PERTH, Australia – With another FDA approval in hand for its regenerative tissue portfolio, Brisbane, Australia-based Admedus Ltd. said it expects to become profitable in the next 12 to 18 months. The FDA cleared Vascucel for marketing on Oct. 17, and the company expects to launch the collagen scaffold for repairing vascular tissue in November.

The company's stock (ASX:AHZ) gained 60 percent on the news, closing Monday at 52 cents a share.

The company markets its Cardiocel product for cardiac tissue repair in the U.S., Europe, Canada, Singapore, Hong Kong, Malaysia, Singapore, New Zealand and the Middle East and North Africa region.

Both products are based on the biotech's Adapt tissue regeneration technology, which re-engineers tissue by starting with a piece of animal pericardium and stripping out DNA and cell remnants and then repopulating the collagen layer with a patient's own cells.

A long-term study found that there was no evidence of calcification after eight years post-implantation of Cardiocel.

"Compared to other products, most have issues regarding calcification, Chief Operating Officer Julian Chick told BioWorld Today, but Admedus' technology facilitates autologous repair so that the body repairs itself over time, he said.

The Vascucel approval will extend the cardiovascular franchise from its current A$8.5 million (US$6.48 million) in annual sales to more than A$20 million, he said.

Other cardiovascular tissue products will be developed as well as other potential regenerative applications, such as combining cellular therapies and Adapt regenerative tissue.

HYBRID BUSINESS MODEL

Admedus has a market cap of A$120 million and is listed on the Australian stock exchange (ASX). Its business model encompasses three distinct business units that are a hybrid of med tech and immunotherapies.

Admedus' most innovative business is its immunotherapy division, which is based on Ian Frazer's DNA vaccine technology. Frazer is best known for his work at the University of Queensland for discovering how to make the vaccine particles that were the basis of the human papillomavirus vaccine Gardasil. The vaccine was then developed by CSL Ltd., and out-licensed to Merck & Co.

Frazer is the chief scientific officer for the immunotherapy division, and he is leading the team of scientists developing therapeutic vaccines for treating and preventing infectious diseases and cancers.

Admedus has two programs in development that target the herpes simplex virus 2 (HSV-2) and HPV. The HSV-2 vaccine is in phase II trials in Australia, and interim data will be out in the next four weeks. A full dataset is expected around March 2017, Chick said. In the competitive space, there is nothing on the market that is a functional cure for herpes, the COO said.

The HPV therapeutic vaccine is on track to enter a phase Ib trial in 2016.

IMMUNOTHERAPY SPINOUT?

The immunotherapy division will soon get to an inflection point where it would make sense to spin out the company as a separate immunotherapy firm, Chick said. Once it hits proof of concept, Admedus will look for additional funding as well as international partners to help fund late-stage clinical trials.

That's a typical model for most Australian biopharmas rather than trying to build out an in-house R&D company.

The country lacks a strong venture capital ecosystem, and although recent government investment is trying to help nurture that ecosystem, most VCs tend to favor med-tech companies, Chick said, because the runway to market is shorter and is seen as less risky.

In August, Admedus raised A$18.3 million, A$10 million in an oversubscribed private placement and A$8.3 million in a renounceable rights issue to existing shareholders at A$0.33 per share.

The private placement and rights issue will allow the company to further invest in its immunotherapy programs, scale up manufacturing and to expand its reach in emerging markets. The funding will take the company through 2018, Interim CEO Wayne Paterson said.

RELYING ON MED-TECH PROFIT CENTER

Up to this point, Admedus has primarily relied on its third med-tech business unit to fund the more innovative side of the house.

That business distributes infusion products to hospitals in Australia and New Zealand and is a profit center for the company. In fact, the company started out as a distribution play until it acquired the technology around the tissue franchise, according to Chick.

Admedus was born from the merger of Allied Medical and Biomd in 2011. In 2013, the company changed its name to Admedus, and it acquired Verigen Australia Pty for its regenerative tissue products.