While this article is a little old, I do have great respect for...

While this article is a little old, I do have great respect for Chris Behrenbruch. He predicts a T/O is a reasonable possibility based on the market dynamics:


"But the second reason why I love this product is because of the market segmentation of breast implant/prosthesis technology. It is fairly fragmented with about a dozen major players that include heavy-hitter brand names like Allergan and Mentor, firms that have extremely deep pockets and are generally aggressive about the space. AirXpander is strategically interesting because it builds mind-share with the patient upstream of the decision about what style and shape (and therefore brand!) of implant to ultimately go after and this gives AirXpander real market influence if it uses the patient experience in a commercially effective way.

Notwithstanding AXP’s fresh market debut, this company is probably a fairly decent acquisition target in the short-medium term if it performs post-IPO. I like this company and its very nifty product, and I hope it will execute in such a way that both patients and shareholders get to benefit from this expansive opportunity."
https://asxlongtail.com/2015/06/22/the-new-kid-in-town-airxpanders/

The new kid in town : AirXpanders

cbehrenbruch / June 22, 2015
Just because a few of my recent posts have been a bit on the silly and sarcastic side, doesn’t mean that you should automatically think that I am going be all inappropriate in this post. Certainly, the female breast is a personal hobby of mine, and there is no denying that my juvenile sense of humour had to be restrained from making slapstick references to any technology that will turn your wife or girlfriend into a DDD with the flick of a remote (actually, wow! A FIFTH remote control alongside the TV, the DVD, the Foxtel and the Apple TV – cool!).
I’m not even going to start talking about Fembots. As hard as that may be…
The reason is because AirXpanders (ASX : TIT AXP) is actually a very serious company, and from this point forward I will be serious too. In a nutshell, AirXpanders makes a type of inflatable breast implant (or “expander” implant) that is used in breast reconstructive surgery for women that have had a mastectomy. Although women with certain types / grades of breast cancer are able to have back-to-back mastectomy and reconstruction, it is typically desirable to use other therapeutic modalities alongside surgery, such as a chemotherapy and radiation. Radiation of the chest wall can be especially vital for women that have more aggressive forms of cancer, and also younger women (who typically have more aggressive disease as well). The result is that additional treatment delays breast reconstruction, and contraction of the breast pocket is the result.
This is where AirXpanders comes in. The conventional breast expander is a hollow “training implant’ that is inserted after mastectomy and has a very low volume profile to minimise additional discomfort. The implant has a re-sealing membrane that can accommodate a needle and, as the patient heals, saline is gradually added via a needle through the skin to increase the volume of the implant. I am informed that it is not a terribly comfortable or pleasant experience, and the regime of “expansion” is determined by physician availability, not the comfort and healing processes of the patient. Getting the timing of it right is actually also very important because if the expansion process takes too long, sclerotic tissue can build-up in the wrong shape and the result can be something more akin to a tennis ball than a natural breast shape.
AirXpanders eliminates all of this by cleverly installing an implant that has a small remotely-controllable carbon dioxide cartridge that can slowly and gently expand an air pocket inside the implant. No butterfly needles/valves, a reduced number of visits to the doc and – most importantly – the ability to gradually and slowly expand every day rather than in large increments, which should not only be more comfortable but do a superior job of controlling capsular tissue formation around the breast implant following surgery. It’s just good for the woman all the way around. When that patient has good bilateral breast appearance, the expander is deflated and slippped out of a small incision under the breast fold, and the actual permanent implant inserted.


AirXpander product concept (Source : AXP Investor Prospectus, March 2015)
Almost two decades ago when I was a graduate student at the University of Oxford, part of my research involved biomechanical simulation of the surgical staging of women undergoing mastectomy in order to select implant size/shape for optimal cosmetic outcome. My perception is that a mastectomy is a truly awful experience, but for many women the trauma goes far beyond the physical domain and can have a massive impact on confidence, intimacy and feminine identity. If ever there were a surgical application where there is a genuine need for a superior cosmetic outcome, this is it. Therefore when I read about this company, I was very interested and frankly a bit amazed that nobody had been smart enough to really come up with this before (there have been attempts but not as clever as this).

Notwithstanding the wonderful things this product can do for women everywhere, and potentially a lower cost and more flexible standard of care post-surgery, there are two reasons why I love this company’s unique product offering. Firstly, it is truly and utterly ready to go in terms of reimbursement and so there is absolutely no barrier to entry for this product in a market that is screaming out for a better solution. A market, incidentally, that is at least $500m worldwide and growing fast with plenty of drivers to growth. Reimbursement levels are actually pretty good too, so there is no reason why AirXpander’s EBIT can’t be impressive.
But the second reason why I love this product is because of the market segmentation of breast implant/prosthesis technology. It is fairly fragmented with about a dozen major players that include heavy-hitter brand names like Allergan and Mentor, firms that have extremely deep pockets and are generally aggressive about the space. AirXpander is strategically interesting because it builds mind-share with the patient upstream of the decision about what style and shape (and therefore brand!) of implant to ultimately go after and this gives AirXpander real market influence if it uses the patient experience in a commercially effective way.
Notwithstanding AXP’s fresh market debut, this company is probably a fairly decent acquisition target in the short-medium term if it performs post-IPO. I like this company and its very nifty product, and I hope it will execute in such a way that both patients and shareholders get to benefit from this expansive opportunity.