Opsens Inc.
FQ2/23 Preview: Focus to be on SavvyWire ramp-up and adoption trends
Our view: OpSens will report FQ2/23 (Feb-qtr) results on 13-Apr. We estimate revenues of $10.2MM (flat q/q; +26%y/y) for FQ2. We believe the focus will remain on the SavvyWire launch and expected ramp-up in US and Canada. Recently, the company signed its first GPO agreement for SavvyWire in the US, which should aid the US ramp-up of SavvyWire over time. We will also look for commentary/evidence related to commercial synergies between OptoWire and SavvyWire since both the wires utilize the same OptoMonitor device.
Key points:
Expecting revenues to be flat sequentially. We expect revenues of $10.2MM (flat q/q; +26% y/y) for FQ2/23 (Feb-qtr). Although, we forecast TAVR revenues to increase sequentially as the commercial launch of SavvyWire ramps up (1,000 SavvyWire procedures completed as of 05-Apr vs. ~500 as of 12-Jan), the revenue increase will likely be offset by certain non-recurring revenue reported in FQ1. We expect the focus to be on the SavvyWire ramp-up in the US and Canada and OptoWire revenue trends in Japan. We will look for GM trends in the quarter (FQ1 GMs improved to ~58%, +670bps y/y) and commentary/evidence related to any commercial synergies between OptoWire and SavvyWire.
Updates on SavvyWire. We expect updates on the SavvyWire launch to date (adoption and reordering rates). On the last earnings call in Jan'23, management had guided for a full scale US commercial launch in H2/FY23. Recently, the company signed its first GPO agreement for SavvyWire in the US, which should aid the US ramp-up of SavvyWire and strengthen OPS’s positioning in the US market when it comes to securing additional GPO contracts for SavvyWire (here). We will also look for any early trends related to US physicians adopting LV pacing during TAVR. Currently, only 10% of US surgeons use LV pacing during TAVR procedures in contrast to significantly higher levels in Canada and Europe. 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. Finally, we will look for any updates to EU approval timelines (expected in mid-2023) and regulatory filing in Japan.
Focus on OptoWire revenues in Japan. We will look for updates to Japan OptoWire revenues in FQ2. OptoWire revenue in Japan lagged in FQ1 (-31% y/y) while ex-Japan, OptoWire revenues were up +15% y/y in FQ1. OPS is seeking a partner for potential SavvyWire commercialization in Japan.
Estimate and PT revisions. Although our FQ2 revenues are largely unchanged, we are now forecasting a more gradual ramp-up of SavvyWire in future periods as OPS signs additional GPO agreements for SavvyWire and US physicians' transition to LV pacing over time. We continue to estimate peak market share of ~25% for SavvyWire in OPS key markets. Based on our revised outlook, our PT is revised lower from $4.00 to $3.50.