RE:Oppenheimer Mar 15Zane777 wrote: Does anyone have the Oppenheimer release for the $10 PT buy rating released on March 15?
Helius Medical Technologies Inc.
4Q Updates on Canada Rollout, FDA Submission
SUMMARY
Yesterday, HSDT reported 4Q18 and provided a commercial update on the rollout of
its PoNS device in Canada and FDA submission. In Canada, patient treatments are
underway at two centers, with three additional centers targeted by 2019-end. Heading
into the year, HSDT is conservatively guiding to '19 revenue from only the opened
two centers (guidance still ahead of our thinking). In the US, HSDT has responded to
FDA with answers to the additional questions it received in January. As a reminder,
at this point our '19 estimates don't assume US revenue. HSDT's Clinical Experience
Programs (CEP) in the US are underway and are designed to build relationships with
leading neurorehabilitation centers (currently five) and collecting additional data for
reimbursement through an open-label clinical study.
KEY POINTS
Canada update. HSDT received license fee revenue of approximately $500k
related to its strategic alliance agreement with HealthTech Connex to establish
neuroplasty clinics. First patients were treated in Canada with positive initial
feedback. Management estimates the patient opportunity in Canada at 350k.
Three new neuroplasticity clinics are expected to be opened this year; one in each
of the three remaining quarters.
FDA information in. As a reminder, FDA requested more information on HSDT's
510k submission on 1/25. The company has responded in the past several days,
well within the 180 days allotted. Management isn't predicting a specific timeline
for response from FDA. Clinical procedures underway as part of HSDT's CEPs
are aimed at data collection for reimbursement, building KOL relationships and
gaining real-world experience.
Other notes. 1) HSDT will now be collecting 6 and 12 month durability data as part
of its CEP procedures to further support commercial and CMS reimbursement. 2)
HSDT ended the year with $25.6M in cash. 3) Launch in Europe would be upside
to our estimates; CE Mark was filed in 4Q18.
Guidance. Management is guiding to $1.6-2M in sales in 2019 from the two
neuroplasticity clinics already opened in Canada. While new sites are expected to
be opened in Canada this year, management isn't including revenue in guidance
from these clinics yet until procedures are underway. Price per system is expected
at CAD$18k, more than our CAD$14k assumption.
Estimates. Our 2019 sales estimate rises to $1.7M from $1.2M on the higher
guidance versus our estimate; revenue per system assumption in Canada is the
primary delta versus our thinking. EPS remains ($1.10). For 2020, we forecast
risk-adjusted sales/EPS of $14.8M/($1.04). Our modeled US ASP remains
approximately $14k, though that could prove conservative.