Opsens Inc T.OPS

Healthcare Medical Devices

OpSens Inc. is a medical device cardiology-focused company. The Company offers an advanced optical-based pressure guidewire that aims at improving the clinical outcome of patients with coronary artery disease. The Company’s segments include Medical and Industrial. The Medical segment focuses on physiological measurements, such as Fractional Flow Reserve (FFR) and Diastolic Pressure Ratio (dPR) in the coronary artery disease market and also supplies a range of miniature optical sensors to measure pressure and temperature to be used in a range of applications that can be integrated into other medical devices. The Industrial segment develops, manufactures and installs fiber optic sensing solutions for critical and demanding industrial applications. Its flagship product, the OptoWire, is a second-generation fiber optic pressure guidewire designed to provide the lowest drift in the industry and lesions access. It is approved for sale in the United States, European Union, Japan and Canada.

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Post by retiredcfon Jan 12, 2022 9:01am

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Post# 34307234

RBC

Current and upside scenario targets are $4.00 and $4.50. GLTA

January 11, 2022

Opsens Inc.

FQ1/22 Preview: Omicron trends likely to impact hospital staffing and supply chain

Our view: OpSens will report FQ1/22 (Nov qtr) results pre-market on 13- Jan. We estimate revenues of $8.1MM for FQ1/22, essentially flat q/q aswe expect a significant impact from the spread of Omicron in OpSens key markets. We also lower our FQ2/22 revenue estimate for the same reason. While we expect near-term results to be impacted by Omicron, we remain
positive on OPS in the mid to long term timeframe. On the earnings call we expect the focus to be on the operational outlook given worsening COVID-19 trends and additional updates on the approval timelines of SavvyWire.

Key points:

Adjusting estimates to reflect worsening Omicron trends on hospitals. We expect revenues of $8.1MM for FQ1/22 (Nov qtr) when OpSens reports on Thursday. We take down our estimates as the Omicron trends in OPS' key markets have been worse than we initially anticipated along with the supply chain challenges and labor shortages, particularly in the hospital environment. Although the Omicron variant seems to be less lethal vs. the Delta variant, its increased transmissibility has burdened the healthcare systems globally in the near term. We expect operating expenses toincrease q/q as OPS prepares for the commercial production and launch of SavvyWire later during the year.

Timelines around regulatory approval of SavvyWire. Recall that OPS filed a 510(k) submission with the US FDA and filed a separate submission with Health Canada for its new guidewire (SavvyWire) to be used in TAVR last month. Management anticipates US approval for SavvyWire in late summer or fall of 2022 and an approval from Health Canada prior to that time.

Lowered the risk profile of TAVR guidewire (SavvyWire). Given several positive developments related to OpSen’s TAVR guidewire (SavvyWire), we recently lowered the risk profile of SavvyWire (details here). We are now more confident on the potential launch and successful commercialization of SavvyWire and reflected that by increasing the multiple associated with the SavvyWire cash flows from 0.6x to 0.8x as part of our outlook and valuation (although still below 1.0x to reflect uncertainty until the final regulatory approvals are received).

Potential for SavvyWire to become the new standard of care in TAVR. Currently, the TAVR procedure typically requires the use of an echocardiogram and pacemaker in addition to a guidewire. SavvyWire can deliver the valve and perform continuous pressure measurement simultaneously. We believe the time/cost savings and efficacy benefits could allow OPS to ultimately command a 35–40%+ share of TAVR guidewire supply in its current markets (US, Canada, EMEA, and Japan). TAVR is a ~US $4B+ global market which we estimate to grow at an 11– 12% CAGR to ~US $7B+ by calendar 2025, with the number of procedures increasing from our forecast of ~200K in 2020E to 300K+ in 2025E. See our in-depth note here for more details on our positive outlook for SavvyWire