Talus implant approved in the EU

It took longer than expected for EpiSurf to get the new Talus implant system approved for marketing in Europe but it is now finally in place. We expect this to become a sizeable market over time, given the lack of alternatives and the number of patients suffering from defects in the talus. The company has not offered an over-abundance of details on the outlook for this market segment and we expect it to provide more information over the coming months.

The talus implant system approved for marketing in the EU. It took slightly longer than expected to obtain approval for the implant system in Europe but as this hurdle is now behind the company, focus should be on the market introduction. There are essentially no alternative implant systems for defects in the talus, making this an attractive area for EpiSurf in our view.

Damage marking can be done on CT for talus. For the talus implant, the treating physicians can fill out the damage marking report based on CT images instead of an MRI (as is the case with the knee-implant system). This will make it slightly easier for the orthopaedic surgeons as CT systems are more readily available than MRI in the orthopaedic department.

A complicated procedure – even with the company’s surgical guides. The surgical procedure itself is complicated and we believe it will take some time before we see a sizeable impact on sales from the talus implant system. As we have seen with the knee implant system, surgeons need some time to become familiar with the implant system, In the interest of the company, we believe a relatively slow and structured launch, where the surgeons are required to do training on the implant system, will most likely benefit the company the most in the long run.

We have not changed our forecast based on the approval. We have been expecting an approval for this system and believe it is very positive that the approval is finally in hand. In our base case, we expect the company to price the talus implant more or less in line with the knee implant system. As mentioned above, we would expect a rather slow launch, as a controlled launch now most likely would lead to better clinical outcomes a few years down the road (and these implant systems sell on good clinical data).

Fair value kept at SEK1.8–4.7. We do not do any forecast changes based on the news, thus we keep our fair value estimate for the stock.

Patrik Ling | DNB Markets | Equity Research | Senior Analyst Healthcare

DNB Bank ASA
Regeringsgatan 59 | Stockholm | Sweden
E-mail:
patrik.ling@dnb.se | www.dnb.no

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