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2 Micro-Cap Opportunities in Atrial Fibrillation

REDONDO BEACH, CA / ACCESSWIRE / November 30, 2015 / Atrial fibrillation - or A-fib - is the most common cardiac arrhythmia, affecting roughly five million Americans, according to the American Journal of Cardiology. When the heart's upper two chambers – known as the atria - become irregular, blood pools in the chambers and predisposes a person to the formation of clots that may cause a stroke. A-fib is particularly dangerous for patients that have experienced or are experiencing cardiac trauma.

According to Grand View Research, the market for A-fib procedures and products is expected to grow at a 13.2% compound annual growth rate and reach $16.17 billion by 2020. The aging population is expected to be a key driver for the market, while the introduction of new types of catheter ablations and pharmacological therapeutics have created new options for patients. As a result, investors may want to take a closer look at opportunities in the space.

ARCA's Developing Story

Pharmacological products dominate the atrial fibrillation market, accounting for about 55% of 2013 revenue, according to Grand View Research, while North America accounts for over 42% of global revenue, making U.S. companies the most compelling choices.

ARCA Biopharma Inc.'s (ABIO) Gencaro (bucindolol) is a beta-blocker with a well-characterized safety profile that has demonstrated success in reducing A-fib in advanced heart failure patients in a previous large Phase 3 clinical trial. In a DNA sub-study of the trial, 74% of patients with a specific genotype responded well to the drug and that genotype was present in approximately 47% of the patients that were treated.

By isolating that genotype and developing a trial with only those patients, ARCA Biopharma believes the results should be compelling enough for an FDA approval. The company received Fast Track designation from the FDA in April 2015. The trial, GENETIC-AF, is currently enrolling patients in the United States and Canada. ARCA anticipates enrolling enough patients for the trial's interim analysis by the end of 2016. If the interim analysis is positive, the trial could be converted into a pivotal Phase III.If the GENETIC-AF trial's outcome is positive, the data from the trial, combined with the data from prior trials, may be sufficient to submit a New Drug Application (NDA) to the U.S. Food and Drug Administration for marketing approval in the United States.

The company partnered with Medtronic Inc. (NYSE:MDT) to conduct the clinical trial, where the medical device maker will supply continuous monitoring devices. In addition, the firm partnered with LabCorp (NYSE:LH) to jointly develop a companion diagnostic to identify patients with the ARG389Gly genotype and secured an FDA Investigational Device Exemption.

If successful, the company believes that Gencaro will target a $450 million to $900 million unmet medical need, with potential for more clinical applications for the same patient population.

Cardiome Targets Europe & LatAm

Cardiome Pharma Corp.'s (CRME) BRINAVESS(TM) (Vernakalant Intraveneous) is a class III antiarrhythmic that blocks a certain type of atrial potassium channel that increases potency as the heart rate rises, which sets it apart from many other drugs that tend to lose effectiveness under those circumstances. In September 2010, the company received marketing approval in Europe and began selling into Euro and Latin American markets with Merck & Co. (NYSE:MRK).

Despite its approval in these regions and its growth around the world, the company has struggled to get the drug approved in the U.S. and Canada. Management indicated on a recent conference call that it plans to reengage the FDA next year after they've completed some important studies for preclinical and clinical, as well as augmented their safety database and their real world experience with the drug around the world.

BRINAVESS sales, compared using constant currency, grew 40% year over year and started to exceed its sales of AGGRASTAT. With gross margins of nearly 72%, the company is well positioned to benefit from the growth of its drug around the world and could see an approval in North America over the coming years in the A-fib field.

Investing in the Space

Atrial fibrillation represents an extremely common heart condition that significantly increases stroke risk. While there are many large companies operating in the space, including Gilead Sciences Inc. (NASDAQ:GILD) and ISIS Pharmaceuticals Inc. (NASDAQ:ISIS), investors may want to consider micro-cap companies like ARCA Biopharma Inc. (ABIO) and Cardiome Pharma Corp. (CRME) as more of a pure-play in the space.

ARCA Biopharma has identified a unique genotype that appears to have responded well to Gencaro in its prior clinical trial, while beta-blockers have a very established safety profile. These elements could de-risk its upcoming trial for investors, while there are a number of near-term catalysts that could send the stock higher, including its interim analysis results in early 2017.

For more information, visit the company's website at www.arcabiopharma.com.

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SOURCE: Emerging Growth LLC