Profound Medical Corp T.PRN

Alternate Symbol(s): PROF

Healthcare Medical Devices

Profound Medical Corp. is a Canada-based commercial-stage medical device company that develops and markets customizable, incision-free therapies for the ablation of diseased tissue. It is commercializing TULSA-PRO, a technology that combines real-time magnetic resonance imaging (MRI), robotically driven transurethral ultrasound and closed-loop temperature feedback control. The TULSA procedure, performed using the TULSA-PRO system, has the potential of becoming a mainstream treatment modality across the entire prostate disease spectrum; ranging from low -, intermediate-, or high-risk prostate cancer; to hybrid patients suffering from both prostate cancer and benign prostatic hyperplasia (BPH); to men with BPH only; and also, to patients requiring salvage therapy for radio-recurrent localized prostate cancer. It is also commercializing Sonalleve, a therapeutic platform that is CE marked for the treatment of uterine fibroids and palliative pain treatment of bone metastases.

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Profound Medical Corp

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Comment by ebrie014on Sep 21, 2017 10:48am

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Post# 26725437

RE:cannot for the life of me using any metric understand $4/sh

Hey Revenant,

I've been following the Company too and can understand where you are coming from.

Tho, in my opinion the Company is at the peak of its cash burn given both the ramp up in sales and marketing, and large research/dev/clinical study costs for the phase 2 clinical study. Once the Company has received all of its patients for the phase 2 and will finally stop doing studies and focus strictly on selling (over the next year and a half) the cash burn should come down a bit.

The thing is the Company also uses a razer blade model which helps lower the burn over time. Once the clinics have bought the machine there will be recurring revenue from procedures and replacement parts in perpetuity. Since the new MRI guide tech they recently bought is also generating sales in europe this will also well with the ramp up (also in final stages of approval in Asia).

As for the target price, I'm in agreement its skewed as its mainly issued by the current underwriters. That being said, if the company gets phase 2 clearance (or shows postive initial signs for the clinical study tests) it should start gaining value. Studies show that most pharma companies/pharma products get bought out once phase 2 has been approved as the product becomes fairly de-risked. IMO a larger strategic wil take them out and then run the approved products through their already established sales channels to benefit from the technology and the sales potential.

I have read the reports you mentionned and they are based off 2022 EBITDA and earnings (and use a 12x EBITDA multiple, and a 20x P/e multiple as they assume the Company will be generating positive earnings at that time (and use a 30% discount rate). However, they are assuming the Company has ramped up to over 100M in revenue by 2022FYE which represents significant growth (and a little too rosy in my opinion) - thats the Echelon report with a 5$ target. As for the Mackie Report they use a 6x EV/Sales multiple using 2019 revenue projections of 70M+ (and a discount rate of 50% to recognize the higher risk) - they have a 3.15$ price target. I personally think its not unreasonable to assume the Company will get taken out for 2-3$ within the next year and a half (if phase 2 shows posititve results).

Hope this helps.