice and the research provided is for informational purposes only. No mention of a particular security in this report constitutes a recommendation to buy, sell or hold that or any security, or that any particular security, portfolio of securities, transaction or investment strategy is suitable for any specific person.

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Frankfurt +49 (0)69 78 8076 960

Schumannstrasse 34b

60325 Frankfurt

Germany

London +44 (0)20 3077 5700

280 High Holborn

London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

1185 Avenue of the Americas

3rd Floor, New York, NY 10036

United States of America

Sydney +61 (0)2 8249 8342

Level 4, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Share this with friends and colleagues