Good morning, Armchair Army,
Welcome to today's edition of The Armchair Analyst, a 5-minute daily update on the ASX life-sciences sector.
I'm in Melbourne with Surgeon Dan.
He's down for the Bio Connections conference this week; come say hi if you're attending.
Last night, over dinner, we were pulled apart an announcement that dropped late Friday night.
"EBR responds to Speculation”
(Source: EBR)
It sounded juicy.
It was.
What happened?
In July, the FDA's MedSun newsletter was published.
MedSun is a notice board that reports product safety issues from clinical facilities.
(Source: MedSun)
On page 3 of the newsletter, EBR’s Wise (Wireless and leadless pacemaker) was flagged:
Two patients had issues:
Patient A - required a defibrillation shock from their implanted cardiac device and was resuscitated.
Patient B - suffered cardiac arrest and could not be resuscitated, resulting in death.
This happened during a routine post-implant echocardiogram and was reported by the clinic itself.
This notice is from the clinic, NOT the FDA.
In late July, internet forum HotCopper got hold of the notice, and the stock started to turn down.
The “speculation”.
Then on Friday came peak speculation, when the company finally responded.
The company’s response:
“The Company’s internal assessment is that this is an isolated event related to a disclosed risk that is mitigated when following the recommended echocardiography (imaging) procedures.”
The response was the right call.
The market hates silence.
The stock rebounded after the company’s response, particularly as it said that there are “no ongoing concerns” with the device.
This was particularly juicy because the company had announced a fully underwritten $150 million capital raise last month.
The underwriter? Australia’s largest biotech fund, Brandon Capital.
They also opened, marked and closed a retail offering across this window.
(Source: EBR - June 4th)
So, what’s the take?
Given that I’m sitting on the train next to a literal surgeon, Surgeon Dan, I’ll hand it over to him to help me dissect what happened.
… pun very intended.
The Surgeon’s Cut
Hi Armchair Army, Surgeon Dan here,
EBR sells a leadless pacemaker device, which has been approved by the FDA.
Looking at the Instructions for Use published by EBR and endorsed by the FDA, there is a caution around ultrasound.
(Source: EBR Instructions for Use, Section 5.4)
The instructions for use state that the electrode implanted in the heart can receive ultrasound, but there are risks.
The risk is highest in the first 30 days after implant.
It recommends ECG monitoring during any diagnostic echocardiography, and that a defibrillator be available.
If extra pacing stimulation occurs, stop imaging, remove the probe, then consider reducing power output, using a different imaging mode, or changing the probe position.
The Wise device itself uses sound waves (ultrasound) to deliver wireless heart pacing.
So it makes sense that an external ultrasound could have complications (as flagged by the company itself).
What's the challenge here?
Ultrasound is the technology that runs echocardiograms.
Echocardiograms are the routine, mainstay diagnostic tool for measuring heart structure and function.
The keyword being “routine”.
While this appears to be an isolated incident - localised to one facility that did not appear to follow the guidelines correctly - it does highlight a workflow challenge in large-scale real-world use.
From my personal experience, echoes happen all the time.
They happen in a variety of settings - emergency departments, radiology, the ward - where the operator may not be trained on, or even aware of, the specific safety issues with this device.
It’s important to note that EBR does mitigate the workflow risks through site training, ID cards, bracelets and pendants - to make the sonographer aware of patients with the device and potential safety issues with running an echo.
What happens now?
The company will likely do a root cause analysis.
What happened? Where was the breakdown?
If the site was trained?
Were the protocols in place to make sure that it was safe?
These are important questions for EBR to answer to demonstrate that the workflow creates the safest environment for the device to use.
EBR is at the early stages of commercialisation, and a hiccup like this can stall a device rollout while surgeons wait for more safety information.
(We are a risk-averse bunch.)
But the FDA did approve the device knowing these risks.
Watch this space…
The Pulse Check
Imricor Medical Systems (ASX: IMR) launches U.S. commercial operations with Rady Children’s Hospital as the first customer. (IMR)
🪑 Off to the races. Well done.
Imugene (ASX: IMU) announces the resignation of CEO Leslie Chong. (IMU)
BLS Pharmaceuticals (ASX: BLS) reports record FY26 revenue of $74.98M, a 156% increase on the previous year and adjusted EBITDA of $19M. (BLS)
🪑 Monster year. Well done.
Just hit the “high” guidance number for BOTH revenue and EBITDA.
OpenAI officially launches ChatGPT Health for US users. (OpenAI)
🪑 Will be very interesting to see how this plays out.
See you all tomorrow,
The Armchair Analyst
