Carmat's Financial Struggles Lead to Insolvency Filing

French artificial heart maker Carmat has filed for insolvency after failing to secure the necessary funding to continue its operations. The company, which launched its Aeson total artificial heart in 2021, has been grappling with financial difficulties for several months, culminating in this latest development.

Funding Shortfall and Crowdfunding Attempt

Carmat had been seeking to raise 35 million euros ($41 million) to fund its operations for the next 12 months. In a last-ditch effort to stay afloat, the company launched a crowdfunding campaign in June, aiming to raise 3.5 million euros to extend its runway into July. However, the campaign fell short, raising only 20,110 euros before closing on Monday.

The company's financial woes have been ongoing, with a near-crisis in September 2023 when its cash runway shrank to just one month. Despite raising 9.7 million euros in January and securing up to 7.9 million euros two months later, Carmat warned on June 20 that it only had enough funds to operate until the end of the month.

Insolvency Filing and Next Steps

As a result of the funding shortfall, Carmat has filed for insolvency and requested to be put in receivership by a court. This process is intended to help creditors recover funds while the company continues its efforts to raise money and support patients. Carmat expects a court hearing to take place in the coming days, during which a decision on the receivership request will be made.

In light of these developments, Carmat has asked Euronext to suspend trading of its stock until the court reaches a decision. The company believes that receivership is the most appropriate way to ensure the continuation of its business activities.

Recent Developments and Future Plans

Despite its financial challenges, Carmat has made some progress in recent months. The company reported sales of 2.4 million euros in the first quarter of this year. Additionally, it secured conditional approval to enroll a second cohort in its U.S. study in April and completed enrollment in a French trial in May.

These studies were intended to support Carmat's efforts to secure reimbursement for Aeson in France by 2026 and potentially bring the device to the U.S. market in 2028. However, the company's current financial situation puts these plans in jeopardy, leaving the future of its innovative artificial heart technology uncertain.