Transcription of The Stock Network Interview with EBR Systems (ASX:EBR), Chief Corporate Development Officer, Andrew Shute
Lel Smits: EBR Systems is building a fast-growing medical device company with the world’s only leadless pacemaker technology designed to improve outcomes for heart failure patients. The Silicon Valley based company’s YCRT system delivers wireless pacing directly inside the heart, representing a major advancement over traditional cardiac resynchronization therapy devices that rely on leads and wires. Following strong commercial momentum in the United States, EBR has launched a fully underwritten $150 million capital raising to support sales, expansion, manufacturing, scale-up, research and development, and working capital as it targets cash flow break-even.
I’m joined today by Andrew Shute, Chief Corporate Development Officer at EBR Systems, to discuss the company’s capital raising, growing commercial momentum, recent healthcare network agreements, progress towards broader adoption of the YCRT system, and the key milestones ahead as EBR targets cash flow break-even.
Andrew, welcome to the Stock Network.
Andrew Shute: Great, thanks. Always a pleasure to talk to you.
Lel Smits: Now, EBR has launched a fully underwritten $150 million capital raising. Also stated, the proceeds are intended to fund the company through to cash flow break-even. What does this funding enable EBR Systems to achieve over the next few years as you scale commercial adoption of the YCRT system across the United States?
Andrew Shute: Yeah, thanks. So firstly, it allows us to continue to invest in expansion of our sales team. We exited Q1 with 12 sales territories in place.
And our goal as we move forward is to continue to expand by adding four additional sales territories every six months. And then the second would be a big focus on manufacturing. We have a new facility that will come online gradually this year.
And this will allow us to move away from relying on contract manufacturers to become vertically integrated. And this in turn will allow us to really focus on reducing our cost of goods through one through scale as we expand our commercial growth, but also through other activities including automation, improving yields and design for manufacturing. Excellent.
Lel Smits: And Andrew, CMS has initiated a national coverage determination reviews for the YCRT system. How important is this process for expanding patient access, also supporting the future adoption across the US healthcare system?
Andrew Shute: Yeah, we’re really excited by that news from CMS. And just by coincidence, it was released on the day of our capital raise.
So as most people would be aware, we already have reimbursement in place through both the ANTAP and TPT reimbursement schemes, which allows us to have a selling price of $63,300. But this decision by CMS will lead towards a national coverage decision, which will last for five years. And that will essentially mandate payers to reimburse the procedure and the device.
Lel Smits: Fantastic. And look, EBR has also recently secured three purchasing agreements with large US networks, including HCA Healthcare, Advocate Health, also Christus Health. What is the significance of these announcements?
Andrew Shute: Well, I think collectively, Lel, they’re really important.
These three are in the top 10 purchasing groups within the US. And for our sales reps in the field, this removes one of the barriers to adoption or the speed to adoption, which is having to arrange the contracting process. And if we think about HCA specifically, we actually had a pilot site.
In fact, it was the first commercial site that we had in the US, St. David’s in Austin, Texas. Their administration allowed them to go ahead and perform seven procedures. They then paused and waited until they received their reimbursement from CMS.
And this ended up being a very profitable procedure for them. And that gave the wider HCA administration confidence to go ahead and issue a national purchasing agreement.
Lel Smits: Great. And look, Andrew, in terms of commercial momentum and next steps, it has been a very busy period for the company, that $150 million capital raising, growing hospital partnerships, also that continued commercial progress for the YCRT system. Looking ahead, what are the key milestones that you think investors should be watching as EBR really works towards that broader adoption and cashflow break-even?
Andrew Shute: Yeah, I think, Lel, the first would be continued revenue growth. And this will come about through two parts.
One, opening additional accounts. And secondly, in our established hospitals, look for deeper penetration, deeper utilisation. And the second would be improvement in our cost of goods as we move into 2027 and 28.
Lel Smits: Andrew, I appreciate the update from EBR Systems. Look forward to seeing what comes next.
Andrew Shute: Thanks, Lel. Appreciate your time.
Ends