(Photo: Irwan iwe for Unsplash)
Quebec City’s OpSens (OPS, $ 2.60) Coronary Procedures Guidewire specialist is approaching an important milestone that could also catch the eye of a suitor.
The “speculation” that the medical device giant Edward Lifesciences (EW, US $ 118.50) one day being interested in the Quebec SME is not new given the small world of medical equipment manufacturers.
“This topic has come up periodically for years in discussions with investors, as is usually the case with any medical device company with good technology about to be deployed,” said Justin Keywood, analyst at Stifel GMP.
In fact, OpSens has just obtained approval from Health Canada to conduct a very first clinical study on 20 patients at the University Institute of Cardiology and Pneumology of Quebec and at the Montreal Heart Institute, two institutions that participated. further development of the new SavvyWire guidewire.
This new guidewire has been designed specifically for the replacement of the aortic valve through the skin. He delivers the prosthesis and measures hemodynamic pressure continuously during the procedure.
An estimated potential market of US $ 5 billion (US $ billion)
The game is not won because the two to three month study will have to be conclusive, but the approval of Health Canada would be an “important step” towards the filing of an application for authorization with that of the Federal & US Drug Administration, in early 2022.
If OpSens were given the green light from the United States, the potential US $ 5 billion market for dermal coronary procedures would open up before it.
“The first human study (for the SavvyWire) brings OpSens one step closer to approving a device for this market. If the device demonstrates its value and gains market share at the expense of the giants Medtronic and Boston Scientific, this pivot would increase the chances that the company falls into the eye of a purchaser, ”also sees Rahul Sarugaser, of Raymond James.
Edward Lifesciences is the most natural contender because the valve supplier owns two-thirds of the aortic valve replacement market, but its “arsenal” does not include guidewires.
The US $ 75 billion colossus could incorporate SavvyWire into its offering and thus strengthen its dominant share of a market expected to reach US $ 8 billion by 2025, speculates Rahul Sarugaser.
Target prices of $ 2.95 to $ 6
This potential scenario appeals to long-term analyst Raymond James, but his buy recommendation and new target price of $ 6 for OpSens is based entirely on the “fundamental” valuation of the company of $ 2.50 per share. action for the revenues it forecasts by 2023 and $ 3.33 per share for the present value of US $ 355.9 million that it gives to the future market for dermal aortic valve replacement.
Justin Keywood of Stifel GMP sees the same potential market for SavvyWire as his colleague. Within 3 to 4 years, Opsens’ revenues and margins could triple to $ 100m and 30%, respectively, he estimates.
Even after tripling in one year, the title is less expensive (7 times the expected income in 2021) than its peers (10 times). “The longer this gap persists, the better the chances that the company will eventually fall prey,” he wrote, recalling that SavvyWire still has several steps to take before reducing the risk profile of the company.
He also recommends buying OpSens, but its target price of $ 2.95 is much more modest.
Stifel GMP spearheaded the recent Open share issue in February which raised $ 28.7 million, priced at $ 1.80 each. THE broker Raymond James also participated.
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