Opsens Inc.
CFO departure and initial read through from J&J's acquisition of Abiomed
TSX: OPS | CAD 2.48 | Outperform | Speculative Risk | Price Target CAD 4.00
Sentiment: Neutral
Our View: OPS announced the departure of CFO Mr. Robin Villeneuve. Louis Laflamme, current President and CEO of OpSens will assume the role of Interim CFO. The company will conduct a comprehensive search to find a permanent CFO and hopes to secure a new CFO by the Q1 release in mid-January, according to management. Separately, J&J announced the acquisition of Abiomed this morning. We note that OPS is a supplier of an important component for Abiomed’s Impella heart pump. Additionally, a portion of the milestone payments associated with the acquisition are related to Impella products. Our discussions with OPS management indicate that the current supply agreement should remain in place until 2028. In our view, J&J could look at OPS as a potential acquisition candidate in future to potentially de-risk the supply chain for the Impella heart pump.
CFO departure: OPS announced the departure of Mr. Robin Villeneuve, CFO and Corporate Secretary for OPS. Mr. Villeneuve will leave OPS on 9-Dec-22 and will pursue other business opportunities. Louis Laflamme, current President and CEO of OpSens will assume the role of Interim CFO. Mr. Laflamme has previously served as OPS CFO during 2005 and 2013. The company will conduct a comprehensive search to find a permanent CFO and hopes to secure a new CFO by the Q1 release in mid-January, according to management.
J&J announced acquisition of Abiomed: This morning J&J (NYSE: JNJ, NC) announced the acquisition of Abiomed (NASDAQ: ABMD; NC) for a total EV of ~$16.6B. We note that OPS currently has a supply agreement with Abiomed to supply an important component for Abiomed’s Impella heart pump. The supply agreement was extended by 4 years to April 2028 earlier this year (see details: here). Our discussions this morning with OPS management indicate that the current supply agreement should remain in place. Additionally, a portion of the milestone payments associated with the acquisition are related to Impella products. In our view, J&J could look at OPS as a potential acquisition candidate in future to potentially de-risk the supply chain for the Impella heart pump. We have previously noted that OpSens could be a future takeout candidate given the merits of its SavvyWire (approved by the FDA and Health Canada; EU approval expected in mid-2023) and OptoWire products. In our view, the commercialization of the SavvyWire could benefit from the marketing and distribution capabilities of a larger player and potentially lead to improved margins for the product. The company’s OptoWire product has been used in 150,000+ patients worldwide.