AGP starts coverage of Itamar Medical at buy; PT $15.50

Alliance Global Partners initiated coverage of Itamar Medical (NASDAQ:ITMR) with a “buy” rating and $15.50 price target. The stock closed at $9.10 on Aug. 29.

“We see Itamar as the technology leader in home sleep testing (HST) for sleep- disordered breathing conditions, such as obstructive sleep apnea (OSA),” writes analyst Ben Haynor.

OSA is a substantial problem with numerous comorbidities including obesity, diabetes, and cardiovascular conditions. The patient population is significant, he said, with 54 million people in the U.S. having at least mild OSA and 24 million people with moderate or severe OSA.

“Although we disagree with the commonly cited statistic that 80% of OSA sufferers are undiagnosed, as it can be traced back to studies conducted at the turn of the millennium, we do believe that about 80% of sufferers are presently untreated,” Mr. Haynor said.

With such a large patient population and only about 4,600 sleep clinics containing some 19,000 beds in the US, “we believe HST must play a significant role in diagnosing this population,” he added.

Itamar’s proprietary peripheral arterial tone (PAT) signal is built into their WatchPAT line of HSTs.

Mr. Haynor said WatchPAT devices have numerous superior characteristics relative to competing home sleep tests, including total sleep time calculation; only three points of contact with a patient; clinically validated HST; and premium Medicare reimbursement.

“We believe investors willing to be patient in both accumulating positions and holding the shares will be well rewarded,” he added.


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