According to the American Heart Association, 5.2 million people in the US are estimated to suffer from atrial fibrillation (AF), the most common sustained cardiac arrhythmia. A report from Delveinsight, a leading life sciences market research firm, puts the global AF market at $7.2 billion in 2015 and projects it to grow to $12.5 billion by 2020.

We've been following a company called ARCA biopharma (Nasdaq: ABIO) that is currently enrolling patients in a Phase 2B/3 trial for its lead candidate, Gencaro, for the treatment and prevention of recurrent AF or flutter in heart failure patients with reduced left ventricular ejection fraction (HFrEF). Ejection fraction is a measure of the heart's efficiency in pumping blood.

AF in HFrEF patients represents a significant unmet medical need, with no FDA approved drugs for this indication. There are beta-blockers approved for HFrEF, but used off-label for AF, that have demonstrated only limited efficacy.

Source: ARCA biopharma Investor Presentation, May 2017

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In ARCA biopharma's recent quarterly business update, Dr. Michael Bristow, CEO, commented, “Atrial fibrillation is considered an epidemic cardiovascular disease based on the pace of increase in incidence in the United States and industrialized countries. There is also increasing evidence that compared to heart failure with sinus rhythm, heart failure with atrial fibrillation responds differently to medical therapy and needs to be approached as a separate disorder. We believe that a precision medicine approach to drug development in atrial fibrillation-heart failure, tailoring medical treatment to the individual genetic characteristics of patient subgroups, can potentially enable more effective therapies, improve patient outcomes and reduce healthcare costs.”

The company has FDA Fast Track designation for Gencaro and recently enrolled its 200th patient for the current clinical trial. The Data Safety Monitoring Board will perform a pre-specified interim efficacy analysis of unblinded efficacy data when at least 150 patients have evaluable data, the outcome of which is expected in September 2017. ARCA biopharma is collaborating with Medtronic (NYSE: MDT) in this trial, with Medtronic providing implanted continuous monitoring devices to measure the AF burden in patients.

Prior clinical data indicates that Gencaro may have potential additional indications in several other patient populations:

• Permanent AF in HFrEF, for rate control and preventing HF events
• Ventricular tachycardia/ventricular fibrillation in HFrEF
• HFrEF regardless of rhythm
• AF prevention in HFpEF or in normal left ventricular function

Investors face the typical risks of a $22 million market cap stock that trades less than 25,000 shares per day. Also of concern is the cash remaining on the balance sheet - $19.2 million at the end of Q1 2017 - so investors need to be prepared for additional dilution by the end of this year. All that being considered, ARCA biopharma fits neatly on our risk-reward spectrum because of the significant potential global market that Gencaro could address.

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