Let me start by stating that I am no expert in this area by a wide margin. My background is as a software entrepreneur. That said, I have been trying to better understand the organ transplant market and came across this report by atonra.
It is concise and well worth reading, as it states competitors, market size, expectations etc and is very bullish on TMDX.
Specifically, I was trying to understand how many transplants are being performed yearly in the USA, and how much growth that market can have. Obviously (and hopefully) not every US citizen will need a transplant. In an earlier post citing (I believe) a press release from Transmedics, they spoke of 18 people a day dying in the US alone die waiting for a transplant, so that would mean roughly 6500 additional potential customers on top of existing transplant numbers being served today. That is my base line assumption.
In a report from Credit Suisse I found the following:
More than 103,000 patients are waiting for an organ transplant in the US alone.
According to preliminary data from United Network for Organ Sharing (UNOS), which serves as the national Organ Procurement and Transplantation Network under federal contract, 42,887 organ transplants were performed in the US in 2022 – an increase of 3.7% from 2021 and a new annual record. Impressive as this number may seem, it accounts for less than half of the people who still need organ transplants.
In the US alone, more than 103,000 people are currently on organ transplant waiting lists and every day 17 of them die waiting for an organ transplant.
The atonra report states that the cost per transplant is 200-400k USD.
It also says that in 2022 TMDX delivered 1000 organs, and doubled that number in 2023. Transmedics revenue in 2023 was 241.6mUSD or 120k USD per organ.
If transmedics can serve the most urgent 6500 people per year that die waiting for a transplant, that is an unserved market of 785m USD.
But more likely Transmedics will serve more people, given that in 2022, there were 103k people on the waiting list, of which only 42k were actually getting a transplant.
In addiiton, given that the outcomes of transmedics-delivered organ transplants are significantly better than alternatives, it is conceivable that a siginificant part of the organs currently being delivered by traditional means will over time be delivered by transmedics instead.
In other words, not considering any competitive means which at this moment seem distant, Transmedics could (and should, for the patients sake and for cost saving reasons alone) become the standard for organ delivery.
Cost savings I assume because the outcome is so much better:
Back to the original atonra report:
If Transmedics achieves 10’000 transplants annually, it could generate over $1.2bn in revenue by CY2027. Assuming they reach a 20% net income margin based on current trends, this would result in an EPS of $7. This is far above today’s consensus, which forecasts $800mn in revenue and an EPS of $2.4 for 2027.
(The assumption here is that Transmedics will deliver 10k organs in 2027, up from 2000 in 2023)
It seems there is a lot of additional opportunity between the technology, the logistics, the actually available donors and the desperately waiting patients.
On my end of the world it is getting late, so I stop here. I hope these reports and my thoughts are useful to someone else. They were for me. I now have started a 6% position.
Cheers
-Zy
