(News Bulletin 247) – Artificial heart designer Aeson announced a new fundraising round this Wednesday to give itself some breathing room. With an initial amount of 10.3 million euros that can be increased to nearly 14 million at most, Carmat is hoping to extend its financial visibility until the end of the year with this operation.

Time is running out for Carmat, which is once again playing for its financial survival. At the beginning of September, the designer of the artificial heart had estimated its financing needs for the next twelve months at 45 million euros.

However, at the end of June, the group’s cash position stood at 11.4 million euros and its financial resources, which include part of a dilutive financing package put in place at the beginning of July, do not ensure the financing of its activities until the end of September.

“We still believe that finding the remaining 45 million euros to bridge the gap until next year will not be a walk in the park,” Degroof Petercam said a few days ago.

The group founded in 2008, therefore having only a few weeks of financial visibility, must therefore go through the capital increase stage to continue its development beyond this deadline.

A new fundraising

Carmat is therefore once again asking the markets to give itself some financial breathing space in the short term. In detail, this fundraising announced this Wednesday takes the form of a capital increase of an initial amount of 10.3 million euros. This amount can be increased to a maximum amount of 13.6 million euros in the event of full exercise of the extension clause and the over-allotment option.

Carmat has set the subscription price at 1.66 euros, representing a discount of 24.5% compared to the average of the volume-weighted average prices of the last five trading sessions preceding the setting of this price. The subscription period has been open since Wednesday, September 18 and runs until September 26, 2024 inclusive.

The problem is that this operation is once again carried out with the removal of the preferential subscription right. But shareholders will be able to benefit in return from a priority period of seven trading days, on an irreducible and reducible basis.

This transaction received subscription commitments and guarantee commitments of €6.7 million, representing 65.2% of the initial amount of the transaction. Including those of historical shareholders, namely Lohas and Santé Holdings for €4.5 million.

On the Paris Stock Exchange, Carmat shares logically fell by 12.2% around 10:10, to 1.79 euros after the announcement of this crucial operation for the finances of the medtech. This operation will unsurprisingly be dilutive for existing shareholders, a dilution is estimated at around 15% by Degroof Petercam.

The fact remains that this call to the market will only provide a fairly modest breath of fresh air to the company. The funds raised should allow Carmat to hold out until the end of the year. However, the designer of the artificial heart estimates its need for additional funding for the next twelve months at between 36 million euros and 38 million euros, after this fundraising.

The company says it is working on a gradual extension of its financing horizon to 12 months, in several stages, and does not rule out one or more additional capital increases in the future.

Oddo BHF analysts recalled last July that the theme of financing and commercial momentum (pace) will be the two main subjects to follow in the second half of the year.

Disappointing accounts

Carmat announces this new call to the market, which is crucial for its survival, a little over 10 days after lowering its turnover target for 2024.

The company is now only counting on revenues of 8 million to 12 million euros for 2024, compared to a previous target of 14 million euros. “This new orientation implies between 15 and 35 commercial implants for the year, which seems more reasonable given that they have already carried out 7 in the first half of the year,” Degroof Petercam explained at the beginning of September.

In its note published this Wednesday, the research office recalls that it is counting on an annual peak in Aeson sales of 750 million euros by 2038, of which around 30% for the transition to transplantation and around 70% for destination therapy.

“Having overcome the obstacles inherent in the development of medical technologies (i.e. quality issues, supply chain challenges, etc.), Carmat is now on the right track to deliver on its promises,” say Degroof Petercam experts.

But before Aeson is rolled out on a massive scale, Degroof Petercam points out that the company still needs around 150 million euros to reach its break-even point by 2027.

“The objective is to bridge the gap until the company finds an institutional investor who could help it raise this additional capital. We believe that the commercial success of the Aeson artificial heart in the coming years will be crucial to achieve this objective. The progress made so far in 2024 at the commercial level is encouraging,” comment Degroof Petercam. The latter remain buyers of the file judging that “the fundamentals are solid”, despite a “lack of visibility in terms of financing”.