CARMAT announces updates in its governance

Paris, January 21, 2019 – 6 pm CET

CARMAT (FR0010907956, ALCAR), the designer and developer of the world’s most advanced artificial heart project, aiming to provide a therapeutic alternative for people suffering from end-stage biventricular heart failure, today announces its indicative financial calendar for 2019.

This preliminary agenda may be modified. Each publication will be released before market opening.

Paris, January 15, 2019 – 8.00 am CET

CARMAT (FR0010907956, ALCAR), the designer and developer of the world’s most advanced total artificial heart, aiming to provide a therapeutic alternative for people suffering from end-stage biventricular heart failure, today announced an update on its clinical progress and recent developments, as well as its cash position at December 31, 2018.

Stéphane Piat, Chief Executive Officer of CARMAT, says: “Ten years after the creation of the Company, we are pleased to present today the results of the first cohort of 10 patients included in the PIVOTAL study. This is the tangible realization of Professor Carpentier’s vision that, at the time, was a challenge that seemed almost impossible to meet. Thanks to the work and tenacity of a group of men and women with unlimited commitment, we have successfully achieved the primary endpoint of the study for 70% of patients with 6 months of support provided by our bioprosthesis or the successful progress towards heart transplant. These interim data confirm that our bioprosthetic heart respects the physiology of the human body, and thus enables to avoid the complications typically observed with other technologies. This is a unique scientific and technological breakthrough that could help cope with the problem of end-stage heart failure, a major pathology that is becoming increasingly prevalent. We can assert that CARMAT has today reached a major milestone in its development enabling us to address the future with renewed confidence.”

• Positive interim results of the first part of the PIVOTAL study

The interim analysis concerned the 10 patients of the first cohort of the PIVOTAL study, the first of whom was enrolled in August 2016 and the last in July 2018. Altogether, the study foresees the enrollment of 20 patients suffering from end-stage biventricular heart failure.

70% of the patients in this first cohort reached the study’s primary endpoint, corresponding to six-month survival with the bioprosthesis or a successful heart transplant within 6 months after device implant. By comparison, this rate was only of 50% for the feasibility study and 54-62% for the only total artificial heart currently on the market[1].

The data collected from the patients having achieved the study’s primary endpoint again confirm the biocompatibility of the CARMAT prosthesis, already proved during the feasibility study, and notably its positive safety profile, never before achieved by other technologies, with the absence of cerebrovascular accidents, gastrointestinal bleeding or infections due to the percutaneous cable. Furthermore, these patients only required light anticoagulant therapy.

The device has moreover proven its ability to respond to changes in the patient’s physical effort by modifying the flow, confirming that the self-regulation system works correctly.

• Ongoing enrollment of the second cohort of patients

Patient enrollment for the second part of the PIVOTAL study began in accordance with the protocol in September 2018 in international medical centers, under the guidance of Principal Investigator Prof. Ivan Netuka (Chair of the Department of Cardiovascular Surgery at the IKEM institute in Prague, Czech Republic) and Co-Principal Investigator Prof. Finn Gustafsson (Rigshospitalet, Copenhagen, Denmark).

To date, the cumulative support time of the CARMAT heart within the framework of the PIVOTAL study has reached 5 years in the 11 implanted patients. This accumulated experience shows the ability of the CARMAT technology to provide a long-term solution for patients suffering from end-stage biventricular heart failure, along with a substantial improvement in their quality of life.

The analysis of the collected data, representing over 20 years of cumulative operating between the clinical study and the reliability tests benches, has made it possible to identify aspects in which the manufacturing process could be improved, essentially concerning the control of the integrity of the prosthesis and the cleanliness of its technical compartment.

The implementation of these corrective actions required the production – and therefore implants – to be suspended in the fourth quarter of 2018. Production has recently resumed and the new prostheses will be available from April.

The Company is currently validating additional clinical centers in two more countries in order to rapidly complete the enrollment of the second patient cohort and submit the CE marking dossier in early 2020. The PIVOTAL clinical data represents the final element needing to be added to the CE marking dossier prior to its submission to the DEKRA notified body.

• Progress in the clinical development strategy in the United States

Since the submission of an Investigational Device Exemption (IDE) application for an Early Feasibility Study (EFS) in 2018, CARMAT has been holding constructive talks with the FDA (Food & Drug Administration, the United States health authority). Significant progress has been made, and the file should be supplemented with biocompatibility tests on a certain number of prostheses currently in production. This enables CARMAT to envision – assuming the FDA validates our application – the launch of implants in American patients by the end of 2019. The selection of clinical centers and the formation of scientific committees are ongoing.

• Solid financial structure

CARMAT had cash and marketable cash instruments of €25.2 million at December 31, 2018, versus
€44.0 million at June 30, 2018, reflecting:

• cash burn of €19.7 million over the period;
• drawdowns on the contingent equity lines subscribed to with Kepler Cheuvreux for a gross total of €0.9 million. Within the framework of this contract, CARMAT has access to an additional €24.2 million of financing that could be exercised depending on its requirements and on market conditions over the coming 36 months[2].

Given the recent non-dilutive financing in the form of a €30 million loan granted by the European Investment Bank (EIB), CARMAT has the necessary financial resources to support its clinical and industrial developments and prepare the commercial phase.

[1] Kirklin JK et al, J Heart Lung Transplant 2018;37:685-691. Arabia F et al, J Heart Lung Transplant, 2018;37:1304–1312

[2] Assuming full drawdown of this equity financing line, a shareholder with a 1.00% stake in CARMAT prior to its implementation would see their stake reduced to 0.91% on a non-diluted basis

Paris, December 17, 2018 – 6.00 pm CET
 
CARMAT (FR0010907956, ALCAR), the designer and developer of the world’s most advanced total artificial heart, aiming to provide a therapeutic alternative for people suffering from end-stage biventricular heart failure, and the European Investment Bank (EIB), which is the bank of the European Union (EU), today announce the signing of a €30 million loan agreement supported by the European Fund for Strategic Investments (EFSI), the central pillar of the Investment Plan for Europe – more commonly known as the Juncker Plan.
 
This loan will support the strategic transformation of CARMAT into an industrial and commercial company via the completion of clinical trials and an increase in its production capacity. The agreement was signed by Ambroise Fayolle, Vice-President of the EIB, and Stéphane Piat, CEO of CARMAT, during a visit of the new automated manufacturing site in Bois-d’Arcy, near Paris.
 
The aim of this type of non-dilutive financing, granted by the EIB with the European guarantee within the framework of the Juncker plan, is to support research and innovation projects developed by companies with substantial growth potential. The CARMAT project meets these criteria as, assuming clinical trials are successful, its bioprosthesis could become a credible alternative to a heart transplant for tens of thousands of patients facing the well-known shortfall in available organs.
 
After having provided the proof of concept of its device in a feasibility study, CARMAT is currently evaluating its bioprosthesis within the framework of an international PIVOTAL study that foresees the inclusion of approximately 20 patients, the second part of this study having begun during the second half of 2018. In Europe, the study is conducted in various countries within cardiac centers of excellence and helps, with this unique medical device, to enhance surgeons’ know-how in caring for patients suffering from heart failure. This project will also have a positive impact on skilled employment. Indeed, CARMAT, which currently employs 180 permanent staff, is planning to double this number by 2025, principally in R&D.
 
This financing will support the clinical evaluation of the CARMAT bioprosthetic heart through to the granting of CE marking, which is expected in 2019, as well as industrial developments and preparations for the commercial phase.
 
“This European financing will support the marketing process of the world’s most advanced total artificial heart while helping increase the production capacities of CARMAT. By accompanying the transformation of this highly-innovative Med Tech into an industrial and commercial company, we are providing CARMAT with the means to develop and potentially become a global champion in the field of artificial hearts,” says Ambroise Fayolle, Vice-President of the EIB, and adds “Med Techs are a key vehicle for innovation that requires substantial investments during the clinical development phase. This is why we provide them with bespoke financing adapted to their specific requirements and their clinical phases. That is the added value of the Juncker plan!”
 
Pierre Moscovici, Head of Economic and Financial Affairs for the European Commission adds: “I am delighted about this new loan to French company CARMAT within the Juncker Plan. Artificial hearts developed by this company raise immense hope. This is concrete evidence that the Juncker Plan fosters innovation in health for the benefit of European citizens and gives French innovation excellence the opportunity to shine.”
 
Stéphane Piat, CEO of CARMAT, concludes: “We are very pleased about this financing agreement with the EIB, and I would like to thank all of the stakeholders who contributed to its realization. This operation allows us to diversify our sources of financing and will contribute to the gradual transformation of CARMAT into a European industrial and commercial company. We now have the necessary resources to complete the CE marking process, and remain confident in our ability to offer an innovative therapy to patients suffering from end-stage heart failure.”

Paris, December 12, 2018 – 6.00 pm CET
 
CARMAT (FR0010907956, ALCAR), the designer and developer of the world’s most advanced total artificial heart, aiming to provide a therapeutic alternative for people suffering from end-stage biventricular heart failure, today announces the appointment of Pascale d’Arbonneau as Chief Financial Officer.
 
A graduate of the ESCP Europe business school, Pascale d’Arbonneau is a member of the Association nationale des directeurs financiers et de contrôle de gestion, (DFCG, the French association of financial and management control managers) and a lecturer at Paris Diderot University. Before joining CARMAT, Pascale d’Arbonneau was Executive Director of the Econocom International B.V. (EIBV) family office.
 
She began her career in 1989 as an auditor at Coopers & Lybrand (now PWC) before entering the pharmaceutical industry as Head of Finance & IT France at Johnson & Johnson – MSD (1995-1999). She spent most of her career (1999-2016) at GlaxoSmithKline (GSK). She joined as Director, Head of Controlling & Finance Partnering, France at GlaxoWellcome, just before its merger with SmithKline Beecham, managing a team of 20 people working on the combination of the two companies. She then held a number of senior positions within the Group (Vice President & Finance Controller, Pharma Europe from 2006 to 2010, Vice President & Area Finance Director, Western Europe from 2010 to 2014) before becoming Vice President Compliance and Control Integration for all business units worldwide.
 
“I am delighted to join CARMAT at a time when the Company is preparing to reach major milestones in its development, to continue the excellent work accomplished thus far on both the financing front and the industrialization front. I look forward to working in collaboration with the team to put in place a detailed financial roadmap and accompany the Company’s growth”, says Pascale d’Arbonneau.
 
Stéphane Piat, Chief Executive Officer of CARMAT, adds: “It is a great pleasure to welcome Pascale d’Arbonneau to our management team. Her arrival marks the completion of the structuring of our Management Committee in view of the challenges ahead, and notably the finalization of the key stages in the CE marking process. Her unique expertise in finance and management control within major global healthcare groups will be essential to secure the ramping up of our project.”

Paris, December 3, 2018 – 6.00 pm CET

CARMAT (FR0010907956, ALCAR), the designer and developer of the world’s most advanced total artificial heart project, aiming to provide a therapeutic alternative for people suffering from end-stage biventricular heart failure, today announced the cooptation of Jean-Pierre Garnier to the Company’s Board of Directors, replacing former Chairman, Jean-Claude Cadudal, who stood down, for the remaining duration of the latter’s mandate, and his appointment as Chairman of the Board.

Scientist and business leader, Jean-Pierre Garnier graduated from Louis Pasteur University (PhD in Pharmacology) and Stanford University (Master in Business Administration). He started his career in 1975 at the pharmaceutical company Schering-Plough where he held a number of management positions in Europe before becoming President of their American division. In 1990, he joined Smithkline Beecham Laboratories as President of the Pharmaceuticals Division and became President and CEO in 1999.

In 2000, Jean-Pierre Garnier achieved the merge of two of the largest pharmaceutical groups (Smithkline Beecham and Glaxo Wellcome), to create GlaxoSmithKline (GSK), which he chaired until 2008.

Jean-Pierre Garnier is currently a member of the Board of Directors of several biotechnology companies; President of Idorsia, Director of Radius Health. He is also a member of the Board of United Technology (Aeronautics) and a Director of the Paul Newman Foundation. From 2011, Jean-Pierre Garnier was Chairman of Actelion (Biotechnology) until its acquisition by Johnson and Johnson in 2017.

The Best Practice Institute has nominated Jean-Pierre Garnier as one of the world’s top 20 CEOs. He is an Officier de la Légion d’Honneur (Officer of the Legion of Honour) and Knight Commander of the Order of the British Empire.

Jean-Claude Cadudal, on behalf of the CARMAT Board of Directors, said: “We are thrilled to welcome Jean-Pierre Garnier as Chairman of the Board of Directors. Through his managerial career at the helm of world leaders in the pharmaceutical industry such as GSK as well as his extensive experience of the medical area, Jean-Pierre has all the skills required to steer, alongside Stéphane Piat, CEO of CARMAT, the Company’s industrial and commercial development. This highly-experienced duo and the CARMAT management team have all the necessary assets to make CARMAT a global leader in medical devices for heart failure.”

Stéphane Piat, Chief Executive Officer of CARMAT, added: “I am delighted to be able to team up with Jean-Pierre Garnier, new Chairman of the CARMAT Board of Directors. We had been preparing this important transition for some months now. Indeed, with the Company on the verge of a crucial phase in its development, its expansion, it is necessary to further expand its governance with professionals who have substantial medical experience and an in-depth knowledge of the challenges of the healthcare market. Today, we firmly believe that Jean-Pierre Garnier will be able to build on our solid foundations and capitalize on his large experience in the health sector to significantly support us in the development of the innovative therapy that the CARMAT approach represents.”

Jean-Pierre Garnier, newly appointed Chairman of the CARMAT Board of Directors, concluded: “The artificial heart invented by Professor Alain Carpentier and developed by CARMAT represents a vital solution for numerous patients suffering from this chronic condition that is end-stage biventricular heart failure. This technological accomplishment, which meets patients’ expectations, has the potential to make CARMAT a leading player in the medical technology sector, and I am particularly delighted to contribute to its development as new Chairman of the Board of Directors. On behalf of the entire Board and shareholders, I would like to thank Jean-Claude Cadudal, Chairman of the company since its inception in 2008, who has shown his ability to mark his vision and values on CARMAT, and thus take it to the clinical proof-of-concept phase via the implementation of important industrial processes for the future. The Senior Management team and Board members are all enthusiastic and determined to transform this project into a genuine commercial success, and I will strive to contribute all of my know-how in order to accompany them in this ambitious and fascinating endeavor.”

• With a cash position of €44.0 million at June 30, 2018, financial resources will allow the continuation of clinical and industrial developments through to the granting of CE marking, expected in 2019
• Operating expenses are in line with the transformation of CARMAT into an industrial and commercial company
• The 1^st part of the PIVOTAL study has confirmed the bioprosthesis’ fundamentals and its adaptability to a broader patient population than initially expected
• More than 50% of patients in the PIVOTAL study have now been implanted

Paris, September 28, 2018 – 7.00 am CEST

CARMAT (FR0010907956, ALCAR), the designer and developer of the world’s most advanced total artificial heart project, aiming to provide a therapeutic alternative for people suffering from end-stage biventricular heart failure, today announced its results for the first half of the year at June 30, 2018^[1] and provides an update on its developments.

Stéphane Piat, Chief Executive Officer of CARMAT, commented: “The first half of 2018 was marked by a significant acceleration of our project, as we have so far completed the enrollment of half of the patients in the PIVOTAL study and reached a decisive industrialization milestone with the opening of our new manufacturing site. The PIVOTAL study has now moved into its second phase. Indeed, the first phase of this study showed the ability of our prosthesis to provide effective support to patients suffering from end-stage heart failure. Furthermore, the successful heart transplant of the first Kazakh patient, after 8 months of support provided by the CARMAT heart, demonstrates that the latter can also be used in patients suffering from comorbidities that prevent an immediate transplant.

Beyond this success, one of the main lessons lies in the fact that the size of our bioprosthesis allows us to target a broader patient population than initially expected, as it has been correctly implanted in patients with a smaller thorax size.

Today, we are at a turning point in our project, and are delighted to be able to count on the expertise of the medical teams who are accompanying us in France and abroad. Our objective is to move forward towards the completion of the PIVOTAL study at a dynamic and controlled pace, and we continue our efforts to expand the study to other leading European centers, as well as our discussions with the FDA to obtain the approval to initiate a feasibility study in the United States by the end of the year.”

• 2018 half-year results

CARMAT recorded no revenue over the first half of 2018, as its total artificial heart project is still in clinical development. The CE marking process, which is a prerequisite to marketing the product in Europe, is progressing in line with the Company’s expectations.

In the first half of 2018, operating expenses increased by 37% to €20.1 million, driven by a number of developments undertaken during the half year, and in particular:

• progress in the CE marking process, with the finalization of all technical modules;
• preparatory work for the opening of the new manufacturing site in Bois-d’Arcy, now operational;
• the ramping up of the PIVOTAL study, with the training of the teams from the international investigation centers involved in the study and the acceleration in patient enrollment.

Once the financial loss (-€455.4 thousand), exceptional items (-€2.7 thousand) and Research Tax Credit (€1.0 million) are taken into account, the net loss at June 30, 2018 was €18.9 million, versus a loss of €14.1 million over the six months to June 30, 2017.

• Strong financial structure

Cash and marketable cash instruments totaled €44.0 million at June 30, 2018, versus €60.7 million at December 31, 2017, due to:

• cash burn of €20.7 million over the first half of 2018;
• drawdowns on the second tranche of the contingent equity line subscribed to with Kepler Cheuvreux, for a gross total of €4.0 million. Given the expiry of the initial contract and in order to continue to benefit from an equity financing reserve, CARMAT[2] has signed a new contract, under identical conditions[3] and for a sum equal to the unused balance, i.e. €25 million, with Kepler Cheuvreux, again acting as financial intermediary. This additional financing ability, to which Kepler Cheuvreux has committed to subscribe to on its own initiative providing the contractual conditions are respected, may be adjusted by the Company in accordance with its requirements and market conditions over the coming 36 months[4]. This operation did not require a prospectus to be submitted to the AMF for a visa.

These financial resources will allow the Company to continue its industrial and clinical development until it receives CE marking expected in 2019. 

• PIVOTAL study continuing in line with the aim of completing patient enrollment by end-2018

• Enrollment in the 1^st part of the study has been completed

In July 2018, CARMAT announced that patient enrollment in the first part of the PIVOTAL study had been completed, corresponding to the inclusion of the 10^th patient, out of 20 planned for the entire study.

During this first phase, the Company was able to gather important information for its remaining clinical development:

• the bioprosthesis fulfilled its role in accordance with the requirements of the clinical protocol;
• the surgical procedures, 100% successful, showed that the size of the bioprosthesis – equivalent to that of a sick heart – could adapt even to a smaller patient thorax. Initial assumptions, indicating anatomic compatibility for 86% of men and 14% of women, are now considered very conservative;
• the National Research Center for Cardiac Surgery (Astana, Kazakhstan) surgical teams successfully carried out the first heart transplant on a patient who benefited from the CARMAT heart for 8 months. This procedure, a world first, highlighted the possibility of using the CARMAT bioprosthesis not only as a definitive therapy, but also as a treatment option while awaiting a transplant (a bridge to transplantation), significantly expanding the targeted patient population. The feasibility of the bridge to transplantation was confirmed by a second heart transplant performed by the Astana teams in a patient who had benefited from the CARMAT bioprosthesis for 5 months.

• Start of the 2^nd part of the study in the 3 approved countries

Following the analysis of the clinical data available to date on the first 10 patients, the health authorities of the countries participating in the trials have approved the continuation of the PIVOTAL study without any changes in the protocol.

Patient enrollment in the second part of the study has therefore begun in the investigation centers, under the control of Principal Investigator, Professor Ivan Netuka (Director of the Cardiovascular Surgery Department at the IKEM institute, Prague, Czech Republic), and Co-Principal Investigator, Professor Finn Gustafsson (Rigshospitalet, Copenhagen, Denmark).

Furthermore, CARMAT is still working intensely to expand the PIVOTAL study to other European countries and complete the implantations at the end of 2018.

• Enrichment of the PIVOTAL study learning curve

To date, 11 patients have been treated, i.e. over 50% of the planned number of patients in the study. The efforts of the clinical team are focused on enrolling patients that best meet the inclusion criteria in order to complete the study in line with the schedule and maximize the chances of success.

The CARMAT heart cumulative support time has reached 3 years 5 months. This accumulated experience shows the ability of the CARMAT technology to offer numerous benefits to patients, as well as the stability of its performances observed so far:

• the 1-month survival rate is 91%, versus 75% in the feasibility study, which can be explained by the generally less compromised clinical profile of patients than previously;
• surgery time has been reduced to 5 hours (versus almost 7 hours for the first three implants) with just 2 hours 40 minutes of extracorporeal circulation (versus close to 3 hours 30 minutes for the first three implants);
• the time before leaving intensive therapy has been cut to 6 days;
• the hospitalization time before patients can return home has been reduced to 35 days.

• Transformation of CARMAT into an industrial and commercial company

• Certification of the Bois-d’Arcy manufacturing plant

Following the recent certification of its new automated manufacturing site in Bois-d’Arcy, near Paris, CARMAT now has an industrial site that meets the highest technological standards enabling it to produce up to 800 prostheses a year at full capacity. The assembly of the hybrid membranes with the help of industrial robots is already performed on site.

• Development of remote patient monitoring

In order to ensure a better therapeutic follow-up, CARMAT has initiated the development of a remote monitoring solution to record the cardiac parameters of patients as well as the CARMAT heart function data remotely. This solution was developed in collaboration with WISNAM (Acireale – Italy), an expert in the field of connected objects.

• Ongoing restructuring of the teams

CARMAT recently announced the appointment of Thierry Dupoux, previously Worldwide Vice President of Quality Assurance at LivaNova, as Senior Director of Quality Assurance. Following the appointments of a Marketing Manager and a Director of Manufacturing last year, the Company is thus continuing to expand its managerial team in key positions with experts who will support its transformation into an industrial and commercial company.

[1] First-half accounts were approved by the Board on September 27, 2018, and have been the subject of a limited review by the statutory auditors.

[2] In accordance with the 8^th resolution approved by the Shareholders’ Meeting of April 5, 2018

[3] Shares will be issued on the basis of the volume-weighted average share price over the two trading days preceding each issue, minus a maximum discount of 6.0%

[4] Should the entire equity line be utilized, a shareholder with a 1.00% stake in CARMAT beforehand would see this stake reduced to 0.91% on a non-diluted basis