English: The illustration shows the major signs and symptoms of heart failure. (Photo credit: Wikipedia)
SSH : NASDAQ : US$5.45
Sunshine Heart develops, manufactures and markets C-Pulse, a minimally invasive assist device to treat Class III heart failure. C-Pulse, which received C.E. Mark in July 2012, is based on the proven concept of intra-aortic balloon pump (IABP) technology. Unlike IABPs, C-Pulse does not come in contact with circulating blood, which should negate thrombus formation and stroke risk. The company is listed on the Australian exchange and NASDAQ.
SOLID PROGRESS IN U.S. AND EUROPE; REITERATE BUY RATING
Sunshine Heart announced Q1 financial results that were in line with our expectations. What’s more, the company reported meaningful progress on its efforts to achieve U.S. regulatory approval for the C-Pulse system. During Q1, the company received IRB approval of the first U.S. trial site and activation of a second site (Minneapolis VA Medical Center), and appointed a surgical principal investigator (PI) for its COUNTER HF pivotal trial. In Europe, SSH announced that the German Heart Institute-Berlin has been activated as the first center for its OPTIONS HF post-market trial. The company is in the process of getting ethics panel approval at seven additional centers across Germany, Italy and the UK, and expects full activation of these sites by Sept. 1. We expect several patients to be enrolled in its European post-market trial through the balance of 2013 and 2014.
We remain positive on the long-term prospects for SSH’s differentiated technology in the treatment of Class III heart failure, thus reiterate our BUY rating and $12.50 price target.
SSH reported a Q1 net loss of $4.4M, or ($0.47) per share, a shade below our expectation of a net loss of $4.5M, or ($0.48) per share.
SSH is discussing with physicians in the feasibility trial weaning additional patients given the positive effects on these sick patients during the feasibility trial.
Complete feasibility study data expected to be published in major medical journal later this year.
Posted by jackbassteam on May 16, 2013
Hologic (Photo credit: Wikipedia)
HOLX : NASDAQ : US$20.66
Hologic is a women’s health company that offers medical imaging, diagnostic and therapeutic products to hospitals, imaging clinics, private practices, and labs through a 625-rep direct sales force as well as select independent distributors. The company develops and markets products that address a range of women’s health concerns, including breast cancer, cervical cancer, menorrhagia, osteoporosis and preterm birth and others.
HOLX missed FQ2/13 results on the top line and lowered its FY/13 outlook on the top and the bottom. Despite the miss, we see favorable risk-reward in HOLX shares LT, driven by better-than-expected synergies with respect to the GPRO integration, looming conversion to higher price 3D tomo from 2D, and deleveraging of the balance sheet.
2Q results. HOLX beat our EPS estimate by 2 cents but missed on revenue by $16M; and more importantly lowered its outlook for F3Q and FY’13.
Revenue shortfall. The ~$18M revenue shortfall from the midpoint of guidance resulted from ThinPrep restructuring in China ($8M impact);
U.S. ThinPrep utilization softness ($4M); and tight capital spending budgets ($6M) for 2D.
GPRO update. The GenProbe Dx business grew 6% pro forma, below our expectations, driven by Women’s Health MDx (+10%) partially offset by
2% growth in blood screening.
Guidance/model. HOLX lowered FY’13 rev. guidance by $85M at the midpoint to $2,530M – $2,550M from $2,610M – $2,640B, and FY’13 Adj.
EPS by $0.04 at the midpoint to $1.54-1.56 from $1.58-1.60. We lower our FY’13 revenue estimate to $2,541M from $2,630M and FY’13E EPS to
$1.54 from $1.58. We lowered FY’14E revs to $2,662M from $2,801M and FY’14E Adj. EPS to $1.65 from $1.77.
Our $26 price target assumes a 16.8x multiple on our C2013E EPS of
Posted by jackbassteam on May 8, 2013
The lumbar region in regards to the rest of the spine. (Photo credit: Wikipedia)
NUVA : NASDAQ : US$20.94
NuVasive is a pure-play differentiated spine company focused on the design, development and marketing of products for the surgical treatment of spine disorders. The company has gained significant mindshare in the spine community with its minimally invasive XLIF (extreme lateral interbody fusion) technique and proprietary nerve avoidance system. The company markets its products through a direct sales force
We reiterate our BUY rating following solid Q1/13 results that confirm our thesis that NuVasive represents one of the top value names in orthopedics. We note strength across all key business units in Q1/13 including XLIF both US and OUS. Additionally, 2013 is set up to be a year of major initiatives as the company garners initial sales from Japan as well as multiple new product launches into the US markets.
Q1/13 revenues of $159.5M grew 5% Y/Y, with US lumbar, US cervical, and OUS all growing at above market rates.
NuVasive noted strength across its key business units including XLIF, driving US and OUS growth.
2013 guidance was reiterated with revenues of $655M (+6% Y/Y) and non-GAAP GM’s of 74%, OM’s of 14% and EPS of $1.00.
IP Settlement with Medtronic removes some risk and OIG Fraud Alert on PODs could provide a tailwind.
We are raising our price target to $26.00 from $25.00. Our valuation is based on our 2014 non-GAAP EPS estimate of $1.06 applied to the 24.4x P/E multiple.
Posted by jackbassteam on May 2, 2013
English: The illustration shows the major signs and symptoms of heart failure. (Photo credit: Wikipedia)
HTWR : NASDAQ : US$85.42
HeartWare is a development-stage company that designs, manufactures, and markets miniaturized left ventricular assist devices (LVADs), which are surgically implanted pumps to offset decreased pumping capability in individuals with heart failure. HeartWare’s axial flow HVAD incorporates its proprietary “hybrid” platform, wherein the impeller (or rotor) used in the pump is suspended by passive magnets and dual hydrodynamic
ROBUST Q1, SHARE GAIN ACCELERATES; RAISE TARGET TO $118, REITERATE BUY
Q1 results crushed even the most bullish prognostications, driven by strong HVAD adoption in the US. Domestic HVAD units sold (238) dwarfed our estimate (162) as the trajectory of HTWR’s share-gain (even ex-stocking) steepened in the first full quarter after FDA approval in November.
Auspicious US center training trends (27 additions since launch), in conjunction with this Q1 data point, portend material upside to our higher-than-consensus forward top-line estimates, which we increase today. OUS results also came in stronger than expected, notwithstanding a difficult Y/Y comp. Q1 results reaffirm our thesis that
1) the LVAD market is poised to accelerate in 2013 with the HVAD launch, and 2) HTWR is poised to gain significant share. We continue to
model HTWR reaching share parity to Thoratec (THOR : NASDAQ : $37.64 | HOLD) by 2016. We recommend investors add to positions in
HTWR. We increase our one-year target to $118 from $114.
Q1 sales increased 87% to $49.2M vs. our estimate of $38.8M (+47.4%) and the consensus expectation of $39.7M.
US HVAD sales of $26.6M increased 300% Y/Y and blew past our $16.7M estimate on 244 HVADs sold vs. our 162E.
OUS sales of $23.1M (+16%) beat our $22.1ME (+11.3%), as OUS units sold (244) topped our estimate (242) on higher average ASPs
Worldwide HVAD units sold totaled 482 vs. our 404 estimate.
We increase our forward estimates and raise our target to $118.
Posted by jackbassteam on May 1, 2013
Magnetic resonance imaging (Photo credit: Wikipedia)
IMRS : NASDAQ : US$3.29
IM : TSX
IMRIS develops, manufactures, and markets intra-operative magnetic resonance imaging (iMRI) systems for use in surgeries, minimally invasive procedures, and radiation oncology treatments. The company has developed an innovative system that marries a high-field MR scanner with the company’s proprietary MR transport system, MR-compatible patient handling table, surgical imaging coils and data-management software platform.
We reiterate our BUY rating and $7 target on shares of IMRIS, as we believe the company represents an attractive investment vehicle at an attractive valuation. Sitting at the cutting edge of a growing trend of real-time precision image guidance in surgery, IMRS accelerated bookings in 2012 and entered the new year with a strong sales funnel, coupled with several new, innovative products coming out of its pipeline, headlined by 1) IMRIS-CT (H1:13E), 2) SYMBIS robotic system (early 2014E), 3) IMRIS-RT precision radiation therapy delivery system (late 2014E) and 4) recently approved wireless coil. The latter, along with a disposable revenue stream from SYMBIS Robotics and service revenue from a perpetually increasing installed system base, represent an expanding, high-margin recurring revenue stream for IMRS.
We believe the current valuation is attractive, trading at a significant discount (~64%) to the small-cap med tech group on an EV/Sales basis. We believe there is a glaring disconnect between the growth profile/opportunity and valuation, which we feel represents an attractive entry point for investors. We recommend accumulating shares of IMRS.
Adjusting estimates on higher share count: We increase our 2013 diluted share count to 50.3M (from 45.6M) following IMRS’ recent secondary offering. This adjustment lowers our 2013 pro-forma LPS estimate by $0.03 to ($0.35). Our 2014E share count increases to 52.4M (from 45.9M) and LPS comes down by $0.02 to ($0.13).
Posted by jackbassteam on March 26, 2013
Image via CrunchBase
ONC : TSX : C$3.12
ONCY : NASDAQ
Oncolytics Biotech is a biotechnology company with a biologic therapy in late stage development for the treatment of various cancers. The company’s lead product, Reolysin, is a live virus that has the ability to replicate in certain cancers, thus destroying the cancer cell. Oncolytics has received a Special Protocol Assessment from the FDA for Reolysin and has initiated a Phase III development program for the drug.
All amounts in C$ unless otherwise noted.
Oncolytics has reported Q4 financial results. Net loss for the quarter was $8.5 million or ($0.11) per share, in line with our estimate of $8.7
million (also ($0.11) per share). For Q4, R&D expenditures were $6.7 million, compared to our estimate of $6.9 million. Based on recent evidence of efficacy for Reolysin, we would be buyers of the stock in anticipation of more impactful data from the head and neck trial and the Phase II study in pancreatic cancer, both expected within 6-9 months.
Cashed up. Oncolytics recently completed a $32 million financing, resulting in pro forma cash of ~$50 million at quarter-end. We believe this represents almost 18 months of cash at projected burn.
Hungry for more randomized data. Because data from the ongoing head and neck study is event-driven, exact timing of final data is uncertain. Moreover, the company may elect to forego an interim data analysis as that would result in a statistical hit for the study.
Next steps in a long journey. We expect that ONC will use recent positive Phase III data and the validation of its thesis to design a pivotal study focusing on the treatment of metastatic lesions.
We value Oncolytics using a probability-weighted NPV model of lead drug Reolysin in key indications including head and neck cancer. We have adjusted our valuation to reflect the recent financing. Based on this analysis, we arrive at a revised target price of C$8.00 (lowered from C$9.00), which continues to support our BUY rating.
Posted by jackbassteam on March 18, 2013
EW : NYSE : US$90.30
[365 Toy Project: 050/365] The Humans Are Dead (Photo credit: nhussein)
Edwards Lifesciences manufactures minimally invasive medical devices for the cardiovascular market. Its primary product line is centered on heart valve therapy and includes tissue valves, mechanical valves, and repair products. It has a large offering for critical care, with key
products for hemodynamic and pressure monitoring.
PARTNER 2, Cohort B (P2/CB) data presented Sunday at ACC met its primary endpoint (non-inferiority for XT vs. SAPIEN in all-cause mortality + disabling stroke + repeat hospitalization at 1 year). We believe these data will drive FDA approval at least in line with our H2/14 estimate. What’s more, recent checks support our thesis that H1 US TAVI sales are tracking at or above our higher-than-consensus estimates, suggesting upside potential to Q1/Q2 revenue and EPS consensus. We believe upside would be catalytic for the stock, given what we perceive is a neutral/negative consensus view presently. We recommend adding to positions in EW. Reiterate BUY and $115 yearend
P2/CB data hit the mark, with outstanding results on survival, stroke, bleeding, vascular complications and procedural factors.
Paravalvular leak rates – namely higher moderate/severe PVL in XT– were surprising. That said, P2/CB still met its primary endpoint (33.9% XT vs. 34.7% SAPIEN) with a high statistical significance (pvalue = 0.0034), notwithstanding the higher PVL rates. While FDA will inquire about PVL, and the bears will focus on it, US physicians want XT (used exclusively OUS), according to our checks.
One important takeaway – which likely won’t be discussed much by our competitors – is the significant improvements in SAPIEN 1 results in P2/CB vs. P1/CB, namely in survival, cardiovascular survival, stroke, and re-hospitalizations. Given SAPIEN will likely be the only TAVI on the US market until H2/14, we think this bodes well for strong EW US TAVI sales trends in 2013 and 2014.
Posted by jackbassteam on March 12, 2013
Image via CrunchBase
QDEL : NASDAQ : US$24.33
Quidel is one of the leading manufacturers of rapid diagnostic tests at the point of care for a variety of medical conditions and illnesses. Quidel’s product offering is focused on infectious disease, reproductive health, and other areas including oncology and gastroenterology. These products are sold both in the US and internationally to physician’s offices, clinics, clinical laboratories, and hospitals through a network of distributors.
We reiterate QDEL as one of our top-rated POC ideas for 2013 coming out of its analyst day filled with a great deal of enthusiasm from the company’s R&D team. We believe investor enthusiasm will grow as approximately $100M of new product revenue ramps over the next three years. We raise our PT to $30 from $25.
De-lever from flu with new product cycle. QDEL now expects to drive $100M of new product revenue by the end of 2015 (previously 2014), as Bobcat is pushed back further in favor of higher market opportunities from Sofia and three molecular platforms: AmpliVue, Wildcat, and its “open box” MDx program.
New financial targets. QDEL offered 2015 financial targets: $100M in new product sales; GM of 65% (from 61% today) and OM of 30%, up significantly from 2012 levels of 6%, as spending growth tapers.
MDx strategy is multi-pronged. Open-box MDx assays bridge the Wildcat platform, while AmpliVue sets up for a solid 2013-2014.
Model. We lower our 2013E EPS to $0.46 from $0.56 to reflect the medical device tax ($0.07) and higher R&D and S&M spend. We initiate 2014E revenue of $217ME (+15% Y/Y) and EPS of $0.58.
Our $30 PT (formerly $25) uses a premium 4.7x multiple on our new ‘14 rev estimate of $217M. The peer group trades at 3.6x 2013E revenues.
Posted by jackbassteam on March 11, 2013
I Am Fluent In Three Languages …item 1.. For-Profit Colleges Pay Executives Based On Profit (07/27/2012 ) …item 2.. RACE TO THE BOTTOM (Thursday, July 5, 2012) …item 3.. Senator Harkin’s Report: (JULY 29, 2012) … (Photo credit: marsmet523)
MYL : NASDAQ : US$28.57
Mylan, Inc. (MYL) engages in the global development, marketing and producing of generic and brand pharmaceutical products. It operates two segments, Generics and Specialty, with branded drugs such as EpiPen Auto-Injector, Performist Inhalation Solution, and antiretroviral (ARV) drugs. It is headquartered in Canonsburg, Pennsylvania.
MYL’s 4Q results and 2013 guidance brought upside and raised guidance as expected. However, focus will be on the $1.6 billion announced Agila
Agila brings an attractive injectables platform and moderate accretion though, like many, we were surprised at the limited financial disclosure which will leave lingering questions and a wider range on pro forma Street EPS. Overall, we’re raising standalone EPS and increasing our target to $33.
4Q and 2013 outlook largely as expected. 4Q brought a penny of costdriven upside while 2013 guidance largely straddled consensus with
revenue lowered and EPS raised (EMEA a positive surprise).
Agila is 5-7% accretive in 2014-16 on our analysis. 2014 pro forma EPS will be the primary focus and our $3.32 is driven by 3% core upside and 5% deal accretion.
Where do we go from here? Raised guidance and major deal announcement were the two primary catalysts we were looking for. Focus will now shift to 2014 with catalysts and EPS upside the primary drivers for both MYL and ACT. Assuming a modest upward stock move in MYL, valuation would be ~ in line with ACT (on our 2014 pro forma EPS) – we see upside in both but all else equal more near-term stock moving catalysts in ACT.
We are raising our target to $33. Our raise reflects both higher 2014 standalone EPS (+3%) and accretion (+5%) though we for now leave
Agila out of published EPS. Our PT is based equally on 2014E P/E and EV/EBITDA and implies a 10x multiple on pro forma 2014E EPS.
Posted by jackbassteam on March 1, 2013