NetScientific — Portfolio starting to mature

NetScientific — Portfolio starting to mature

The NetScientific portfolio steadily marches forward with an increasing number of companies with significant revenue on the horizon. Wanda and ProAxsis are currently the only companies with sales, but this is about to change with the first sales of Vortex’s VTX-1 occurring and Glycotest opening a CLIA lab in H217. The company reported sales of £0.5m for 2016, which we see expanding to single (c £3m) and double (£12m) digits through 2017 and 2018 as these companies’ offerings expand.

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Written by

NetScientific

Portfolio starting to mature

Earnings update

Pharma & biotech

5 May 2017

Price

54.50p

Market cap

£28m

$1.23/£

Net cash (£m) at 31 December 2016

9.2

Shares in issue

51.1m

Free float

79%

Code

NSCI

Primary exchange

AIM

Secondary exchange

N/A

Share price performance

%

1m

3m

12m

Abs

0.0

(11.4)

(31.9)

Rel (local)

0.2

(13.1)

(42.6)

52-week high/low

83.0p

53.0p

Business description

NetScientific is a transatlantic biomedical and healthcare technology group. Its portfolio of five core investments and one material investment is focused on three main sectors: digital heath (Wanda), diagnostics (Vortex, ProAxsis, Glycotest) and therapeutics (PDS Biotechnology).

Next events

Glycotest Series A

H117

VTX-1 beta launch

H117

NEATstik PoC launch

H217

Analysts

Maxim Jacobs

+1 646 653 7027

Nathaniel Calloway

+1 646 653 7036

NetScientific is a research client of Edison Investment Research Limited

The NetScientific portfolio steadily marches forward with an increasing number of companies with significant revenue on the horizon. Wanda and ProAxsis are currently the only companies with sales, but this is about to change with the first sales of Vortex’s VTX-1 occurring and Glycotest opening a CLIA lab in H217. The company reported sales of £0.5m for 2016, which we see expanding to single (c £3m) and double (£12m) digits through 2017 and 2018 as these companies’ offerings expand.

Year end

Revenue (£m)

PBT*
(£m)

EPS*
(p)

DPS
(p)

P/E
(x)

Yield
(%)

12/15

0.1

(11.3)

(24)

0.0

N/A

N/A

12/16

0.5

(12.3)

(21)

0.0

N/A

N/A

12/17e

2.7

(14.3)

(22)

0.0

N/A

N/A

12/18e

11.6

(12.4)

(19)

0.0

N/A

N/A

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

Wanda expands into hospital system and ACO market

As part of the 2016 results, Wanda admitted that the strategy of launching its product in the home care market has stumbled and it was having difficulty gaining traction. It has therefore realigned its commercial operations to include hospital systems, payers, and accountable care organisations (ACOs). Contracts with these businesses could yield more volume than home care. The company is building out a new sales organisation to target these markets.

Product launches lined up

The near-term launch of new products is expected for Vortex, ProAxsis and Glycotest. Vortex is the furthest along, with the VTX-1 officially available for sale and it will be rolling out to targeted institutions in a soft launch throughout the year. ProAxsis is expecting a CE mark for the NEATstik point of care test, and will be launching commercially in H217. Finally, Glycotest is targeting opening a CLIA lab in H217, with a CLIA waiver and launch of its liver cancer test in 2018.

FY16: Burn up on Vortex and Wanda buildout

The company reported cash used in operations of £12.9m in 2016, up from £10.7m in 2015. The primary reason for this increase was an increase in SG&A due to hiring at Vortex and Wanda, as well as increased working capital. R&D spend was £7.4m in 2016, although we expect this to increase as the companies are financed and we predict £9.7m in R&D spending in 2017.

Valuation: Decreased to £60.3m or 118p per share

We have decreased our valuation to £60.3m or 118p per share, from £67.8m or 133p per share. The reduction was largely due to adjusting our Wanda sales timelines and increasing the risk for the company. Additionally we have adjusted our R&D timelines to match financing and rolled over our NPVs. We expect to update our valuations based on early sales information from the upcoming launches.

Wanda realigns

One of the most significant changes that has occurred in the portfolio is a shift in the commercial plan at Wanda. The company was originally focused on marketing its patient monitoring platform to the home healthcare market. The key value proposition to these companies is that algorithmic patient monitoring can improve outcomes and reduce hospitalisations, thereby extending the value of these services. Wanda complements this market well because the platform is more easily integrated into the patients’ routines due to persistent contact with healthcare professionals. Moreover, the monitoring solutions provided by Wanda closely mirror some of the responsibilities of the home healthcare provider. To this end, the company has signed contracts with three such networks (A to Z Home Health Care, 24Hr HomeCare, and Health Resource Solutions) and this market remains important to the company. However, the company has stated it failed to gain significant traction in 2016 by targeting these providers. We suspect that this may be due to the low margin nature of the business and the unclear correlation between patient outcomes and the bottom line.

However, three other players in the healthcare system with significant vested interests in patient outcomes are hospitals, payers, and accountable care organisations. Moreover, due to the nature of their businesses, there is the potential to attract significantly higher volume through these channels and greater recurring revenue. Wanda has shifted its focus to sourcing contracts with these businesses. Although we see a higher barrier to entry into these markets, we believe that the metrics on outcomes gathered in the home healthcare market can be leveraged into larger contracts. A key strategic goal for 2017 is to build out a sales pipeline to target these markets, and Wanda’s CTO Foad Dabiri was promoted to CEO to lead the transition, because of his experience in the digital health space. The company has stated a target of $800k in sales for 2017. Additionally, NetScientific has impaired its £8.8m (to £3.8m) debt payable by Wanda.

Additionally, as part of this transition Wanda has sold its equity in OncoVerse, its cancer patient monitor platform in development with Dignity Health. The project was sold to BTG for an undisclosed amount, but NetScientific management stated that it represented a “strong return on NetScientific’s initial investment.”

Getting products on the market

Vortex’s circulating tumour cell (CTC) isolation system, the VTX-1, is commercially available in the US and EU. The company received a CE mark and a class 1 designation from the FDA and launched the product for research purposes in February 2017. Management has informed us that manufacturing hurdles have been surmounted and that it is currently targeting its key researchers and centres for a soft rollout. The inclusion of the technology in prominent scientific publications continues to bolster its utility among scientists. The latest such publication is the use of the system to perform a single-cell western blot of a CTC.1 A small number of sales have already occurred and we expect the first revenue for this company to be reported in the next earnings release. The company may be able to enter the broader cancer screening market via adding its technology to existing 510(k) market approvals. This would involve validating VTX-1 as an alternative to biopsy in established biochemical assays. To this end, the company is doing a study in collaboration with UCLA comparing the ability to assess epidermal growth factor receptor (EGFR) status in patients with non-small cell lung cancer (NSCLC) using CTCs and comparing data with traditional biopsy.

  SinKala E, et al. (2017) Profiling protein expression in circulating tumour cells using microfluidic western blotting. Nature Comm. 14622.

ProAxsis is also expanding its commercial footprint. The company’s neutrophil elastase tests have been commercially available since August 2015 for research use, but it has been in the development of its NEATstik point-of-care test for the broader diagnostic market. NEATstik is a one-use crossflow device for monitoring cystic fibrosis (CF) and chronic obstructive pulmonary disease (COPD) patients for exacerbations. The company is targeting a CE mark in H117 and a commercial launch of the product in H217. The company is also launching two new immunoassays for the research market (plasmin and tryptase) in late 2017, although we see the potential of these products as very incremental.

Finally, Glycotest has also announced its near-term commercialisation timeline. The company is currently in a Series A financing in China, which it intends to use to open a CLIA lab in H217. A CLIA waiver (expected in early to mid-2018) should enable the company to launch its hepatocellular carcinoma (HCC) test in H218.

Valuation

We have decreased our valuation to £60.3m or 118p per share from £67.8m or 133p per share. This was largely due to an adjustment in our valuation of Wanda. We have reduced the value of the share of the company from £18.7m to £8.0m. We have adjusted the sales ramp for the company to reflect the new target market, and removed OncoVerse from the model, which amounted to approximately £2m of our NPV. Additionally, we have decreased the probability of success for the company to 5% from 7.5% because of the commercialisation difficulties seen in 2016. We have also adjusted our research and development spending timelines to reflect updated financing timelines for all companies, as no Series A financings concluded in 2016. These adjustments are partially offset by advancing our NPVs. We expect to update our valuations following early reports from the launches of the Vortex, ProAxsis and Glycotest products. We also expect to update our valuations following the completion of Series A financings.

Exhibit 1: NetScientific valuation

Development programme

Probability of success

Profitability

Peak sales (£m)

Margin

rNPV
(£m)

Ownership

Share value (£m)

Vortex

15.0%

2020

150

44%

18.0

95.0%

17.1

Wanda

5.0%

2019

352

52%

11.3

70.9%

8.0

ProAxsis

10.0%

2020

50

51%

8.6

56.5%

4.9

Glycotest

10.0%

2019

123

51%

16.4

87.5%

14.4

PDS

10.0%

2021

302

57%

38.7

17.4%

6.7

Total

 

 

 

 

 

 

51.0

Net cash and equivalents (YE16) (£m)

9.2

Total firm value (£m)

60.3

Total shares (m)

51.1

Value per share (p)

118

Source: NetScientific reports, Edison Investment Research

Financials

The company reported a small amount of revenue (£518k) for 2016, although we expect this value to be eclipsed by increasing sales of the Vortex and Wanda products in 2017 (£2.7m total revenue) and the launch of the Glycotest HCC test in 2018 (£11.6m total revenue). Operational cash burn for 2016 was £12.9m compared to £10.7m for 2015, with the increase due to a combination of increased SG&A costs (£5.0 vs £2.8m from continued programmes in 2015) attached to building out Wanda and Vortex as well as increases in working capital. R&D spending for 2016 was £7.4m, significantly lower than our estimate of £9.7m. Our R&D spending estimates are coupled to the financing of the portfolio companies and we have adjusted both of these timelines. We expect Glycotest to complete its Series A in 2017, which should result in a concurrent increase in spending for that programme. We forecast £9.7m in R&D spending in 2017 as the portfolio programmes expand their research operations seeking broader marketing approval. NetScientific ended 2016 with £9.2m in net cash. For illustrative purposes, we have included £24m in debt in 2017 to finance the operations of the portfolio companies to profitability in 2019, although we expect these financing requirements to be met through outside investments. After accounting for approximately £6m in obligations from minority interests, this corresponds to a total obligation of £18m (up from £15m).

Exhibit 2: Financial summary

£000s

2014

2015*

2016

2017e

2018e

Year end 31 December

IFRS

IFRS

IFRS

IFRS

IFRS

PROFIT & LOSS

Revenue

 

 

24

122

518

2,682

11,630

Cost of Sales

0

(6)

(255)

(656)

(4,130)

Gross Profit

24

116

263

2,025

7,500

Research and development

(3,098)

(7,256)

(7,443)

(9,677)

(10,081)

Selling, general & administrative

(3,212)

(4,260)

(5,001)

(6,063)

(7,397)

EBITDA

 

 

(6,352)

(11,530)

(12,570)

(13,856)

(10,119)

Operating Profit (before GW and except.)

(6,286)

(11,400)

(12,429)

(13,715)

(9,978)

Intangible Amortisation

0

0

0

0

0

Exceptionals/Other

(948)

(1,518)

(666)

0

0

Operating Profit

(7,234)

(12,918)

(13,095)

(13,715)

(9,978)

Net Interest

77

78

86

(602)

(2,408)

Other (change in fair value of warrants)

0

0

(49)

0

0

Profit Before Tax (norm)

 

 

(6,209)

(11,322)

(12,343)

(14,317)

(12,386)

Profit Before Tax (IFRS)

 

 

(7,157)

(12,840)

(13,058)

(14,317)

(12,386)

Tax

30

94

(18)

72

62

Deferred tax

0

0

0

0

0

Profit After Tax (norm)

(6,179)

(11,229)

(12,361)

(14,245)

(12,325)

Profit After Tax (IFRS)

(7,127)

(12,746)

(13,076)

(14,245)

(12,325)

Minority interest

702

1,905

1,881

3,216

2,596

Profit After Tax after minority interest (FRS 3)

(6,425)

(10,842)

(11,195)

(11,030)

(9,729)

Average Number of Shares Outstanding (m)

35.9

38.2

51.1

51.1

51.1

EPS - normalised (p)

 

 

(15)

(24)

(21)

(22)

(19)

EPS - IFRS (p)

 

 

(18)

(28)

(22)

(22)

(19)

Dividend per share (p)

0

0

0

0

0

BALANCE SHEET

Fixed Assets

 

 

3,040

2,946

4,054

5,063

7,029

Intangible Assets

10

1

0

0

0

Tangible Assets

348

285

779

638

497

Other

2,681

2,660

3,275

4,425

6,532

Current Assets

 

 

17,720

23,799

11,034

20,859

7,263

Stocks

0

0

0

894

2,326

Debtors

853

560

1,578

268

1,163

Cash

16,867

23,239

9,456

19,696

3,774

Other

0

0

0

0

0

Current Liabilities

 

 

(1,324)

(2,206)

(2,172)

(2,947)

(3,273)

Creditors

(1,281)

(2,156)

(2,044)

(2,947)

(3,273)

Short term borrowings

(43)

(50)

(128)

0

0

Long Term Liabilities

 

 

(740)

0

(80)

(24,080)

(24,080)

Long term borrowings

(687)

0

(80)

(24,080)

(24,080)

Other long term liabilities

(53)

0

0

0

0

Net Assets

 

 

18,696

24,538

12,836

(1,106)

(13,061)

Minority Interest

(1,098)

(1,805)

(3,875)

(7,091)

(9,686)

Shareholder Equity

 

 

17,598

22,733

8,961

(8,196)

(22,747)

CASH FLOW

Operating Cash Flow

 

 

(6,698)

(10,752)

(12,939)

(11,952)

(11,469)

Net Interest

67

38

43

(602)

(2,408)

Tax

19

83

112

72

62

Capex

(336)

(299)

(457)

0

0

Acquisitions/disposals

(2,181)

(144)

(1,261)

(1,150)

(2,108)

Financing

0

18,208

0

0

0

Dividends

0

0

0

0

0

Other

119

39

66

0

0

Net Cash Flow

(9,010)

7,172

(14,436)

(13,632)

(15,923)

Opening net debt/(cash)

 

 

(25,069)

(16,136)

(23,189)

(9,248)

4,384

HP finance leases initiated

0

0

0

0

0

Exchange rate movements

(140)

(212)

(603)

0

0

Other

218

92

1,098

0

0

Closing net debt/(cash)

 

 

(16,136)

(23,189)

(9,248)

4,384

20,307

Source: NetScientific reports, Edison Investment Research. Note: *Not restated.

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2017 Edison Investment Research Limited. All rights reserved. This report has been commissioned by NetScientific and prepared and issued by Edison for publication globally. 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. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US 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. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and 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 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. This document is provided 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.
Edison has a restrictive policy relating to personal dealing. 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. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. 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. 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 (ie 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. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2017. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

Frankfurt +49 (0)69 78 8076 960

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London +44 (0)20 3077 5700

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London, WC1V 7EE

United Kingdom

New York +1 646 653 7026

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 8249 8342

Level 12, 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

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Edison is an investment research and advisory company, with offices in North America, Europe, the Middle East and AsiaPac. The heart of Edison is our world-renowned equity research platform and deep multi-sector expertise. At Edison Investment Research, our research is widely read by international investors, advisers and stakeholders. Edison Advisors leverages our core research platform to provide differentiated services including investor relations and strategic consulting. Edison is authorised and regulated by the Financial Conduct Authority. Edison Investment Research (NZ) Limited (Edison NZ) is the New Zealand subsidiary of Edison. Edison NZ is registered on the New Zealand Financial Service Providers Register (FSP number 247505) and is registered to provide wholesale and/or generic financial adviser services only. Edison Investment Research Inc (Edison US) is the US subsidiary of Edison and is regulated by the Securities and Exchange Commission. Edison Investment Research Limited (Edison Aus) [46085869] is the Australian subsidiary of Edison and is not regulated by the Australian Securities and Investment Commission. Edison Germany is a branch entity of Edison Investment Research Limited [4794244]. www.edisongroup.com

DISCLAIMER
Copyright 2017 Edison Investment Research Limited. All rights reserved. This report has been commissioned by NetScientific and prepared and issued by Edison for publication globally. 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. Opinions contained in this report represent those of the research department of Edison at the time of publication. The securities described in the Investment Research may not be eligible for sale in all jurisdictions or to certain categories of investors. This research is issued in Australia by Edison Aus and any access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. The Investment Research is distributed in the United States by Edison US to major US institutional investors only. Edison US is registered as an investment adviser with the Securities and Exchange Commission. Edison US 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. As such, Edison does not offer or provide personalised advice. We publish information about companies in which we believe our readers may be interested and this information reflects our sincere opinions. The information that we provide or that is derived from our website is not intended to be, and should not be construed in any manner whatsoever as, personalised advice. Also, our website and 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 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. This document is provided 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.
Edison has a restrictive policy relating to personal dealing. 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. Edison or its affiliates may perform services or solicit business from any of the companies mentioned in this report. The value of securities mentioned in this report can fall as well as rise and are subject to large and sudden swings. In addition it may be difficult or not possible to buy, sell or obtain accurate information about the value of securities mentioned in this report. Past performance is not necessarily a guide to future performance. 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. 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 (ie 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. To the maximum extent permitted by law, Edison, its affiliates and contractors, and their respective directors, officers and employees will not be liable for any loss or damage arising as a result of reliance being placed on any of the information contained in this report and do not guarantee the returns on investments in the products discussed in this publication. FTSE International Limited (“FTSE”) © FTSE 2017. “FTSE®” is a trade mark of the London Stock Exchange Group companies and is used by FTSE International Limited under license. All rights in the FTSE indices and/or FTSE ratings vest in FTSE and/or its licensors. Neither FTSE nor its licensors accept any liability for any errors or omissions in the FTSE indices and/or FTSE ratings or underlying data. No further distribution of FTSE Data is permitted without FTSE’s express written consent.

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

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 8249 8342

Level 12, 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

245 Park Avenue, 39th Floor

10167, New York

US

Sydney +61 (0)2 8249 8342

Level 12, Office 1205

95 Pitt Street, Sydney

NSW 2000, Australia

Research: Healthcare

Carmat — Carmat obtains clearance to resume pivotal study

Carmat announced on 2 May 2017 that it has obtained approval from the French regulatory agency (ANSM) to resume its pivotal trial for the Carmat heart. This follows a favourable review by ANSM of the actions and analyses taken by Carmat following the trial’s suspension after the death in October 2016 of this trial’s first patient six weeks after his implantation. Carmat maintained that the death was not due to a prosthesis malfunction, but due to poor handling of the batteries by the patient. Our valuation (previous rNPV of €747m in our 15 July 2016 update note) is under review.

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