EBR Systems pioneered the WiSE Cardiac Resynchronization Therapy (CRT) system tech, the size of a grain of rice
\nThe world\u2019s first pacing system within the heart for heart failure provides pacing stimulation inside the left ventricle
\nSystem granted US FDA breakthrough device designation with four out of five modules for premarket approval submitted<\/p>\n
It\u2019s hard to imagine that a device, equivalent in size to a cooked grain of rice, embedded inside the heart\u2019s left ventricle and remotely powered by ultrasound is capable of treating heart failure.<\/p>\n
However, EBR Systems (ASX:EBR)<\/strong><\/a>, established in 2003 in Silicon Valley, has pioneered the WiSE Cardiac Resynchronization Therapy (CRT) system tech \u2013\u00a0 literally the size of a cooked rice grain \u2013 which employs proprietary wireless methods to provide pacing stimulation directly inside the heart\u2019s left ventricle.<\/p>\n Looking microscopically inside the device there are more than 100 miniature electrical components put together by hand before it gets rolled up into a cylindrical rice grain shape.<\/p>\n The WiSE CRT system is the size of a cooked grain of rice. Source: EBR Systems<\/p>\n WiSE holds the distinction of being the world\u2019s first pacing system within the heart for heart failure.<\/p>\n The company was described by early investor\u00a0 and well-known venture capitalist Mark Carnegie as having potential to \u201cbe as big as Cochlear\u201d<\/a> when it made its IPO in 2021.<\/p>\n Stockhead recently caught up with CEO and president John McCutcheon, and senior vice president of business development Andrew Shute on their visit to Australia with Morgan\u2019s healthcare analyst Scott Power to discuss the big-hearted company looking to change lives.<\/p>\n \u00a0<\/p>\n To understand how EBR\u2019s WiSE system works, it is first necessary to understand where the company fits into the medical specialty of cardiology, which is the treatment of disorders of the heart and cardiovascular system.<\/p>\n CEO and president John McCutcheon Source: EBR Systems<\/p>\n McCutcheon says EBR sits in a sub-speciality of cardiology called cardiac rhythm management (CRM). He says CRM is made up of three segments including pacemakers, wearable defibrillators and cardiac resynchronisation therapy. Basic pacemakers are used to treat people with a slow heart beat called bradycardia.<\/p>\n \u201cThey pace the right ventricle of the heart with a pacemaker to keep that heart rate up and that is the most mature side of CRM and it was actually started in Australia going back to the 1960s,\u201d he says.<\/p>\n A company called Telectronics, founded in Sydney in 1963, was considered Australia\u2019s first successful high-tech medical electronics company manufacturing pacemakers, implantable defibrillators and cardiac monitors.<\/p>\n Senior vice president of business development Andrew Shute. Source: EBR Systems<\/p>\n \u201cTelectronics was a leader for many years with a lot of the technology they developed subsequently crossing over into other company\u2019s devices,\u201d says Shute.<\/p>\n \u201cThis goes off on a tangent but the reason we are listed on the ASX is because there was a Telectronics biomedical engineer called Trevor Moody \u2013 a current board member \u2013 and after moving to the US he was an early investor in EBR.<\/p>\n \u201cThen in 2017, he connected us to leading Australian investors MH Carnegie and Brandon Capital, along with some of their limited partners including HESTA, Hostplus, AustralianSuper and Statewide Super.\u201d<\/p>\n McCutcheon says the second sector within CRM is defibrillation, where high voltage electrical current is employed to restore a normal heart rhythm during a life-threatening ventricular arrhythmia.<\/p>\n Automated external defibrillators can be found in health facilities and public spaces.\u00a0 McCutcheon says there are also wearable defibrillators programmed to automatically detect cardiac arrest or a life-threatening arrhythmia and offer an electric charge.<\/p>\n \u201cThe third segment within cardiac rhythm management where we sit is cardiac resynchronisation therapy and it\u2019s focused on people with ventricular dyssynchrony,\u201d McCutcheon says.<\/p>\n He says in heart failure patients with ventricular dyssynchrony, the right and left side of the heart get out of sync.<\/p>\n \u201cIn these patients the right side of the heart is beating, but the left side won\u2019t keep up,\u201d he says.<\/p>\n He says as a result the heart is not\u00a0squeezing enough blood out and the ventricle gets bigger and bigger.<\/p>\n \u201cYou want the blood to go into the heart but most of it to exit when its squeezes,\u201d he says.<\/p>\n The standard of care to treat a heart failure patient with ventricular dyssynchrony is to put a lead outside the left ventricle of the heart and pace both the right and left ventricles simultaneously to get them to synchronise together but the problem is sometimes those leads fail and that\u2019s where EBR\u2019s WiSE system come into its own.<\/p>\n McCutcheon says the WiSE system paces from the left ventricle and after implantation up through a leg vessel like a heart catheterisation procedure will naturally get covered by heart tissue.<\/p>\n \u201cThe reason it\u2019s so tiny is there\u2019s no battery or power in there and we remotely power it with ultrasound,\u201d he says.<\/p>\n \u201cWe have a transmitter that is under the skin between the ribs and it sends ultrasound energy to the device and it harvests that ultrasound energy and converts it to electrical energy.<\/p>\n \u201cYou have the pacemaker on the right side and our device on the left to synchronise both chambers.\u201d<\/p>\n \u00a0<\/p>\n McCutcheon says if the leads work it is a good therapy and EBR\u2019s business model is focused not on displacing current standard of care but to offer another line of therapy if it fails.<\/p>\n \u201cWhen they get to us these patients have few options and are in bad shape with the next step a heart transplant list or something really invasive like an LVAD (left ventricular assist device),\u201d he says.<\/p>\n Shute uses an example of a very ill patient who was implanted with WiSE who can now walk 5km a day, swims a few times a week and even enjoys mundane chores like vacuuming.<\/p>\n McCutcheon says three major multinational medical devices and health care companies including Medtronic, Abbott Laboratories and Boston Scientific are the major players focused on right-chamber leadless pacing.<\/p>\n In a bid to overcome the limitations of lead-based pacemakers, both Medtronic and Abbott recently introduced leadless pacemakers for bradycardia, while Boston and Medtronic have released leadless defibrillators.<\/p>\n EBR\u2019s WiSE is the only leadless device to be used to pace the left side of the heart for heart failure. As right-sided leadless pacemakers are 20 times larger than EBR\u2019s WiSE electrode, if they were implanted into the left ventricle, they would likely be thrombogenic, causing blood clots.<\/p>\n McCutcheon says if clots were to form, there would be risk they float to the brain and cause a stroke. In contrast, the WiSE Electrode is so small, it becomes covered in the heart\u2019s own tissue within 30 to 45 days, removing the risk for clot formation.<\/p>\n \u201cWe see these right-chamber leadless pacemakers as complementary to EBR\u2019s left ventricle leadless pacing system,\u201d says McCutcheon.<\/p>\n \u201cWe look at the growth in their sales as complementary growth to our TAM.<\/p>\n \u201cUp to 30% of patients with these right-side leadless pacemakers will over time require upgrades to include left-side leadless pacing, which can only be done with EBR\u2019s WiSE CRT.\u201d<\/p>\n \u00a0<\/p>\n McCutcheon says to date 500 patients have been implanted with the tiny WiSE device, including some approaching 10-year anniversaries.<\/p>\n EBR achieved a key catalyst in May last year,\u00a0 announcing positive results of its pivotal SOLVE-CRT (SOLVE) trial at the Heart Rhythm Society\u2019s (HRS) 2023 conference in New Orleans.<\/p>\n The annual meeting is the premier global electrophysiology conference, attracting the largest gathering of heart rhythm professionals globally.<\/p>\n The SOLVE-CRT trial met safety and efficacy endpoints with statistical significance, enabling the study to conclude, and importantly, providing clinical validation of leadless pacing with the WiSE CRT system.<\/p>\n Furthermore, WiSE has been granted US FDA breakthrough device designation, which qualifies EBR for two reimbursement schemes for inpatients and outpatients.<\/p>\n It has submitted four out of five required modules for FDA premarket approval (PMA).<\/p>\n The final module,\u00a0 related to biocompatibility and device verification testing, is underway and due to be submitted in Q3 CY24 with approval expected in Q1 FY25.<\/p>\n \u00a0<\/p>\n EBR\u2019s initial addressable market is US$2.6 billion, with a market size of >90,000 devices per year with strong potential for growth in subsequent years.<\/p>\n Shute says EBR\u2019s initial target markets are the US, followed by Australia, UK, Germany and France.<\/p>\n He says EBR will initially target the US as it makes up 50% of the global market for CRT and secondly has the highest ASP (average selling price) globally as well.<\/p>\n EBR has upgraded its WiSE CRT system target ASP from US$35k to $US$45k.<\/p>\n He says the company also has strong support in the US from key opinion leaders including those who took part in the clinical trial and are wanting to present and write up reports on sub analysis of EBR\u2019s clinical data.<\/p>\n \u201cThose physicians that we didn\u2019t work with but are still considered thought leaders in the US are also putting their hand up and wanting to participate in that first wave of commercialisation,\u201d Shute says.<\/p>\n \u201cFor physicians we have produced training programs using simulators we take to them and from the administrators\u2019 perspective there is no upfront fees and due to high reimbursement the hospitals will break even.<\/p>\n Shute says in the US there are 1906 hospitals that implant CRT devices but ~50% of the entire market is concentrated in 252 of the top hospitals.<\/p>\n \u201cThat makes it really for a company of our size that all they need to do in those first few years is focus on those top 252 hospitals,\u201d he says.<\/p>\n EBR plans to grow initial sales to 35 territories by the end of 2027 with each sales team consisting of a sales rep working alongside a clinical or technical expert.<\/p>\n \u201cWith success in the US we can start expanding out to other parts of the globe and initially that would be Australia and countries of western Europe so countries with a good reimbursement essentially,\u201d McCutcheon says.<\/p>\n \u00a0<\/p>\n EBR chairman is Allan Will, \u00a0internationally recognised for his broad expertise in establishing, financing, managing, and selling medical device companies.<\/p>\n Before EBR, Wills led negotiation of the acquisition of Ardian, which develops catheter-based therapies to treat hypertension and related conditions, by global medtech Medtronic for more than US$800 million.<\/p>\n McCutcheon was encouraged to join EBR as its CEO by Will when he sold the orthopaedic company he was running in 2019 to multinational medical equipment manufacturing company Smith+Nephew.<\/p>\n \u201cIt\u2019s a small world so if you work together with someone and it works well you tend to keep gravitating back to the same people,\u201d he says.<\/p>\n \u201cAllan was an early investor in EBR, was chairman of the board and stepped into the role of CEO on an interim basis in 2012 and thought he would be in that role for two years.<\/p>\n \u201cHowever, in 2019 he was eight years into it and looking to really hand it off.<\/p>\n \u201cBecause of our relationship where we\u2019d worked together before he called me when I had that other exit and I was excited to come on board.\u201d<\/p>\n Furthermore, EBR has strong support from long-term investors including those mentioned and Aussie super funds.<\/p>\n \u201cWe have support from the supers including Telstra Super, AustralianSuper, Statewide Super, Hesta and Hostplus,\u201d Shute says.<\/p>\n \u00a0<\/p>\n Shute says EBR has existing manufacturers already in place with capability to scale but is also looking to expand in-house manufacturing to meet future demand.<\/p>\n He says as demand increases the company seeks to optimise operations to reduce global supply chain risk.<\/p>\n \u201cHopefully, later this year we will be able to share details on a new facility we will take on with the goal to bring much more of our manufacturing in-house,\u201d he says.<\/p>\n EBR is\u00a0 also developing a new rechargeable battery that will support the CRT System in becoming a first line therapy option and treat a broader suite of patient.<\/p>\n The company held US$73.4 million on December 31, 2023 and remains well-funded through initial commercialisation.<\/p>\n Power says a key milestone for EBR Systems is the finalisation of its submission to the FDA in Q3 CY24.<\/p>\n \u201cFrom that point the approval path is relatively clear with 180 days turnaround time subject, of course, to any questions from the FDA,\u201d<\/p>\n \u201cSo assuming a clear run, which we think will be the case, the WiSE system will be approved and ready for commercial launch in the US in 2025.<\/p>\n \u201cThe market is large, we estimate greater than $2 billion and the system will be complementary to other devices (working on the right side of the heart) owned by major companies like Abbott, Boston Scientific and Medtronic. Watch this space.\u201d<\/p>\n \u00a0<\/p>\n \ufeff<\/span><\/span><\/span>\u00a0 The post How big-hearted EBR Systems is pacing a multi-billion dollar cardiac market<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"How WiSE Works<\/h2>\n
Currently no competition<\/h2>\n
Offering hope with a de-risked pathway to market<\/h2>\n
US initial target market<\/h2>\n
Strong leadership and backing<\/h2>\n
Well-positioned to capitalise on growth<\/h2>\n
The EBR share price today:<\/h2>\n\n
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