Thanks @Metis. This was great to read. I can only grab a couple of seconds atm and want to give this the proper reply it deserves. Will post again in coming days.

@Metis, my shares also started life as Admedus ones, circa 2015.  So I possibly even bought yours second-hand.  Rest assured it was still a struggle for quite a few years after that but.  I think my first parcels were at the equivalent of $75 per share in today’s shares (with 2 x 1 to 10 consolidations since then).

It would be telling only half the story to claim that Admedus was a completely different company back then, but I can say that Anteris are now singularly focused on a completely different product.

The Admedus I bought was a strange conglomerate of 3 businesses:

• an early stage experimental vaccine platform;
• A low margin and unremarkable medical infusions business; and
• A heart tissue patching product called Cardiocel made using the the ADAPT platform.

Admedus’ foray into TAVR at that stage was in the mere conceptual phase of the exploratory spectrum.  It was a complete pipe-dream.

Fast forward to now and the vaccine platform was sold at a loss to the Chinese.  The infusion business also off-loaded for fair value (which was little).  Anteris still owns the IP for ADAPT (it is the bovine collagen product in our DurAVR TAVR) but we have since licensed the Cardiocel suite to a mob better-placed and structured to sell it bulk to North American hospitals.

I’d say that for at least 5 years now CEO Wayne Paterson’s focus has been solely on TAVR.  I now think he was 100% right in this, but there was — and in the eyes of the market still is — some undeniable baggage with Anteris.  I think ASX investors are right in thinking a leopard doesn’t change its spots.  This has been a money pit.  Frankly, there has been a lot of thesis creep. But yes (here come those dangerous words), this time it’s different.

I think this is a multi-billion dollar company waiting for the market to realise this and price it accordingly.  I call my $78 valuation conservative because:

• it is based on Anteris achieving only 10% market share by 2027;
• That market share does not even include the valve-in-valve market in which Anteris has a huge edge (more news on this next week hopefully);
• That market share does not really include  significant TAVR cannibalisation of the SAVR market (ie, TAVR patients getting much younger); and
• That it is also based on a very conservative 20% profit margin. CEO Paterson has been coy about profit margin projections, but I think we will scale well and these margins will be much higher.

But that is still not the bull case.

You are right that there are a number of companies that are competing in the TAVR space.  Thankfully only two of them matter, Edwards (estimated to have been 65-75% of US market share) and Medtronic (almost all the rest).

My bull case is based on Anteris proving clinical superiority over both of these companies’ TAVR offerings — with longevity of the device itself being but one component.  Commissural alignment is another (although that, of itself, will probably not be a unique barrier for the next generation of TAVR devices/catheter systems).  However, the most important feature of its clinical superiority appears to be in fluid dynamics.  This appears to be a function of DurAVR’s one piece design (also involving minimal stitching) which closely mimics our native aortic valves.

It’s this last component, I think, which is crucial to Anteris’ value.  And what Edwards or Medtronic will be paying for by acquisition.

Which brings me to the question of will we actually have to wait in 2027 (and commerciality) to get the right price?  I doubt it.  I’m expecting the first serious offers for Anteris to come within 3 months of the 30 day EFS data to be published next quarter. By serious I mean at premiums 100% or above current market price.

Best case scenario from there is a bidding war, bolstered by wider US investor sentiment (whether through the slightly clunky vehicle of the new US ADR or a later dual-listing on NASDAQ).

Personally I will be happy with just anything north of my conservative valuation, but of course I would very much prefer we don’t leave too much value on the table.  I’d be thrilled if I retained ownership in anything that came close to being a dominant player in TAVR in 2027/2028, but I don’t think it will happen that way.

Paterson is fond of telling the story of Medtronic’s acquisition of Corevalve in 2009 for $700 million USD [link].  Prices in general — and the TAVR TAM itself — have gone up since then. At that time that company had even less FDA approval than Anteris has now (but they had implanted a couple hundred more humans than Anteris). Anteris will be close to, or over, 40 humans by end of this year, with around half of those patients being in North America.  That’s more than enough for a big player to pull the buy trigger.

I hope I’ve made sense @Metis, thanks again for your interest and comments.

@PabloEskyBruh I have been on holiday and I try to keep my holidays share free so as to actually enjoy them!! Well to keep the other half happy I’m not reading all the time anyway…

Thanks so much for the detailed reply, it will prompt me to look into the specifics of why this will a better option as the market it just so huge that a disrupter will make a hell of a lot of money. What I’ve gleaned is at the moment there is a consistent stable vision from Wayne Paterson and the way forward will likely be a buy out. If it happens to be even better and we avoid a buy out then well watch out late 2020’s….

What I do struggle with is the heterogeneity of studies… and direct randomised control trials comparing devices (apart from that CHOICE trial with Edwards and Medtronic) but this will always be hard and the uncertainty creates opportunity at the expense of surety. I look forward to delving back in, the opportunity and growth in this market is too hard to ignore.

Once again thank you for this information, I sometimes work with the cardiologist that does them here do you have any questions you would like me to ask when I next see him?

Cheers,

Just an update re publicised patient numbers, Anteris are now as 39:

Haha, well we got it for free if I recall correctly, so probably still a good ROI.