BioTuesdays

Mackie Research ups Profound Medical to speculative buy

Profound Medical

Mackie Research upgraded Profound Medical (TSX:PRN; NASDAQ:PROF) to “speculative buy” from “hold,” but reduced its price target to $16.20 from $26.10 due to the anticipated impact of the coronavirus. The stock closed at $9.96 on March 23.

Analyst Andre Uddin writes that Profound had expected to sign contracts for 20 TULSA-PRO sites this year – with 15 of those sites operational by the end of 2020 – as well as obtain a temporary “C-Code” in July 2020, which would provide partial reimbursement for three years. 

“Profound had planned to initiate several clinical trials in 2020 to help apply for a permanent, specific CPT code – we believe those trials are likely going to be delayed,” he says.

Mr. Uddin noted that since Profound recently completed a US$40-million equity financing and fully repaid its C$12.5-million debt, he estimates the company would have some C$49-million in cash by the end of Q1 2020.

“We expect the coronavirus outbreak would mainly affect sales of products used in hospitals/clinics. We are reducing our TULSA-PRO sales estimates as we expect fewer devices to be installed which would result in a reduction in recurring revenues,” Mr. Uddin said.

Sign up for the BioTuesdays weekly newsletter

Get the latest news on the healthcare industry’s corporate and clinical developments, executive moves, and market updates. Every Tuesday, in your inbox.