Opsens Inc T.OPS

RBC

[retiredcf]

Once again, they retain their $3.50 target. It will be interesting to see if these results might prompt someone else (ie. Company D) to take a run at the company. GLTA

November 22, 2023

Opsens Inc.
FQ4/23: Results ahead of consensus estimates; focus likely to remain on the sale process

TSX: OPS | CAD 2.85 | Outperform | Speculative Risk | Price Target CAD 3.50

Sentiment: Neutral

Our view: OpSens reported FQ4/23 (Aug-qtr) results that were ahead of consensus estimates. Revenues of $14.2MM were ahead of consensus ($13.1MM) and broadly in line with RBCe ($14.3MM). Revenues were up +8% q/q and +57% y/y. Net loss of $1.6MM during the quarter was better than RBCe ($2.8MM loss) and consensus ($2.9MM loss) on lower-than-expected operating expenses. TAVR (SavvyWire) revenues grew +38% q/q to $1.1MM as the company ramped up commercialization of SavvyWire but were slightly below RBCe ($1.2MM). We label the sentiment neutral as stock direction will be tied to the sale process, in our view. The acquisition of OPS by Haemonetics (NYSE: HAE, NC) is expected to close by the end of January 2024, subject to satisfaction of customary closing conditions. The BoDs have unanimously approved the transaction and recommend that shareholders vote in favour of the transaction ($2.90/sh). The arrangement is to be voted on at a special shareholder meeting on December 1, 2023. In our view, the ~17% discount to our and the consensus PT of ~$3.50 at the time of acquisition announcement is somewhat disappointing and likely reflects poor broader market conditions. The proxy circular filed on November 2, 2023, noted a total of 4 unnamed parties over an extended period of time. We believe an extensive process was completed and the likelihood of an overbid remains low but Company D (as noted in the proxy filing) could emerge given they were unable to enter into a strategic transaction at the time.

Revenues ahead of consensus estimates and broadly in line with RBCe. FQ4/23 revenues of $14.2MM (+8% q/q and +57% y/y) were ~8% above consensus ($13.1MM) and broadly in line with RBCe ($14.3MM). Total medical revenues were $13.3MM (+7% q/ q; +66% y/y), including FFR and dPR sales of $6.8MM (+20% y/y), below RBCe ($7.1MM). FFR and dPR revenues were led by strong performance in North America with OptoWire US sales growing at 13% y/y (likely reflecting revenue synergies with the SavvyWire launch and benefits from the increase in the US sales force), EMEA (served through distributors) recorded growth of 42% y/y, while Asia Pacific (also served through distributors) saw growth of 13% y/y. Optical medical products revenues (including the supply agreement with Abiomed) were $5.4MM (+146% y/y), above RBCe ($5.0MM). TAVR (SavvyWire) revenues were $1.1MM (+38% q/q), below RBCe ($1.2MM). The company moved to a full market release of SavvyWire during FQ4/23. Management expects EU approval of SavvyWire in early CY24. Industrial revenues were $0.8MM (-15% y/y) and came below RBCe ($1.0MM).

FQ4 net loss of $1.6MM was better than RBCe ($2.8MM loss) and consensus ($2.9MM loss). Gross margins were ~58% vs. RBCe (~59%) and consensus (~56%) and FQ4/22 (~48%), led by a favourable product mix, a higher weighting of direct sales to hospitals and higher sales volume. Operating expenses of $9.7MM (-17% q/q; +15% y/y) were below RBCe ($11.2MM) and consensus ($10.7MM). Operating expenses have increased y/y as the company has invested in sales and marketing of the SavvyWire product launch along with an increase in R&D to support existing products and to drive future innovations. OpSens ended FQ4/23 with a cash position of $18.1MM (vs. $20.5MM as of FQ3/23).

[Brudom2002]

Je continue croire que ca vaut plus que l'offre reue. Nous avons de bons produits, la croissance est l, nous sommes de plus en plus connui. Pour ma part j'ai vot contre la recommandation du CA