Viveve Medical Inc. (VIVE:NASDAQ) released its Q1/17 financials on May 11, reporting revenue of approximately $3 million, beating analyst expectations. The company also reported that it launched its U.S. commercial sales team in late January, and 62% of sales that quarter derive from the United States.
The company also closed a public offering that resulted in gross proceeds of $34.5 million. The offering was originally $25 million and was increased because of high demand.
Viveve is a medical technology company focused on new solutions to improve women's overall well-being and quality of life. According to the company, the Viveve System uses radio frequency energy-based technology to "uniformly deliver volumetric heating while gently cooling surface tissue to generate robust neocollagenesis in one 30-minute in-office session. Viveve is currently in the process of submitting an IDE [investigational device exemption] to the FDA to conduct a pivotal study on use of the device in the United States for improvement in sexual function."
Industry analysts reacted positively to the results. Jeffrey S. Cohen of Ladenburg Thalmann noted in a May 12 report that "Q1 revenue increased 137% on an annual basis and 24% sequentially as the company's commercial and clinical activities continue to drive adoption and penetration in the marketplace, particularly in the United States from the recent commercial launch."
Cohen also noted that "gross margins during the quarter were 47%, slightly ahead of our estimate for 45%. We continue to expect modest gains throughout the year as scale takes hold, but would expect more material gains during 2018 as product improvements related to design and form factor are placed in the market."
Ladenburg Thalmann has a Buy rating and a target price of $22.
Analyst Anthony Vendetti of Maxim Group stated in a May 12 report that "we would continue to be buyers of VIVE following its seventh consecutive quarter of double-digit revenue growth driven by a successful launch of the U.S. commercialization coupled with reaffirmed guidance. For the quarter, 62% of its better-than-expected sales were attributed to the U.S. market, which was commercialized in late January."
Vendetti also noted that Viveve "expanded its South Korean indication to include vaginal laxity and received regulatory approval in Malaysia." This brings the number of countries with regulatory approval to 54. Vendetti stated that during the quarter, "the FDA asked VIVE to conduct a preclinical study to support its IDE submission, which we believe could take an additional six months. Management indicated that it expects to start its VIVEVE II study for the indication of improving sexual function by the end of 2017." The Viveve II study will involve the "use of the Viveve System for the treatment of vaginal tissue to improve sexual function in women. The clinical trial is to use the Female Sexual Function Index (FSFI) as the primary efficacy endpoint, an important distinction versus competitors. The proposed VIVEVE II clinical study is a randomized, double-blinded, and sham-controlled trial that is proposed to include approximately 250 patients at up to 25 study sites in the U.S. and Canada."
In conclusion, Vendetti stated, "We believe management's focus on supporting its commercialization efforts in the U.S., obtaining additional regulatory clearances, and investing in market awareness, should provide the foundation for further growth."
Maxim maintains a Buy rating and an $11 target price on Viveve.
Analyst Greg Chodaczek of B. Riley & Co. echoed the sentiments of the other traders in a May 12 report, noting "Viveve's management reiterated its 2017 revenue guidance of $14MM to $16MM. Based on our calculations, the company will need to double its Viveve System install base and sell close to 10,000 disposable treatment tips in 2017 to meet the mid-point of its revenue guidance. We think this guidance is very reasonable for multiple reasons including initial sales in the U.S. were stronger than expected despite only selling the Viveve system for nine weeks, Brazil and Colombia are coming online, South Korea's regulatory agency expanded the label for the Viveve system to include vaginal laxity, and Asia-Pacific distribution partner, Dynamic Medical Technologies, Inc. (DMT) has a minimum purchase requirement of 75 Viveve Systems in 2017."
B. Riley is maintaining its Buy recommendation and $10 target price.