Raymond James Following Thursday’s close of an $11.5-million bought deal equity financing, Raymond James analyst Rahul Sarugaser expects investor sentiment toward Opsens Inc. will remain “cool” in the near term.
“We anticipate it trading range-bound until the company demonstrates that it is generating material adoption of SavvyWire, the earliest signs of which we expect to see in mid/late-2023,” he said.
“We continue to have strong long-term conviction that SavvyWire’s unique 3-in-1 TAVR capability represents compelling commercial potential that could drive OPS’ top-line revenue to $100-million by 2026, so we maintain our rating at Outperform.”
Mr. Sarugaser attributed the cautious investor approach to the Quebec City-based medical device cardiology-focused company on a “challenging combo of insufficient cash raised and outsized dilution.”
“Before this financing, OPS technically had sufficient cash on hand to execute a commercial launch of its new SavvyWire device, providing investors confidence that any potential dilution would be limited,” he said. “At the same time, consensus was that OPS would (should) add a material amount of cash to supercharge its already fully-funded SavvyWire launch, to give the product its best shot at material market penetration (25 per cent by 2033, per our estimates).
“This recent equity raise seems to have satisfied neither of these requirements $11.5-million, in our view, appears to be insufficient to achieve the ‘supercharging’ investors had hoped for. The $1.90 per share price represented outsize dilution relative to the opportunity to finance at a better time/price, particularly given OPS’ stock had run to $3.00 at the time of SavvyWire’s FDA approval in September.”
With his unchanged “outperform” recommendation, Mr. Sarugaser cut his target for Opsens shares to $3.50 from $5. The average is $4.03.