Carmat’s future rests with core backers.

Carmat's future rests with core backers.

Troubled Carmat Appeals to Key Shareholders, Including Airbus, for Funds

Carmat

PARIS, Sept 29 (ANBLE) – Troubled artificial heart maker Carmat (ALCAR.PA) is appealing to key shareholders led by Airbus (AIR.PA) to invest new funds to avoid the collapse of the 30-year-old venture dating back to a chance meeting between a French surgeon and a missile magnate.

Shares in the French medtech champion plummeted 37% this week after it warned it could run out of cash at the end of October following supply issues, as it actively explores “several financing options”.

The Origins of Carmat

Carmat’s inception can be traced back to 1993 when the late industrialist Jean-Luc Lagardere, one of the founders of Airbus, diverted engineers from his precision missile parts business to embark on a new venture with renowned heart surgeon Alain Carpentier. Boldly named Carmat, the company went public and Airbus now holds a 12% stake in it.

Urgent Appeal for Funding

Stephane Piat, CEO of Carmat, expressed the urgent need for existing shareholders, including Airbus, to participate in fundraising efforts, emphasizing the vital role they play in the company’s survival. Piat stated, “This is the message which we are giving to our existing shareholders: that we live thanks to them. They are the ones who decide whether or not we pursue and so they have the most important role among our shareholders. We hope that (the decision) will be positive.”

Funding talks are currently underway, with the French government being made aware of the situation. President Emmanuel Macron has recognized the significance of health technology, with Carmat being one of the few companies developing alternatives to heart transplants in the face of organ shortages.

Financial Challenges and Future Plans

According to sources, Carmat, which had 24 million euros in cash at mid-year, aims to raise approximately 100 million euros, although the company has not officially disclosed amounts. The decision to invest further in the firm will be a pressing matter for Thomas Toepfer, the new finance director of Airbus.

Samir Devani, the managing director of Rx Securities, highlights the challenging market conditions for raising equity capital in healthcare stocks currently. He notes that smaller healthcare firms, which burn through cash, have underperformed the market this year.

The Aeson Prosthetic Heart and Expansion in the U.S.

Carmat’s Aeson prosthetic heart, which costs around 90,000 euros to manufacture, is connected to a battery and controller carried in a pouch. Currently, 13 people are fitted with the device. However, if Carmat fails to secure the necessary funding, contingency plans must be made to ensure support for these patients.

The company obtained European approval in 2020 for its “Bridge-to-Transplant” devices, allowing them to be fitted to individuals awaiting heart transplants. The implants were temporarily suspended in December 2021 due to quality issues but received clearance to resume in late 2022.

Carmat is actively conducting feasibility studies in the United States and plans to apply for FDA pre-market approval by the end of 2026, further expanding its reach.

Airbus’s Role and Investments

Although Airbus has previously stated that Carmat is non-core, it has contributed to periodic cash calls. In March 2022, Airbus invested 10 million euros in the company. While Carmat remains a part of the largely dormant Matra Defense unit inherited from Lagardere, Airbus continues to invest in medical research. In collaboration with Zurich University, Airbus is exploring the growth of human tissue in space to treat damaged organs.

Looking Ahead

Carmat’s appeal to key shareholders, notably Airbus, to inject new funds into the company is crucial for its survival. As talks continue and the fate of the artificial heart maker hangs in the balance, the decision to invest will play a pivotal role in determining Carmat’s future. With President Macron’s focus on health technology and the scarcity of organ donors, it is hoped that adequate funding can be secured to sustain Carmat’s pioneering work in providing alternatives to heart transplants.