DNB Markets: Episurf Medical - New long-term data strengthens the story
The company announced on 2 September that the 5–7-year follow-up data for the first trial with the Episealer system has been accepted for publication. We view this as important (even though it is a small trial) as it should validate the long-term outcome of Episealer treatment. We understand there have been no revisions for five years and the patients feel as well as after the 2-year follow-up. We reiterate our fair value of SEK2.7–8.2.
Long-term follow-up data of first Episealer patients to be published. The company announced on 2 September that the long-term follow-up data for the first trial with 10 patients treated with the Episealer implant system has been approved for publication. As of now, we do not know the full outcome, but the company mentioned in the press release that the data shows no revisions for the 5–7 years of follow-up. This looks to be a very good result and to confirm the data seen after two years of follow-up.
Long-term follow-ups needed for market success. Even though the trial is small, it confirms the outcomes of larger, but shorter trials of the implant system, and we believe this data should be supportive of the company’s sales efforts. The 2-year follow-up data for these patients presented in 2017 showed (besides no implant revisions) a clear improvement in the patients’ knee and pain (measured by the KOOS and VAS scales). We are hopeful that the KOOS and VAS results will be in line with the data presented previously. In general terms, this type of documentation is needed to secure a strong market position in this patient group in our view, with several other implant systems and alternative treatments launched historically that indicated short-term beneficial outcomes but failed to provide the patients with a long-term solution to their knee injuries.
Launch of Talus implant progressing as planned. The new implant solution for injuries in the ankle – the Talus implant – is being rolled out gradually. The company was clear that the first step of the launch would take place in a controlled fashion, with only selected clients being approached. However, it has already reported the first planned and conducted procedures in, among others, Hong Kong, Spain and Estonia.
Fair value of SEK2.7–8.2 reiterated. We believe the company is moving in the right direction, with growth in its clinical documentation set to continue into 2022. The new patella implant product could add revenues earlier than previously forecast and allow entry into the US market sooner than with the Episealer implant system. We believe its financial position is stable, and its cash should take it into 2023.
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Patrik Ling | DNB Markets | Equity Research | Senior Analyst Healthcare
DNB Bank ASA
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