23 Days left

EpiHeart - Enabling new cardiac treatments

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anonymous 4 days ago

-There are some investments made before the round opened, can you reveal related EUR sums and investors? Knowing, for example, that people close to the company already committed to invest would increase the confidence to invest, especially taking into account the early phase of the company. -Can you give more light to the patents: what exactly is or will be protected? -What are your estimates on the unit economics: sales price per device/per consumable and related gross profits? If you cannot give estimates on these, could you give estimate on gross profit margin as percentage of sales?

Thank you

EpiHeart Oy
4 days ago

Thank You for your questions:

I cannot reveal exact sums invested by individual parties, but I can say that parties most involved have taken risks and invested as possible while considering their personal/family financials. Personally, I have invested notably more than my family would have preferred. We are committed.

Our patenting activities so far have related individual products in the solution that we have seen room for patentable improvements. The two applications pending are around sterile centrifugation and tissue processing at the operating room. We are currently exploring further patenting, where we could patent certain interactions between the products. More broadly, we believe that patents will play some role, but they are not only source for sustainable competitive advantage.

In our cash flow scenarios, the gross margin is 76% for 2022 and well over 80% in 2023. This means we have healthy margins from day one. The improvement is based on assumption of some cost reduction actions to be taken by 2023. I am not very keen to disclose exact estimated sales prices for multiple reasons, but for hospital the cost per procedure package is some thousands of euros. That pricing is based on some real-world feedback and is extremely low compared to cellular therapies in generally. All in all, the margin structure should well support profitability.

I hope these answers provided some further insights, despite I needed to keep some information confidential.

Kai Kronström, Co-founder & CEO

anonymous 5 days ago

Hello and thank you for a well done pitch! Below are my questions, any help would be really appreciated.

  1. The timeline for the clinical trials and the regulatory approval of the product seems fast. You listed some reasons, but I wonder if you could list some comparable real life examples where such a fast schedule has actually realized? What reasons might be the most probable blockers for your timeline, and how would you assess their probability to occur?

  2. How much additional funding would be needed to start producing of the product, to achieve the sales targets you have set for, e.g. 2022 and 2023? What kinds of recruiting you would need to do to achieve this phase?

  3. I would like to better understand the use case of the product. Would it bring considerable value for what % of CABG surgeries? Based on your answer, how does that compare with the research already done (in University of Helsinki/HUS), can you comment on what concrete benefits have the patients received when compared to a "normal" CABG?

  4. Am I right to assume that using your product would increase the cost per CABG surgery? How prone are the potential customers to spend more money per surgery, if they can generate benefits for the patient? Can you describe the increase of costs per surgery (in terms of euros and/or percentage) and compare that to the benefits as asked in question 3?

Thank you for the answers in advance!

EpiHeart Oy
5 days ago

Thank You for a comprehensive set of questions

I start with answering the quesiton 1) only, and come later today back with answers to other questions.

So let's start with the regulatory approvals: EpiHeart is enabling a new therapy with its solution that consists both EpiHeart products and 3rd party products. In practice, we can leverage 3rd party products to a notable extent. Those products already have the approvals. Our own products are essentially class 1 (sterile) products. This means that the regulatory burden is not at the same level as for many other companies. For example, no additional clinical studies are needed for regulatory approvals.

The concern about the timeline and risk for delays is relevant. The following three areas are likely the most relevant: (i) own development, (ii) hospitals and (iii) vendors. I am not very concerned over our own development, manufacturing and QA as the scope of those activities is relatively limited and those activities are in our own hands. Clinical research conducted in hospitals tend to be prone for delays. However, in our case the safety is already well demonstrated, there are many lessons learned, there is strong basis for clinical collaboration and study preparations are already well on the way. These aspects should at least limit the risk for delays in that area. The vendors are the third potential source for delays. We have mostly identified the vendors we work with and we are happy with choices. There are no major issues identified or concerns, but some risks exist. For example, Covid-19 has caused some minor delays with some Benelux-based vendors, but based on current understanding those delays do not impact the overall schedule.

Kai Kronstöm, Co-founder & CEO

EpiHeart Oy
5 days ago

Let's continue with answers:

Answer to question 2. - Funding and recruitment needs.

According to our cash flow modelling (base scenario) the 1M€ funding will be enough to achieve targets for 2022 and 2023; while containing some cash reserve for possible bumps on the road. The scenario assumes largely sales for studies and pilots for the most of 2022 and commercial sales starting late 2022. We can also reach value adding milestones (e.g. expansion of clinical studies, regulatory approvals) with lesser funding and raising funding in stages is well possible. I any case, we aim to keep the cost in control and operations lean.

As most of manufacturing is outsourced that doesn’t require huge recruitments. The immediate recruitment plans consist of a person that can start setting up the operations. I may come up with recruitment add in coming weeks.

Answer to question 3. Sub-segmenting within CABG surgeries and patient benefits.

The amount of damage caused by myocardial ischemia varies. Almost all CABG (coronary artery by-pass grafting) patients have some damage and/or risk for heart failure. The most relevant target group are those that have had a myocardial infraction that typically has led some notable damage. The damage can be analyzed with MRI as done in studies, but in urgent practical situations that MRI imaging is not needed. To sum up, the natural first target group are the 30% of CAGB patients that have had a myocardial infraction or have otherwise presumably notable ischemic damage.

The clinical study conducted was a first-in-human study, designed as a feasibility/safety study. Logically the number of patients was small. For these reasons, the results may not be interpreted to demonstrate benefits, but regardless of these limitions, it appears that anatomical improvements took place in statistically meaningful way (ventricular wall thickening as discussed in the pitch). However, the inherent target with this type of therapy is, to provide longer life and improve the quality of life. All the treated patients survived, but one life was lost for heart failure in the non-treated “normal” CABG control group. Unfortunately, one can only speculate if the treatment would have made the difference.

Answer to question 4. Cost/Benefits and pricing.

You are correct to assume that our products will cost something for hospital. Thus the cost of CABG surgery is somewhat increased or the cost will be handled through separate procedure/reimbursement code. However, the increase is rather marginal compared to overall costs and assuming the benefits can be demonstrated in larger studies, the cost/benefit ratio well justifies the broad use of the therapy as part of the CABG.

The cost efficiency is a major benefit for us as often novel cellular therapies are that expensive that their usage become very limited. Based on discussions so far, our targeted pricing fits well what Nordic university hospitals can afford/expect and that doesn’t cause major issues. In most of the countries, university hospitals have some budget for “new treatments” that support early market. Typically, the majority of the health care funding flows based procedure specific reimbursement codes. If we can establish dedicated reimbursement codes or utilize existing reimbursement codes that is based on cost structure of “typical” cardiac cellular therapy, while providing cost-efficient solution, that may drive demand and profitability in many parts of the world.

All in all, it was difficult to keep it short and provide comprehensive answers. I hope these answers provided a decent compromise between those targets. Hopefully this also clarified, why I believe EpiHeart is an exceptional opportunity.

Yours, Kai Kronström Co-founder & CEO

anonymous 5 days ago

Thank you for the answers, they are greatly appreciated!