TSX:OPS - Post Discussion
Post by
retiredcf on Apr 18, 2023 9:27am
RBC Follow Up Report
Their upside scenario target remains $5.00. GLTA
Outperform Speculative Risk
TSX: OPS; CAD 1.79 Price Target CAD 3.50
Scenario Analysis*
FQ2/23: Results ahead of estimates; Larger scale commercial launch of SavvyWire in H2/FY23
Our view: OpSens reported FQ2/23 (Feb-qtr) revenues of $10.8MM, ahead of RBCe ($10.2MM) and consensus ($10.5MM). Revenues were up +6% q/ q and +33% y/y. Net loss of $3.0MM was better than RBCe ($3.7MM loss) and consensus ($4.4MM loss). Management noted the SavvyWire launch is tracking ahead of internal expectations and will transition from controlled release into a larger scale commercial launch of SavvyWire in H2/FY23.
Key points:
FQ2/23 revenues of $10.8MM (+6% q/q and +33% y/y) above RBCe ($10.2MM) and consensus ($10.5MM). Included in the $10.8MM were total medical revenues of $9.9MM (+8% q/q; +40% y/y), with FFR and dPR sales of $5.7MM (+23% y/y) ahead of RBCe ($5.4MM). Optical medical products revenues (including the supply agreement with Abiomed) were $3.4MM (+43% y/y) ahead of RBCe ($3.2MM). Structural Heart (SavvyWire) revenues of $0.5MM were up +31% q/q, as the company ramped-up commercialization of SavvyWire but were light vs. RBCe ($0.7MM). Industrial revenues of $0.9MM (-12% y/y) were in-line with RBCe ($0.9MM). GMs of 57% were above estimates (RBCe: 56%; cons.: 54% and operating expenses of $9.3MM (-4% q/q; +44% y/y) were broadly in- line with estimates (~$9.4MM). FQ4 net loss of $3.0MM was better than RBCe ($3.7MM loss) and consensus ($4.4MM loss).
Updates on SavvyWire. Management noted that SavvyWire launch is tracking ahead of internal expectations. SavvyWire has now been used in over 1,000 procedures since launch (~500 procedures as of mid-Jan in ~30 hospitals across North America (60 projected by FY end) and has average share of ~35-50% in TAVR volumes at some of the more mature hospitals that have been using SavvyWire for a few months. At some centers, SavvyWire has become the dominant wire and management expects increased adoption of SavvyWire given its benefits over traditional guidewires. OPS signed its first GPO agreement for SavvyWire in March (here) and management expects to reach GPO coverage for SavvyWire similar to that of OptoWire (covering over 90% of US hospitals) by the end of CY23. Management noted ~2/3rd of SavvyWire hospitals are also OptoWire customers. 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.
Outlook. Management expects double-digit revenue growth for FQ3/FQ4 and anticipates further improvement in GMs over the medium term as revenues from the regions with direct sales forces increase along with growth in SavvyWire revenues. The company noted that it is investing in products that might come to the market in the next 24 months. Management expects data from the SAFE-TAVI study by end-FY23/early- FY24 that will aid SavvyWire approval in Europe (expected in CY23).
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