The US Food and Drug Administration (FDA) has approved Polarean's proven Xenon MRI platform for use in paediatric patients as young as six years old from the previous limit of 12. This approval increases the number of eligible patients by c1 million, confirming a total addressable market (TAM) in the US of cUS$2bn for use of the technology in evaluating ventilation. The FDA decision has come a little ahead of previous guidance. Approval for use in gas exchange, which remains subject to a clinical trial, would bring the total TAM to US$5bn in the US alone. At its recent full-year results, Polarean revealed that the expected cost of this trial has halved to US$4.0m-US$4.5m. Polarean has potential upside many times its current market capitalisation, we calculate, based on observable deal metrics and our NPV analysis, while the valuation is so low, it could attract take-over interest, we believe.
