FQ1/23: Results ahead of estimates; SavvyWire sales to accelerate
Our view: OpSens reported FQ1/23 (Nov-qtr) revenues of $10.2MM, ahead of RBCe ($9.1MM) and consensus ($9.4MM). Revenues were up +13% q/ q and +26% y/y. Net loss of $3.6MM was better than RBCe ($4.1MM loss) and consensus ($3.9MM loss). Management noted strong acceptance of SavvyWire by physicians and hospitals with premium pricing and rapid reorder rates. A full commercial US launch of SavvyWire is expected in H2/ FY23. Additionally, management noted evidence of commercial synergy between OptoWire and SavvyWire in the US and Canada (both wires utilize the same OptoMonitor device).
Key points:
FQ1/23 revenues of $10.2MM (+12.6% q/q and +25.9% y/y) above RBCe ($9.1MM) and consensus ($9.4MM). Included in the $10.2MM were total medical revenues of $8.9MM (+21% y/y), with FFR and dPR sales of $5.2MM (+6% y/y). Optical medical products revenues (including the supply agreement with Abiomed) were $3.3MM (+38% y/y). Industrial revenues were $1.0MM (+44% y/y), above RBCe ($0.9MM). Gross margins of 58% were above estimates (RBCe: 51% and cons.: 52%). Operating expenses of $9.7MM (+14% q/q) were above RBCe ($8.6MM), as the company has invested in sales and marketing to support the SavvyWire launch along with an increase in R&D. FQ4 net loss of $3.6MM was better than RBCe ($4.1MM loss) and cons. ($3.9MM loss).
Updates on SavvyWire. SavvyWire revenues of ~$0.4MM in FQ1 were ahead of management's internal expectations. The company is currently doing a controlled market launch and expects a full commercial launch in H2/FY23. Management noted strong acceptance by physicians and hospitals with premium pricing and rapid reorder rates. The company is approaching ~500 total SavvyWire cases and has launched SavvyWire in ~20 hospitals across North America. In our view, the ramp-up of SavvyWire in the US will be dependent on the shift to LV pacing for TAVR procedures over time. Currently, only 10% of US surgeons use LV pacing during TAVR procedures, while this percentage is significantly higher in Canada and Europe. Management also noted evidence of commercial synergy between OptoWire and SavvyWire in the US and Canada. US OptoWire revenues were up +38% y/y, even as sales in Japan were -31% y/y due to inventory build-up and weaker-than-expected demand.
Outlook. Management expects further improvement in GMs over the medium term as revenues from the regions with direct sales force increase along with growth in SavvyWire revenues. Management expects SavvyWire growth to increase significantly once the company enters full commercial launch (H2/FY23). The company also expects revenue synergies in the EMEA and Japan once SavvyWire is launched in these markets. OPS is also looking for another partner in Japan for SavvyWire, which should also benefit future OptoWire revenues in Japan.