Morning. Thanks for joining us this morning for a session here with Anteris Technologies. I'm very pleased to have with us Wayne Paterson, President and CEO. My name is Matt Miksic. I cover medical devices here at Barclays. I'm going to give Wayne an opportunity to maybe just speak for a minute or two on sort of the setup. What's the key core strategy of the company? Which market are you sort of entering and going after? Then we can dive into the weeds a little bit about how you expect that to play out.
Great. Thanks, Matt. My name is Wayne Paterson, CEO of Anteris Technologies. The company is basically in the TAVR space, a structural heart. We deal with a disease called aortic stenosis. We're a relatively new entry into an established market. We are right now in the development phase, heading into the pivotal study during this year, and hopefully come out the other side in 2026 with a commercial product.
That's pretty straightforward. I just spent the weekend at CRT, which is, for those folks who don't follow cardio closely, I think one of the better, interesting, small, but powerful kind of cardio conferences with a focus on this area and some other areas of cardiology and cardiovascular devices. I'll try not to drag us into the weeds too much. Maybe if you could talk a little bit about, frame the sort of duopoly of the market as it exists right now between Edwards and Medtronic, and where you think that the DurAVR and Anteris product kind of fits in, and what benefits it brings relative to both of those players.
Sure. This is a market that will be worth about $10 billion by 2028. Essentially, two players in the market, as you mentioned, Edwards and Medtronic. The market has been pretty static for about a decade. This is a fatal disease. The technologies in this market have not really shifted for quite a while. I think where we entered this market is looked at the two incumbent competitors. We basically developed a brand new class of product in this space. We have brought in a new technology, a new valve. The key for our product is the fact that it is so differentiated clinically. In the trials we have run to date, we are about 30% clinically superior to what is available in the market at the moment. We are across about 100 patients.
The future for us in this space is going to be one where we look at taking market share, but I also think that this market is also growing significantly. I think doctors, physicians are very excited with the clinical data that we have so far.
OK. From a distance, you might say, well, wait a second, it's another TAVR valve. Why would we be seeing some of the better performance? I think it comes down to sort of leaflet design, tissue technology. Maybe talk a little bit about those things.
Yeah. This is basically a disease where there's no pharmacotherapy to treat. It's a fatal disease, as I said. How they treat this disease is to switch out a piece of your anatomy, which is the aortic valve. Essentially, every other product that has been used to treat this disease belongs to a class of product called bioprosthetic, three pieces of tissue sewn into a frame. We looked at this problem and said, OK, we essentially are going to create something very different. We created a new class of valve, which is biomimetic, not bioprosthetic. By doing that, we created a different valve. It's 3D molded. It looks like the valve in your body, biomimetic. It gives hemodynamic results that are significantly better than the incumbent valves that are in the market today. Here, it's quite a different product.
As a result, we're getting very different hemodynamics, mean gradients, which is how they calibrate and measure this disease. We're coming into the curative range, which was not available to physicians or patients prior to this.
OK. Sewn into the frame is kind of a key image that you mentioned. Adds a lot of stressors to the tissue, creates maybe some additional or takes away maybe some additional space, maybe adds some torque and tension to the leaflets that maybe causes them to perform in a different way. Might explain some of the benefits that you're talking about. One of the things that has kind of been pretty, it's been here for five or 10 years now, but became quite stark last year, was just the sort of clear delineation between balloon expandable and self-expanding. Maybe talk a little bit about that. Why the demand for self-expanding, I mean, for balloon expandable? What led you to the decision to pursue balloon expandable instead of supra-annular self-expanding?
Yeah. I think this is an interesting question because the market is essentially divided up into 70%-30% between these two technologies. Interventional cardiology is dominated by balloon technologies in many other areas beyond aortic stenosis, beyond valve replacement. Physicians are very comfortable with the balloon expandable technology. The 30% part of the market is self-expanding. It is a different technology. When we looked at the market and when we came and we had a blank sheet of paper, assembled a group of physicians from the biggest centers in the US and said, look, if you have a new product in this space, what does it look like for you? They were very clear that they wanted a balloon expandable platform to put this valve inside of patients. We went down that path and created a fairly new technology around the catheter itself.
Physicians from the ground up helped design this particular catheter delivery system with our engineers. I'm told it's the first ground-up physician design platform. It's a lot simpler to use than a self-expander. I think that's key. It is very clear that the market dynamic is 70%-30%, that the delivery system itself is a barrier to adoption, or it drives adoption, however you want to look at that. Essentially, when you talk to physicians, that is very clear that if it's a self-expander, it's going to be a little bit more challenging for them to use. That's why we went down the path of balloon expandable. The market told us what they wanted, so we took that path.
Yeah. I had a bunch of conversations this weekend at the conference. I'm smiling because it's just incredibly consistent that clinicians want another balloon expandable valve, which if we rewind three or four or five years, anyone who's been following the space closely would say, what do you mean you're going to have another balloon expandable valve and you're going to go up against Edwards? Why would anyone do that? I think maybe talk about some of the opportunities in areas where you would say the current balloon expandable valve isn't meeting all the needs of clinicians and where AVR has an opportunity.
Yeah. I think it's a great question again. The current product certainly has got market dominance because of its ease of use. I think when you look at what is really important in this disease, one part is delivering the valve into the body. The other part is how the valve performs inside of the body. These two things are very separate, delivery and function. What we know, Sapien is very easy to deliver. We also know that the hemodynamic profile of the current product is slightly lower than, in fact, the self-expanding valve. We can see that from the market share that hemodynamics are actually taking a backseat to actual deliveries themselves. It takes about 25 minutes to use the balloon expanding platform, about 45-ish to use the self-expanding platform. There's quite a difference in physician input throughput in the hospital itself.
The end result is that the self-expanding valve actually has slightly better or better hemodynamics than the Sapien platform. We have looked at that problem. We kind of come up with the best of both worlds, which is to say that our product now with this new class of valve, biomimetic, has in fact got stabilized hemodynamics within the curative range, 5-10 millimeters of mercury, which is definitely superior to the existing balloon expandable platform, particularly in these small annuli patients, women, et cetera, and more in line with the self-expanding hemodynamics, but on a balloon platform. We have kind of married the two technologies.
OK. Better hemodynamics on a balloon expandable platform, balloon expandable platform preferred by clinicians. That is the opportunity. Hemodynamics, as kind of been talked about a fair amount over the last couple of years, is important, but is not a kind of today or tomorrow or a this year problem when clinicians look at a patient. It is a longer-term problem, but certainly desirable to have better hemodynamics.
Right. Look, I think philosophically you've got to look at this. You're born with certain hemodynamics. If you can achieve those when you're now being treated for the disease, why wouldn't you try and aim for that rather than having higher hemodynamics, higher mean gradients? I know there's a lot of debate amongst the clinicians, amongst the companies as to what is the relevance of a mean gradient. Is 20 millimeters OK? Is 10 millimeters OK? I think if you're born between 5 or 10, that's what you want to try to achieve for. There's a lot of good data coming out now as well that supports a lower mean gradient in terms of the valve longevity. Even more mortality is going to be more beneficial for the patient.
OK. So you've been working on DurAVR for a number of years now. I guess imitation is the best form of flattery. I'm not sure who to apply that to in this space. Abbott has recently started their first in human, enrolled their first in human study. They are also kind of beginning to realize having a self-expanding valve in Navitor, they want to pursue a balloon expandable valve. I guess maybe talk a little bit about the timeline where you're at, which is past first in man, about to file the IDE, and sort of the path to market from here.
Yeah. I think, look, everyone's worked this out, balloon expandable. We were certainly in front of that wave. I think that's important because the path to market, of course, is based on time and studies. We'll be first out of the gates for sure. When I look at the current technologies, the path to get to market is complex. I think a lot of people are now trying to get in behind us. For us, we're hitting the IDE study now. We're just negotiating the end part of that protocol. We will have started that study about Q3 with the first patients in. I think the other companies behind us certainly will not be at that same place. We will definitely come out with the product before the others.
When I look at the other technologies, what I do know, if we take the Abbott valve, it is still a three-piece bioprosthetic valve. I think that's the real deal here is when you come out the other side, have you got a product that meets the criteria of a balloon expandable with better hemodynamics? It's possible that we're seeing a bit of a throwback to the self-expanding market where we actually saw three self-expanders coming out and didn't really scratch the market too much because people already had the Medtronic valve. I feel like the balloon expandable market is going to maybe go down that same path. There's no point making a three-piece bioprosthetic valve and simply putting it on a balloon because you can use Sapien if you're going to get the same hemodynamics.
We truly have driven something new here with this new class of valve where you do get those better hemodynamics. It will be interesting to see how it plays out.
Getting ready to file the IDE, finalizing the protocol, it's a very, very small amount of revenue at the moment. Given that we have a ways to wait for pivotal results and commercialization, what are some of the other sort of clinical milestones or points of evidence that investors can say, this is firming up, this is confirming the story for us to get involved?
I think there are three parts to how we look at this particular disease. One is the here and the now, the data that we have to date. We're up around about 100 patients. That's quite a lot. How do you place this product? There's tons of data out there for the existing market. Across the DurAVR platform, we've got, with these 100 patients already, mean gradients, which are very, very clear, 5-10 millimeters of mercury across these patients. That's well known. Investors can look at that and say, OK, we can see that the product is clearly within that range you want to be for mean gradients. That's part one. Part two is the valve-in-valve market itself as well. We've got patients that are we've had up to eight patients in valve-in-valve now.
Valve-in-valve is a market where you're putting a second valve into these TAVR patients or surgical patients whose first valve has failed. These are patients who are now living longer. They're getting that second valve put in, quite a tricky procedure. We've got data around that as well. That will be in our pivotal study. I think that market is going to be worth $2 billion-$3 billion by 2028. No one really knows, but maybe 20%-30% of the market as well. Thirdly, our study is about to start. There's quite a lot of catalysts to be aware of. It's not five years down the track. We're starting this study.
The key for investors is to say, well, if your data is that good and we can place your product based on the current results and we can look at the study results in Europe and valve-in-valve, then there's quite a lot that we can get excited about.
Right. I guess the point of valve-in-valve being if you're dealing with a valve-in-valve patient, you're essentially dealing already kind of with a smaller annulus. You may or may already have something that kind of protrudes above the valve into the coronary arteries and don't want to kind of layer something else there. The desirability of a short valve that can operate well on a small annulus kind of fits that model, it sounds like.
Right. Right. I think valve-in-valve is a big deal because it's a fairly new phenomenon. These products were only approved for use in younger patients, as you know, in about 2019. I think those patients now are hitting that four, five, six-year period. Because they are living longer, these patients typically were older before they would pass away. You didn't kind of see these problems. There is no dedicated product for valve-in-valve. Physicians tend to use the Medtronic valve in that space because it does have better hemodynamics. As you said, you're trying to squeeze into essentially what is a smaller annuli because you've got debris in there from the former valve that has failed. I think that's a big one because that in itself is a $2 billion-$3 billion market.
Right. Again, I'm trying to not drag us down into the weeds, but I'm kind of bringing us there anyway. There is one other kind of competitive aspect of this that we haven't talked about in terms of balloon expandability and hemodynamics. That is the height. This weekend I had a number of conversations, particularly around care of patients in the earlier younger patients. No one, on the one hand, I think some of the shorthand assessment from the investment community has been, OK, Medtronic has better hemodynamics because they have the supra- annular valve. Younger patients, more active patients are going to go through their valve faster, potentially. Therefore, maybe younger patients should get a Medtronic valve. The pushback that we've heard is just a heightened concern around blocking the coronary access in those patients.
With older patients, you can kind of pre-intervene. You can do other things. In a younger patient, I think docs look ahead and say, there's a long, there's many years in front of us. We just want to be able to get access to those coronaries. Height as a factor, maybe talk a little bit about that.
Yeah. Frame height, I think, is certainly, as you mentioned, blocking or jailing the coronaries. It does not allow reintervention. This is all about replacing that second valve. Remember, when we started this journey too, people used to say, this is a valve for life, and particularly the market leader. They will never say that. Now what they say is choose your first valve wisely. I think the critical issue is when we look at valve-in-valve, it is less about frame height and more about the geometry of the open cells. Can you get into the STJ? Can you get into the coronaries? The critical issue with our product, of course, is that we have made the valve such that it is, from a coaptation point of view, giving you these normalized hemodynamics, but also big cell geometry.
If you are using this valve, you're able to get in for access. I think valve height is really something that's a bit of a misnomer. It kind of is a throwback to the earlier days of TAVR where we talked about French-sized valve height, PVL on those things. It's all about geometry. It's about where you place that valve in the first place. I think at the moment, when we look at our valve compared to, say, the others, we have a normal coaptation zone, which gives us these better hemodynamics. If you look at a conventional valve, they tend to look like that, whereas ours looks like this. It's quite important to understand that the valve height here is actually not the critical issue.
It's whether you've got access to the coronaries through the open cell geometry and how those leaflets move and how they move out of the way if you have the reintervention.
Interesting. OK. Maybe let's take us out of the weeds into this general market. As you say, expect I think most other companies expect this to kind of get to a $10 billion level. The perception among investors over the last couple of years has been this has been a slowing market. Someone might look at that and say, wait a second, why pursue a slowing market? Maybe talk a little bit about some of the major market dynamics that even if this is beginning to sort of mature, and I say sort of because I don't think anyone knows if it's going to land in the five to seven or six to eight range of growth sustainably. What about pricing? What about penetration? What about the health of the market makes this an attractive opportunity for you?
Yeah. I think I might disagree with the street a little bit here. I would violently disagree that this is a mature or slowing market. I think it might have been five years ago. What we know at the moment is that we're only treating about 15% of patients. There's 80%-85% of patients who are therefore not being treated. If we say the market is $8 billion-$10 billion by 2028, that's representative of that 15%. There's a big opportunity with the market moving forward. I think the growth is there. We're not treating these patients. It is a fatal disease. There's no pharmacotherapy. What happened in the last five years is that we started to treat younger patients. I think there is the opportunity for investors, for us moving forward.
Now the dynamic of this market is also changing because the products that we're currently using were, I guess, less, as we mentioned before, less physiologically and anatomically correct. They gave maybe a different outcome and a different result in an older patient who might pass away. If we're now treating patients who are going to be here 10 or 15 years, you're going to need a new class of product. I think that's where we've stepped in now. Will the market grow? Yes. I think products like DurAVR will help drive that market into the future. The valve-in-valve market is also an interesting phenomenon because it also didn't exist. I think that's also going to drive market growth as we see the range of 20%-30% of dual-visual valve-in-valves becoming a big part of the market as well.
I think, yeah, for the future, there is a lot of opportunity in this market. Diagnosis is improving. Technologies such as 2D MRI and 4D MRI are going to help drive that performance as well.
Yeah. No, I would agree. I think most, speaking for ourselves, I think most street models do not really fully appreciate the valve-in-valve opportunity or even kind of know where to put that number. Is it like many med device markets, mature med device markets have this kind of built-in replacement revision kind of dynamic in them. We are just sort of getting to that point really where activity levels have gone up so much for AVR replacement. I think there might have been 5% or 10% penetration when this whole thing started with TAVR. Not only has TAVR grown, but surgical has grown. If you have surgeries and TAVR going in, then you are driving this kind of downstream wave of valve-in-valve that has not. I do not think we can fully appreciate how large that might be. How big do you think that gets?
Look, here's what we know, right? Back in 2015, 2014, about 48% of the market was surgical valve. We know by 2028 it's going to be 10%. Surgery is definitely moving. Therefore, it's given us a view on this to say, OK, the TAVR has taken the pie, but the pie is getting a lot bigger. Moving forward, I think that that's the opportunity that the diagnosis, the change in technologies move away from surgery. At the end of the day, the valve-in-valve thing is interesting because I've heard one physician describe it as a tsunami. We really don't know how big that's going to get. If patients are living longer, if we're treating more, the diagnosis is going up, then it's who knows.
In the next five or 10 years, it's probably if you live long enough, you're going to get a valve-in-valve. It could be 100% of those patients ultimately will get that second valve. It could be double market size.
Sure. Yeah. Interesting and exciting. We are kind of winding down here. Anything else that you'd want to sort of wrap up with in terms of the opportunity or the cadence of milestones in the next year?
Yeah. I think, look, for investors looking at this market, I think it's not a mature market. It's a big market. It's an exciting market. I think the good news for us is we've brought this new technology. We've got clearly significantly differentiated product with a new class. We've got clinically superior results so far, not only in untreated native aortic stenosis, but also in these secondary patients in valve-in-valve. Whether we get 10% of the market or 20%, it's a big number in a $10 billion market. I think there's the opportunity.
Excellent. OK. So great to have you here, Wayne. Thanks so much for joining us.
Thanks, Matt. Appreciate it.
Thank you .