RENERVE LTD

ReNerve Limited (ASX:RNV) is an Australian medical device company focused on developing and marketing medical devices to enhance surgical procedures and patient outcomes for invasive nerve surgery. The company’s first product, the FDA-approved NervAlign® Nerve Cuff, is already available in the U.S. market, with three additional products currently in development.

The Scale of the Global Nerve Repair Market Continues to Grow. The global market for biological medical devices for peripheral nerve injury (PNI) repair was valued at USD$1.68Bn in 2023 and is forecast to grow to US$6.2Bn in 2031. ReNerve aims to capitalise on this growth through a multi-product strategy and by expanding into additional jurisdictions beyond the U.S. This approach positions the company to capture market share in a PNI market largely dominated by products that do not provide optimal patient outcomes, giving ReNerve a significant competitive advantage.

Strong Market Traction and Growing Adoption. ReNerve has demonstrated market traction since the recent launch of the NervAlign® Nerve Cuff in 2022. Sales reached $177k in FY24, marking a 38% increase from $128k in FY23. This growth reflects the increasing awareness of the NervAlign® Nerve Cuff’s ability to deliver superior patient outcomes, driving its adoption among hospitals and surgeons across the U.S. ReNerve’s ongoing investment in a targeted sales and marketing strategy is expected to further accelerate revenue growth and solidify its position as a superior product in the market.

Significantly Undervalued on an Intrinsic Basis. ReNerve presents a compelling investment opportunity, with its intrinsic value significantly underappreciated by the market. Read our in-depth research report on ReNerve Limited to access our detailed discounted cash flow valuation and gain deeper insights into the company’s potential.

 

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Company Overview

ReNerve (ASX:RNV) is a company focused on developing and marketing innovative medical devices designed to improve surgical procedures and patient outcomes in nerve surgery. The company was founded to create a comprehensive portfolio of products tailored for hand and wrist, foot and ankle, breast, neurosurgical, and plastic surgical procedures. These products aim to enhance the repair and regeneration of peripheral nerves, ultimately delivering superior patient outcomes. ReNerve seeks to achieve this by developing and offering solutions that:

• protect nerve regrowth from scarring and the negative effects of inflammation;

• provide an ideal, debris-free environment for the nerves to regenerate and re-establish nerve function back to native condition and promote cell proliferation;
• absorbed naturally within 6 months which minimises the risks of post-surgery complications and longer-term detriment to the patient; and
• offer convenience and surgical ease of use to surgeons engaged in peripheral nerve injury repairs.

Peripheral Nerve Injuries Explained

Peripheral nerves are those located outside the spinal cord and central nervous system, playing a crucial role in everyday functions such as movement, walking, running, speaking, jumping, and eating. The proper functioning of peripheral nerves is essential for daily life. However, these nerves are vulnerable to damage from trauma, accidents, surgeries, or congenital conditions. As a result, restoring injured peripheral nerves is critical for improving quality of life and ensuring patients regain their essential abilities.

Peripheral nerve injuries (PNI) can result from trauma in one of three ways:

• Transections (cut) – nerves that have been partially or completely cut through severing the connection. Causes include knife wounds, gunshot wounds, motor vehicle accidents, surgical injuries and power tool accidents.
• Compression – crushing or compression of the nerve due to trauma or inflammation such as carpal and cubital tunnel.
• Neuroma – the result of amputations, ectomies such as mastectomies and gastrectomies.

All three of these nerve injury categories can severely impact the peripheral nervous system, adversely affecting the patient’s sensory, motor and mixed functions. ReNerve is focused on developing products to better treat PNI, improve patients’ quality of life and promote independence post-surgery.

Market Overview

ReNerve competes in the global nerve repair and surgical reconstruction markets. The global market for biological medical devices for peripheral nerve injury repair was valued at USD$1.68Bn in 2023 and is forecast to grow to US$6.2Bn in 2031, representing a compound annual growth rate (CAGR) of 17.8% (Global Nerve Repair Biomaterials Market Research Report, 2020-2031). In addition to the healthcare and economic burden (estimated in the US at US$4bn per annum), the impact on productivity of PNI is significant as most patients are of productive age and can face long periods of rehabilitation and varied post-surgery outcomes.

Product Overview

ReNerve is confident that its products offer superior nerve regeneration for patients with PNI when compared to existing treatment methods and competing nerve repair products. The company believes that incorporating its products into PNI surgical procedures can lead to significant improvements in patient outcomes, including reduced pain, enhanced motor function, increased flexibility, and better overall nerve recovery.

ReNerve currently has one (1) product with regulatory clearance for use in the US market along with a portfolio of three (3) additional products at varying stages of development:

• the NervAlign® Nerve Cuff (FDA approved and in market)
• the NervAlign® Nerve Conduit (in commercial development)
• the NervAlign® Nerve Guide Matrix (in commerical development)
• the NervAlign® Bionic Nerve (in research and development)

ReNerve will focus its resources on growing sales of the NervAlign® Nerve Cuff and advancing the development and commercialisation of other products for the U.S. and global markets. With a network of sales agents in the U.S., the company expects that expanding its product portfolio will drive incremental sales growth. Direct sales staff may be considered once the portfolio and sales volume warrant a more direct approach.

Sales and Marketing Strategy

In February 2022, ReNerve received FDA 510(k) clearance for its NervAlign® Nerve Cuff. After registering as an establishment in May 2022, the company made its first US sales in July and initiated a soft product launch in October.

ReNerve has implemented a cost-efficient sales and marketing strategy focused on minimising fixed expenses by utilising commission-based sales agents. The company has strategically divided the United States into five key regions and aims to establish at least one productive sales agent in each area. Their recruitment strategy prioritises agents with expertise in biological tissue products and existing connections with surgeons specialising in peripheral nerve injury repairs. As the Company expands its product portfolio and achieves higher sales volumes, ReNerve will evaluate the potential benefits of employing direct sales personnel to enhance and complement its existing sales and marketing infrastructure.

ReNerve will leverage its FDA 510(k) market clearance to seek regulatory approval for the NervAlign® Nerve Cuff in additional jurisdictions, such as Europe, South America and Australia. ReNerve will aim to work with local distributors to gain market approval and sales in these jurisdictions. Opportunities to enter additional markets will be evaluated on a case-by-case basis, considering estimated time and costs to achieve market entry as well as sales potential.

To support this international expansion, ReNerve is conducting comprehensive clinical studies to build a robust clinical data repository which will strengthen their regulatory submissions across different jurisdictions. As the company develops its product portfolio, the NervAlign® Nerve Cuff will benefit from a complementary product strategy. By offering a comprehensive suite of PNI repair solutions, ReNerve aims to position itself as a one-stop vendor for surgeons, potentially increasing market adoption.

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  Mr Stephen Cooper

  Non-Executive Chairman

  Stephen Cooper is a director of Grant Samuel Group Pty Limited, a leading independent Australian investment banking business.  Stephen has over twenty-five years of experience in investment banking and has been responsible for numerous corporate advisory assignments including public company takeovers, mergers, business sales and acquisitions, schemes of arrangement, capital raisings and business valuations.  He has served as the chairman of an ASX-listed biotechnology company, Avexa Ltd.

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  Dr Julian Chick

  Executive Director and Chief Executive Officer

  Dr Julian Chick is an experienced healthcare executive with over 25 years’ experience in senior management including in Avexa and Admedus. His roles have included Chief Executive Officer, COO and Head of Business Development, as well as running early and late-stage R&D projects and launching medical devices into the global markets. Dr Chick while COO at Admedus Ltd was involved in the R&D development, regulatory approval and launch of several tissue products in North America, Europe and Asia. He has ten years of experience in investment banking and advisory and has also held a role as an analyst reviewing healthcare and biotechnology investment opportunities for private equity investors and venture capitalists. Julian has a PhD in Muscle Physiology and is currently a non-executive Director of LTR Pharma (ASX: LTP).

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  Dr Michael Panaccio

  Non-Executive Director

  Michael Panaccio is a co-founder of Starfish Ventures, a venture capital firm specialising in early-stage technology companies, where he actively manages its portfolio. He has served as a director for numerous tech businesses in Australia and the US, including SIRTeX Medical Ltd, Engana Pty Ltd (acquired by Optium Inc), Energy Response (sold to EnerNoc Inc), ImpediMed Ltd, and Protagonist Therapeutics Inc. Currently, he sits on the boards of dorsaVi Ltd, MetaCDN Pty Ltd, Margin Clear Pty Ltd, Marp Therapeutics Pty Ltd, and Cylite Pty Ltd.

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  Dr David Rhodes

  Executive Director

  Dr David Rhodes brings over 20 years of experience in the healthcare and biotechnology sectors, holding senior roles across several ASX-listed companies. His previous positions include Senior Researcher at Amrad, Chief Scientific Officer at Admedus Ltd, and Senior Vice President of Biology and Head of Drug Discovery at Avexa Ltd.

  Dr Rhodes has successfully led numerous technology development programs, securing substantial funding from State and Federal Government initiatives and research institutes. A published author in high-impact journals and inventor on multiple patents, he is also an Adjunct Associate Professor in the Faculty of Engineering at Monash University and formerly served on the Australian Regenerative Medicine Institute Leadership Advisory Board. Dr Rhodes holds a PhD in Biochemistry.

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  Dr Michael Findlay

  Chairperson Scientific Advisory Board

  Dr Findlay is an Academic Reconstructive Plastic, Hand, and Microsurgeon from Melbourne, Australia, with prior appointments at Stanford University, USA, under Professor Geoffrey C. Gurtner. As a Fulbright Scholar and the inaugural Stanford Applied Regenerative Medicine (SARM) Fellow, he held roles as Visiting Assistant Professor (Research) and Clinical Instructor. His translational research in stem cell and tissue engineering focuses on addressing acquired defects in regenerative capacity to enable reproducible, transformative tissue regeneration for clinical use. During his PhD with Professor Wayne Morrison at the O’Brien Institute, Melbourne, he developed the world’s first large-animal model for tissue-engineered breast reconstruction. Dr Findlay’s clinical practice specialises in reconstructive surgery.

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  Dr Paige Fox

  Scientific Advisory Board

  Stanford Medical

  Dr Paige Fox is Board Certified Plastic Surgeon who specialises in hand surgery, reconstructive microsurgery, as well as peripheral nerve and brachial plexus surgery. Dr Paige Fox is an Associate Professor in the Division of Plastic and Reconstructive Surgery in the Department of Surgery. Dr Paige Fox works with adult and pediatric patients. Her research focuses on wound healing, disorders of the upper extremity, and surgical biosensors. Dr Paige Fox has a passion for sustainability and health care’s effect on the environment. She is involved in efforts to green the OR and the clinics at Stanford University.

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  Dr Bryan Loeffler

  Scientific Advisory Board

  Orthocarolina

  Dr Loeffler specialises in the entire spectrum of hand and upper extremity disorders from the fingertips to the shoulder. Dr Loeffler has been awarded multiple research grants to fund various clinical studies as well as a basic science study on biological solutions to improve rotator cuff healing. Dr Loeffler has authored numerous book chapters and peer-reviewed articles on topics ranging from forearm injuries to shoulder and elbow replacement. Dr Loeffler has received numerous academic honours and achievements ranging from excellence in surgery to resident teaching awards. He has also participated in two international medical missions, providing orthopaedic surgical care in underserved areas.

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  Dr Mihir Desai

  Scientific Advisory Board

  Associate Professor, Division of Hand and Upper Extremity

  Dr Desai is a leading hand surgeon based in Tennessee. Dr Desai has worked in nerve surgery and nerve repair for over 10 years. Dr Desai specialises in hand and orthopedic surgery, fractures and sports medicine