Interview – Admedus aims to build a business in the gaps

Some areas in medtech are contested fiercely – with billions of dollars at stake, huge multinationals slug it out, producing new products with tiny advantages over existing tech and hoping doctors will be impressed. Others do not see the same level of attention, and a smaller company might be able to exploit a niche that the bigger groups do not consider worth their time.

The tissue engineering specialist Admedus hopes to do just this. Its cellular scaffold for cardiovascular repair competes with offerings from Medtronic, St Jude and Baxter. “This market is not enormous – it’s not the $3bn TAVI market,” the company’s chief operating officer, Julian Chick, tells EP Vantage. Other companies’ scaffold products can be “very hard to find”, he argues, "because they just don’t promote them. I don’t think they see the market as financially significant enough”.

This sector is significant for Admedus. The company’s core technology is based on denaturing bovine pericardium to be used as an inert, non-immunogenic tissue graft, though Mr Chick says the denaturing process can be applied to any tissue, “rodent right through to human”.

The technology has a broad range of applications, Mr Chick says, but the initial focus is on cardiovascular uses. It is approved in the US as CardioCel for 10 specific indications, including valve repair and reconstruction, repair of the aortic arch, carotid endarterectomy and aneurysm repair.

This puts it in contention with CorMatrix Cardiovascular and Baxter International, as well as most of the big CV medtech firms. Edwards, St Jude Medical and Medtronic all have products, Mr Chick says.

Safety valve

One of the key areas for Admedus is valve repair. The products used in transcatheter aortic valve implantation (TAVI) are prone to calcification – a build-up of calcium over several years that stops them working properly. CardioCel is designed to enable surgeons to perform procedures such as repairing a leaflet – one of the valve flaps – or even rebuilding the whole valve.

The company is initially addressing the paediatric market. “There’s an unmet need as valve implants [in children] calcify very fast, as there’s a lot of rapid growth and accelerated metabolism," he says. It then intends to expand into treating adults.

Studies show a clear benefit to having a rebuild rather than a percutaneous valve, he says. “In the TAVI market, where you’re treating people in their late 70s and 80s, we’re trying to work with the surgeons to say, let’s go when they’re younger and rebuild, so they’ll actually get a new heart valve.”

The company intends to do postmarket studies in this space. But the adult market could prove tricky: an 80-year-old patient is unlikely to live long enough to require a replacement procedure, so a surgeon may decide that the risks of a transcatheter valve are worth taking.

The paediatric market might be a better proposition. “Congenital heart disease in paediatrics alone is probably only a $200m market. Medtronic might not want to spend their time doing that, so we think we can grab a significant portion of that market.”

As for cost, synthetic materials sell for $350-400, Mr Chick says, and human donor tissue costs between $3,500 and $5,000. CardioCel is “kind of in the mid-range”. For reimbursement purposes, cost of the tissue is incorporated into the surgical procedure, and the company has been getting "very little pushback on the pricing".


CardioCel is in a somewhat unusual situation in that it is approved more widely in the US than in Europe. “Our European indication is a little more limited,” Mr Chick says, “though we are hoping to file on the back of existing data to broaden that to be in line with the US."

And after that, the company hopes to expand into other sectors entirely. “We have preclinical data on pelvic floor, orthopaedics, hernia. We’ve shown it’s very good for seeding stem cells, as a delivery platform, because it does not create an inflammatory response.”

While Admedus is selling CardioCel through its own sales force, use of the matrix for other applications, including cellular therapies, would be done via partnerships.

“Take something like pelvic floor – there are a number of companies that have problems with their pelvic floor products, particularly in the synthetic space. A tissue that has the same tensile strength, whereby it would actually regenerate rather than causing scarring, we see as a genuine application. But it’s not something that we would sell ourselves.”

Perhaps companies such as Boston Scientific and C. R. Bard, whose pelvic mesh products have failed with disastrous consequences, could be interested (Mesh lawsuits could derail Boston’s big year, September 10, 2014).

Tipping point

Admedus will need partnerships if it is to continue on the path to which Mr Chick says it is committed. When it comes to a trade sale, he says, “We’re not interested.

“Obviously there is an amount that becomes a tipping point, but … the goal is driving revenue, making it into a profitable business – building a global healthcare company.”

To do it justice, Admedus is on its way: as well as its core tissue engineering business it also develops drug pumps and DNA therapies. The infusion device business brought the company about A$7.5m ($6.5m) in revenue last year, Mr Chick says, but just as importantly this business allows it to stake out a presence in hospitals.

The most advanced of its immunotherapies, a vaccine for herpes simplex virus 2, is about to enter phase II trials. A human papillomavirus programme should reach phase I in a few months, Mr Chick says.

With three distinct businesses and a core technology it intends to market alone for cardiovascular use and partner for others, Admedus cannot be accused of lacking ambition.

To contact the writer of this story email Elizabeth Cairns in London at [email protected] or follow @LizEPVantage on Twitter

Share This Article