In a new report, Alliance Global Partners analyst Ben Haynor writes that investors appear to have ignored the potential of Profound Medical’s (OTCQX:PRFMF; TSX:PRN) TULSA-PRO MRI-guided ablation system for the treatment of benign prostatic hyperplasia (BPH) based on clinical studies as well as clinical practice outside the U.S.
TULSA-PRO is CE-marked and “European experience suggests its use in BPH could be substantial,” he said.
In Profound’s latest quarterly update, the company said about 40% of TULSA-PRO procedures were performed on BPH patients. “We think this is reflective of European clinicians realizing the benefits of utilizing TULSA-PRO on BPH patients, particularly men with larger prostates who are poorly served at present by other treatment options,” Mr. Haynor said.
TULSA-PRO has successfully treated prostates up to 250cc, compared with other minimally invasive procedures, which are typically not done in prostates over 70cc.
“Based on our calculations, we believe BPH patients with larger prostates comprise a substantial market totalling more than $1-billion for the current patient population,” Mr. Haynor added.
Citing significant investment rounds and acquisitions of firms focused on BPH treatment devices, Mr. Haynor said “we believe [these transactions] support higher valuations for Profound.”
In addition, he expects Profound to gain “additional attention, particularly following the release of the TACT study results (likely in April) and FDA clearance (fall 2019) and anticipate investors will reward Profound’s shares as a result.” TACT is Profound’s pivotal study of TULSA-PRO to treat prostate cancer.
Mr. Haynor reiterated his “buy” recommendation and US$1.60 [C$2.15] price target for Profound, which closed at US$64 cents [C$83 cents] on the Jan. 22.
