Carmat, designer and developer of the world’s most advanced total artificial heart, intended to offer a therapeutic alternative to patients suffering from end-stage biventricular heart failure, today announced its results for the first half ended June 30 2022 and provide an update. on its latest developments and main strategic objectives.
Due to the voluntary suspension, on a temporary basis, of the implantations of its artificial heart Aeson, decided on December 2, 2021, the company did not register any income during the first half of 2022.
The company is in the process of recovering a stock of implantable prostheses, with the aim of resuming Aeson implants in October 2022, subject to obtaining the necessary authorizations from the competent authorities.
During the past semester, CARMAT devoted most of its efforts and resources to:
– the definition and implementation, in its “supply chain”, of preventive and corrective actions aimed at addressing the quality problems appearing at the end of 2021;
– the resumption of its production after the implementation of these actions both in its factory in Bois-d’Arcy and with the suppliers concerned;
– exchange with the competent authorities and prepare the necessary regulatory submissions for the recovery of the establishments;
– collaboration with its suppliers to increase production volumes;
-the training and education of hospitals and doctors, and their support in the management of therapy, so that they are ready to resume the implantations.
In this context, although significant resources have been dedicated to making the prosthesis more reliable and securing the production chain, the company has tried to control its expenses, so that the operating loss for the 1st semester 2022 amounts to 25, 1 ME (compared to an operating loss). of 25.5 ME for the first half of 2021).
After taking into account the financial result (-1.9 ME) and the Credit Tax Research (+0.9 ME), the net loss for the first half of 2022 amounts to 26 ME (compared to a loss of 26, 4 ME for the first half of 2021). ).
Cash flow and financial structure
The company’s cash position as of June 30, 2022 was 47.4 million euros, compared to 39.2 million euros as of December 31, 2021.
In terms of financing, the company has during the first half of 2022:
– in April, it raised funds in the amount of 40.5 ME, including 36.5 ME by private placement with specialized, strategic and historical investors, and 4.1 ME with individuals via the PrimaryBid platform;
– received €0.7 million through the equity financing line confirmed with Kepler-Cheuvreux, which also expired on March 27, 2022.
The certain financial resources available to CARMAT should allow it to finance its activities, according to its current business plan, until March 2023.
The company is confident that it is well positioned to obtain the financial resources necessary for the continued development and commercialization of Aeson in the future.
Preparation for the resumption of Aeson seats in October 2022
On December 2, 2021, after the occurrence of quality problems that affected some elements of its prosthesis and led to the death of several patients, CARMAT took the decision to voluntarily suspend, temporarily, all the ‘implantations of its artificial heart Aeson, either on a commercial basis or in the context of clinical trials.
In view of its current discussions with the competent authorities, the company expects a resumption of settlements in October 2022, after obtaining the green light from these authorities. For this purpose, the company actively produces new prostheses that incorporate modifications aimed at avoiding the quality problems incurred in the past.
Implementation of corrective and preventive actions and resumption of production
Since December 2021, the company has made an effort to characterize the various quality problems identified. Corrective and preventive actions related to each of the problems were defined and then implemented, both at the Bois-d’Arcy assembly site and, under the control of CARMAT, at the various suppliers and subcontractors concerned.
Production, integrating all these corrective and preventive actions, was able to resume at the end of the 1st quarter of 2022. All these actions are the subject of a continuous evaluation.
Progress in regulatory processes
At the beginning of August 2022, CARMAT submitted a “notification of change” to the notified body DEKRA. Given the usual review times and its discussions with DEKRA, the company is quite confident of obtaining regulatory approvals that will allow it to take over Aeson’s commercial facilities in the European Union and in all countries that recognize the CE marking.
As for the EFICAS clinical study in France, CARMAT submitted, at the beginning of September 2022, to the ANSM (National Agency for the Safety of Medicines and Health Products) a request to resume this process. Given the usual timelines, the company anticipates ANSM approval for October, which paves the way for the first implantations of Aeson(R) as part of this study involving 52 patients, whose purpose is to collect medical data – economic to support the “value proposition” and the reimbursement of the device, especially in France.
Finally, CARMAT collaborates with the FDA (Food & Drug Administration) with a view to restarting the implantations in the framework of the EFS study (Early Feasibility Study) in the United States. The company has therefore submitted two files in July 2022, and a final one will be presented in September. After its review, the company anticipates submitting an “IDE Supplement” to the FDA, which will allow the recruitment of the second cohort (7 patients) of this study, which will include a total of 10 patients.
Support to hospitals with training, education and reimbursement
In response to the strong interest of hospitals for Aeson, and to allow a sustained dynamic of implantations in the months after its resumption, the company has continued and intensified since the beginning of 2022, the training of the various centers , especially in Germany. . , in Italy and France.
At the end of June 2022, 17 centers had been formed (10 in Germany, 1 in Italy and 6 in France as part of the preparation for the EFICAS study), and others will be in the second half of this year.
At the same time, CARMAT continued to support the various centers in their process of obtaining reimbursement of the therapy from the various payers.
The combined general meeting of May 11, 2022 approved the reduction of the mandate of the company’s directors, from 6 to 3 years. The Board of Directors chaired by Jean-Pierre Garnier is currently composed of 11 directors, of which 7 are independent. Their mandates expire in 2025, at the end of the meeting to approve the financial statements for the year ending December 31, 2024.
On July 1, 2022, Mr. Francesco Arecchi, former Director of Global Market Development, saw his responsibilities extend to all marketing-sales and training activities of the company. This change follows the expected departure of the commercial director, Mr. Eric Richez, at the end of the first half.
Severance Pay and Non-Compete Commitment
At its meeting of September 13, 2022, the Board of Directors, on the proposal of the Recruitment and Remuneration Committee, decided that Mr. Stéphane Piat, director and general manager of the company, would benefit from an allowance of 18 months of compensation (fixed and variable) in case of forced termination of their functions. To this end, an agreement was signed between the company and Mr. Stéphane Piat, which also provides for the latter various commitments of exclusivity, non-competition, non-solicitation and confidentiality, as well as regarding intellectual property. A monthly allowance equal to 40% of his fixed monthly remuneration could be paid to him under the non-competition agreement during the 12 months following his departure from the company. The company believes that the amount and terms of payment of these indemnities are appropriate given the highly sensitive and risky nature of its activities.
Strategy and perspective
The main objective of the company during the second half of 2022 is the effective recovery of establishments from October 2022, in accordance with its action plan that provides:
– the increase in the production recovery process started in the first half;
-obtaining the necessary regulatory authorizations for the recovery of establishments;
– the training of hospitals and their support in terms of reimbursement, which will generate a strong demand and allow a sustained dynamic of post-recovery establishments.
Given the improvement in the health situation COVID-19, CARMAT does not foresee any significant impact on the 2nd semester 2022, but continues to closely monitor this situation in France and internationally where the company, its suppliers and its customers they operate The company may have to adjust its development prospects if the situation deteriorates.
Stéphane Piat, CEO of CARMAT, said: “During the first half of 2022, we have focused our efforts on our key goal of restarting Aeson(R) heart implants next October. Thanks for the work of our teams and our suppliers, thanks to whom we can restart production at the end of March after implementing the necessary changes in our production chain.
At the same time, we have made good progress in our exchanges with the various regulatory actors in Europe (DEKRA), in France (ANSM) and in the United States (FDA), whose agreements are necessary to be able to take over our establishments in the commercial and clinical framework. To meet the strong demand from doctors and prepare for the resumption of implantations, our teams have also intensified the training of European centers, bringing to 17 the number of hospitals ready to carry out Aeson implantations in Germany, France and Italy.
Finally, I would like to thank our shareholders – old and new – for their essential support during our fundraising of 40.5 ME last April.
Given these advances, we are well positioned to resume Aeson deployments in the fourth quarter as planned, and more confident than ever in our ability to make Aeson, in the coming years, a reference therapy for advanced heart failure”.