FDA approves head-to-head trial of Orchestra BioMed’s balloon

NEW HOPE, Pa. - Orchestra BioMed Holdings, Inc. (NASDAQ:OBIO), a biomedical company with a strong balance sheet showing more cash than debt and an impressive gross profit margin of 92%, announced today that the U.S. Food and Drug Administration (FDA) has approved an amendment to the Investigational Device Exemption (IDE) for the company’s Virtue Sirolimus AngioInfusion Balloon (Virtue SAB). According to InvestingPro data, the company maintains healthy liquidity with a current ratio of 4.27, though analysts note it’s currently burning through cash reserves. This approval allows the initiation of a pivotal clinical trial, the Virtue Trial, to compare Virtue SAB with Boston Scientific’s AGENT paclitaxel-coated balloon, currently the only FDA-approved drug-coated balloon for coronary applications.

The Virtue SAB is an innovative, non-coated balloon system designed to deliver a proprietary extended-release formulation of sirolimus, aiming to prevent arterial restenosis. The device has previously received FDA Breakthrough Device Designation for various coronary and peripheral indications. In the SABRE pilot study, Virtue SAB showed promising results, including low target lesion failure rates and minimal late lumen loss.

The upcoming Virtue Trial is a robust non-inferiority study that will enroll 740 patients across up to 75 U.S. centers. It aims to demonstrate the safety and effectiveness of Virtue SAB compared to the AGENT paclitaxel-coated balloon. The primary endpoint will be Target Lesion Failure (TLF) at 12 months post-treatment. With a market capitalization of $100 million and analyst price targets ranging from $12 to $20, InvestingPro subscribers can access 10+ additional key insights about Orchestra BioMed’s growth potential and financial health metrics.

Orchestra BioMed’s Chairman and CEO, David Hochman, expressed confidence in Virtue SAB’s differentiated approach to treating atherosclerosis and believes this head-to-head trial will help establish its potential advantages. The trial is expected to commence in the second half of 2025, marking a step toward regulatory approval and addressing the significant market demand for coronary drug delivery balloons.

Coronary In-Stent Restenosis (ISR), the condition this trial targets, is a complication that can arise after coronary stenting, potentially leading to severe heart problems. Current estimates suggest that ISR affects up to 10% of stented patients within the first year, with ongoing risks thereafter.

Orchestra BioMed emphasizes its focus on developing high-impact technologies through strategic partnerships, with Virtue SAB being a key product in its pipeline. The company maintains a partnership-enabled business model, working closely with leading medical device companies to ensure successful commercialization of its innovations. Trading near its 52-week low of $2.49, the stock has seen significant pressure, down 57% over the past six months. InvestingPro analysis suggests the stock may be undervalued at current levels, with the company’s next earnings report scheduled for May 13, 2025.

This article is based on a press release statement issued by Orchestra BioMed.

In other recent news, Orchestra BioMed has garnered attention with its recent financial and clinical developments. The company reported a net loss of $61 million for 2024, closely aligning with analyst estimates, and generated $2.6 million in total revenue. This comes alongside H.C. Wainwright’s adjustment of the company’s stock target to $12, while maintaining a Buy rating. Additionally, BTIG also reiterated a Buy rating with a $12 price target, noting the company’s strategic partnerships and potential for future growth.

Orchestra BioMed’s atrioventricular interval modulation (AVIM) therapy has received the FDA Breakthrough Device Designation, a significant milestone that could expedite its development and review process. This designation is expected to facilitate better reimbursement options and enhance the therapy’s commercial prospects. The AVIM therapy is currently under evaluation in the BACKBEAT global pivotal study, targeting patients with uncontrolled hypertension.

The company’s collaboration with Medtronic aims to develop and commercialize AVIM therapy, with Medtronic holding the right of first negotiation for potential global commercialization. Orchestra BioMed’s focus on innovative therapies for hypertension and coronary artery disease, along with strategic partnerships, is highlighted by analysts as a key factor in its growth potential. Upcoming developments in the BACKBEAT trial and partnership restructuring with Terumo Corporation are anticipated to be significant future events for the company.

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