Sydney, May 29, 2007 (ABN Newswire) - Ventracor (ASX: VCR) (ADR: VTCRY) is about to commence two major clinical trials in the US after the company successfully completed a Feasibility Trial. The first is a Bridge to Transplant (BTT) Pivotal Trial for patients on the transplant list; the FDA recently approved the start of this trial. The trial will be conducted on approximately 140 patients in up to 40 centres. The second is the Destination Therapy Trial (DT) for patients who are not on the transplant list. The trial design is innovative and separated into two modules and the primary outcome is stroke-free survival (refer to full document link below).
The company will apply for a patent surrounding this trial design and potentially could reduce the time for approval by 18 months.
Ventracor recently announced that 100 implants had been performed in Australia, Europe and the US. Ventracor gained its European approval in December 2006. The trial results showed an 83% success rate in the trial, better than the recently announced 75% success from market leader Thoratec for its second-generation device.
ABN AMRO has reviewed the competitive landscape for third-generation heart assist devices (refer to full document for more details). Of the third-generation device companies, Ventracor is more advanced in the US than its competitors in terms of undertaking clinical trials. In Europe, Ventracor is one of three third-generation devices approved for sale.
ABN AMRO's DCF based valuation is A$1.41 (from A$1.50) following a change to later-year forecasts. The assumptions are a risk free rate of 5.75%, a WACC of 15.8% and terminal growth rate of 3.0%. Our price target remains A$1.20, a 15% discount to the valuation to reflect a short term view on successfully achieving milestones. The downside risks to our price target revolve around delays that may occur during the approval process and a slower development of the LVAD market, which is still in its infancy.
For the full ABN AMRO report, please download from the link below;
http://www.abnnewswire.net/publicdocs/vcr70423.pdf
