Dive Brief:

• TransMedics on Tuesday said it received FDA premarket approval for its system to preserve hearts donated after brain death that would otherwise be deemed unsuitable for transplant due to the limits of prolonged cold static storage.
• The OCS Heart System will allow surgeons to assess donor heart viability in real time and is expected to save lives by expanding the pool of acceptable hearts, Dr. Jacob Schroder of Duke University Medical Center said in a press release from TransMedics. Approval was based on results from the OCS Heart EXPAND and PROCEED II clinical trials.
• The heart system's approval comes less than two months after an FDA advisory panel voted to back TransMedics' OCS liver preservation technology despite an analysis from the agency that suggested the company could face hurdles navigating the PMA process for that device.

Dive Insight:

FDA's green light for TransMedics to market the heart preservation system follows the agency's 2019 approval and subsequent commercialization of the company's OCS Lung System, which includes a portable enclosure with mechanical and electrical components that warm, ventilate and supply the lungs with fluid. The system also employs a preservation solution combined with packed red blood cells and allows the transplant team to monitor the donor organs while they are being perfused.

Analysts at J.P. Morgan said the label for the heart preservation system came in broader than the company anticipated.

"This broad label gives TransMedics access to both extended criteria hearts and about 25% of standard criteria hearts, leaving it up to physicians to drive adoption based on their understanding of the need," the J.P. Morgan analysts wrote in a note to clients.

TransMedics plans initially to roll out the device with the 25 centers it has already engaged with, the J.P. Morgan report said. The launch could modestly increase TransMedics' heart revenue in the fourth quarter, and the analysts expect additional centers to be added toward the end of the year and into 2022.

CEO Waleed Hassanein said in the Tuesday release that the company plans to start an OC heart perfusion registry and could expand its clinical indications in the future.

The company is also seeking FDA approval for its OCS Liver System, which received support in July from FDA's Gastroenterology and Urology Devices Panel of expert advisers. J.P. Morgan said the liver preservation device is on track for approval in the fourth quarter.

"All in, we see this update as a win for TransMedics given the contentious panel and feel incrementally positive about the opportunity for OCS Heart," the analysts wrote.

After dropping by nearly 3% on Friday, investors continued to sell off TransMedics stock despite the product approval. The company's stock price dropped by 2.6% Tuesday and was down by about 2.5% when the market opened Wednesday.