XVIVO PerfusionXvivo’s commercial and clinical progress, strong positioning for a surgical pick...

Important information: All information regarding limitation of liability and potential conflicts of interest can be found at the end of the report Redeye, Mäster Samuelsgatan 42, 10tr, Box 7141, 103 87 Stockholm. Tel. +46 8-545 013 30, E-post: [email protected]

Initiation of coverage

Equity Research 29 May 2020

KEY STATS

Ticker XVIVO.ST Market Mid Cap

Share Price (SEK) 143.2 Market Cap (MSEK) 3809 Net Debt 20E (MSEK) -122 Free Float 84 %

Avg. daily volume (‘000) 41

BEAR BASE BULL 110

200

290

KEY FINANCIALS (SEK)

2018 2019 2020E 2021E 2022E 2023E Net sales 188 221 220 272 334 408 EBITDA 31 29 43 54 78 112 EBIT 14 4 10 23 42 70

EPS (adj.)

2018 2019 2020E 2021E 2022E 2023E EPS (adj.) 0.5 0.2 0.4 0.8 1.3 2.1 EV/Sales 17.6 19.8 16.8 13.7 11.4 9.4 EV/EBITDA 106.7 151.7 85.0 69.4 48.7 34.0 EV/EBIT 235.6 1108.6 356.0 161.6 89.7 54.7 P/E 274.7 915.6 394.7 190.8 108.6 66.9

ANALYSTS

Arvid Necander [email protected] Mats Hyttinge

[email protected]

45

3

0

50

100

150

200

250

29-maj 27-aug 25-nov 23-feb 23-maj

OMXS 30

XVIVO Perfusion

Well-preserved value Redeye re-initiates coverage of Xvivo with strengthened conviction following a deep dive into

its clinical data and that of key competitor TransMedics, as well as target markets. While the

coronavirus crisis presents some nearer-term challenges, the case is attractive in view of

Xvivo’s commercial and clinical progress, strong positioning for a surgical pick-up and

undemanding valuation even after the share’s recent rebound.

Approaching transformation

Xvivo is approaching a transformational phase with significant progress with both its

commercialised assets and clinical development projects. With reimbursement through the

US Centers for Medicare & Medicaid Services (CMS) agency in place and a collaboration with

United Therapeutics that should intensify shortly, the lung transplant business area is

approaching a growth inflection point.

Initiating trials

Moreover, Xvivo is ready to initiate large-scale trials of its two main clinical assets – the heart

preservation system and PrimECC. These offer scope to transform it into a company with a

promising late-stage pipeline.

Positive positioning

Like other medtechs, Xvivo is challenged by the new coronavirus reality of disrupted supply

chains, face-to-face sales interactions and elective surgeries. However, we note that US CMS

guidelines and transplant society recommendations both make organ transplants top

priorities not to be postponed. This positions Xvivo well as healthcare systems recover.

Re-initiating coverage with a SEK 200 Base Case

Our 15-year DCF model indicates a Base Case fair value of SEK 200 per share, giving potential

upside of some 40% from current levels. This values Xvivo at 13.8x our 2024 revenue

forecast discounted back to present value at 9%. The multiple represents a slight discount

to its peer group of high-growth medtech companies trading at a median multiple of 15.6x

2020 estimates.

XVIVO Perfusion Sector: Life Science

REDEYE RATING

XVIVO.ST VERSUS OMXS30

FAIR VALUE RANGE

Financials

People

Business

REDEYE Equity Research XVIVO Perfusion 29 May 2020

2

Contents Investment case .................................................................................................................................................... 3

Company Description ............................................................................................................................................ 5

Product Portfolio ................................................................................................................................................... 5

Perfadex ....................................................................................................................................................................... 6

XPS, LS and STEEN Solution ................................................................................................................................... 7

Addressing a high unmet medical need ............................................................................................................ 8

PrimECC .................................................................................................................................................................... 12

XHPS and SXHS ....................................................................................................................................................... 12

Clinical experience ................................................................................................................................................... 13

XPS and STEEN Solution .................................................................................................................................... 13

XHPS and SXHS ................................................................................................................................................... 23

PrimECC ................................................................................................................................................................ 23

Other product candidates .................................................................................................................................. 23

Market Opportunity ............................................................................................................................................. 24

Opportunity in ex vivo perfusion ............................................................................................................................ 24

TAM in lung transplantation .............................................................................................................................. 25

TAM in heart transplantation ............................................................................................................................. 31

Opportunity in open-heart surgery ........................................................................................................................ 35

Competitive landscape in ex vivo perfusion ....................................................................................................... 37

TransMedics ......................................................................................................................................................... 37

Other competitors in ex vivo perfusion ............................................................................................................ 46

EVLP with manual method ................................................................................................................................ 46

Other technologies and approaches ................................................................................................................ 46

Financial Forecasts ............................................................................................................................................. 47

Well-positioned in turbulent times ........................................................................................................................ 47

Sales forecasts ......................................................................................................................................................... 49

Perfadex ................................................................................................................................................................ 49

Ex vivo perfusion .................................................................................................................................................. 49

PrimECC ................................................................................................................................................................ 55

Cost forecast ............................................................................................................................................................ 56

Valuation .............................................................................................................................................................. 59

DCF valuation ........................................................................................................................................................... 59

Sensitivity analysis................................................................................................................................................... 60

Multiple-based valuation ........................................................................................................................................ 60

Appendices .......................................................................................................................................................... 62

Appendix 1. Senior management .......................................................................................................................... 62

Appendix 2. Board of directors .............................................................................................................................. 62

Appendix 3. Patent portfolio .................................................................................................................................. 63

dsfdsf REDEYE Equity Research XVIVO Perfusion 29 May 2020

3

Investment case Building on research by Professor Stig Steen – a pioneer in the field – Xvivo’s technology

expands the transplant donor pool by objectively evaluating suitability.

This addresses a key issue with transplantation. Since introduction in the 1960s, it has been

accepted as a life-saving treatment for numerous end-stage organ diseases. However, the

need for donor organs far exceeds supply and many patients die awaiting transplants.

Approaching transformation

Now, after years of research, development and investment, Xvivo is approaching a

transformational phase. In our view, the company is set for significant progress with both its

commercialised assets and clinical development projects.

It has established Perfadex as the gold standard preservation solution for cooling and storing

lungs for transplant. Its technology for ex vivo perfusion of donor lungs is now gaining

acceptance. With reimbursement through the US Centers for Medicare & Medicaid Services

(CMS) agency in place and a collaboration with United Therapeutics that should intensify

shortly, the lung transplant business area is approaching a growth inflection point, we believe.

Moreover, Xvivo is ready to initiate large-scale trials of its two main clinical assets – the heart

preservation system and PrimECC. These offer scope to transform it into a company with a

promising late-stage pipeline.

Set for leadership in USD 800m markets

We view XPS and its accompanying preservation solution STEEN Solution as best-in-class

products and expect Xvivo to emerge as the leading player in the field of ex vivo lung and heart

perfusion. Key factors in this are its unmatched clinical data and significantly more attractive

pricing than the main competitor product (TransMedics’ OCS Lung).

Furthermore, Xvivo’s installed base (which we estimate at 49 machines, compared to about

20-25 for OCS Lung) already covers many of the high-volume clinics. We anticipate the

company managing to reach lower-volume clinics as well. Through its collaboration with

United Therapeutics, leaving little room for competitors. Given the investments of time and

training involved in an EVLP program, switching costs are high.

Margin expansion ahead

While Xvivo is in a capital intensive phase, we believe it has reached a margin inflection point.

We expect increased investments in the commercial organisation and research portfolio to

soon level off. In view of its razor/razorblade business model and the high gross margins of

Perfadex and XPS disposables kits (>75%), as well as the concentrated customer base, we

expect the company to enjoy a high degree of operating leverage on its sales.

Re-initiating coverage with a base case of SEK 200 per share

Our 15-year DCF model indicates a Base Case fair value of SEK 200 per share, giving potential

upside of some 40% from current levels. This values Xvivo at 13.8x our 2024 revenue forecast

discounted back to present value at 9%. The multiple represents a slight discount to its peer

group of high-growth medtech companies trading at a median multiple of 15.6x 2020

estimates.


4

Key risks Here we consider key company or industry risks that could negate our thesis.

Impact of COVID-19

The medtech industry has been particularly challenged by the COVID-19 outbreak. Industry

players are forced to adapt to a new reality where supply chains, face-to-face sales interactions

and elective surgeries are disrupted. The consequences of the crisis remain unclear, but

healthcare systems will probably continue be affected in the near term. However, we note that

guidelines from the CMS and transplant societies recommend that organ transplant should be

top priority and not postponed.

Competitors entry of

Xvivo’s Perfadex dominates the market for solutions for cold preservation of lungs. The original

version was first marketed in 1999 and has been sold off-patent for a number of years. With

generic versions having become available, there is a risk that Xvivo’s market share will decline

over time. The company recently introduced a second generation ready-to-use version that

does not require prior addition and mixing of buffer and electrolytes. This should help fend off

competition, but maintaining market share will depend on continued innovation.

Inadequate reimbursement

XPS is already reimbursed through national systems in key markets such as the US and France,

but our investment case depends on successful expansion to all of Xvivo’s primary markets.

Inadequate reimbursement, resulting in lower hospital gross margins and reduced incentives

for transplant surgeons to use EVLP, would probably hurt Xvivo’s sales potential and margins.

Physician scepticism

Transplant centres are evaluated on their success rates. It is common for clinics to cite higher

survival rates than the national average in their marketing. While Xvivo’s clinical trials have

shown that success rates with extended criteria lungs are comparable to those with normal

criteria lungs after EVLP, physician diligence indicates that knowledge of EVLP is still lacking.

Furthermore, we expect the quality of organs donated after circulatory death (DCD) to decline

somewhat as the donor pool is extended. This could cause some scepticism among cautious

physicians, hampering uptake in the near to medium term.

New technologies

New technologies that might reduce the need for organ transplant could constitute a threat for

Xvivo. We view novel pharmaceutical treatments for chronic and end-stage organ disease as

the largest threat. However, these diseases have different causes and little progress has been

made in recent years. Additionally, we acknowledge that other technologies, such 3D-printed

organs, mechanical organs and xeno transplant are still in their early days and clinically

unproven.


5

Company Description Xvivo is a medical technology company that develops and sells optimised solutions for organ,

tissue, and cell preservation in connection with transplantation and open-heart surgery.

The foundations for Xvivo were laid in 1998, when Dr Magnus Nilsson acquired the rights to

Perfadex – a solution for the preservation of lungs before transplantation. In 1999, Magnus

Nilsson’s company merged with Vitrolife and became the company’s transplantation business

area. In 2009, it become its own separate company again (Xvivo Perfusion AB) and in 2012,

Xvivo was spun off and listed on Nasdaq First North. In 2016, Xvivo acquired key competitor

Vivoline, increasing its presence in Europe and giving it the rights to an advanced development

project for the preservation and evaluation of hearts for transplant.

Today, the company’s headquarters are in Gothenburg, Sweden, and it is listed on Nasdaq

Stockholm Mid Cap. Research and production are carried out at a site in Lund, Sweden. Xvivo

has subsidiaries in Denver, US, and Sydney, Australia. Currently, the company has 59

employees, of whom 33 are based in Sweden.

Xvivo’s business model relies on a razor-razorblade pricing strategy, where durable goods (XPS

and LS) are sold at a zero or low profit margin and disposables kits generate higher profits. The

company has a direct sales strategy in North America, Europe, and Oceania. It uses distributors

in other market regions.

Product Portfolio Xvivo’s product portfolio is built on research by Professor Stig Steen - a pioneer in the field of

organ transplantation and ex vivo (outside the body) preservation of organs. The company first

initiated the collaboration with Professor Steen’s research centre (Igelösa Life Science) in 1998,

renewing it in 2016 when the company acquired Vivoline.

At present, Xvivo is focusing mainly on the thorax area (lung and heart). In the lung and heart

transplant business areas, the company has two assets in commercial phase (Perfadex and

the XPS) and three pre-commercial assets currently undergoing clinical trials (XHPS, SXHS,

and PrimECC). Its long-term goal is to develop products for abdominal (liver and kidney)

transplants as well. Furthermore, Xvivo is investigating isolated tissue therapy - a novel concept

where part of the body is isolated for treatment in order to avoid side effects.

In our valuation, we include the lung transplant business and the development projects that are

furthest along in development and are financed.

Product portfolio and pipeline

Source: Redeye Research

Product LOA* PoC Pivotal Market

Perfadex - Launched

XPS & STEEN Solution - Launched

XHPS & SXHS 75% Q3'20 2024

PrimECC 50% Q3'20 2022 (2023 in the US)

Liver preservation system Not included in valuation

Kidney preservation system Not included in valuation

Isolated tissue therapy Not included in valuation

Clinical development

Potential year of launch


6

Perfadex Perfadex is a colloid-based preservation solution for rapid cooling, perfusion, and storage of

organs in connection with lung transplantation. The colloid component, dextran 40, is used to

coat and protect the endothelium (the cells that constitute the inner lining of the blood and

lymph vessels) from leukocyte interaction and reperfusion injury (Menger et al., 1995; Hoffman

et al., 1997).

Although the ideal non-oxygenated cold ischemic time (the time between the cooling of the

organ and when it is warmed up by having blood supply restored) for lungs is debated, a

number of studies have shown that Perfadex can preserve lungs successfully for up to 12

hours, depending on the organ’s state prior to cooling (Muller et al., 1999; Fischer et al., 2001;

Struber et al., 2001; Rabanal et al., 2003; Sakamaki et al., 1997; Struber et al., 1999; Struber et

al., 2000; Oto et al., 2006; Gamez et al., 2005; Okada et al., 2006; Arnaoutakis et al., 2010).

The first version of the product has been marketed since 1999 (first 510(k) cleared in 2001),

but in June 2018, Xvivo launched Perfadex Plus – a second generation ready-to-use version

that does not require prior addition and mixing of buffer and electrolyte. Thanks to a market

share north of 90 percent, Perfadex is today the gold standard lung preservation solution.

Perfadex Plus and silicone tubing set

Source: Xvivo Perfusion


7

XPS, LS and STEEN Solution In 1999, Xvivo and Igelösa Life Science developed a new concept for lung transplantation,

targeting a new group of donors (donation after circulatory death; DCD). This method is called

ex vivo lung perfusion (EVLP) – it keeps the organ is alive outside the body so that a surgeon

can evaluate its suitability for transplant.

After successful studies in animals, Professor Steen’s research group published the results

from the first human study in the Lancet in 2001. In the study, a 54 year old woman was

successfully transplanted with a right lung that was procured after DCD. The transplant was

carried out after standard static cold storage (SCS) with Perfadex, followed by EVLP with the

manual method, employing off-the-shelf equipment used in heart-lung machines (e.g. an

oxygenator, a ventilator, and a centrifugal pump).

These components, combined with a tailor-made solution, allowed Steen et al. to maintain lung

viability for several hours at normothermic/warm temperatures (37ºC) without oedema

developing – one of the main hurdles to overcome during continuous machine perfusion of an

organ ex vivo (passing fluid through the organ) for extended periods of time. This in turn made

it possible to evaluate an organ’s suitability for transplant.

Schematic of EVLP system and components

Source: Cypel et al. (2008)

Building on these findings, Xvivo developed an integrated platform for EVLP and a tailor-made

lung function assessment solution – the XVIVO Perfusion System (XPS) and STEEN Solution.

The XPS uses well-proven components such as a CardioHelp XVIVO centrifugal pump with a

Quadrox-iR next-generation oxygenator and a Hamilton ICU ventilator. It has X-ray and CT scan

possibilities and allows continuous data recoding. Like Perfadex, STEEN Solution contains

dextran 40 to protect against reperfusion injury. However, it also includes the human serum

albumin to provide an optimal colloid osmotic pressure and to prevent oedema.


8

To improve the physical status of the organ, STEEN Solution also provides it with electrolytes,

among other things, to improve the organ’s physical status. By doing so, the XPS and STEEN

Solution have been demonstrated to maintain stable lung function without edema formation

for up to 10 hours at normothermic temperatures (Steen et al., 2003; Neyrinck et al., 2004;

Koike et al., 2011; Munshi L, et al., 2013; Machuca et al., 2013; Sanchez et al., 2012; Aigner et

al., 2012). During this time, the transplant team can examine the lungs and evaluate their

function. Furthermore, the extension of the safe preservation allows transplant centres to

move many procedures to the daytime, enabling surgery during daylight hours with fully staffed

teams and better recipient matching.

The XPS and STEEN Solution were originally approved by the US FDA under a humanitarian

device exemption (HDE) in August 2014, but the approval was converted to a premarket

approval (PMA) in April 2019. Following the approval, certain restrictions were lifted, such as

the cap on the number of patients treated per year and the possible need for approval by an

institutional review board (IRB) before treatment. In Europe, the XPS is CE-marked as a class

IIa device.

XPS and disposables lung kit


Addressing a high unmet medical need

Today, approximately 112,000 patients are on the waiting list for organ transplant in the US.

Around 1,200 patients are waiting for a lung transplant and about 3,500 for a heart transplant.

However, the number of patients in need of a lung transplant is far greater than these figures

suggest, as many patients die while awaiting a new organ each year (mortality on the lung and

heart transplant waiting list is about 25%). Furthermore, many patients are not on the list as

their chances of finding a donor are slim to none.

Considering the rising incidence of end-stage organ disease, ageing populations in western

countries, and changing lifestyles in the other parts of the world, it is unlikely that the need for

organ transplant will abate any time soon.


9

Active waitlist and lung transplantations performed in the US (left) and Eurotransplant area* (right)

*Includes Austria, Belgium, Germany, and the Netherlands. **Candidates aged 12 years or older.

Source: OPTN data, Eurotransplant data

Although there are enough donors to meet today’s needs, available organs often don’t reach

patients due to inefficiencies in procurement and allocation. Currently, only a small portion of

organs from deceased donors (DD) are utilised. Of the approximately one million deaths that

lead to referrals to organ procurement organisations (OPOs) in the US, fewer than 11,000 result

in organ donation.

Of these, only about 20% are donations after circulatory death (DCD) donors. Numbers reported

by European transplant societies/authorities indicate a similar proportion there. It is clear that

increased utilisation of DCD donors offers significant potential and could even provide enough

organs to meet the demand.

Deceased organ donor population in the US in 2018

Source: OPTN data

Interest in the use of DCD organs is increasing in the transplant community. The first DCD

transplant after the use of EVLP was conducted in 2007 (with Xvivo’s STEEN Solution). Canada,

one of the pioneering countries in DCD transplantation, has practised such transplantations

since 2007. In the US, the number of transplants with DCD lungs increased from 20 in 2008 to

more than 120 in 2018.

Imminent or eligible death referrals to OPOs

1,073,084

Imminent neurological and eligible deaths

21,267

OPTN eligible deaths

11,664

Utilised DD

DBD: 8,591 DCD: 2,130

DD meeting criteria

8,282 donors

DD tx

29,676

0

200

400

600

800

1000

1200

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Num

ber

of patie

nts

Active waitlist Lung transplants

0

500

1000

1500

2000

2500

3000

2010 2011 2012 2013 2014 2015 2016 2017 2018

Num

ber

of patie

nts

Active waitlist** Lung transplants


10

Furthermore, the latest figures from the United Network for Organ Sharing (UNOS) confirms

that five- and ten-year survival rates after transplantation with DCD and DBD lungs are indeed

virtually comparable (Valapour et al, 2020). However, there is still a long way to go; we estimate

that DCD organs are used in less than 10% of lung transplants and less than 1% of heart

transplants in the US and Europe.

We argue that the lack of objective methods to evaluate DCD organs’ suitability for transplant

and the short tolerable ischemic time have been stumbling blocks for transplant centres and

surgeons. We thus believe Xvivo’s technology will be an important component in the ongoing

paradigm shift.

Transplant specialists’ response supports strong value proposition

In 2018, we conducted a survey to investigate the perception of warm perfusion and Xvivo

Perfusion’s product offering among transplant specialists. The responses indicated that most

physicians see a clear clinical benefit with ex vivo perfusion prior to transplantation.

Geographical distribution of respondents

Redeye transplant survey (2018)

Most of the respondents believe that warm perfusion will be able to meet the medical need for

more transplantable organs to a high degree.

Will ex vivo perfusion meet the medical need for more transplantable organs?


Germany5%

Sweden5%

UK15%

USA75%

0 0 0

1

3 3

4

6

1

2

0

1

2

3

4

5

6

7

1 2 3 4 5 6 7 8 9 10

Num

be

r o

f re

sp

on

se

s

1 = to a very low degree 10 = to a very high degree


11

Furthermore, we also recognise that the majority of the physicians have a positive attitude

towards the products of Xvivo Perfusion.

How compelling do you consider the XPS (left) and STEEN Solution (right) to be?


While data presented on warm perfusion Xvivo and other investigators has been

overwhelmingly positive, more than half (60 percent) are not yet able to say if the method will

become a standard-of-care procedure, indicating that awareness is still low among many

physicians and there remains a high need for education.

Will normothermic ex vivo perfusion become a standard of care procedure?


6

2

12

0

2

4

6

8

10

12

14

Yes No Need more clinical data to have anopinion

Num

be

r o

f re

sp

on

se

s

0 0 0

1

4

3 3

8

1

00

1

2

3

4

5

6

7

8

9

1 2 3 4 5 6 7 8 9 10

Num

ber

of re

sponses

1 = very uncompelling 10 = very compelling

0 0

1

2

4

2

7

4

0 00

1

2

3

4

5

6

7

8

1 2 3 4 5 6 7 8 9 10

Num

ber

of re

sponses

1 = very uncompelling 10 = very compelling


12

PrimECC PrimECC is a priming solution developed for use during cardiopulmonary bypass (CPB) with

heart-lung machines. Like STEEN Solution, PrimECC is based on dextran 40. The solution has

been developed to give patients a better fluid balance during and after the operation and to

reduce the risk of kidney damage.

Before a machine is connected to a patient, the extracorporeal circulation (ECC) system must

be filled with about 1,500ml of priming solution and vented. Today, simple saline solutions,

such as Ringer’s solution, are used for this purpose. As these solutions are not optimised for

this purpose, they can cause a fluid overload – a complication that is particularly concerning

when a patient has impaired kidney function. Patients with congestive heart failure constitute

another risk group. In these patients, fluid overload can result in life-threatening pulmonary

oedema and the worsening of heart failure, which could lead to end-organ damage or even

death (Epstein & Waseem, 2019).

PrimECC was CE-marked as a class III medical device in Europe in January 2016. The solution

has been studied in two proof-of-concept trials and a potentially pivotal large-scale trial is set

to begin later this year. Xvivo has obtained regulatory approval to initiate recruitment in Europe,

but the development plan in the US remains to be confirmed.

XHPS and SXHS When Xvivo acquired the rights to Vivoline’s development project for preservation and

evaluation of hearts for transplant, it was still an early-stage asset. Since then, Xvivo has

developed an integrated system for ex vivo heart perfusion (EVHP) and an accompanying

tailor-made solution: the Xvivo Heart Preservation System (XHPS) and Supplemented Xvivo

Heart Solution (SXHS). Unlike the XPS, the XHPS is a portable device, enabling continuous

machine perfusion directly after procurement and during transport.

Xvivo has offered few details on the technology behind the XHPS and SXHS, but it is believed

that the portable feature will enable longer preservation times, which is key when aiming to

expand the donor pool for heart transplants. The acceptable non-oxygenated time ex vivo for

hearts is only four to six hours, compared to eight to 12 hours for lungs and livers.

XHPS and SXHS have completed a smaller clinical proof-of-concept trial, while a potentially

pivotal large-scale trial is currently underway later this year. Xvivo has obtained regulatory

approval to initiate recruitment in Europe, but the regulatory route required for market approval

in the US is currently unknown. The products were granted breakthrough device designation

(BDD) by the FDA in December 2019, indicated for hypothermic (<35°C) perfusion of excised

donor hearts for preservation prior to transplant.


13

XHPS prototype


Clinical experience EVLP with the XPS and STEEN Solution has undergone extensive clinical evaluation. Results

show that the method with these products is safe and supports a strong clinical benefit.

Furthermore, XHPS, SXHS and PrimECC have shown promise in early, proof-of-concept trials.

XPS and STEEN Solution

The HDE and PMA approvals of XPS and STEEN Solution were supported by two clinical

studies: the NOVEL and HELP trials. In the initial HDE approval, the US clinical trial (NOVEL)

was considered pivotal in supporting the safety and probable benefit of EVLP when using the

XPS system with STEEN Solution. Following the approval, the study continued to enrol patients

in an expansion cohort. Results from the full trial served as the basis for the pre-market

approval (PMA).

The NOVEL trial (2011-2017)

The NOVEL trial was a non-randomised, prospective, multi-centre study that was designed to

determine the safety of transplanting initially rejected donor lungs, usually referred to as

extended criteria lungs, after EVLP re-assessment and reconditioning. The trial was conducted

in 2011-2017 (NOVEL extension: 2014-2017) at 20 US sites. Results showed EVLP to be safe

and leading to favourable outcomes after transplantation.

To support the HDE application, Xvivo submitted data from 62 patients (31 in each arm). Upon

HDE approval in 2014, the study was expanded (the NOVEL extension study) to include 220

patients (110 in each arm) to meet the requirements for the PMA application. An additional 32

patients were included to satisfy the requirements for the post-approval study (PAS), putting

the total number of patients at 252 (126 in each arm).


14

Donor demographics

Source: Company data, Redeye Research

The NOVEL extension study remained a controlled non-randomised trial. In the control arm,

lungs were transplanted at the same centres during the same period. All donor lungs were

stored and transported with standard SCS, but unlike in the EVLP arm, where extended criteria

lungs were used, transplants in the control were performed with standard criteria lungs. The

study period was set to include a follow-up one year after transplantation, but the total follow-

up period was three years in the protocol.

Donor lungs in both arms were flushed with cold preservation solution (Perfadex) and

transported to the study sites according to industry standards. On arrival, lungs in the EVLP

arm were warmed and perfused with the XPS for a minimum of 3 hours and a maximum of 6.

Physiological parameters were collected every hour during the EVLP period. Furthermore, x-

rays were taken at least once an hour to provide secondary confirmation of improvement if the

reason for initial rejection was pulmonary oedema. The presence of oedema could also be

evaluated by the surgeon via less objective measures (such as by lifting the lung to determine

if it had become less boggy and heavy, or via a visual inspection of the frothing coming from

the lung). If the lung were deemed acceptable for transplantation, it would be cooled again with

standard SCS to minimise the risk of lung degradation during implantation.

To be eligible for EVLP, donor lungs’ PaO2/FiO2 ratio could not exceed 300mmHg, suggesting

an acceptable level of arterial oxygenation. If the PaO2/FiO2 was above 300mmHg, the donor

must have one of the following risk factors: 1) multiple blood transfusions; 2) confirmed

pulmonary oedema; 3) donation after circulatory death; or 4) investigator evaluation of the

donor lung as “unsuitable” for transplant.

NOVEL EVLP

not transplanted

(n=106)

NOVEL EVLP

transplanted

(n=110)

NOVEL control

not transplanted

(n=116)

UNOS control

transplanted

(n=4898)

Donor lung type

Bilateral lungs 89 (84.0%) 88 (80.0%) 85 (73.3%)

Single lung 17 (16.0%) 22 (20.0%) 31

Donor gender

Female 34 (32.1%) 30 (27.3%) 45 (38.8%) 1917 (39.1%)

Male 72 (67.9%) 80 (72.7%) 71 (61.2%) 2981 (60.9%)

Donor type

Brain death 66 (62.3%) 82 (74.5%) 115 (99.1%) 4790 (97.8%)

Circulatory death 40 (37.7%) 28 (25.5%) 1 (0.9%) 108 (2.2%)

Cytomegalovirus

Negative 40 (37.7%) 54 (49.1%) 50 (43.1%) 1899 (38.8%)

Positive 64 (60.4%) 56 (50.9%) 66 (56.9%) 2991 (61.1%)

Unknown 2 (1.9%) 0 (0.0%) 0 (0.0%) 8 (0.2%)

Cause of death

Trauma 43 (40.6%) 42 (38.2%) 45 (38.8%) 1114 (22.7%)

CVA 28 (26.4%) 25 (22.7%) 27 (23.3%) 2097 (42.8%)

Hypoxia 30 (28.3%) 36 (33.7%) 37 (31.9%) 1553 (31.7%)

Other 5 (4.7%) 7 (6.4%) 7 (6.0%) 134 (2.7%)

Smoking status

Never 45 (42.5%) 49 (44.5%) 59 (50.9%)

Current 42 (39.6%) 43 (39.1%) 36 (31.0%)

Former 10 (9.4%) 14 (12.7%) 11 (9.5%)

Unknown 9 (8.5%) 4 (3.6%) 10 (8.6%)

N/A

N/A


15

To proceed to transplant, stability or improvement in the all-lung function parameters (PVR,

compliance, and airway pressure) had to be seen during perfusion. A ΔPO2 ≥ 350, mmHg,

measuring the oxygen capacity and transfer, had to be observed at two time points during

EVLP. However, the surgeon always had the last say and had to be clinically satisfied with the

lung evaluation before the lungs were transplanted.

Exclusion criteria for the study included presence of pneumonia, persistent purulent secretion,

significant aspiration of gastric contents within the lung, significant mechanical lung injury, or

trauma. Donor lungs with active infectious disease such as HIV, hepatitis B or C, or syphilis

were also not permitted in the study.

Primary outcome measures were the one-year survival and rate of severe (grade 3) primary

graft dysfunction (PGD) at 72 hours post-transplant. The outcome in the EVLP arm was only

considered a success if both measures met comparisons in the control arm. A non-inferiority

margin of 12% was imposed on specified and primary endpoints to be evaluated using a two-

sided 95% (adjusted Wald) confidence interval. Non-inferiority was confirmed if the upper

confidence limits for each of the difference in rates were no more than 0.12.

Secondary outcome measures included pulmonary function tests (FEV1) three to 12 months

post-transplant, PGD scores at 24 and 48 hours post-transplantation, length of intensive care

unit (ICU) stay, length of hospital stay, and quality of life and functional status one year post-

transplantation.

The read-out presented in the FDA review reflected data collected until July 2018 at 17

investigational sites. In total, the dataset included 226 patients from the NOVEL extension

study plus 16 patients recruited to the HDE PAS study. Some of the double lungs were split

after EVLP and transplanted into different recipients. In total, 332 donor grafts were enrolled

into the study, leading to 110 lung transplants and 106 rejections of donor lungs in the EVLP

arm. As such, the utilisation rate (transplants cases / utilised donors) was approximately 51%

in the EVLP arm.

After one year, 95 of patients (86%) in the EVLP arm were still alive and 109 (94%) in the control

arm (all-cause mortality). The patient survival co-primary endpoint was therefore not met

according to the pre-specified delta of 12% in the protocol (the outcome in the EVLP arm was

15% worse). However, seven deaths in the EVLP arm and two in the control arm were

characterised by Xvivo as accidental. Adjusting for this, the one-year survival was 93% in the

EVLP arm, compared with 96% in the control arm, meaning that non-inferiority was achieved.

The US FDA recognised that the adjusted survival rates introduced uncertainty into the

analysis, since it is difficult to assess bias in the adjudication. No accidental deaths related to

accidents (such as automobile) were reported. However, in the dataset submitted to the FDA,

the outcomes were also compared with data from UNOS, giving further credibility to the

hypothesis of non-inferiority.

The UNOS control (n=4063) comprised transplant recipients from the centres included in the

NOVEL trial but excluded EVLP and paediatric subjects as well as some high-risk patients (such

as those using a ventilator at the time of transplant). The one-year survival in the UNOS control

was 88%, which is in line with the unadjusted survival rate in the EVLP arm and significantly

lower than the adjusted survival rate.


16

Unadjusted and adjusted overall survival

*Unadjusted for accidental deaths. *Unadjusted for accidental deaths.


The exceptionally high survival rates in the control arm could be explained by selection bias. In

the PMA application, Xvivo stated that the control arm was subject to bias since some

investigators in the study failed to enrol control patients concurrently with their EVLP patients.

This was supported by evidence in the monitoring visits performed by the company to the

investigational sites. We recognise the relatively small samples in the EVLP and control arms

and believe that the adjusted survival data gives support to this theory. In our opinion, data

from UNOS likely provides a better reference for the survival rate.

The rate of clinically relevant PGD (grade 3) at 72 hours post-transplantation was 14% in the

EVLP arm and 7% in the control arm. The outcome did not meet the success criteria pre-

specified in the protocol. However, nine patients (all in the EVLP arm) were deemed to have

received prophylactic extracorporeal membrane oxygenation (ECMO) and to have stayed on

ECMO after transplantation. In line with the guidelines of the International Society for Heart and

Lung Transplantation (ISHLT), any patient on ECMO when assessed for PGD would be

automatically be classified as grade 3 in the NOVEL protocol.

In the NOVEL statistical analysis plan, prophylactic ECMO patients were excluded from the

primary analyses. When these patients were excluded, the rates of PGD grade 3 were more

comparable between the two arms. After adjudication by two independent pulmonologists, but

still including all ECMO patients, the PGD grade 3 rates were revised to 9% and 16% in the EVLP

and control groups, respectively. To adjunct the reported PGD, the pulmonologists used raw,

blinded, de-identified chest x-ray images and a clinical database extract of arterial blood gases

(ABGs), according to ISHLT guidelines.

While the adjusted analysis introduced uncertainty due to the difficulty in determining whether

patients on ECMO therapy were treated prophylactically or therapeutically, we note that

outcomes in the EVLP arm compared favourably to UNOS data. The rate of PGD grade 3 in the

UNOS control arm was 31.3% 72 hours post-transplant. Furthermore, the Lung Transplant

Outcomes Group (LTOG) – a US National Institutes of Health (NIH) sponsored, multi-centre,

prospective cohort study that aimed investigated PGD – reported an incidence of grade 3 PGD

of 16.8% 72 hours post-transplant (Diamond et al., 2013). This is also within the range found

by Christie et al. (2005), reporting that the national incidence of grade 3 PGD is 10-30%.

The adjustments in the EVLP arm introduce some uncertainty as it is difficult to assess bias in

the adjudication. However, we view the reported data as solid overall. In support of this, we

recognise the focus on the superiority against UNOS data in one-year survival and PGD grade

3. UNOS is widely accepted as a reference when conducting clinical trials in transplantation.

93%96%

88%

0%

20%

40%

60%

80%

100%

1-year survival

Surv

ival r

ate

**

EVLP (n=110) Control (n=116) UNOS (n=4063)

86%83%

70%

94%

87%

77%

88%

79%

71%

0%

20%

40%

60%

80%

100%

1-year survival 2-year survival 3-year survival

Surv

ival r

ate

*

EVLP Control UNOS


17

Unadjusted and adjusted rate of PGD 72 hours post-transplant

*Unadjusted for prophylactic/therapeutic use of ECMO. **Adjusted for prophylactic/therapeutic use of ECMO.


Secondary outcome measures indicated a favourable safety profile and economic value for

the EVLP arm. The mean lengths of ICU stay were 9.9 days and 9.8 days in the EVLP and control

arms, respectively. The mean length of hospital stay was 23.9 days in the EVLP arm and 28.5

in the control arm. 12 months post-transplant, pulmonary function tests showed a comparable

mean FEV1 (a measure of the amount of air a person can force out of their lungs in one second)

of 72 in the EVLP arm and 76 in control arm. The rate of serious acute rejection was higher in

the EVLP arm (13% vs. 10%), but the overall incidence of serious major lung events (MLEs) was

slightly lower (130 vs. 138 events). Furthermore, patients’ quality of life, activities of daily living

(ADLs), mobility, and employment status indicated no significant difference between the two

arms.

34%

38%

15% 14%

32%

46%

16%

7%

31%

0%

10%

20%

30%

40%

50%

Grade 0 Grade 1 Grade 2 Grade 3

Rate

of PG

D*


9%

16%

31%

0%

10%

20%

30%

40%

50%

Grade 3

Rate

of PG

D g

rade 3

**



18

Other measures of safety and quality of life


While the sample was limited, a successful outcome was also indicated by longer-term data

from the PAS trial initiated under the HDE. At the time of its read-out, 83 (75%) of the 110 EVLP

subjects and 87 (75%) of the 116 control subjects had reached the follow-up period of two

years. Additionally, 70 (64%) of EVLP subjects and 73 (63%) of control subjects had reached

the three-year post-transplantation point.

Safety profile

EVLP Control P-value

Mean duration, days

Mechanical ventilation 7.0 5.7

ICU length of stay 9.9 9.8

Hospital length of stay 23.9 28.5

Mean FEV1%

At 3 months 69% 73%

At 6 months 71% 74%

At 9 months 72% 72%

At 12 months 72% 75%

Cases of delayed extubations,

re-intubations & tracheostomies

Extubated within 96 hours of transplant 91 (83%) 101 (87%)

Not extubated within 96 hours of transplant 19 (17%) 15 (13%)

Not re-intubated after initial extubation 88 (80%) 91 (78%)

Re-intubated within 1 year of transplant 22 (20%) 25 (22%)

Not trached within 1 year of transplant 94 (85% 99 (85%)

Trached within 1 year of transplant 16 (15%) 17 (15%)

Cases of serious MLEs

Acute rejection 34 (19%) 32 (18%)

Bronchial complication 19 (10%) 12 (7%)

Respiratory failury 45 (25%) 53 (30%)

Major pulmonary failure 84 (46%) 79 (45%

Major pulmonary infection 0 (0%) 0 (0%)

Re-transplant

Quality of life

Functional status

No limitations 83 (87%) 91 (83%)

ADLs with some assistance 5 (5%) 13 (12%)

ADLs with total assistance 0 (0%) 1 (1%)

Subject hospitalised 2 (2%) 0 (0%)

Physical capacity

No limitations 83 (87%) 93 (85%)

Limited mobility 5 (5%) 10 (9%)

Wheelchair or more limited 0 (0%) 0 (0%)

Subject hospitalised 2 (2%) 0 (0%)

Physical capacity

Working full-time 4 (4%) 5 (5%)

Working part-time 2 (2%) 1 (1%)

Working, amount unknown 6 (6%) 1 (1%)

Not working 51 (54%) 70 (64%)

0.457

0.870

1.000


19

Data adjusted for accidental deaths is not available, but the overall survival (all-cause mortality)

was 83% in the EVLP arm (n=83), 87% in the control arm (n=87), and 79% in the UNOS control

(n=3309). After three years, survival was 70% in the EVLP arm (n=70), 77% in the control (n=73),

and 71% in the UNOS control (n=2565). Survival curves for the EVLP arm, control arm, and

UNPOS control appear to track one another to three years post-transplantation, indicating a

comparable outcome.

Kaplan-Meier survival curves up to three years post-transplant


We argue that the results from the longer-term follow-up are further strengthened by the low

number of observations of bronchiolitis obliterans syndrome (BOS) – an inflammatory

condition that often prevents long-term success in lung transplantation. At one year, BOS was

observed in 87% and 85% of patients the EVLP and control arms, respectively. After three years,

the observed rate of BOS was 84% in the EVLP arm and 93% in the control arm.

Rate of BOS observed at 1-3 years post-transplant


87%

84% 84%85%

88%

93%

75%

80%

85%

90%

95%

100%

1 year post-transplant 2 years post-transplant 3 years post-transplant

Rate

of

BO

S

EVLP Control


20

The lack of randomisation and blinding in trial – mainly stemming from ethical considerations

and the relatively small sample size – could be considered study limitations, possibly resulting

in selection bias. However, additional analyses were performed to ensure that the patients in

the final UNOS dataset did not differ from the control arm (age, sex, cause of death, or median

PaO2 upon acceptance). We also view the UNOS data utilised in the analysis as convincing,

given that it includes all subjects at the NOVEL study sites within the study time frame and is

also a much larger sample size than the control arm.

The HELP trial (2008-2010)

The HELP trial (NCT01190059) was the first prospective trial that investigated the safety of

EVLP as a method to evaluate the suitability of lungs initially rejected for transplantation. HELP

was a non-randomised, single-centre study that was conducted in 2008-2010 at the Toronto

General Hospital in Ontario, Canada. While the study was not powered to show statistically

significant differences in the predefined endpoints, results indicated that transplants after

EVLP were at least equivalent to those using conventionally assessed and preserved donor

lungs.

In the trial, STEEN Solution was perfused with available off-the-shelf equipment. The

equipment was functionally equivalent to the components of the XPS and disposable kits. This

provided a basis for the development of the XPS. The EVLP arm consisted of initially rejected

donor lungs that were treated with EVLP. The control arm included all other lung transplants

performed during the same study period after using standard SCS with Perfadex.

To be included in the trial, the recipient had to undergo either a single or bilateral lung

transplant. Donor PaO2/FiO2 could not exceed 300mmHg. The primary reason for unsuitability

was poor oxygenation and/or poor lung compliance. The absence of pneumonia, persistent

purulent secretion on bronchoscopy, or significant mechanical trauma were required. Other

exclusion criteria included the presence of infections, significant mechanical lung injury

(contusion), infectious diseases (HIV, hepatitis B and C, HTLV, and syphilis), and malignancy.

The selection of donor/recipient was based on first available lungs that did not meet the

standard criteria for donor lungs and donor match. Initially rejected lungs were defined

according to the 2003 ISHLT consensus document on lung transplant acceptability criteria. To

assess the donor lungs’ suitability for transplant, delta PO2 > 350mmHg and stable pulmonary

vascular resistance (PVR), peak airway pressure, and lung compliance (< 15% deterioration)

were evaluated after four hours of EVLP. If these criteria were met, the donor lungs were

considered acceptable for transplant.

The primary outcome measures were the PGD scores in the first 72 hours after transplant and

30-day mortality post-transplant. Secondary outcome measures included the incidence of the

need to be placed on extra-corporeal membrane oxygenation and bronchial complications. The

investigators also monitored the duration of mechanical ventilation, intensive care unit stay,

and length of hospital stay.

Initially, the study included three transplants from standard criteria donors in a safety pilot

study. Following a successful pilot, the study recruited 19 initially unacceptable lung donors for

transplantation. After this, 39 additional patients were added in a compassionate-use

extension arm, bringing the total sample size to 61.

https://clinicaltrials.gov/ct2/show/NCT01190059


21

The first comprehensive analysis of the HELP trial was published by Cypel et al. (2011) in the

New England Journal of Medicine. However, the article did not include the full sample and read-

outs from the trial reported continued to be reported at different stages as they became

available. Furthermore, results were published by authors at different times, meaning sample

sizes in the available analyses were not consistent. However, the primary endpoint showed no

significant difference in clinically relevant PGD or survival rate in the EVLP.

A granular analysis reported by Xvivo showed that PGD grade 2 occurred in 11% (4/35) of

patients in the EVLP arm and in 23% (24/103) in the control arm. Results indicated an even

more favourable result with EVLP when assessing PGD grade 3: only 3% of patients in the EVLP

arm experienced PGD grade 3, compared with 11% in the control arm.

A lower incidence of PGD was also reported by Cypel et al. (2012) in one of the most

comprehensive read-out from the HELP trial. The analysis, including the outcome for 317 lung

transplants (50 with EVLP), showed a PGD grade 3 of 2% in the EVLP arm and 8.5% in the

control arm. However, the difference was not statistically significant (p=0.14).

Rate of PGD 72 hours post-transplant


While the sample size was limited in the survival analysis, the reported 30-day mortality post-

transplant was 4% in the EVLP arm and 3.5% in the control arm. At three years, survival was

comparable across arms: 67.9% (n=28) in the EVLP arm versus 71.2% (n=163) in the control

arm.

Overall survival at 1-3 years post-transplant


86%

11%

3%

64%

24%

11%

0%

20%

40%

60%

80%

100%

Grade 1 Grade 2 Grade 3

Rate

of

PG

D

EVLP (n=35) Control (n=103)

84%

75%68%

85%78%

71%

0%

20%

40%

60%

80%

100%

1-year survival 2-year survival 3-year survival

Su

rviv

al ra

te

EVLP Control


22

The early deaths in the EVLP arm were attributed to post-operative complications (i.e.

retroperitoneal bleeding and sepsis) not directly related to the allograft. After deviating from

the control arm due to the early deaths, the survival curves intersect and show a similar trend

for the remainder of the follow-up period, indicating favourable results in a longer-term follow-

up. At the last follow-up (May 2013), 77% (57) of patients in the EVLP arm were alive and 78%

(309) of patients in the control arm, indicating non-inferiority.

Kaplan-Meier survival curves up to three years post-transplant


Non-inferiority to the control arm was indicated by the secondary outcome measures as well.

The duration of mechanical ventilation and length of ICU stay were comparable. The median

length of stay was 20 days in the EVLP arm (n=50) and 23 days in the control arm (n=253).

Other measures of safety and quality of life


One limitation of the study was the lack of data collection from pulmonary function tests

(PFTs) over time. While data from PTSs might have given a more detailed picture of how well

the lungs are working after EVLP, we believe that worsening lung function among patients

would likely have been captured in survival rates over time.

Results are strengthened by studies from other research groups

A recent study by Divithotawela et al. (2019), including the outcomes for almost 1,000 patients

from the Toronto Lung Transplant Program (230 in the EVLP arm), confirmed non-inferiority

for lung transplants performed after EVLP evaluation with long-term follow-up.

EVLP (n=50) Control (n=253) P-value

Median duration, days

Mechanical ventilation 2.0 2.2 0.30

ICU length of stay 4.0 4.5 0.32

Hospital length of stay 20.0 23.0 0.11

30-day mortality (%) 4.0 3.5 1.00


23

The study reported no significant difference in time to chronic lung allograft dysfunction

between the EVLP and non-EVLP group (70% vs 72% at three years; 56%vs 56% at five years;

and 53% vs 36% at nine years; log-rank p=0.68) or allograft survival between the EVLP and non-

EVLP groups (73% vs 72% at three years; 62% vs 58% at five years; and 50% vs 44% at nine

years). Based on this, the authors concluded that the use of EVLP had led to an increase in the

number of patients undergoing transplantation, with comparable long-term outcomes.

Similar findings were demonstrated in a meta study by Tian et al. (2020), analysing the

outcomes from eight clinical studies (1,191 patients) investigating EVLP protocols. While not

statistically significant (all p values >0.05), the authors reported no significant differences in

outcomes between the EVLP and non-EVLP groups. The analysis included the length of post-

operative intubation, post-operative extracorporeal life support/extracorporeal membrane

oxygenation use, length of intensive care unit stay, length of hospital stay, 72-hour rate of PGD

grade 3, 30-day survival and one-year survival.

XHPS and SXHS

Xvivo presented the results from the first clinical trial with its system for heart preservation and

evaluation at the 2019 annual conference for the International Society for Heart and Lung

Transplantation (IHLT). In its presentation, the company reported the results for the first six

heart transplant patients at Lund University Hospital in Sweden. Results indicated that the

method is safe to use in humans, paving the way for a large-scale study.

The findings are strengthened by evidence from previous preclinical studies. A study with an

earlier prototype of the system, published by Steen et al. in 2016, showed that porcine hearts

could be preserved safely. These findings were recently confirmed by Sommer et al. (2019),

using the OCS Lung with STEEN Solution.

PrimECC

Results from a proof-of-concept trial with PrimECC were presented in 2018.The study was a

blinded, randomised study that recruited 80 patients at Sahlgrenska University Hospital in

Gothenburg, Sweden.

Results showed that PrimECC was safe to use. Patients had a better fluid balance during and

after their operation when PrimECC was used. Furthermore, the study indicated a reduced risk

of kidney damage and red blood cell destruction (hemolysis), which occurs when blood is

circulated outside the body in a heart-lung machine. While the clinical benefit of this remains

to be validated in a large-scale trial, research has shown that hemolysis releases substances

that are harmful to both kidneys and blood vessels.

Other product candidates

While we believe the potential could be high in liver and kidney transplant as well as isolated

tissue therapy, the product candidates are in early clinical phase and granular clinical data has

not been presented. At the most recent update, about 40 patients had been treated with the

product prototypes for liver and kidney transplants and two patients with the method for

isolated tissue therapy.


24

Market Opportunity Today, we estimate that Xvivo is addressing a USD 800m opportunity. However, we believe

that the company will grow its target markets significantly and forecast a USD 1,800m

opportunity at the end of our forecast period.

We value Xvivo’s total addressable markets (TAMs) using patient-based market models. To

keep our estimates conservative, we base our model mainly on developed countries, which we

believe will be on the company’s radar in the short to medium term and offer highest potential.

However, as we believe China will become one of the most important EVLP/EVHP markets in

the medium to long term, we also include that market in our model.

Value of Xvivo’s target markets in 2020


Opportunity in ex vivo perfusion We estimate Xvivo’s TAM in EVLP and EVHP is worth more than USD 1,600m. We forecast a

significant expansion of this market, mainly due to increased DCD donation, and we estimate

that DCD donors will represent about 50% of total donors at the end of our forecast period.

Number of organs transplants in 2018, worldwide

Source: GODT data

95 479

34 074

8 311 6 3862 338 163

0

20 000

40 000

60 000

80 000

100 000

120 000

Kidney Liver Heart Lung Pancreas Small bowel

305

286

163

43

0

100

200

300

400

500

600

700

800

900

XPS & STEEN Solution XHPS & SXHS PrimECC Perfadex

Ma

rke

t va

lue

(U

SD

m)


25

TAM in lung transplantation

We estimate that more than 6,000 lung transplants are performed at the 195 centres included

in our market model. Based on this, we estimate the TAM for Perfadex, XPS and XPS

disposables kits at USD approximately USD 350m. At the end of our forecast, we estimate an

opportunity just short of USD 1000m. Our calculation relies on higher utilisation of both DBD

and DCD donor organs.

According to Organ Procurement and Transplantation Network (OPTN) data from 2018, almost

7,000 of eligible DD lungs in the US were not recovered for transplant. The risk assessment

that led to these refusals is often based on arbitrary evaluation methods. While some of the

refusals would also have been unavoidable with EVLP (e.g. presence of infections, HIV, or

anatomical abnormalities), we know that a large portion of organs are rejected because of

factors such as poor organ function (34%) and donor medical history (7%) and would have

been suitable for transplantation with EVLP.

In Canada, where DCD lung transplantation is the most advanced, the utilisation rate is 40%.

However, the utilisation rate in the NOVEL trial was even higher at 51%. Furthermore, clinical

trials investigating EVLP protocols (the Lund and Toronto protocols) have yielded rates of 46-

100%, indicating that a higher degree of utilisation could be possible. Adjusted for the sample

sizes, the weighted mean rate of all the trials is approximately 75%.

In addition, we consider that almost 8,000 DD liver transplants and more than 15,500 DD kidney

transplants (including split grafts) were performed in the US during 2018, indicating far higher

degrees of utilisation (the acceptable non-oxygenated time for livers is similar to lungs at eight

to 12 hours).

By the end of our 15-year forecast period, we estimate that 60% of DBD lungs and 20% of DCD

lungs will be suitable for transplant, putting the total peak utilisation rate for all lungs at 40%.

We believe this could prove a conservative estimate, but as we expect the quality of DCD

organs to decrease as the donor pool expands, we argue it is a reasonable assumption.

North America

Data from the OPTN, Canadian Organ Replacement Register (CORR), and Global Observatory

on Donation and Transplantation (GODT) shows that more than 3,000 lung transplant cases

are performed at 77 transplant centres across the US and Canada each year. However, given

more than 9,000 DBD donors and almost 3,000 DCD donors, we see an opportunity for more

than 6,000 transplants per year today and almost 9,000 by the end of our forecast period.

Throughout our forecast period, we expect the number of utilised DBD donors to continue

growing at a CAGR of about 1% per year and DCD donors to grow at a CAGR of about 10% per

year. Based on the assumed peak utilisation rate, this translates into a CAGR for total lung

transplants of about 7% until the peak number of transplants is reached.

We argue that this strong growth is bolstered by the increasing attention that organ transplants

are receiving from the Department of Health & Human Services (HHS) and the FDA in the US.

The HHS recently launched the kidney care reform, one of the goals of which is to double the

number of kidneys available for transplant by 2030.


26

Lung transplants in the US

Source: OPTN data

Europe

Based on data from the GODT and national transplant societies, we estimate that more than

2,000 lung transplant cases are performed each year in developed Europe (EU15, Switzerland,

and Norway). Moreover, we estimate there are about 10,000 donors, of whom more than 8,000

are DBD and in excess of 2,000 are DCD. Based on our assumed utilisation rates, this puts the

total opportunity at more than 5,000 transplants today and more than 8,000 at the end of our

forecast period.

We recognise the low donation rate in Europe and believe that our estimates could prove

conservative. According to GODT, there are about 16 organ donors per million inhabitants in

Europe, compared with 31 in the US and 47 in Spain. A key factor behind the high donation rate

in Spain has been the move to a soft opt-out system, where it is assumed that people want to

donate their organs after they die, unless they have stated otherwise. As the UK and

Netherlands recently adopted similar systems, the only remaining western European countries

without an opt-out system are Germany, Switzerland, and Denmark. While we believe these

countries will eventually move to an opt-out system as well, there is high uncertainty as to when

this will happen. We therefore factor in the current growth trajectory for organ donors in our

forecast.

Lung transplants in the five largest European economies (5EU)

Source: GODT data

-20%

-10%

0%

10%

20%

30%

40%

0

500

1 000

1 500

2 000

2 500

3 000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Gro

wth

Num

be

r o

f tr

an

sp

lan

ts

DBD DCD Growth, all donors

-20%

-10%

0%

10%

20%

30%

40%

0

200

400

600

800

1 000

1 200

1 400

1 600

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Gro

wth

Num

be

r o

f tr

an

sp

lan

ts

France Germany Italy Spain United Kingdom Growth


27

APAC

According to data from the GODT and national transplant societies, more than 400 lungs are

transplanted from more than 7,000 donors each year in the major developed markets in APAC

(Australia, Japan, South Korea, and New Zealand). However, Xvivo is working to gain market

approval for the XPS and STEEN Solution in China – a market that we believe could become

the company’s largest in the long term.

In 2015, China introduced reforms prohibiting the use of organs from executed prisoners.

According to official numbers, the number of lung transplants performed in China has since

increased to more than 400 in 2018 (from 33 in 2014). However, it is difficult to know if the

data is accurate, as statements from government officials often have cited a far higher number.

Based on this, along with volumes reported by hospitals and scientific literature, several

research papers have estimated the true number of transplants and concluded that official

numbers underestimate procedure numbers significantly. However, as these estimates are

associated with high uncertainty, we choose to use the official numbers reported from

hospitals and approved by the Ministry of Health.

In our model, we rely on the latest official update from 2014, where the Ministry of Health had

approved organ transplants at 169 hospitals, of which 27 were for lung transplant. However,

according to a statement from the chairman of the National Organ Donation and

Transplantation Committee in 2016, the goal was to increase the number to 300 by 2020.

Furthermore, the executive chairman of the China Organ Transplant Alliance has stated that

more than 1,000 medical institutions in China performed organ transplants in 2007.

Recognising this, we believe our model likely underestimates the potential.

According to available data from the China Lung Transplantation Registry (CLuTR), more than

60% of lung transplants are made with lungs donated after DCD and brain and cardiac death

(DBCD). These two classifications are similar to Maastricht's standard class IV, which is

commonly used to classify DCD in the developed world. Based on this, along with data reported

from the China Organ Transplant Response System, we estimate that about 150 transplants

were made with DBD lungs and about 250 with DCD lungs. For reference, researchers have

estimated 60,000-100,000 organs are transplanted each year by Chinese surgeons, compared

to approximately 20,000 in the latest official figures. This further indicates that the TAM in our

market model is conservative, potentially giving upside to our estimates.

In total, we estimate about 3,000 DBD donors and more than 5,000 DCD donors in Xvivo’s

primary markets today. Assuming the same long-term utilisation rate as in North America and

Europe, we estimate a total opportunity in APAC of more than 3,000 transplants today and

more than 15,000 transplants at the end of our forecast period (CAGR of about 12%). The high

growth is mainly a result of increased DBD and DCD donation in China.

Lung transplants in China

Source: GODT data

35 33 33 33 33 33

118

204

299

403

0

100

200

300

400

500

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Num

be

r o

f tr

an

sp

lan

ts

Lung transplants


28

Lu

ng

tx m

ark

et m

od

el, N

orth

Am

eric

a (C

A &

US

)

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

Lu

ng

tx c

en

ters

77

77

77

77

77

77

77

77

77

77

77

77

77

77

77

77

Machin

es p

er c

entre

11

11

11

11

11

11

11

11

Expecte

d life

length

(years

)10

10

10

10

10

10

10

10

10

10

10

10

10

10

10

10

Op

po

rtun

ity (n

o. o

f ma

ch

ine

s pe

r ye

ar)

88

88

88

88

88

88

88

88

DB

D o

pp

ortu

nity

Utilise

d D

BD

do

no

rs9 2

56

9 3

81

9 5

05

9 6

29

9 7

52

9 8

74

9 9

95

10 1

15

10 2

34

10 3

52

10 4

69

10 5

85

10 7

00

10 8

14

10 9

27

11 0

38

Gro

wth

1%

1%

1%

1%

1%

1%

1%

1%

1%

1%

1%

1%

1%

1%

1%

1%

Utilis

atio

n ra

te31%

32%

34%

35%

37%

38%

40%

42%

44%

46%

48%

50%

52%

55%

57%

60%

DB

D d

on

or tx

ca

ses

2 8

73

3 0

38

3 2

12

3 3

96

3 5

90

3 7

96

4 0

13

4 2

43

4 4

86

4 7

43

5 0

15

5 3

02

5 6

06

5 9

27

6 2

66

6 6

23

Gro

wth

6%

6%

6%

6%

6%

6%

6%

6%

6%

6%

6%

6%

6%

6%

6%

6%

Peak u

tilisatio

n ra

te60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

Unutilis

ed D

BD

donor o

rgans

2 6

81

2 5

91

2 4

91

2 3

81

2 2

61

2 1

28

1 9

84

1 8

26

1 6

54

1 4

68

1 2

66

1 0

49

814

561

290

0

DB

D o

pp

ortu

nity

(no

. of o

rga

ns)

5 5

54

5 6

29

5 7

03

5 7

77

5 8

51

5 9

24

5 9

97

6 0

69

6 1

40

6 2

11

6 2

81

6 3

51

6 4

20

6 4

88

6 5

56

6 6

23

DC

D o

pp

ortu

nity

Utilise

d D

CD

do

no

rs2 6

47

2 9

67

3 3

14

3 6

88

4 0

89

4 5

18

4 9

76

5 4

63

5 9

78

6 5

22

7 0

95

7 6

97

8 3

27

8 9

84

9 6

68

10 3

79

Gro

wth

13%

12%

12%

11%

11%

10%

10%

10%

9%

9%

9%

8%

8%

8%

8%

7%

Utilis

atio

n ra

te9%

9%

10%

10%

10%

11%

11%

12%

13%

13%

14%

15%

16%

17%

19%

20%

DC

D d

on

or tx

ca

ses

238

275

318

367

424

490

566

654

756

873

1 0

09

1 1

66

1 3

47

1 5

56

1 7

98

2 0

76

Gro

wth

16%

16%

16%

15%

16%

16%

16%

16%

16%

15%

16%

16%

16%

16%

16%

15%

Peak u

tilisatio

n ra

te20%

20%

20%

20%

20%

20%

20%

20%

20%

20%

20%

20%

20%

20%

20%

20%

Unutilis

ed D

CD

donor o

rgans

291

318

345

371

394

414

429

439

440

431

410

373

318

241

136

0

DC

D o

pp

ortu

nity

(no

. of o

rga

ns)

529

593

663

738

818

904

995

1 0

93

1 1

96

1 3

04

1 4

19

1 5

39

1 6

65

1 7

97

1 9

34

2 0

76

To

tal a

dd

ressa

ble

ma

rke

t

AS

P P

erfa

dex (U

SD

)3 0

00

3 0

00

3 0

00

3 0

00

3 0

00

3 0

00

3 0

00

3 0

00

3 0

00

3 0

00

3 0

00

3 0

00

3 0

00

3 0

00

3 0

00

3 0

00

AS

P X

PS

(US

D)

250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

AS

P X

PS

dis

posable

s k

its (U

SD

)20 0

00

22 0

00

22 4

40

22 8

89

23 3

47

23 8

14

24 2

90

24 7

76

25 2

71

25 7

77

26 2

92

26 8

18

27 3

54

27 9

01

28 4

59

29 0

29

TA

M (U

SD

m)

142

157

164

171

178

185

193

201

209

218

227

237

247

258

269

281

TA

M P

erfa

dex (U

SD

m)

18

19

19

20

20

20

21

21

22

23

23

24

24

25

25

26

TA

M X

PS

(US

Dm

)2

22

22

22

22

22

22

22

2

TA

M X

PS

dis

posable

s k

its (U

SD

m)

111

124

128

132

137

141

146

150

155

160

165

170

176

181

187

192

TA

M X

PS

dis

posable

s k

its, D

CD

(US

Dm

)11

13

15

17

19

22

24

27

30

34

37

41

46

50

55

60

Sourc

e: R

edeye

Researc

h


29

Lu

ng

tx m

ark

et m

od

el, E

uro

pe

(EU

15, C

H, &

NO

)

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

Lu

ng

tx c

en

ters

69

69

69

69

69

69

69

69

69

69

69

69

69

69

69

69

Machin

es p

er c

entre

11

11

11

11

11

11

11

11

Expecte

d life

length

(years

)10

10

10

10

10

10

10

10

10

10

10

10

10

10

10

10

Op

po

rtun

ity (n

o. o

f ma

ch

ine

s pe

r ye

ar)

77

77

77

77

77

77

77

77

DB

D o

pp

ortu

nity

Utilise

d D

BD

do

no

rs8 1

08

8 2

98

8 4

83

8 6

62

8 8

36

9 0

04

9 1

67

9 3

25

9 4

77

9 6

24

9 7

66

9 9

03

10 0

35

10 1

62

10 2

84

10 4

01

Gro

wth

0%

2%

2%

2%

2%

2%

2%

2%

2%

2%

1%

1%

1%

1%

1%

1%

Utilis

atio

n ra

te23%

24%

26%

27%

29%

31%

33%

35%

37%

40%

43%

46%

49%

52%

56%

60%

DB

D d

on

or tx

ca

ses

1 8

47

2 0

03

2 1

72

2 3

56

2 5

55

2 7

71

3 0

05

3 2

59

3 5

35

3 8

34

4 1

58

4 5

10

4 8

91

5 3

05

5 7

54

6 2

41

Gro

wth

1%

8%

8%

8%

8%

8%

8%

8%

8%

8%

8%

8%

8%

8%

8%

8%

Peak u

tilisatio

n ra

te60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

Unutilis

ed D

BD

donor o

rgans

3 0

18

2 9

76

2 9

18

2 8

41

2 7

47

2 6

31

2 4

95

2 3

36

2 1

51

1 9

40

1 7

02

1 4

32

1 1

30

792

416

0

DB

D o

pp

ortu

nity

(no

. of o

rga

ns)

4 8

65

4 9

79

5 0

90

5 1

97

5 3

02

5 4

02

5 5

00

5 5

95

5 6

86

5 7

74

5 8

60

5 9

42

6 0

21

6 0

97

6 1

70

6 2

41

DC

D o

pp

ortu

nity

Utilise

d D

CD

do

no

rs1 9

09

2 1

56

2 4

29

2 7

31

3 0

64

3 4

30

3 8

31

4 2

70

4 7

50

5 2

73

5 8

42

6 4

60

7 1

29

7 8

53

8 6

34

9 4

76

Gro

wth

8%

13%

13%

12%

12%

12%

12%

11%

11%

11%

11%

11%

10%

10%

10%

10%

Utilis

atio

n ra

te11%

11%

12%

12%

12%

13%

13%

14%

14%

15%

16%

16%

17%

18%

19%

20%

DC

D d

on

or tx

ca

ses

209

242

280

324

375

434

503

583

675

782

906

1 0

49

1 2

15

1 4

07

1 6

30

1 8

95

Gro

wth

11%

16%

16%

16%

16%

16%

16%

16%

16%

16%

16%

16%

16%

16%

16%

16%

Peak u

tilisatio

n ra

te20%

20%

20%

20%

20%

20%

20%

20%

20%

20%

20%

20%

20%

20%

20%

20%

Unutilis

ed D

CD

donor o

rgans

173

189

206

222

238

252

263

271

275

273

262

243

211

164

97

0

DC

D o

pp

ortu

nity

(no

. of o

rga

ns)

382

431

486

546

613

686

766

854

950

1 0

55

1 1

68

1 2

92

1 4

26

1 5

71

1 7

27

1 8

95

To

tal a

dd

ressa

ble

ma

rke

t

AS

P P

erfa

dex (U

SD

)2 7

98

2 7

30

2 7

30

2 7

30

2 7

30

2 7

30

2 7

30

2 7

30

2 7

30

2 7

30

2 7

30

2 7

30

2 7

30

2 7

30

2 7

30

2 7

30

AS

P X

PS

(US

D)

201 4

77

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

AS

P X

PS

dis

posable

s k

its (U

SD

)16 7

90

18 5

66

18 9

37

19 3

16

19 7

02

20 0

96

20 4

98

20 9

08

21 3

26

21 7

53

22 1

88

22 6

32

23 0

84

23 5

46

24 0

17

24 4

97

TA

M (U

SD

m)

104

117

122

128

134

140

147

154

161

169

176

185

194

203

213

223

TA

M P

erfa

dex (U

SD

m)

15

15

15

16

16

17

17

18

18

19

19

20

20

21

22

22

TA

M X

PS

(US

Dm

)1

11

11

11

11

11

11

11

1

TA

M X

PS

dis

posable

s k

its (U

SD

m)

82

92

96

100

104

109

113

117

121

126

130

134

139

144

148

153

TA

M X

PS

dis

posable

s k

its, D

CD

(US

Dm

)6

89

11

12

14

16

18

20

23

26

29

33

37

41

46

Sourc

e: R

edeye

Researc

h


30

Lu

ng

tx m

ark

et m

od

el, A

PA

C (A

US

, CH

I, JA

P, K

OR

& N

Z)

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

Lu

ng

tx c

en

ters

49

51

53

55

57

59

61

63

66

69

72

75

78

81

84

87

Machin

es p

er c

entre

11

11

11

11

11

11

11

11

Expecte

d life

length

(years

)10

10

10

10

10

10

10

10

10

10

10

10

10

10

10

10

Op

po

rtun

ity (n

o. o

f ma

ch

ine

s pe

r ye

ar)

55

56

66

66

77

78

88

89

DB

D o

pp

ortu

nity

Utilise

d D

BD

do

no

rs3 0

85

3 6

08

4 1

96

4 8

52

5 5

80

6 3

84

7 2

67

8 2

32

9 2

82

10 4

18

11 6

42

12 9

55

14 3

58

15 8

51

17 4

33

19 1

03

Gro

wth

18%

17%

16%

16%

15%

14%

14%

13%

13%

12%

12%

11%

11%

10%

10%

10%

Utilis

atio

n ra

te21%

21%

22%

23%

25%

26%

28%

30%

32%

35%

38%

41%

45%

49%

54%

60%

DB

D d

on

or tx

ca

ses

635

770

934

1 1

33

1 3

74

1 6

66

2 0

20

2 4

50

2 9

71

3 6

03

4 3

69

5 2

98

6 4

25

7 7

91

9 4

48

11 4

62

Gro

wth

21%

21%

21%

21%

21%

21%

21%

21%

21%

21%

21%

21%

21%

21%

21%

21%

Peak u

tilisatio

n ra

te60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

Unutilis

ed D

BD

donor o

rgans

1 2

16

1 3

95

1 5

84

1 7

78

1 9

74

2 1

64

2 3

40

2 4

89

2 5

98

2 6

48

2 6

16

2 4

75

2 1

90

1 7

20

1 0

12

0

DB

D o

pp

ortu

nity

(no

. of o

rga

ns)

1 8

51

2 1

65

2 5

18

2 9

11

3 3

48

3 8

30

4 3

60

4 9

39

5 5

69

6 2

51

6 9

85

7 7

73

8 6

15

9 5

11

10 4

60

11 4

62

DC

D o

pp

ortu

nity

Utilise

d D

CD

do

no

rs5 4

27

6 2

23

7 0

70

7 9

62

8 8

94

9 8

60

10 8

53

11 8

67

12 8

95

13 9

31

14 9

69

16 0

04

17 0

30

18 0

43

19 0

38

20 0

12

Gro

wth

16%

15%

14%

13%

12%

11%

10%

9%

9%

8%

7%

7%

6%

6%

6%

5%

Utilis

atio

n ra

te7%

7%

7%

7%

8%

8%

9%

9%

10%

11%

12%

13%

15%

16%

18%

20%

DC

D d

on

or tx

ca

ses

366

429

503

590

692

812

952

1 1

17

1 3

10

1 5

36

1 8

02

2 1

14

2 4

79

2 9

08

3 4

11

4 0

02

Gro

wth

17%

17%

17%

17%

17%

17%

17%

17%

17%

17%

17%

17%

17%

17%

17%

17%

Peak u

tilisatio

n ra

te20%

20%

20%

20%

20%

20%

20%

20%

20%

20%

20%

20%

20%

20%

20%

20%

Unutilis

ed D

CD

donor o

rgans

719

816

911

1 0

02

1 0

87

1 1

60

1 2

19

1 2

56

1 2

69

1 2

50

1 1

92

1 0

87

927

701

397

0

DC

D o

pp

ortu

nity

(no

. of o

rga

ns)

1 0

85

1 2

45

1 4

14

1 5

92

1 7

79

1 9

72

2 1

71

2 3

73

2 5

79

2 7

86

2 9

94

3 2

01

3 4

06

3 6

09

3 8

08

4 0

02

To

tal a

dd

ressa

ble

ma

rke

t

AS

P P

erfa

dex (U

SD

)2 7

98

2 7

30

2 7

30

2 7

30

2 7

30

2 7

30

2 7

30

2 7

30

2 7

30

2 7

30

2 7

30

2 7

30

2 7

30

2 7

30

2 7

30

2 7

30

AS

P X

PS

(US

D)

201 4

77

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

AS

P X

PS

dis

posable

s k

its (U

SD

)16 7

90

18 5

66

18 9

37

19 3

16

19 7

02

20 0

96

20 4

98

20 9

08

21 3

26

21 7

53

22 1

88

22 6

32

23 0

84

23 5

46

24 0

17

24 4

97

TA

M (U

SD

m)

58

74

86

100

116

134

153

174

197

223

250

280

312

346

383

423

TA

M P

erfa

dex (U

SD

m)

89

11

12

14

16

18

20

22

25

27

30

33

36

39

42

TA

M X

PS

(US

Dm

)1

11

11

11

11

11

12

22

2

TA

M X

PS

dis

posable

s k

its, D

BD

(US

Dm

)31

40

48

56

66

77

89

103

119

136

155

176

199

224

251

281

TA

M X

PS

dis

posable

s k

its, D

CD

(US

Dm

)18

23

27

31

35

40

45

50

55

61

66

72

79

85

91

98

Sourc

e: R

edeye

Researc

h


31

TAM in heart transplantation

Relying mainly on the sources used in our lung transplant model, we estimate a TAM of almost

USD 300m for XHPS and SXHS. At the end of our forecast, we estimate an opportunity just

short of USD 800m. As in our lung transplant model, we assume higher utilisation of both DBD

and DCD donor organs.

Recognising the high medical for need for more heart transplants and high overlap of clinics

performing lung and heart transplants, we believe the market for EVLP and EVHP will follow a

similar dynamic.

The UK, Australia, and Belgium have been performing DCD heart transplants, albeit only few,

for several years. In the US, the first heart transplant after DCD was performed in late 2019.

Compared to lungs, we assume a slightly shorter acceptable ischemic time quality of DCD

organs and decreasing quality as the donor pool is expanded, and so we forecast a peak

utilisation rate of 10% for DCD organs. This results in a total utilisation rate of 35% for the whole

donor pool. The total opportunity is expected to expand from about 13,000 transplants today

to about 28,000 at the end of our 15-year forecast (CAGR of 5%).

Heart transplants in the US and 5EU

Source: OPTN data, GODT data

-20%

-10%

0%

10%

20%

30%

40%

0

1000

2000

3000

4000

5000

6000

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Gro

wth

Num

be

r o

f tr

an

sp

lan

ts

USA 5EU Growth


32

He

art tx

ma

rke

t mo

de

l, No

rth A

me

rica

(CA

& U

S)2

019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

He

art tx

ce

nte

rs152

153

154

155

156

157

158

159

160

161

161

161

161

161

161

161

Machin

es p

er c

entre

11

11

11

11

11

11

11

11

Expecte

d life

length

(years

)10

10

10

10

10

10

10

10

10

10

10

10

10

10

10

10

Op

po

rtun

ity (n

o. o

f ma

ch

ine

s pe

r ye

ar)

15

15

15

16

16

16

16

16

16

16

16

16

16

16

16

16

DB

D o

pp

ortu

nity

Utilise

d D

BD

do

no

rs9 2

56

9 3

81

9 5

05

9 6

29

9 7

52

9 8

74

9 9

95

10 1

15

10 2

34

10 3

52

10 4

69

10 5

85

10 7

00

10 8

14

10 9

27

11 0

38

Gro

wth

1%

1%

1%

1%

1%

1%

1%

1%

1%

1%

1%

1%

1%

1%

1%

1%

Utilis

atio

n ra

te41%

42%

43%

44%

45%

46%

47%

48%

50%

51%

52%

54%

55%

57%

58%

60%

DB

D d

on

or tx

ca

ses

3 7

72

3 9

16

4 0

66

4 2

21

4 3

82

4 5

50

4 7

24

4 9

05

5 0

93

5 2

88

5 4

90

5 7

00

5 9

18

6 1

44

6 3

79

6 6

23

Gro

wth

4%

4%

4%

4%

4%

4%

4%

4%

4%

4%

4%

4%

4%

4%

4%

4%

Peak u

tilisatio

n ra

te60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

Unutilis

ed D

BD

donor o

rgans

1 7

82

1 7

13

1 6

37

1 5

56

1 4

69

1 3

74

1 2

73

1 1

64

1 0

47

923

791

651

502

344

177

0

DB

D o

pp

ortu

nity

(no

. of o

rga

ns)

5 5

54

5 6

29

5 7

03

5 7

77

5 8

51

5 9

24

5 9

97

6 0

69

6 1

40

6 2

11

6 2

81

6 3

51

6 4

20

6 4

88

6 5

56

6 6

23

DC

D o

pp

ortu

nity

Utilise

d D

CD

do

no

rs2 6

47

2 9

67

3 3

14

3 6

88

4 0

89

4 5

18

4 9

76

5 4

63

5 9

78

6 5

22

7 0

95

7 6

97

8 3

27

8 9

84

9 6

68

10 3

79

Gro

wth

13%

12%

12%

11%

11%

10%

10%

10%

9%

9%

9%

8%

8%

8%

8%

7%

Utilis

atio

n ra

te0%

0%

0%

0%

0%

0%

1%

1%

1%

1%

2%

3%

4%

6%

8%

10%

DC

D d

on

or tx

ca

ses

23

58

12

18

27

41

62

94

143

217

329

499

757

1 0

38

Gro

wth

50%

67%

60%

50%

50%

50%

52%

51%

52%

52%

52%

52%

52%

52%

37%

Peak u

tilisatio

n ra

te10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

Unutilis

ed D

CD

donor o

rgans

263

294

326

361

397

434

471

505

536

558

567

553

504

399

210

0

DC

D o

pp

ortu

nity

(no

. of o

rga

ns)

265

297

331

369

409

452

498

546

598

652

710

770

833

898

967

1 0

38

To

tal a

dd

ressa

ble

ma

rke

t

AS

P X

HP

S (U

SD

)250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

250 0

00

AS

P X

HP

S d

isposable

s k

its (U

SD

)20 0

00

22 0

00

22 4

40

22 8

89

23 3

47

23 8

14

24 2

90

24 7

76

25 2

71

25 7

77

26 2

92

26 8

18

27 3

54

27 9

01

28 4

59

29 0

29

TA

M (U

SD

m)

120

134

139

145

150

156

162

168

174

181

188

195

202

210

218

226

TA

M X

HP

S (U

SD

m)

44

44

44

44

44

44

44

44

TA

M X

HP

S d

isposable

s k

its, D

BD

(US

Dm

)111

124

128

132

137

141

146

150

155

160

165

170

176

181

187

192

TA

M X

HP

S d

isposable

s k

its, D

CD

(US

Dm

)5

77

810

11

12

14

15

17

19

21

23

25

28

30

Sourc

e: R

edeye

Researc

h


33

He

art tx

ma

rke

t mo

de

l, Eu

rop

e (E

U15, C

H, &

NO

)

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

He

art tx

ce

nte

rs115

116

117

118

119

120

121

122

123

124

125

126

127

128

129

130

Machin

es p

er c

entre

11

11

11

11

11

11

11

11

Expecte

d life

length

(years

)10

10

10

10

10

10

10

10

10

10

10

10

10

10

10

10

Op

po

rtun

ity (n

o. o

f ma

ch

ine

s pe

r ye

ar)

12

12

12

12

12

12

12

12

12

12

13

13

13

13

13

13

DB

D o

pp

ortu

nity

Utilise

d D

BD

do

no

rs8 1

08

8 2

98

8 4

83

8 6

62

8 8

36

9 0

04

9 1

67

9 3

25

9 4

77

9 6

24

9 7

66

9 9

03

10 0

35

10 1

62

10 2

84

10 4

01

Gro

wth

0%

2%

2%

2%

2%

2%

2%

2%

2%

2%

1%

1%

1%

1%

1%

1%

Utilis

atio

n ra

te24%

25%

27%

28%

30%

32%

34%

36%

38%

41%

43%

46%

49%

53%

56%

60%

DB

D d

on

or tx

ca

ses

1 9

36

2 0

93

2 2

63

2 4

47

2 6

46

2 8

61

3 0

93

3 3

44

3 6

15

3 9

08

4 2

25

4 5

68

4 9

39

5 3

40

5 7

73

6 2

41

Gro

wth

-1%

8%

8%

8%

8%

8%

8%

8%

8%

8%

8%

8%

8%

8%

8%

8%

Peak u

tilisatio

n ra

te60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

Unutilis

ed D

BD

donor o

rgans

2 9

29

2 8

86

2 8

27

2 7

50

2 6

56

2 5

41

2 4

07

2 2

51

2 0

71

1 8

66

1 6

35

1 3

74

1 0

82

757

397

0

DB

D o

pp

ortu

nity

(no

. of o

rga

ns)

4 8

65

4 9

79

5 0

90

5 1

97

5 3

02

5 4

02

5 5

00

5 5

95

5 6

86

5 7

74

5 8

60

5 9

42

6 0

21

6 0

97

6 1

70

6 2

41

DC

D o

pp

ortu

nity

Utilise

d D

CD

do

no

rs1 9

09

2 1

56

2 4

29

2 7

31

3 0

64

3 4

30

3 8

31

4 2

70

4 7

50

5 2

73

5 8

42

6 4

60

7 1

29

7 8

53

8 6

34

9 4

76

Gro

wth

8%

13%

13%

12%

12%

12%

12%

11%

11%

11%

11%

11%

10%

10%

10%

10%

Utilis

atio

n ra

te2%

2%

2%

3%

3%

3%

3%

4%

4%

5%

6%

6%

7%

8%

9%

10%

DC

D d

on

or tx

ca

ses

36

45

56

70

87

108

134

167

208

259

322

400

497

618

769

948

Gro

wth

44%

25%

24%

25%

24%

24%

24%

25%

25%

25%

24%

24%

24%

24%

24%

23%

Peak u

tilisatio

n ra

te10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

Unutilis

ed D

CD

donor o

rgans

155

171

187

203

219

235

249

260

267

268

262

246

216

167

94

0

DC

D o

pp

ortu

nity

(no

. of o

rga

ns)

191

216

243

273

306

343

383

427

475

527

584

646

713

785

863

948

To

tal a

dd

ressa

ble

ma

rke

t

AS

P X

HP

S (U

SD

)201 4

77

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

AS

P X

HP

S d

isposable

s k

its (U

SD

)16 7

90

18 5

66

18 9

37

19 3

16

19 7

02

20 0

96

20 4

98

20 9

08

21 3

26

21 7

53

22 1

88

22 6

32

23 0

84

23 5

46

24 0

17

24 4

97

TA

M (U

SD

m)

87

99

103

108

113

118

123

128

134

140

145

152

158

165

171

179

TA

M X

HP

S (U

SD

m)

22

22

22

22

22

22

23

33

TA

M X

HP

S d

isposable

s k

its, D

BD

(US

Dm

)82

92

96

100

104

109

113

117

121

126

130

134

139

144

148

153

TA

M X

HP

S d

isposable

s k

its, D

CD

(US

Dm

)3

45

56

78

910

11

13

15

16

18

21

23

Sourc

e: R

edeye

Researc

h


34

He

art tx

ma

rke

t mo

de

l, AP

AC

(AU

S, C

HI, J

AP

, KO

R &

NZ)

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

He

art tx

ce

nte

rs54

56

58

60

62

64

67

70

73

76

79

82

85

88

92

96

Machin

es p

er c

entre

11

11

11

11

11

11

11

11

Expecte

d life

length

(years

)10

10

10

10

10

10

10

10

10

10

10

10

10

10

10

10

Op

po

rtun

ity (n

o. o

f ma

ch

ine

s pe

r ye

ar)

56

66

66

77

78

88

99

910

DB

D o

pp

ortu

nity

Utilise

d D

BD

do

no

rs3 0

85

3 6

08

4 1

96

4 8

52

5 5

80

6 3

84

7 2

67

8 2

32

9 2

82

10 4

18

11 6

42

12 9

55

14 3

58

15 8

51

17 4

33

19 1

03

Gro

wth

18%

17%

16%

16%

15%

14%

14%

13%

13%

12%

12%

11%

11%

10%

10%

10%

Utilis

atio

n ra

te32%

33%

33%

34%

34%

35%

36%

38%

40%

41%

44%

46%

49%

52%

56%

60%

DB

D d

on

or tx

ca

ses

999

1 1

75

1 3

83

1 6

27

1 9

14

2 2

52

2 6

50

3 1

18

3 6

69

4 3

17

5 0

80

5 9

77

7 0

33

8 2

75

9 7

37

11 4

62

Gro

wth

18%

18%

18%

18%

18%

18%

18%

18%

18%

18%

18%

18%

18%

18%

18%

18%

Peak u

tilisatio

n ra

te60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

60%

Unutilis

ed D

BD

donor o

rgans

852

990

1 1

35

1 2

84

1 4

34

1 5

78

1 7

10

1 8

21

1 9

00

1 9

34

1 9

05

1 7

96

1 5

82

1 2

36

723

0

DB

D o

pp

ortu

nity

(no

. of o

rga

ns)

1 8

51

2 1

65

2 5

18

2 9

11

3 3

48

3 8

30

4 3

60

4 9

39

5 5

69

6 2

51

6 9

85

7 7

73

8 6

15

9 5

11

10 4

60

11 4

62

DC

D o

pp

ortu

nity

Utilise

d D

CD

do

no

rs5 4

27

6 2

23

7 0

70

7 9

62

8 8

94

9 8

60

10 8

53

11 8

67

12 8

95

13 9

31

14 9

69

16 0

04

17 0

30

18 0

43

19 0

38

20 0

12

Gro

wth

16%

15%

14%

13%

12%

11%

10%

9%

9%

8%

7%

7%

6%

6%

6%

5%

Utilis

atio

n ra

te0%

1%

1%

1%

1%

1%

1%

2%

2%

3%

3%

4%

5%

6%

8%

10%

DC

D d

on

or tx

ca

ses

27

36

48

64

85

113

151

201

268

357

476

635

847

1 1

30

1 5

07

2 0

01

Gro

wth

35%

33%

33%

33%

33%

33%

34%

33%

33%

33%

33%

33%

33%

33%

33%

33%

Peak u

tilisatio

n ra

te10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

10%

Unutilis

ed D

CD

donor o

rgans

516

586

659

732

804

873

934

986

1 0

22

1 0

36

1 0

21

965

856

674

397

0

DC

D o

pp

ortu

nity

(no

. of o

rga

ns)

543

622

707

796

889

986

1 0

85

1 1

87

1 2

90

1 3

93

1 4

97

1 6

00

1 7

03

1 8

04

1 9

04

2 0

01

To

tal a

dd

ressa

ble

ma

rke

t

AS

P X

HP

S (U

SD

)201 4

77

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

196 5

78

AS

P X

HP

S d

isposable

s k

its (U

SD

)16 7

90

18 5

66

18 9

37

19 3

16

19 7

02

20 0

96

20 4

98

20 9

08

21 3

26

21 7

53

22 1

88

22 6

32

23 0

84

23 5

46

24 0

17

24 4

97

TA

M (U

SD

m)

41

53

62

73

85

98

113

129

148

168

190

214

240

268

299

332

TA

M X

HP

S (U

SD

m)

11

11

11

11

11

22

22

22

TA

M X

HP

S d

isposable

s k

its, D

BD

(US

Dm

)31

40

48

56

66

77

89

103

119

136

155

176

199

224

251

281

TA

M X

HP

S d

isposable

s k

its, D

CD

(US

Dm

)9

12

13

15

18

20

22

25

28

30

33

36

39

42

46

49

Sourc

e: R

edeye

Researc

h


35

Opportunity in open-heart surgery For PrimECC, we estimate a TAM of more than USD 150m. Considering current trends and

technological advances, we estimate that the opportunity will shrink to about USD 120m during

our forecast period.

Unlike in our transplant models, we do not include China, as there is no clear regulatory path

forward there. We include coronary artery bypass grafting (CABG), heart valve procedures,

repairs of congenital heart defects and thoracic aneurysms, heart transplants, and other less

common open-heart surgeries. We exclude implants of pacemakers and assist devices and

extracardiac surgery, because the vast majority of these procedures can be done in a minimally

invasive fashion today.

Based on data from various national cardiac surgery societies, scientific literature, physician

diligence, and reported sales numbers from heart valve manufacturers, we estimate that

almost 800,000 open-heart procedures are performed with CPB each year. However,

recognising that the number of CABG procedures is decreasing, we forecast that the number

of procedures will shrink to about 600,000 at the end of our forecast period.

Off-pump CABG (OPCAB) has gained high acceptance in some countries, such as Japan, where

the procedure represents about 40% of total CABG procedures (Shimizu et al., 2018). However,

in the US, OPCAB is performed in more than 80% of cases (iData Research, 2018).

Large-scale studies have shown that OPCAB is associated with worse clinical outcomes than

on-pump CABG (Shroyer et al., 2017). Available data also indicates that the procedure has

plateaued. Thus, the reason for the decreasing number of CABG procedures in our model is

mainly a result of excessive use in certain countries, and not a decreasing share of OPCAB.

Another reason for the shrinking market opportunity is an assumed increase in the usage of

non-invasive valve procedures such as transcatheter aortic valve replacement (TAVR) and

transcatheter mitral valve repair (TMVR). A review of the scientific literature indicates that 15-

30% of heart valve procedures cannot be performed minimally invasively due to blockages in

arteries and complex anatomies. We therefore assume that minimally invasive valve

procedures will peak at 85% of total procedures.

Trends for cardiac surgery in the US (left) and Germany (right)

Source: HCUP data, iData Research data, German Society for Thoracic and Cardiovascular Surgery data, Redeye Research

-25%

-15%

-5%

5%

15%

25%

0

100 000

200 000

300 000

400 000

500 000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Gro

wth

Num

ber

of tr

anspla

nts

CABG prcedures Growth

5%

20%

35%

50%

65%

80%

0

50 000

100 000

150 000

200 000

250 000

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018

Share

of to

tal p

rocedure

s

Num

ber

of tr

anspla

nts

Total heart procedures CABG procedures

CPB procedures / total heart procedures (%) OPCAB / total CABG procedures


36

Ca

rdia

c su

rge

ry m

od

el

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

No

rth A

me

rica

(CA

& U

S)

He

art p

roce

du

res w

ith E

CC

496 7

39

484 5

90

472 7

74

461 3

05

450 1

78

439 4

01

428 9

69

418 8

87

409 1

56

399 7

75

390 7

50

382 0

85

373 7

90

365 8

77

358 3

75

351 2

12

Isola

ted C

AB

G215 7

39

209 7

72

204 0

85

198 6

64

193 4

92

188 5

56

183 8

41

179 3

37

175 0

31

170 9

12

166 9

70

163 1

97

159 5

82

156 1

18

152 7

98

149 6

13

Isola

ted va

lve p

rocedure

s137 7

40

132 5

96

127 4

41

122 3

08

117 2

11

112 1

72

107 2

05

102 3

24

97 5

43

92 8

71

88 3

19

83 8

94

79 6

03

75 4

50

71 4

40

67 5

76

CA

BG

com

bin

atio

n p

rocedure

s59 8

60

58 2

04

56 6

27

55 1

23

53 6

88

52 3

18

51 0

10

49 7

60

48 5

65

47 4

22

46 3

29

45 2

81

44 2

79

43 3

18

42 3

96

41 5

12

Heart tra

nspla

nts

3 7

74

3 9

19

4 0

71

4 2

29

4 3

94

4 5

68

4 7

51

4 9

46

5 1

55

5 3

82

5 6

33

5 9

17

6 2

47

6 6

43

7 1

36

7 6

61

Oth

er c

ard

iac s

urg

ery

79 6

26

80 0

99

80 5

50

80 9

81

81 3

93

81 7

87

82 1

62

82 5

20

82 8

62

83 1

88

83 4

99

83 7

96

84 0

79

84 3

48

84 6

05

84 8

50

Gro

wth

-2%

-2%

-2%

-2%

-2%

-2%

-2%

-2%

-2%

-2%

-2%

-2%

-2%

-2%

-2%

-2%

Eu

rop

e (E

U15, C

H, &

NO

)

He

art p

roce

du

res w

ith E

CC

232 6

31

227 2

17

221 9

20

216 7

51

211 7

19

206 8

34

202 1

04

197 5

37

193 1

42

188 9

22

184 8

87

181 0

40

177 3

91

173 9

43

170 7

07

167 6

81

Isola

ted C

AB

G83 2

78

80 9

04

78 6

46

76 4

96

74 4

48

72 4

96

70 6

34

68 8

57

67 1

60

65 5

40

63 9

92

62 5

10

61 0

93

59 7

36

58 4

38

57 1

94

Isola

ted va

lve p

rocedure

s65 3

64

63 0

43

60 6

71

58 2

68

55 8

49

53 4

30

51 0

24

48 6

43

46 2

99

43 9

99

41 7

52

39 5

64

37 4

42

35 3

88

33 4

07

31 5

00

CA

BG

com

bin

atio

n p

rocedure

s34 4

06

33 4

44

32 5

28

31 6

55

30 8

24

30 0

31

29 2

75

28 5

54

27 8

66

27 2

07

26 5

78

25 9

77

25 4

02

24 8

51

24 3

23

23 8

18

Heart tra

nspla

nts

1 9

72

2 1

38

2 3

19

2 5

17

2 7

33

2 9

69

3 2

27

3 5

11

3 8

23

4 1

67

4 5

47

4 9

68

5 4

36

5 9

58

6 5

42

7 1

89

Oth

er c

ard

iac s

urg

ery

47 6

11

47 6

88

47 7

56

47 8

15

47 8

65

47 9

08

47 9

44

47 9

72

47 9

94

48 0

09

48 0

18

48 0

21

48 0

18

48 0

10

47 9

97

47 9

80

Gro

wth

-2%

-2%

-2%

-2%

-2%

-2%

-2%

-2%

-2%

-2%

-2%

-2%

-2%

-2%

-2%

-2%

AP

AC

(AU

S, J

AP

, KO

R &

NZ)

He

art p

roce

du

res w

ith E

CC

54 8

98

54 6

22

54 3

51

54 0

94

53 8

68

53 6

89

53 5

74

53 5

39

53 6

06

53 8

00

54 1

48

54 6

83

55 4

45

56 4

82

57 8

50

59 6

19

Isola

ted C

AB

G13 4

86

13 2

42

13 0

18

12 8

11

12 6

20

12 4

44

12 2

82

12 1

33

11 9

95

11 8

67

11 7

50

11 6

43

11 5

44

11 4

53

11 3

70

11 2

93

Isola

ted va

lve p

rocedure

s19 4

81

18 7

99

18 0

93

17 3

68

16 6

32

15 8

91

15 1

49

14 4

12

13 6

83

12 9

66

12 2

65

11 5

82

10 9

18

10 2

77

9 6

59

9 0

66

CA

BG

com

bin

atio

n p

rocedure

s10 2

41

10 5

71

10 8

80

11 1

71

11 4

44

11 7

01

11 9

43

12 1

70

12 3

85

12 5

89

12 7

80

12 9

60

13 1

31

13 2

93

13 4

45

13 5

90

Heart tra

nspla

nts

1 0

26

1 2

11

1 4

31

1 6

91

1 9

99

2 3

65

2 8

01

3 3

19

3 9

37

4 6

74

5 5

56

6 6

12

7 8

80

9 4

05

11 2

44

13 4

63

Oth

er c

ard

iac s

urg

ery

10 6

64

10 7

99

10 9

29

11 0

53

11 1

73

11 2

88

11 3

99

11 5

05

11 6

06

11 7

04

11 7

97

11 8

86

11 9

72

12 0

54

12 1

32

12 2

07

Gro

wth

0%

-1%

0%

0%

0%

0%

0%

0%

0%

0%

1%

1%

1%

2%

2%

3%

To

tal a

dd

ressa

ble

ma

rke

t

To

tal o

pp

ortu

nity

(no

. of p

roce

du

res)

784 2

68

766 4

29

749 0

45

732 1

50

715 7

65

699 9

24

684 6

47

669 9

63

655 9

04

642 4

97

629 7

85

617 8

08

606 6

26

596 3

02

586 9

32

578 5

12

AS

P N

orth

Am

eric

a (U

SD

)250

250

250

250

250

250

250

250

250

250

250

250

250

250

250

250

AS

P E

uro

pe (U

SD

)150

150

150

150

150

150

150

150

150

150

150

150

150

150

150

150

AS

P A

PA

C (U

SD

)150

150

150

150

150

150

150

150

150

150

150

150

150

150

150

150

TA

M (U

SD

m)

167

163

160

156

152

149

146

142

139

136

134

131

128

126

124

122

TA

M N

orth

Am

eric

a (U

SD

m)

124

121

118

115

113

110

107

105

102

100

98

96

93

91

90

88

TA

M E

uro

pe (U

SD

m)

35

34

33

33

32

31

30

30

29

28

28

27

27

26

26

25

TA

M A

PA

C (U

SD

m)

88

88

88

88

88

88

88

99

Sourc

e: R

edeye

Researc

h


37

Competitive landscape in ex vivo perfusion There is limited competition within ex vivo perfusion. We regard three companies as Xvivo’s

main competitors: TransMedics, Organ Assist, and OrganOx. While we expect to see intensified

competition, we do recognise that the XPS offers unique features and unbeaten clinical

documentation. Furthermore, we believe Xvivo’s sound focus on innovation and product

development will keep it at the cutting edge of this technological development.

TransMedics

Xvivo’s main competitor is TransMedics, a US public company listed under the ticker TMDX on

the NASDAQ stock market. The company was founded in 1998 and has its headquarters in

Andover, Massachusetts.

TransMedics has developed the Organ Care System (OCS) – a portable platform that can be

used for normothermic ex vivo perfusion of the lungs, heart, and liver. Based on results from

the INSPIRE clinical trial, the OCS Lung received PMA for use with standard criteria donor lungs

in April 2018. In June 2019, the device received PMA for use in extended criteria lungs based

on the results from the EXPAND clinical trial. OCS Heart is currently under review by the FDA

for use in standard and expanded criteria lungs and OCS Liver is undergoing late-stage clinical

trials. All three are CE-marked.

TransMedics has implemented an aggressive growth strategy with significant spending on

both its commercial organisation and clinical development. According to Pitchbook, the

company has raised more than USD 310m since it was founded in 1998. Recently,

TransMedics filed a prospectus for a mixed shelf offering of another USD 70m.

At the end of 2019, the company had 109 employees and opex of USD 43.5m (FY19). For

reference, Xvivo had opex of SEK 158.9m (roughly USD 17.1m based on the year-end 2019

USD/SEK rate) over the same period and 53 employees at the end of 2019.

Global footprint

Despite more aggressive spending and pricing, the revenues generated by TransMedics are

not much higher than those reported by Xvivo. In 2019, TransMedics generated revenues of

about USD 23.6m (Xvivo reported revenues of SEK 220.8m for the same period; approximately

USD 23.7m). Furthermore, an analysis indicates that TransMedics’ market share in monetary

value is highly inflated by the significant pricing disparities between XPS and OCS Lung

disposables.

A review of the scientific literature, along with physician diligence, indicates that OCS Lung

disposables kits are priced at approximately USD 60,000-70,000 in the US and USD 40,000-

50,000 in Europe. XPS disposables kits are sold for about USD 22,000 in the US and USD 18,500

(EUR 17,000) in Europe. Despite this, TransMedics’ gross margin of 59% for 2019 was lower

than Xvivo’s 74%.

TransMedics expects more than 90% of its revenues to come from the sale of disposables. In

2019, revenues from OCS Lung amounted to USD 8.7m. Based on company data, we estimate

about 90% of this was generated in the US. Assuming an average sales price (ASP) of USD

65,000 in the US and USD 45,000 in other markets, this would indicate that fewer than 140

evaluations were made with the OCS Lung in 2019. Using the same method for OCS Heart, but

assuming the US represented about 25% of total sales and given a slightly lower pricing (USD

60,000 in the US and USD 41,000 in other markets), we estimate that just short of 260

evaluations were made in 2019.


38

We thus conclude that with XPS Xvivo holds a far greater market share in volume terms. When

applying the same calculation method to warm perfusion sales, assuming an ASP of USD

20,000 in the US and about USD 16,500 in Europe, we calculate that more than 500 lungs were

evaluated with XPS disposables kits/STEEN Solution in 2019. (STEEN is also sold as a

standalone product to centres performing EVLP via the manual method.)

Net sales by geography and OSC product, TransMedics

Source: Company data

Based on company data and physician diligence, we estimate that TransMedics installed its

systems at about 50 lung and heart transplant centres. Of these systems, we estimate that 20-

25 are OCS Lung. According to the latest company update, 53 hospitals have access to either

the XPS or LS – more than double our estimate for TransMedics.

Scientific approach

A key differentiator between Xvivo’s systems and the OCS is the clinical protocol used to

preserve organs. Unlike Xvivo’s NOVEL protocol, where ischemic cold static storage (ICSS) is

used to preserve the organ during the transport, the OCS is designed to keep the organ in a

normothermic state using continuous machine perfusion of warm perfusate.

To cool or not to cool

After an organ is procured and the blood flow has been removed, it only takes a few minutes

before organ cells start to die. Preservation fluids and cooling – constituting the first line of

defence against hypoxic and ischaemic injury – can only slow this damage down.

Cooling can prevent tissue injury by reducing the metabolic rate and thus the demand for

oxygen and substrates from the tissue. A reduction of organ temperature from 37°C to around

4°C with SCS reduces the metabolic rate to approximately 5% of its physiological level (De

Perrot et al., 2005; Weeder et al., 2015). These findings give the transplant team the necessary

time to retrieve, transport, assess, and implant the organ, and they have resulted in SCS

gradually becoming the gold standard method of organ preservation since the 1960s.

3,5 2,7

6,5

16,3

1,4 2,6

2,6

2,2

1,42,4

2,4

4,0

0

5

10

15

20

25

2016 2017 2018 2019

US

Dm

USA UK All other countries

0,7 1,1 2,03,5

3,6

5,86,0

11,4

1,9

0,8

5,1

8,7

0

5

10

15

20

25

2016 2017 2018 2019U

SD

m

OCS liver OCS heart OCS lung


39

Decrease in temperature and reduces in metabolic rate in humans

SCS=static cold storage, HMP=hypothermic machine perfusion, COR=controlled oxygenated rewarming,

SNMP=subnormothermic machine, perfusion, and NMP=normothermic machine perfusion.

Source: Jing et al., 2018

However, the rapid metabolism of metabolic products that occurs when an organ depleted of

energy stores is rewarmed has been shown to cause cellular injury (referred to as ischaemia

reperfusion injury; IRI), delayed graft function (DGF), and PGD. Paradoxically, therefore, even

though ischemic cells need oxygen to survive, reperfusion causes injury to the organ. This can

be avoided by preserving the organ at normothermic temperatures.

While research suggests that a prolonged cold ischemic period can have an adverse impact

on graft and patient outcomes, the association remains somewhat unclear. Advocates of

warm mobile machine preservation question whether cooling for transport before warm EVLP

is justified, but other scientists believe the adverse effects can be counteracted by a controlled

and slow oxygenated warming up of the organ.

Evidence was reported by Leiva-Juarez et al. (2020) in a retrospective analysis of the NOVEL

study (110 patients). The authors found that extended cold post-EVLP preservation (≥5 hours)

was associated with an increased risk of PGD and to one-year mortality. The rate of PGD grade

3 was 8.4% in the non-extended group and 29.6% in the extended group at 72 hours post-

transplant (p=0.005). After one year, the survival rate was 91.6% in the non-extended group and

70.4% in the extended group (p=0.013). The three-year survival rates were 75.9% and 55.6% in

the non-extended and extended groups, respectively (p=0.023).

Further evidence on the effect of cold ischemic time was provided by Grimm et al. (2015)

analysing data from more than 10,000 adults who underwent lung transplantation in 2011-

2015 (among which some 31% of the organs were exposed to prolonged ischemia exceeding

six hours) in the UNOS database. Results showed no difference in clinical outcome or survival

after one year (83.6% vs 84.%) or five years (52.5% vs 53.5%) between the groups that received

grafts that were or were not exposed to ischemia lasting six hours or more, respectively.


40

Additional data was provided by a more recent data-mining analysis of almost 1,000 pediatric

patients. Hayes et al. (2016) concluded that a total graft ischemic time of four to six hours was

associated with optimal survival outcomes. Both shorter and longer ischemia were associated

with a higher mortality hazard. When comparing the group with an ischemic time of four to six

hours to the group with less than four hours of ischemic time, the hazard ratio (HR) was 0.533

(p<0.001). The hazard ratio relative to the group with more than six hours of ischemic time was

1.613 (p=0.002). Acknowledging that the UNOS registry does not differentiate between cold

and warm ischemic times, the authors conducted a supplementary analysis, using

geographical distance as a proxy for cold ischemic time. The analysis showed no association

between geographical distance and recipient mortality hazard.

Another retrospective trial by Yeung et al. (2016) found that extension of graft preservation

time beyond 12 hours with EVLP has no negative impact on early patient outcome. Of the 900-

plus patients, 97 had a total preservation time of more than 12 hours, and lengths of ICU and

hospital stay were comparable. While not statistically significant, the median hospital stays

were 23.0 and 25.5 days (p=0.60) in the less than 12 hours and more than 12 hours groups,

respectively. Furthermore, PGD grade did not differ significantly between the two groups at 72

hours post-transplantation (p=0.85)

These findings are strengthened by previous animal studies. Comparative studies with porcine

lungs by Mulloy et al. (2012) and Olbertz et al. (2018) indicated no benefit of immediate EVLP.

Mulloy et al. (2012) showed that the combination of CSP and EVLP was necessary to obtain

optimal post-transplant function. Olbertz et al. (2018) showed that lung function was similar

when EVLP was performed immediately or after prolonged SCS preservation (after 9 hours of

SCS). Based on this, the authors suggest that direct EVLP is not necessary.

Overall, we see little evidence of improved patient outcomes with immediate warm perfusion

and preservation of lungs. We have only been able to identify one study that challenges the

validity of this approach. An animal study using porcine lungs by Stanzi et al. (2014) indicated

that normothermic preparation after EVLP results in similar graft performances compared with

lung cooling after EVLP.

However, we recognise the modest sample size (n=10) and that clinical evidence is lacking. It

is also important to recognise that, in order to reduce organ damage, donor lungs usually are

cooled after normothermic perfusion (regardless of the preservation method during transport),

potentially exposing them to damage from IRI. Furthermore, we acknowledge that the trial does

not appear to have spurred much interest in the transplant community.

Lower temperatures – likely the key to longer-term preservation

Recent studies indicate that lower temperatures are the key to longer-term preservation.

Supercooling is a new modality that questions the use of investigating organ preservation at

normothermic temperatures. While the research is still at a relatively early stage, the results

are highly promising.

In 2014, Berendsen et al. showed that rat livers could be preserved for up to four days using

machine perfusion at hypothermic temperatures. More recently, de Vries et al. (2019)

presented the results from a study where a supercooling protocol was evaluated with human

livers, reporting a notable extension of the acceptable ischemic time. Using ice-free storage at

-6°C, followed by hypothermic machine perfusion, the investigators were able to extend the ex

vivo life of human livers by 27 hours.


41

To achieve the results, the investigators minimised air-liquid interfaces, known to cause ice-

nucleation, by de-airing the storage solution bag ahead of supercooling. A standard clinical

solution for hypothermic solution was used as a base and modified by adding two substances,

trehalose and glycerol, to enable stabilisation of cell membrane at sub-zero temperatures. By

using machine perfusion, uniform distribution of protective agents within protective tissue was

achieved, avoiding freezing of grafts and endothelial injury.

Using machine perfusion also allowed the investigators to gain a detailed assessment of liver

viability and control for donor-to-donor variability in extended criteria livers that were rejected

for transplantation. Using clinically validated ex vivo viability parameters during simulated

transplantation by normothermic blood reperfusion, the study showed that the viability of the

organs was unchanged after supercooling and indicated that injury was low. Furthermore, the

investigators observed parameters indicating viability of marginal livers up to 44 hours after

procurement.

Key ex vivo viability parameters during simulated transplantation after supercooling

Source: de Vries et al., 2019

While we recognise there is still much to prove and that current protocols have significant

practical and logistical constraints, we believe the findings hint at future developments in the

case for normothermic preservation. Given the potential uncovered in these results,

strengthened by earlier in vivo models, we believe research into organ preservation will likely

focus increasingly on developing protocols for colder temperatures.

Portable machine perfusion beneficial, but SCS likely to remain

While we do not view the evidence for preservation at normothermic temperatures as

compelling, we believe research indicates a benefit from machine perfusion at lower

temperatures during transport. However, we believe the level of this benefit will vary between

different types of organs and that SCS will remain the standard for some time.


42

Like machine-performed perfusion at hospitals before transplantation, machine perfusion of

the organ during transport can remove toxic metabolic waste and provide it with continuous

circulation of oxygen and essential metabolic substrates. When performed at hypothermic

temperatures, research has shown that, despite high levels of oxygen, it can recondition the

mitochondria and decrease the release of reactive oxygen species (ROS) – a by-product of

metabolism that induces downstream inflammation and consequent organ damage (Schlegel

et al., 2017).

Mechanism of injury following reperfusion and protection with machine perfusion (liver)

Source: Schegel et al., 2017

Although these findings have led to the increasing use of transportable devices for

hypothermic machine perfusion, SCS remains the standard method for organ preservation,

likely because direct-mobile clinical EVLP requires a high amount of resources. In our view, the

practical and logistical challenges imposed by the method will continue to hamper its uptake.

However, we recognise that the acceptable ischemic times varies significantly between

different organ types. As mentioned above, non-oxygenated time for lungs ex vivo is

approximately eight to 12 hours, but hearts can only withstand four to six hours. Furthermore,

some researchers have argued that SCS is sufficient for normal criteria organs, while machine

perfusion should be used during the transport of extended criteria organs.

Considering this, we believe that methods for organ preservation will become more dynamic

in the future. While we believe the need is lower in lung transplant, we do not rule out that future

versions of the XPS will, like the XHPS, be portable. However, we consider it unlikely that

transportable devices will replace SCS as the preferred method for lung preservation for the

foreseeable future.

Clinical experience – XPS vs. OCS Lung

Overall, we believe Xvivo fares well against TransMedics when comparing clinical data from

the pivotal trials. However, while we recognise that physicians often rely on cross-trial

comparisons when assessing competing treatments, head-to-head data should also be

considered. A direct comparison of the NOVEL study and TransMedics’ EXPAND is further

complicated by the two trials’ different purposes, differences in inclusion criteria, and small

sample sizes.


43

While NOVEL investigated the safety of evaluating donor lungs with the XPS and STEEN

Solution (after transport with standard SCS), EXPAND explored the safety of transporting and

evaluating lungs with OCS Lung. Furthermore, EXPAND used more lenient inclusion criteria (i.e.

the definition of expanded criteria lungs). While both trials included DCD donors and donors

with a PaO2/FiO2 ratio ≤ 300 mmHg, EXPAND excluded donors with an expected total ischemic

time >6 hours. Moreover, donors ≥55 years old were considered normal criteria in NOVEL but

extended criteria in EXPAND.

EXPAND included 25 lungs in the EVLP arm with a cross-clamp time (time outside the body)

>6 hours, of which 11 only met the inclusion criteria of >6 hours ischemic time. Additionally,

the trial included 31 donors ≥55 years, of which 22 only met one inclusion criteria (28% of the

sample). Summarising this, we note that at least 42% of the donors included in EXPAND would

have been considered normal criteria donors in the NOVEL trial. However, since lungs that met

multiple criteria in EXPAND protocol still could have been considered normal criteria in NOVEL,

the actual number is likely even higher.

Overall, we argue that the inclusion criteria skewed the sample in EXPAND to TransMedics’

advantage. However, there are some parameters that could have balanced this somewhat. In

the NOVEL trial, the reported mean time outside the body was 735 minutes and mean cold

ischemic time 494 minutes. EXPAND reported a significantly lower median cross-clamp time

of 590 minutes (all donors, n=79), but a slightly higher median expected cold ischemia time of

585 minutes (donors that met a single inclusion criteria, n=58). The reported median age in the

NOVEL trial was 34-36 compared with 50 in EXPAND. Furthermore, the use of DCD organs was

slightly more common in EXPAND – 25% and 33% of transplants were from DCD donors in the

NOVEL and EXPAND EVLP arms, respectively.

Despite the somewhat unfair comparison, we see Xvivo coming out on top when the primary

outcome measures are placed side-by-side. The one-year survival rate (adjusted for accidental

deaths) and rates of PGD grade 3 (adjusted for prophylactic/therapeutic use of ECMO) were

93% and 9% in the NOVEL trial, respectively. In EXPAND, the one-year survival rate was a slightly

lower 91% (only one patient used ECMO pre-transplant) and the incidence of PGD a

significantly higher 17%. Unlike Xvivo, TransMedics refrained from providing UNOS control data

from the same time period and investigational sites; it instead referred to the less comparable

national averages.

1-year survival and rate of PGD 72 hours post-transplant

*Adjusted for accidental deaths. **Adjusted for prophylactic/therapeutic use of ECMO.


93%*

91%

90%

91%

91%

92%

92%

93%

94%

1-year survival

Surv

ival r

ate

NOVEL (n=110) EXPAND (n=79)

9%**

17%

0%

3%

6%

9%

12%

15%

18%

PGD grade 3

Rate

of PG

D



44

While the reported utilisation rate was high in EXPAND, we believe that a direct comparison

with the NOVEL trial would be difficult. We acknowledge the large discrepancies between the

samples used in the studies and the ultimate decision lying with the surgeon whether or not

the lung is suitable for transplant. The less strict inclusion criteria in EXPAND likely worked in

TransMedics’ favour. Furthermore, surgeons’ use of subjective measures to evaluate an

organ’s suitability for transplant introduces a high risk for bias. Research has shown that

utilisation rates can differ significantly between transplant centres, indicating that aggressive

surgeons could be willing to accept a higher level of risk. As there is no way to adjust the

samples and reported outcomes for this, a direct comparison of utilisation rates would be like

comparing apples with oranges.

Utilisation rate, NOVEL vs. EXPAND


It is possible that the benefits of machine perfusion during transport of the organ could be a

contributing factor to the higher utilisation rate seen in EXPAND. Lower rates of organ discard

(compared to SCS) have also been reported in trials evaluating portable devices for machine

perfusion of organs other than lungs. However, we recognise that this is yet to be proven in

large-scale head-to-head trials and do not view it as a competitive disadvantage for the XPS.

Rocky road to approval for OCS Lung

Prior to HDE approval, members of the FDA advisory committee voted unanimously in favour

of approving the XPS and STEEN Solution. While the majority of panel members voted in favour

of the OCS Lung, it was not with a clean record or without concerns. The concerns stemmed

mainly from changes in the clinical protocol during the INSPIRE study trial and risk for selection

bias.

The intent-to-treat (ITT) population in the trial was the 407 subjects randomised to OCS Lung

(n= 208) or standard SCS (n= 99). However, a significant amount of screening failures occurred

in the OCS Lung (21%) and SCS arms (7.5%). Thus, the ITT population, which was the basis for

the dataset, was modified to 349 subjects.

As a result of the modifications to the study sample, TransMedics changed the primary

analysis population from modified ITT to per protocol (PP). However, as the PP population is

susceptible to selection bias, the FDA regarded modified ITT as the primary analysis population

and PP as the secondary. Additionally, it is possible that the comparability of the study arms

was weakened when excluding patients after randomisation, raising further concerns.

51%

87%

0%

20%

40%

60%

80%

100%

Utilisation rate

Utilisa

tio

n r

ate



45

The FDA panel members also had reservations about TransMedics’ decision to change the

primary outcome measure during the pivotal study. Initially, the FDA approved a composite

endpoint of 30-day survival post-transplantation and absence of PGD grade 3 at 72 hours post-

transplantation. Despite the agency advising against it, TransMedics later decided to change

the endpoint to 30-day survival post-transplantation and absence of PGD grade 3 within the

first 72 hours post-transplantation.

The advisory panel voiced statistical concerns about the modified endpoint, noting that

sponsors should pre-specify primary endpoints and hypotheses before any medical device

clinical trial begins. Furthermore, and perhaps even more concerning, the FDA recognised that

the sponsor had access to unblinded outcome data before the endpoint change (227 of 320

subjects had been transplanted). The agency hypothesised that access to data related to these

subjects could have been the reason for the endpoint change.

Ultimately, the members of the gastroenterology-urology devices panel of the medical devices

advisory committee voted 11 to 2 in favour of the device’s safety, 8 to 5 in favour of its probable

effectiveness, and 9 to 4 in favour of an acceptable benefit/risk. However, one member

cautioned TransMedics to never conduct such a change during clinical trials again.

FDA advisory panel votes prior to approval of the XPS and OCS Lung

Source: US FDA data

Other key differentiators

We see the portable feature of the OCS Lung as the device’s main competitive advantage.

Additionally, we recognise that OCS is a multi-organ platform, which could be perceived as

more user-friendly. However, we recognise that TransMedics lacks a proprietary solution,

which likely contributes to the inferior data.

Additionally, we believe the significantly higher price tag will discourage most potential

customers who are not among the core believers in machine perfusion at normothermic

temperatures. Given the clinical documentation, we find the approximately 2-3x higher price

for the disposables kits hard to justify.

Another key differentiator is Xvivo’s collaboration with Lung Bioengineering, a subsidiary of US

biotechnology company United Therapeutics. As part of this collaboration, Lung

Bioengineering has agreed to purchase multiple XPS machines for use at its centres to provide

hospitals with a centralised EVLP service and donor lungs. Currently, two XPSs are in use in

Lung Bioengineering’s centres. We anticipate that the collaboration will allow Xvivo to also

reach lower-volume clinics, which we believe do not have the resources to set up their own

EVLP programmes.

Xvivo TransMedics Xvivo TransMedics Xvivo TransMedics

Number of votes in favour 10 11 10 8 10 9

Number of votes against 0 2 0 5 0 4

There is reasonable assurance

the device is safe

Benefits of the device do

outweigh the risks

There is reasonable assurance

that the device is effective


46

Lastly, we highlight that Xvivo is collaborating with MyCartis to develop a rapid diagnostic test

that uses multiple biomarkers to assess the quality of a donated organ before transplantation.

We believe that molecular testing will be one of the main drivers of innovation in ex vivo

perfusion and consider it encouraging that Xvivo is at the forefront of this development. We

argue that the collaboration is yet another demonstration of Xvivo’s high focus on innovation

and that the feature propels Xvivo even further ahead of its competitors.

Although it has not been validated in large-scale prospective clinical trials, the assay has been

shown to have both high sensitivity and specificity. By relying on signal molecules such as

interleukin-1β, the assay can identify inflammation in lungs during perfusion. As part of the

collaboration, the testing panel will be expanded further to also enable the an objective

quantitative measure of organ damage alongside the degree of inflammation.

Other competitors in ex vivo perfusion

Alongside TransMedics, two other main players have developed systems for ex vivo machine

perfusion: Organ Assist (NL) and Organ Ox (UK). While their technologies have shown some

promise in liver and kidney transplantation, clinical evidence for them in lung and heart

transplantation is lacking. Recognising their somewhat slow-paced expansion on the

commercial side, likely hampered by access to funding, we do not expect them to emerge as

leading players.

EVLP with manual method

Some centres are performing EVLP with off-the-shelf equipment. However, this is generally

performed using STEEN Solution. Furthermore, Xvivo has been able to convert clinics that

previously used the manual method, including a clinic in Canada, a country where the manual

method has a strong presence. Considering this and the more advanced technologies used in

integrated systems and their superior user-friendliness, we expect to see more clinics switch

to using the XPS.

Other technologies and approaches

Companies and research teams are evaluating many approaches that might reduce the need

for organ transplant. We view novel pharmaceutical treatments for chronic and end-stage

organ disease as the largest threat. However, these diseases have different causes and little

progress has been made in recent years.

Additionally, we acknowledge that other technologies, such 3D-printed organs, mechanical

organs, and xeno transplant, are still in their early days and clinically unproven. While xeno

transplant has shown some promise in animal models, we believe that there still would be a

demand for ex vivo perfusion if the method were to be proven in humans. Given the ability to

clean and evaluate the organ, we believe that ex vivo perfusion could be an important measure

to prevent graft rejection. To support this, we consider preclinical trials that have indicated that

ex vivo perfusion could help prevent immune reactions. Furthermore, we recognise that

scientists are working on new approaches, such as immune cloaking, where the endothelial

surface is covered with nano-biolayers that could prevent immune excessive system

interaction.


47

Financial Forecasts Given the few end-customers and its razor-razorblade pricing strategy, Xvivo’s business model

offers high growth potential and high operating leverage, in our view. Recognising the high

penetration of the XPS target market and increasing acceptance for EVLP, we forecast

significant revenue growth and margin expansion over the coming years.

Well-positioned in turbulent times We expect Xvivo, along with other medtechs, to be hurt by the COVID-19 outbreak in the short

term. Currently, industry players are being forced to adapt to a new reality, where supply chains,

face-to-face sales interactions, and elective surgeries are disrupted. It is difficult to predict the

consequences of the crisis at present, but healthcare systems will likely continue be affected

in the near term.

We do recognise, however, that guidelines from the Centers for Medicare & Medicaid Services

(CMS) and various transplant societies recommend that organ transplant should be a top

priority and should not postponed. Furthermore, reports have indicated that activities have

increased in countries that were affected early in the outbreak, such as South Korea and China.

Consequently, we believe that Xvivo is well-positioned when the healthcare system’s recovery

intensifies.


48

CMS Adult Elective Surgery and Procedures Recommendations

Source: CMS, 2020-03-19


49

Sales forecasts In total, we estimate risk-adjusted sales potential of about SEK 3,200m for Xvivo’s product

portfolio. We believe the lung transplant business holds the greatest potential.

Perfadex

We estimate sales potential of almost SEK 300m for Perfadex. Since the first version of

Perfadex lost its patent, two generic versions have become available: Servator P from S.A.L.F.

(ITA) and LungProtect from Carnamedica (PL). This poses a risk that Xvivo’s market share will

decrease with time. We believe the introduction of Perfadex Plus will help fend off competition

over the coming years, but we recognise that a maintained market share relies on ongoing

innovation.

Accounting for this, we conservatively forecast a market share between of 30% and 20% in the

US and Europe, respectively. In APAC, we forecast a long-term market share of about 10%.

However, this is based on the TAM in our lung transplant market model, where Perfadex is used

both prior to and after EVLP. As we do not expect EVLP technologies to penetrate 100% of the

market, the real-life market share is estimated to about 50%. We assume a price in line with

today’s levels, where about USD 2,000 is charged for preservation of lungs during transport

and about USD 1,000 when re-cooling after EVLP.

Sales of Perfadex


Ex vivo perfusion

We estimate that Xvivo’s products for EVLP and EVHP hold sales potential of about SEK

2,750m. Considering the high overlap of clinics performing lung and heart transplants, we

foresee strong synergies in its sales organisation.

Pricing and reimbursement

Xvivo obtained current procedural terminology (CPT) codes from the American Medical

Association in November 2017, simplifying the reimbursement process for hospitals in the US.

In Q1 2019, the company also obtained reimbursement for the process in France. We believe

that reimbursement will follow in other key European markets shortly.

0%

10%

20%

30%

40%

0

50

100

150

200

2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025G

row

th

Sa

les (

SE

Km

)

Sales cold preservation Growth


50

CPT 0494T, 0495T and 0496T cover the whole EVLP process: the preparation of marginal

donor lungs, EVLP on an organ perfusion system of a marginal lung, and the additional hours

needed for an EVLP. The codes are contractor-priced, meaning that Medicare contractors have

the authority to determine reimbursement. The reimbursement is generally established on an

individual case basis after a review of available documentation (e.g. an operative report). This

approach lets Medicare analyse the proliferation of the procedure based on regional

reimbursement variables and determine appropriate national payment levels.

This introduces some uncertainty, as it is possible that Medicare could adopt a lower national

payment level, resulting in pricing pressure. However, organ transplants are very profitable, and

the costs associated with EVLP equipment represent a fraction of the total procedure cost.

Furthermore, we see high incentives to set up a programme for EVLP or EVHP because they

offer benefits to all stakeholders in the organ transplant value chain. For hospitals, they can

provide higher transplant volumes. For payers, they can offer a cost-effective treatment for

end-stage organ disease and reduce post-transplant complication costs and the length of

hospital stay. The strong value proposition is further supported by the total procedure cost of

less than USD 100,000 per quality-adjusted year – a generally accepted threshold value for

treatments to be deemed cost-effective (Ouwents et al., 2003; Vasilis et al., 2005; Mendonça et

al., 2014; Schnitzler et al., 2014).

EVLP equipment represents a fraction of the costs associated with a lung transplant, USA

Source: Milliman (2017), Redeye Research

Considering this, we see little risk of price erosion. For XPS and XHPS disposables, we assume

pricing in line with the list price: USD 22,000 in North America and EUR 17,000 in the rest of the

world. We assume a modest price increase of 2% per year. We assume capital sales of

machines (XPS and XHPS) at the current XPS list price (USD 250,000 in North America and

EUR 180,000 in the rest of the world) throughout our forecast period. We estimate that leases

of machines are priced at about USD 60,000 per year.

EVLP forecast

We estimate sales potential of SEK about 1,800m for Xvivo’s EVLP products. We believe the

US will be the most important market in the short to medium term. As hospitals operate under

the same healthcare system and regulatory requirements across the whole market, we view

the obtained CPT codes as a significant milestone and growth driver in the market.

Furthermore, we believe the company’s collaboration United Therapeutics will be a significant

catalyst for growth in the next one to two years.

30 days pre-transplant3%

Procurement10%

Hospital admission56%

Physician during transplant admission

6%

180 days post-transplant discharge

19%

OP supressants and other rx

4%

EVLP equipment2%

Total cost: USD 1,190,700


51

We typically regard EMEA as a slower market in which to develop new medical devices. Due to

the different requirements and healthcare systems in each country, the process of obtaining

reimbursement is often lengthy and administratively burdensome. Furthermore, acceptance of

innovation is generally lower in comparison to the US. We therefore expect to see a more

gradual ramp-up of sales in this market region over the next years.

Assuming market leadership, we assume a market penetration of 40% in the US, 30% in Europe,

and 10% in APAC for XPS disposables kits by the end of our forecast period.

Net sales & penetration of TAM, XPS & XPS disposables


0

500

1000

1500

2000

Sale

s (

SEK

m)

Sales disposables (SEKm) Sales durable goods (SEKm)

27% 28%31%

34% 35%

41%

48%51%

54%56% 58%

60%62% 63% 63% 63%

4% 3% 3% 5% 6% 7% 9%11%

13%15%

17%19%

21% 22% 24% 23%

0%

15%

30%

45%

60%

75%

Penetr

atio

n

Penetration of TAM, durable goods Penetration of TAM, disposables


52

EV

LP

sale

s mo

de

l

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

XP

S so

ld5

46

64

13

14

79

65

66

42

2

Of w

hic

h n

ew

sale

s5

46

64

22

21

11

00

00

0

Of w

hic

h re

pla

cem

ents

00

00

011

12

58

54

66

42

2

XP

S le

ase

d6

68

88

88

88

88

88

88

8

Centre

s w

ith X

PS

52

56

62

68

72

85

99

106

115

121

126

132

138

142

144

146

Penetra

tion o

f TA

M27%

28%

31%

34%

35%

41%

48%

51%

54%

56%

58%

60%

62%

63%

63%

63%

AS

P X

PS

capita

l sale

s (S

EK

m)

2,2

2,1

2,1

2,1

2,1

2,2

2,2

2,0

2,2

2,2

2,1

2,1

2,1

2,1

1,9

1,9

AS

P X

PS

lease (S

EK

m)

0,5

0,5

0,5

0,5

0,5

0,5

0,5

0,5

0,5

0,5

0,5

0,5

0,5

0,5

0,5

0,5

Sa

les d

ura

ble

go

od

s (SE

Km

)14,1

11,5

17,0

17,0

12,5

33,3

34,7

18,4

23,9

17,5

14,5

17,0

17,0

12,5

8,1

8,1

Eva

lua

tion

s with

XP

S531,6

390,1

546,2

767,4

1050,2

1398,6

1816,1

2304,0

2861,1

3483,8

4166,2

4900,5

5678,0

6488,7

7322,6

7469,0

Eva

luatio

ns p

er X

PS

centre

10,2

7,0

8,8

11,3

14,6

16,5

18,3

21,7

24,9

28,8

33,1

37,1

41,1

45,7

50,9

51,2

Penetra

tion o

f TA

M4%

3%

3%

5%

6%

7%

9%

11%

13%

15%

17%

19%

21%

22%

24%

23%

AS

P X

PS

dis

posable

s k

its (S

EK

m)

0,1

70,2

10,2

10,2

10,2

20,2

20,2

30,2

30,2

30,2

40,2

40,2

50,2

50,2

50,2

60,2

6

Sa

les d

ispo

sab

les (S

EK

m)

91,9

80,0

114,8

164,1

228,5

309,5

408,9

527,8

666,8

826,2

1005,4

1203,5

1419,1

1650,5

1895,8

1968,3

Ne

t sale

s EV

LP

(SE

Km

)106,0

91,5

131,8

181,1

241,0

342,8

443,6

546,2

690,7

843,7

1019,9

1220,5

1436,1

1663,1

1903,9

1976,4

Sourc

e: R

edeye

Researc

h


53

EVHP forecast

We estimate risk-adjusted sales potential of more than SEK 1,000m for Xvivo’s EVHP products.

As mentioned above, we believe the EVHP market dynamic will be similar to that of the EVLP

market. We thus foresee a similar sales development in both markets. However, recognising

the high overlap of clinics performing lung and heart transplants and the increasing experience

with EVLP, we believe the ramp of sales related to EVHP could be slightly faster.

We forecast a launch in 2024 in all major markets. Considering TransMedics’ head start, we

conservatively forecast a market penetration of 20% in the US, 15% in Europe, and 10% in APAC

for XHPS disposables kits. We believe the promising, albeit early, clinical results and experience

gained with the XPS and STEEN Solution support a low development risk and so we estimate

a likelihood of approval (LOA) of 75%.

Net sales & penetration of TAM, XHPS disposables


0

200

400

600

800

1000

1200

2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034

Sale

s (

SEK

m)

North America Europe APAC

13%14%

15% 15%

1% 1% 1%2%

4%5%

7%

9%

11%

2%2%

4%

6%

9%

11%

14%

16%

17%19%

20%

0%

5%

10%

15%

20%

25%

30%

2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034

Penetr

atio

n



54

EV

HP

sale

s mo

de

l

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

XH

PS

sold

14

20

14

75

33

10

014

Of w

hic

h n

ew

sale

s14

20

14

75

33

10

00

Of w

hic

h re

pla

cem

ents

00

00

00

00

00

14

XH

PS

lea

sed

48

12

16

17

18

19

19

19

19

19

Centre

s w

ith X

HP

S18

42

60

71

77

81

85

86

86

86

86

Penetra

tion o

f TA

M5%

12%

17%

20%

21%

22%

23%

23%

23%

23%

22%

AS

P X

PS

capita

l sale

s (S

EK

m)

2,3

2,2

2,3

2,3

2,2

2,1

2,1

2,5

--

2,3

AS

P X

PS

lease (S

EK

m)

0,5

0,5

0,5

0,5

0,5

0,5

0,5

0,5

0,5

0,5

0,5

Sa

les d

ura

ble

go

od

s (SE

Km

)33,7

48,5

37,8

24,1

19,6

15,7

16,2

12,3

9,8

9,8

41,3

Eva

lua

tion

s with

XH

PS

180

295

516

811

1186

1611

2071

2554

3052

3553

4046

Eva

luatio

ns p

er X

HP

S c

entre

10,0

7,0

8,6

11,4

15,4

19,9

24,4

29,7

35,5

41,3

47,0

Penetra

tion o

f TA

M1%

2%

3%

4%

6%

7%

9%

11%

12%

13%

14%

AS

P X

HP

S d

isposable

s k

its (S

EK

m)

0,2

20,2

20,2

30,2

30,2

40,2

40,2

40,2

50,2

50,2

60,2

6

Sa

les d

ispo

sab

les (S

EK

m)

39,5

65,6

117,0

187,6

279,2

385,9

504,5

632,5

767,9

908,3

1051,0

Ne

t sale

s EV

HP

(SE

Km

)73,2

114,1

154,8

211,7

298,8

401,5

520,7

644,8

777,7

918,0

1092,3

LO

A*

75%

75%

75%

75%

75%

75%

75%

75%

75%

75%

75%

Risk

-ad

juste

d n

et sa

les

54,9

85,5

116,1

158,7

224,1

301,2

390,5

483,6

583,3

688,5

819,2

*Lik

elih

ood o

f appro

val

Sourc

e: R

edeye

Researc

h


55

PrimECC

We estimate sales potential of SEK more than SEK 100m for PrimECC. As cardiac surgery is

performed at thousands of hospitals, the potential end-customers for PrimECC are many. As

broad market penetration with a direct sales strategy would place new demands on Xvivo’s

sales and marketing organisation, we argue that a partner sales strategy would be a better fit

with the current business model.

We believe that manufacturers of heart-lung machines, e.g. Medtronic or LivaNova, would be

an ideal match. However, as it is currently uncertain how Xvivo aims to commercialise

PrimECC, we conservatively model a more focused strategy, where the company targets the

highest-volume centres through direct sales. Given the higher use of colloids in Europe, we

expect to see a faster ramp-up of sales in the market region. However, considering the high

volume of procedures performed, we expect the US to offer the greatest potential in the long

term.

We assume a price of USD 250 in the US and USD 150 in Europe across the whole forecast

period. While this represents a significant premium to currently available alternatives, these

products are not optimised for this purpose and are characterised by a low level of innovation.

Furthermore, we acknowledge that the cost comprises a fraction of the total cost for

cardiovascular procedures. According to the Healthcare Cost and Utilization Project (HCUP),

the mean hospital charge for the CABG procedure was USD 168,541 in 2014.

We forecast market launch in 2022 in Europe and 2023 in the US. Our view is that PrimECC will

see its main use in high-risk groups, such as patients with impaired kidney function or

congestive heart failure. Considering this, we estimate a market penetration of 20% in the US

and 10% in Europe and APAC. Given that PrimECC builds on experience gained with Perfadex

and STEEN Solution, we believe the development risk is low. However, given the novel nature

of the product, we conservatively estimate a likelihood of approval (LOA) of 50%.

Net sales & penetration of TAM, PrimECC


0

50

100

150

200

250

2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034

Sale

s (

SEK

m)


1% 1%2%

3%

5%

8%

11%

14%

17%

19%20%

5% 5% 5% 5% 5%

1% 1%3%

4%

6%

8%10%

11%12%

14% 14% 15%

0%

5%

10%

15%

20%

25%

30%

2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034

Penetr

atio

n



56

Cost forecast The clinical development and commercialisation of XHPS, SXHS, and PrimECC will require

significant investments over the coming two years. Thus, we do not expect the company to

maximise profits in the near term. Despite this, we believe that Xvivo has reached a margin

inflection point and we forecast margin expansion ahead.

In the near-term, our forecast assumes a gross margin just short of 80% for disposables. While

we expect the margin to be negatively affected by the product mix in the medium-term, we

believe this will be countered by increasing economies of scale in the longer-term. We expect

increased investments in the commercial organisation and research portfolio to level off

somewhat in 2022, when the company has reached sales of SEK more than SEK 300m. In view

of its razor/razorblade business model, the high gross margins for Perfadex and XPS

disposables kits (>75%), and the concentrated customer base, we expect the company to enjoy

a high degree of operating leverage on its sales.

We forecast that CapEx related to the development portfolio will grow from about SEK 70m in

2020 to about SEK 90m in 2022. In the following years, we expect the growth to taper off. At

the end of our forecast, we estimate that NWC / sales will normalise to about 10%.

Net sales, EBIT margin and cash flow


14% 16%

12%15%

16%

13%

18%20%

23%

28%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

0

50

100

150

200

250

300

350

400

450

2014 2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E

Sale

s (S

EKm

)

Net sales EBIT margin

-100

-50

0

50

100

150

200

2014 2015 2016 2017 2018 2019 2020E 2021E 2022E 2023E

Ca

sh fl

ow

(SEK

m)

FCFF


57

Income statement, Xvivo


2019 2020

(SEKm) Q1 Q2 Q3 Q4 Q1E Q2E Q3E Q4E

Disposables 46,8 50,5 50,1 59,4 44,2 42,1 53,4 69,2

Warm perfusion (estimated) 20,1 22,7 20,6 28,5 11,9 10,6 21,8 35,7

Cold preservation (estimated) 26,7 27,8 29,6 30,9 32,3 31,5 31,6 33,5

PrimECC (estimated)

COGS -10,7 -14,8 -15,8 -16,7 -11,1 -11,7 -11,9 -20,0

Disposables -10,5 -11,5 -11,7 -13,8 -9,1 -9,4 -11,9 -15,5

Durable goods -0,2 -3,3 -4,1 -2,9 -2,0 -2,3 0,0 -4,5

Gross profit 36,9 41,6 38,5 45,7 35,4 33,1 42,3 54,5

Disposables 36,3 39,1 38,5 45,6 35,1 32,7 41,5 53,7

Durable goods 0,7 2,6 0,1 0,1 0,3 0,4 0,8 0,8

OPEX -38,8 -39,7 -36,3 -44,1 -35,4 -33,6 -38,0 -47,9

Selling expenses -12,1 -16,0 -14,4 -18,4 -14,8 -14,0 -15,8 -20,2

Administrative expenses -5,4 -6,1 -6,0 -7,2 -5,6 -5,8 -6,0 -7,3

R&D costs -15,0 -12,9 -16,8 -18,0 -16,9 -9,0 -17,2 -19,8

Other -6,3 -4,7 1,0 -0,6 2,0 -4,7 1,0 -0,6

EBIT -1,9 1,9 2,3 1,6 0,0 -0,5 4,3 6,6

Net f inancial items 1,5 0,5 3,2 -3,8 6,6 0,1 0,1 0,1

EBT -0,4 2,5 5,5 -2,2 6,6 -0,4 4,4 6,7

Taxes 0,1 -0,2 -0,6 0,3 0,0 0,1 -0,9 -1,4

Net income -0,3 2,2 4,9 -1,9 6,5 -0,3 3,5 5,3

EBITDA 3,2 8,1 9,0 8,5 7,6 7,0 11,8 14,1

Growth

Warm perfusion 52% 25% 28% 9% -41% -53% 6% 25%

Cold preservation 8% 15% 22% 18% 21% 13% 7% 8%

PrimECC

Durable goods -81% 54% >200% -50% 164% -53% -81% 74%

Gross margin

Disposables 77% 77% 77% 77% 79% 78% 78% 78%

Durable goods 76% 44% 2% 3% 13% 15% 100% 15%

Total 77% 74% 71% 73% 76% 74% 78% 73%

EBITDA margin 7% 14% 17% 14% 16% 16% 22% 19%

EBIT margin -4% 3% 4% 3% 0% -1% 8% 9%

Net margin -1% 4% 9% -3% 14% -1% 6% 7%

EPS -0,01 0,08 0,26 -0,07 0,25 -0,01 0,13 0,20


58

Income statement, Xvivo


(SEKm) 2016 2017 2018 2019 2020E 2021E 2022E 2023E

Disposables 123 141 173 206,9 208,9 255,2 316,6 395,7

Warm perfusion (estimated) 40,1 49,8 73,7 91,9 80,0 114,8 164,1 228,5

Cold preservation (estimated) 82,4 91,2 99,0 114,9 128,9 140,4 151,4 162,7

PrimECC (estimated) 1,1 4,6

Durable goods 15,7 7,3 15,2 14,0 11,1 17,0 17,0 12,5

Net sales, total 138 148 188 220,8 219,9 272,2 333,6 408,3

COGS -35,9 -34,9 -51,9 -58,0 -54,7 -68,9 -83,8 -99,5

Disposables -24,8 -30,4 -39,4 -47,4 -45,9 -54,4 -69,4 -88,8

Durable goods -11,1 -4,6 -12,5 -10,6 -8,8 -14,4 -14,4 -10,7

Gross profit 102,2 113,4 136,0 162,8 165,3 203,3 249,8 308,8

Disposables 97,7 110,6 133,3 159,4 163,0 200,8 247,3 306,9

Durable goods 4,5 2,8 2,7 3,4 2,3 2,5 2,5 1,9

OPEX -99,5 -106,3 -122,0 -158,9 -154,9 -180,2 -207,6 -238,8

Selling expenses -35,7 -43,7 -47,9 -60,8 -64,9 -74,7 -85,1 -96,9

Administrative expenses -24,5 -20,0 -22,5 -24,7 -24,8 -29,5 -34,7 -40,8

R&D costs -36,7 -39,5 -47,9 -62,7 -62,8 -73,1 -84,2 -96,9

Other -2,6 -3,1 -3,6 -10,7 -2,4 -2,9 -3,5 -4,3

EBIT 2,7 7,1 14,0 3,9 10,4 23,1 42,2 70,0

Net f inancial items 0,3 0,3 3,5 1,4 6,9 2,4 2,7 3,0

EBT 3,0 7,5 17,5 5,3 17,2 25,6 44,9 73,0

Taxes -1,5 -1,2 -4,8 -0,4 -2,2 -5,6 -9,9 -16,1

Net income 1,5 6,3 12,7 4,9 15,0 20,0 35,1 56,9

EBITDA 16,0 22,0 30,9 28,8 40,4 54,1 78,0 112,6

Growth

Warm perfusion 26% 24% 48% 25% -13% 44% 43% 39%

Cold preservation 11% 11% 9% 16% 12% 9% 8% 7%

PrimECC NM NM NM NM NM NM NM >200%

Durable goods 10% -53% 107% -8% -21% 53% 0% -26%

Gross margin

Disposables 80% 78% 77% 77% 78% 79% 78% 78%

Durable goods 29% 38% 18% 24% 21% 15% 15% 15%

Total 74% 76% 72% 74% 75% 75% 75% 76%

EBITDA margin 12% 15% 16% 13% 18% 20% 23% 28%

EBIT margin 2% 5% 7% 2% 5% 9% 13% 17%

Net margin 1% 4% 7% 2% 7% 7% 11% 14%

EPS 0,07 0,24 0,48 0,18 0,56 0,75 1,32 2,14


59

Valuation Xvivo saw a significant sell-off when the COVID-19 outbreak sent markets down earlier this

year. While the share has seen some recovery since then, it is still undervalued in our view.

DCF valuation To value Xvivo we apply a discounted cash flow (DCF) model with a 15-year forecast period.

Our model uses a WACC of 9% (reflecting both current market rates of return and risk specific

to the company) to discount forecasted cash flows. Assuming a terminal growth rate of 2%,

our model indicates a fair value of about SEK 200 per share.

DCF model, Xvivo


(SEKm) 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E 2032E 2033E 2034E TP

EBIT 10 23 42 70 92 137 215 305 418 554 717 894 1092 1308 1334

Depreciation and amortisation 33 31 36 42 51 60 71 84 98 113 130 148 169 191 211

Paid taxes -4 -8 -13 -19 -29 -38 -54 -77 -103 -134 -170 -209 -253 -300 -298

Change in w orking capital 4 -8 -8 -4 -14 -6 -2 -2 1 4 9 14 20 25 0

Other items 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0

Operating cash flow 44 38 57 89 100 153 230 309 414 537 685 847 1027 1223 1247

Change in other long-term liabilities 0 0 0 0 1 1 1 1 1 2 2 2 2 2 1

Gross CapEx, tangible assets -11 -14 -17 -21 -25 -29 -33 -38 -43 -48 -52 -57 -62 -67 -38

Gross CapEx, intangible assets -67 -81 -94 -108 -124 -141 -159 -179 -200 -222 -246 -270 -296 -323 -215

Free cash flow to the firm -34 -56 -53 -39 -48 -15 38 94 173 270 389 522 671 835 995 14492

Discounted FCFF -32 -49 -43 -29 -32 -9 22 49 83 118 156 192 227 259 283 4 121

Sum of FCFF present value 5315

Interest-bearing debt -6

Cash and cash equivalents 160

Value of equity, FCFE 5469

Value per share 206

CAGR 2020-24 21%

CAGR 2024-2034 20%

EBIT margin 2034 44%

EPS 2024 2,82

WACC 9,0%

Terminal grow th rate 2%

Number of shares FY1 (mn) 26,6


60

Sensitivity analysis Since NPV valuations are highly sensitive to the discount rate (WACC) used, we also present a

table to show values at different rates. Moreover, this illustrates the valuation impact of

higher/lower price increases for XPS/XHPS disposables kits and a higher/lower LOA for XHPS

and SXHS.

Effect on value per share, key variables


Multiple-based valuation To further assess Xvivo’s value, we analyse the share against other companies in the same

industry. This approach relies on the assumption that similar companies should trade at similar

valuation multiples. It should, however, be noted that medtech companies are relatively scarce

in Sweden and that consensus estimates are often derived from a limited number of analysts.

For reference, we have compiled a table with Swedish high-growth companies active in medical

technology and supplies. Since forecast growth varies among these companies and some are

in capital-intensive phases, we use EV/Sales, which gives an acceptable indication of their

future cash flows. Based on analyst consensus, the peer group (adjusted for outliers) currently

trades in EV/S ranges of 2.5-112 times 2020 estimates.

We note that the median multiple is 15.6x and that, after excluding the outliers, most

companies are trading in the range of 12.0-35.7x. Companies forecast to grow sales by more

than 25% (range 25-138%) in 2022 are trading in the range of 15.5-35.7x 2021 estimates

(median 17.3x). For slightly more mature companies, forecast to grow sales less than 15%, the

range is 8.2-35.7 (median 13.7).

In our multiple-based approach, we apply a range of 13.0-15.0x EV/Sales to our 2024

estimates. This represents a slight discount to the selected peer group. On the one hand, we

think a slight discount is warranted, as the uncertainty increases as we move further down the

forecast. On the other hand, this target could ultimately prove conservative given the company

is still expected to deliver strong growth in the following years.

WACC

7% 8% 9% 10% 11%

4% 437 331 258 206 168

3% 390 295 231 184 149

2% 348 263 206 164 133

1% 310 235 183 146 119

0% 277 209 163 130 106

WACC

7% 8% 9% 10% 11%

95% 369 280 219 174 142

85% 359 272 212 169 137

75% 348 263 206 164 133

65% 337 255 199 159 129

55% 326 247 193 154 125

SS

& S

XH

S

an

nu

al p

ric

e

inc

rea

se

XH

PS

& S

XH

S

LO

A


61

To arrive at valuation ranges for the share, we discount the estimates at 9% (together with the

net cash position). This approach indicates a value of SEK 188-218 per share, supporting the

upside in our DCF model.

High growth companies, medical technology and laboratory equipment*

Source: Bloomberg

2020 2021 2022 2020 2021 2022 2020 2021 2022 2020 2021 2022

Elekta 39 469 -17% -19% 3,0x 2,8x 2,6x 15,2x 14,1x 12,2x 26,2x 22,4x 18,7x 33,2x 27,7x 22,4x

Getinge 46 453 -1% 30% 1,9x 1,9x 1,8x 9,2x 9,4x 9,1x 14,4x 15,1x 14,1x 17,1x 17,7x 16,7x

Arjo 14 150 17% 32% 2,2x 2,1x 2,0x 11,3x 9,9x 9,1x 25,5x 19,6x 17,2x 23,2x 19,2x 16,8x

Handicare 1 591 -27% -26% 1,2x 1,0x 1,0x 24,8x 8,1x 8,2x N/A 15,1x 15,3x N/A 10,9x 10,5x

Median 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0 0,0

Vitrolife 20 342 -6% -7% 13,7x 12,2x 11,0x 38,9x 31,8x 29,4x 48,5x 38,1x 34,1x 62,1x 49,7x 44,2x

Biotage 9 024 11% 23% N/A 6,8x 6,0x 38,1x 25,4x 22,4x 57,1x 32,8x 28,1x 67,2x 43,7x 37,3x

Cellavision 6 917 -9% -5% 12,9x 11,0x 9,8x 41,0x 32,4x 25,6x 47,8x 36,7x 30,9x 63,0x 45,8x 38,6x

Cellink 6 131 71% 107% 33,1x 17,0x 12,6x N/A 161,9x 65,1x N/A 228,6x 76,7x N/A 304,3x 104,4x

Sedana Medical 5 370 69% 111% N/A 33,5x 20,5x N/A 538,5x 70,8x N/A 1 670,3x 78,7x N/A 1 456,3x 105,4x

Bactiguard 4 545 62% 219% 15,6x 11,0x 8,6x 43,6x 28,2x 21,2x 80,6x 39,0x 26,9x 59,4x 31,8x 22,1x

Raysearch 2 849 -22% -33% N/A 3,1x N/A 10,2x 11,8x 7,5x 33,1x 28,0x 18,6x 71,3x 51,5x 29,9x

Bonesupport 2 350 11% 41% 12,0x 7,3x 5,5x N/A N/A 57,3x N/A N/A 67,4x N/A N/A 71,2x

Genovis 2 193 33% 89% 35,7x 17,8x 14,2x 201,5x 52,7x 38,0x 1 898,3x 59,2x 41,6x 2 233,3x 60,9x 45,3x

Q-linea 1 615 22% 9% N/A 11,4x N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Boule Diagnostics 1 301 -2% 12% N/A 2,7x N/A 18,1x 13,7x 12,4x 25,1x 17,6x 15,5x 37,0x 22,1x 18,7x

SyntheticMR 1 022 13% -11% 17,3x 11,5x 9,1x 85,6x 30,3x 20,5x 130,7x 35,3x 22,7x 173,9x 46,5x 29,9x

Senzime 1 004 -3% 156% 33,8x 15,8x 9,2x 108,8x 21,3x N/A N/A N/A 29,3x N/A N/A N/A

Irras 482 -69% -71% 15,5x 5,0x N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Episurf 283 34% 11% 31,0x 16,8x 8,1x N/A N/A N/A N/A N/A N/A N/A N/A N/A

CLS 252 -8% -34% 15,8x 3,8x N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A

Zenicor 56 -32% -36% N/A 1,8x N/A 26,1x 29,5x 6,1x 74,7x 59,0x 6,8x 247,5x 66,0x 7,8x

Median 15,8 11,0 9,2 40,0 29,9 24,0 57,1 38,1 29,3 67,2 49,7 38,0

High 35,7 33,5 20,5 201,5 538,5 70,8 1898,3 1670,3 78,7 2233,3 1456,3 105,4

Low 12,0 1,8 5,5 10,2 11,8 6,1 25,1 17,6 6,8 37,0 22,1 7,8

2020 2021 2022 2020 2021 2022 2020 2021 2022 2020 2021 2022

Elekta 13 555 13% 7% 7% 4% 9% 19% 20% 21% 11% 13% 14% 8% 9% 11%

Getinge 26 559 9% 5% 12% -1% 3% 20% 20% 20% 13% 13% 13% 9% 9% 9%

Arjo 8 925 8% 5% 5% 5% 5% 19% 21% 22% 8% 10% 11% 6% 7% 8%

Handicare 271 5% -5% -26% 15% -1% 5% 13% 12% NM 7% 7% NM 6% 5%

Vitrolife 1 480 36% 7% -3% 13% 10% 35% 38% 38% 28% 32% 32% 23% 25% 19%

Biotage 1 101 19% 10% -1% 21% 12% 22% 27% 27% 14% 21% 22% 12% 16% 16%

Cellavision 462 27% 16% 18% 17% 12% 31% 34% 36% 27% 30% 32% 20% 24% 25%

Cellink 742 9% 13% 11% 14% 13% 35% 27% 37% 11% 11% 15% 5% 6% 9%

Sedana Medical 72 NM 50% 65% 25% 63% N/A N/A N/A N/A N/A N/A N/A N/A 21%

Bactiguard 62 32% 108% 395% 42% 27% 36% 39% 41% 19% 28% 32% 22% 31% 36%

Raysearch 61 17% 35% -1% 101% 25% 18% 34% 38% 2% 30% 34% 2% 30% 32%

Bonesupport 155 NM 39% 23% 64% 32% N/A N/A 10% N/A N/A 8% N/A N/A 8%

Genovis 499 14% 4% -8% 14% 8% 17% 20% 20% 12% 15% 16% 8% 11% 12%

Q-linea 1 NM 554% 1094% 885% 138% N/A N/A N/A N/A N/A N/A N/A N/A N/A

Boule Diagnostics 46 11% 34% 26% 50% 26% 20% 38% 44% 13% 33% 40% 10% 25% 31%

SyntheticMR 5 NM 233% 439% 208% 122% NM NM NM NM NM NM NM NM NM

Senzime N/A N/A N/A N/A 95% 35% N/A N/A 19% N/A N/A 16% N/A N/A 13%

Irras 7 NM 151% 332% 114% 71% N/A N/A N/A N/A N/A N/A N/A N/A N/A

Episurf 5 NM 67% 20% 85% 108% N/A N/A N/A N/A N/A N/A N/A N/A N/A

CLS 1 NM 357% 1001% 320% 106% N/A N/A N/A N/A N/A N/A N/A N/A N/A

Zenicor 21 NM 29% 10% 35% 45% N/A N/A N/A N/A N/A N/A N/A N/A N/A

Revenue in

2019 (SEKm)

EBIT margin

in 2019

CAGR

2020-2022

Sales growth EBITDA margin EBIT margin Net margin

P/EMarket cap

(SEKm)

Share perf.

YTD

Share

perf. LTM

EV/Sales EV/EBITDA EV/EBIT


62

Appendices The information detailed in this chapter was retrieved from Xvivo’s website 2020-05-29.

Appendix 1. Senior management Magnus Nilsson, CEO

Born 1956, Doctor Med. Sc. at Uppsala Universitet. CEO in XVIVO Perfusion from 2011 and

before that CEO in Vitrolife since 2003. Before that project leader for preclinical and clinical

development, KaroBio AB and Pharmacia & Upjohn AB. Magnus Nilsson will hand over the role

as CEO to Dag Andersson (currently a member of the Xvivo board of directors) on June 1, 2020.

Christoffer Rosenblad, CFO

Born 1975, M. Sc. Mech. Eng. and B. Sc. Fin Ec. Previously business controller at Ciba Vision

Nordic AB, before that financial positions at LG Electronics.

Pär-Ola Larsson, Marketing & sales director

Born 1969, B. Sc. Business Administration, General management studies (CBS). Previously

Business Development Manager Pulmonary and Bronchial Thermoplasty at Boston Scientific,

before that managerial positions within sales, marketing and business development at

Johnson & Johnson.

Katrin Gisselfält, Quality and regulatory director

Born 1969, Ph.D., Polymer Chemistry, Chalmers University of Technology. Previously R&D and

Regulatory Affairs Director at Abigo Medical AB and before that VP R&D with responsibility for

R&D, Regulatory and clinical studies at Artimplant AB.

Henrik Isaksson, Operations director

Born 1971, B. Sc. Business and Economics with additional graduate studies in Business.

Previously Senior Manager Sourcing and Supply Chain at Stryker and before that Product

Manager and Supply Manager positions at Ericsson and Gambro.

Emur Jensen, Development director

Born 1972, B. Sc. Chem. Eng., Professional engineer license for the state of Colorado.

Previously Plant Manager for Vitrolife Inc. and before that engineering and process

development for C&MI Inc.

Appendix 2. Board of directors Gösta Johannesson, Chairman of the board

Chairman of the Remuneration Committee

Born 1959. B.Sc. in Business Administration and Economics. Senior adviser at Bure Equity AB.

Other Board assignments: Vice Chairman of the board in Interflora AB and Axiell Group, board

member in Mentice AB, Yubico AB and others. Earlier Partner at Provider Venture Partners,

before that executive position at Öhman Fondkommission and Handelsbanken Markets.

Shareholding in XVIVO Perfusion: 2 000 shares.


63

Camilla Öberg

Chairman of the Audit Committee

Born 1964, B.Sc. in Business Administration at Stockholm school of economics. CFO

Cybercom Group from 2012 and before that CFO in Logica. Before that management positions

in WM-data, SEB, Lexicon and Swegro Group. Other Board assignments: Board member in

Instalco. Shareholding in XVIVO Perfusion: 1 076 shares.

Folke Nilsson

Member of the Audit Committee

Born 1950. MD, PhD. at University of Gothenburg. Specialist in Cardiothoracic surgery. Earlier

responsible for Heart and Lung transplantation at Sahlgrenska Universitetssjukhuset. Currently

General practitioner. No other Board assignments. Shareholding in XVIVO Perfusion: – shares.

Dag Andersson

Member of the Remuneration Committee

Born 1961, MBA from INSEAD and a BA (Hons) in Business and Commerce from Stockholm

School of Economics. Other Board assignments: Board member in Nolato AB (publ), GHP

Specialty Care AB (publ), Terveystalo oy and Chairman of the Board in Diaverum Middle East.

solid experience from the med tech and life science industry, most recently from the role as

CEO for Diaverum AB during 2008-2018, and before that leading positions in Mölnlycke Health

Care AB during 1993 – 2007. Dag Andersson is independent in relation to the company and

company’s major shareholders. Shareholding in XVIVO Perfusion: 3 000

Yvonne Mårtensson

Member of the Remuneration Committee and the Audit Committee

Born 1953. M. Sc. Ind. Eng. Independent Board Director and Business Advisor. Other Board

assignments: Chairman of the board in Elos Medtech AB, board member in Biotage AB,

SyntheticMR AB and 3Brain AG. More than thirty years’ experience from leading positions in

fast growing companies primarily within medtech and diagnostic. Earlier CEO for CellaVision

AB during 1998-2014. Shareholding in XVIVO Perfusion: 3 000 shares

Appendix 3. Patent portfolio Xvivo has 17 patent families or patent applications at different stages.

Patent applications have been filed for Perfadex Plus in all important markets and the

European patent authority has approved the patent in Europe.

STEEN Solution is protected by patents in 15 countries, including EP validations.

These patents are valid until 2021/2022 and protect both the product and the use of

STEEN Solution.

SXHS is protected by patents in the US, Canada, and Europe. The patents are valid

until 2035. Furthermore, Xvivo has been granted and received patents for the heart

evaluation equipment in Europe, Australia, Canada, and China. These patents are valid

until 2036.

PrimECC is protected by patents in 15 countries, including EP validations. These

patents are valid until 2031. The US patent protects the use of a solution similar to

PrimECC in the priming of a heart-lung


64


65

Summary Redeye Rating The rating consists of three valuation keys, each constituting an overall assessment of several factors that are rated

on a scale of 0 to 1 points. The maximum score for a valuation key is 5 points.

People: 4

Management has extensive industry experience. Xvivo's track record as a listed company is relatively short, but the CEO held an

equivalent position at Vitrolife, which Xvivo was spun off from. The board has relevant industry experience from both medtech

companies of different sizes.

Business: 5

The company has the potential to grow revenues by more than 20 percent annually for a foreseeable future. Investments in clinical

development portfolio strengthens the growth potential in a long-term perspective.

Financials: 3

Xvivo Perfusion is profitable and the earnings trend is headed in the right direction. The company is investing heavily in growth,

however, and clinical development programs will continue to hamper margin expansion in the near to medium-term horizon.


66

PROFITABILITY 2018 2019 2020E 2021E 2022E ROE 2% 1% 2% 3% 6% ROCE 3% 1% 3% 4% 7% ROIC 5% 1% 2% 5% 8% EBITDA margin 16% 13% 20% 20% 23% EBIT margin 7% 2% 5% 9% 13% Net margin 7% 2% 4% 7% 11%

Please comment on the changes in Rating factors……

INCOME STATEMENT 2018 2019 2020E 2021E 2022E Net sales 188 221 220 272 334 Total operating costs -157 -192 -177 -218 -256 EBITDA 31 29 43 54 78 Depreciation -6 -10 -14 -11 -11 Amortization -11 -15 -19 -20 -25 Impairment charges 0 0 0 0 0 EBIT 14 4 10 23 42 Share in profits 0 0 0 0 0 Net financial items 4 1 2 2 3 Exchange rate dif. 0 0 0 0 0 Pre-tax profit 18 5 12 26 45 Tax -5 0 -3 -6 -10 Net earnings 13 5 10 20 35

BALANCE SHEET 2018 2019 2020E 2021E 2022E Assets Current assets Cash in banks 187 160 127 72 20 Receivables 54 56 53 62 72 Inventories 36 44 42 50 60 Other current assets 0 0 0 0 0 Current assets 278 259 221 184 153 Fixed assets Tangible assets 16 24 21 24 30 Associated comp. 0 0 0 0 0 Investments 0 0 0 0 0 Goodwill 66 66 66 66 66 Cap. exp. for dev. 0 0 0 0 0 O intangible rights 214 273 321 382 451 O non-current assets 0 0 0 0 0 Total fixed assets 295 362 407 471 546 Deferred tax assets 14 13 14 16 20 Total (assets) 587 634 642 672 719 Liabilities Current liabilities Short-term debt 0 3 3 2 1 Accounts payable 42 49 48 59 71 O current liabilities 0 0 0 0 0 Current liabilities 42 53 51 61 72 Long-term debt 0 2 2 1 1 O long-term liabilities 1 1 1 2 2 Convertibles 0 0 0 0 0 Total Liabilities 43 56 54 64 75 Deferred tax liab 3 1 1 1 1 Provisions 0 0 0 0 0 Shareholders' equity 540 578 587 607 642 Minority interest (BS) 0 0 0 0 0 Minority & equity 540 578 587 607 642 Total liab & SE 587 634 642 672 719

FREE CASH FLOW 2018 2019 2020E 2021E 2022E Net sales 188 221 220 272 334 Total operating costs -157 -192 -177 -218 -256 Depreciations total -17 -25 -33 -31 -36 EBIT 14 4 10 23 42 Taxes on EBIT 0 0 0 0 0 NOPLAT 14 4 10 23 42 Depreciation 17 25 33 31 36 Gross cash flow 31 29 43 54 78 Change in WC -14 -1 4 -8 -8 Gross CAPEX -54 -92 -78 -95 -111 Free cash flow -37 -64 -31 -48 -41

CAPITAL STRUCTURE 2018 2019 2020E 2021E 2022E Equity ratio 92% 91% 91% 90% 89% Debt/equity ratio 0% 1% 1% 1% 0% Net debt -187 -154 -122 -69 -18 Capital employed 353 423 465 538 624 Capital turnover rate 0.3 0.3 0.3 0.4 0.5

GROWTH 2018 2019 2020E 2021E 2022E Sales growth 27% 18% 0% 24% 23% EPS growth (adj) 101% -61% 95% 107% 76%

DATA PER SHARE 2018 2019 2020E 2021E 2022E EPS 0.48 0.19 0.36 0.75 1.32 EPS adj 0.48 0.19 0.36 0.75 1.32 Dividend 0.00 0.00 0.00 0.00 0.00 Net debt -7.09 -5.80 -4.60 -2.58 -0.67 Total shares 26.40 26.60 26.60 26.60 26.60

VALUATION 2018 2019 2020E 2021E 2022E EV 3,298.1 4,367.7 3,686.8 3,740.5 3,791.2 P/E 274.7 915.6 394.7 190.8 108.6 P/E diluted 274.7 915.6 394.7 190.8 108.6 P/Sales 18.6 20.5 17.3 14.0 11.4 EV/Sales 17.6 19.8 16.8 13.7 11.4 EV/EBITDA 106.7 151.7 85.0 69.4 48.7 EV/EBIT 235.6 1,108.6 356.0 161.6 89.7 P/BV 6.4 7.8 6.5 6.3 5.9

SHARE INFORMATION Reuters code XVIVO.ST List Mid Cap Share price 143.2 Total shares, million 26.6 Market Cap, MSEK 3809.2 MANAGEMENT & BOARD CEO Magnus Nilsson CFO Christoffer Rosenblad IR Chairman Gösta Johannesson FINANCIAL INFORMATION ANALYSTS Redeye AB Arvid Necander Mäster Samuelsgatan 42, 10tr [email protected] 111 57 Stockholm Mats Hyttinge [email protected]

SHARE PERFORMANCE GROWTH/YEAR 18/20E 1 month 2.3 % Net sales 8.2 % 3 month -3.9 % Operating profit adj -14.0 % 12 month -20.1 % EPS, just -13.1 % Since start of the year -15.8 % Equity 4.2 %

SHAREHOLDER STRUCTURE % CAPITAL VOTES Bure Equity 15.8 % 15.8 % Swedbank Robur Fonder 6.9 % 6.9 % Eccenovo AB 5.8 % 5.8 % Fjärde AP-fonden 4.7 % 4.7 % Handelsbanken Fonder 3.9 % 3.9 % Invesco 3.8 % 3.8 % State Street Bank And Trust co 3.5 % 3.5 % Skandinaviska Enskilda Banken S.A 2.8 % 2.8 % Norron Fonder 2.7 % 2.7 % Tredje AP-fonden 2.0 % 2.0 %

DCF VALUATION CASH FLOW, MSEK WACC (%) 9.0 % NPV FCF (2020-2021) -124 NPV FCF (2022-2028) 201 NPV FCF (2029-) 5238 Non-operating assets 160 Interest-bearing debt -6 Fair value estimate MSEK 5469 Assumptions 2020-2026 (%) Average sales growth 26.0 % Fair value e. per share, SEK 205.6 EBIT margin 14.6 % Share price, SEK 143.2


67

Redeye Rating and Background Definitions Company Quality

Company Quality is based on a set of quality checks across three categories; PEOPLE, BUSINESS, FINANCE. These

are the building blocks that enable a company to deliver sustained operational outperformance and attractive long-

term earnings growth.

Each category is grouped into multiple sub-categories assessed by five checks. These are based on widely

accepted and tested investment criteria and used by demonstrably successful investors and investment firms. Each

sub-category may also include a complementary check that provides additional information to assist with

investment decision-making.

If a check is successful, it is assigned a score of one point; the total successful checks are added to give a score for

each sub-category. The overall score for a category is the average of all sub-category scores, based on a scale that

ranges from 0 to 5 rounded up to the nearest whole number. The overall score for each category is then used to

generate the size of the bar in the Company Quality graphic.

People

At the end of the day, people drive profits. Not numbers. Understanding the motivations of people behind a business

is a significant part of understanding the long-term drive of the company. It all comes down to doing business with

people you trust, or at least avoiding dealing with people of questionable character.

The People rating is based on quantitative scores in seven categories:

Passion, Execution, Capital Allocation, Communication, Compensation, Ownership, and Board.

Business

If you don’t understand the competitive environment and don’t have a clear sense of how the business will engage

customers, create value and consistently deliver that value at a profit, you won’t succeed as an investor. Knowing

the business model inside out will provide you some level of certainty and reduce the risk when you buy a stock.

The Business rating is based on quantitative scores grouped into five sub-categories:

Business Scalability, Market Structure, Value Proposition, Economic Moat, and Operational Risks.

Financials

Investing is part art, part science. Financial ratios make up most of the science. Ratios are used to evaluate the

financial soundness of a business. Also, these ratios are key factors that will impact a company’s financial

performance and valuation. However, you only need a few to determine whether a company is financially strong or

weak.

The Financial rating is based on quantitative scores that are grouped into five separate categories:

Earnings Power, Profit Margin, Growth Rate, Financial Health, and Earnings Quality.


68

Redeye Equity Research team

Management Björn Fahlén

[email protected]

Håkan Östling

[email protected]

Technology Team Jonas Amnesten

[email protected]

Henrik Alveskog

[email protected]

Havan Hanna

[email protected]

Kristoffer Lindström

[email protected]

Erika Madebrink

[email protected]

Fredrik Nilsson

[email protected]

Tomas Otterbeck

[email protected]

Eddie Palmgren

[email protected]

Oskar Vilhelmsson

[email protected]

Viktor Westman

[email protected]

Editorial Eddie Palmgren

[email protected]

Mark Siöstedt

[email protected]

Life Science Team Gergana Almquist

[email protected]

Oscar Bergman

[email protected]

Anders Hedlund

[email protected]

Arvid Necander

[email protected]

Erik Nordström

[email protected]

Klas Palin

[email protected]

Jakob Svensson

[email protected]

Ludvig Svensson

[email protected]

Niklas Elmhammer

[email protected]

Mats Hyttinge

[email protected]


69

Disclaimer Important information Redeye AB ("Redeye" or "the Company") is a specialist financial advisory boutique that focuses on small and mid-cap growth companies in the Nordic region. We focus on the technology and life science sectors. We provide services within Corporate Broking, Corporate Finance, equity research and investor relations. Our strengths are our award-winning research department, experienced advisers, a unique investor network, and the powerful distribution channel redeye.se. Redeye was founded in 1999 and since 2007 has been subject to the supervision of the Swedish Financial Supervisory Authority. Redeye is licensed to; receive and transmit orders in financial instruments, provide investment advice to clients regarding financial instruments, prepare and disseminate financial analyses/recommendations for trading in financial instruments, execute orders in financial instruments on behalf of clients, place financial instruments without position taking, provide corporate advice and services within mergers and acquisition, provide services in conjunction with the provision of guarantees regarding financial instruments and to operate as a Certified Advisory business (ancillary authorization). Limitation of liability This document was prepared for information purposes for general distribution and is not intended to be advisory. The information contained in this analysis is based on sources deemed reliable by Redeye. However, Redeye cannot guarantee the accuracy of the information. The forward-looking information in the analysis is based on subjective assessments about the future, which constitutes a factor of uncertainty. Redeye cannot guarantee that forecasts and forward-looking statements will materialize. Investors shall conduct all investment decisions independently. This analysis is intended to be one of a number of tools that can be used in making an investment decision. All investors are therefore encouraged to supplement this information with additional relevant data and to consult a financial advisor prior to an investment decision. Accordingly, Redeye accepts no liability for any loss or damage resulting from the use of this analysis. Potential conflict of interest Redeye’s research department is regulated by operational and administrative rules established to avoid conflicts of interest and to ensure the objectivity and independence of its analysts. The following applies:

For companies that are the subject of Redeye’s research analysis, the applicable rules include those established by the Swedish Financial Supervisory Authority pertaining to investment recommendations and the handling of conflicts of interest. Furthermore, Redeye employees are not allowed to trade in financial instruments of the company in question, from the date Redeye publishes its analysis plus one trading day after this date.

An analyst may not engage in corporate finance transactions without the express approval of management and may not receive any remuneration directly linked to such transactions.

Redeye may carry out an analysis upon commission or in exchange for payment from the company that is the subject of the analysis, or from an underwriting institution in conjunction with a merger and acquisition (M&A) deal, new share issue or a public listing. Readers of these reports should assume that Redeye may have received or will receive remuneration from the company/companies cited in the report for the performance of financial advisory services. Such remuneration is of a predetermined amount and is not dependent on the content of the analysis.

Redeye’s research coverage Redeye’s research analyses consist of case-based analyses, which imply that the frequency of the analytical reports may vary over time. Unless otherwise expressly stated in the report, the analysis is updated when considered necessary by the research department, for example in the event of significant changes in market conditions or events related to the issuer/the financial instrument. Recommendation structure Redeye does not issue any investment recommendations for fundamental analysis. However, Redeye has developed a proprietary analysis and rating model, Redeye Rating, in which each company is analyzed and evaluated. This analysis aims to provide an independent assessment of the company in question, its opportunities, risks, etc. The purpose is to provide an objective and professional set of data for owners and investors to use in their decision-making. Redeye Rating (2020-05-29)

Duplication and distribution This document may not be duplicated, reproduced or copied for purposes other than personal use. The document may not be distributed to physical or legal entities that are citizens of or domiciled in any country in which such distribution is prohibited according to applicable laws or other regulations. Copyright Redeye AB.

Rating People Business Financials

5p 14 12 4 3p - 4p 108 82 32 0p - 2p 6 34 92 Company N 128 128 128

CONFLICT OF INTERESTS

Arvid Necander owns shares in the company : Yes Mats Hyttinge owns shares in the company : No Redeye performs/have performed services for the Company and receives/have received compensation from the Company in connection with this.

XVIVO PerfusionXvivo’s commercial and clinical progress, strong positioning for a surgical pick...

Documents

Transcript of XVIVO PerfusionXvivo’s commercial and clinical progress, strong positioning for a surgical pick...