Canaccord Genuity raised its price target for Neuronetics (NASDAQ:STIM) to $20 from $8, reflecting the company’s strong fourth quarter preliminary financial results and a new focus on high-margin utilization, compared with previous management’s focus on driving capital sales. The stock closed at $14.05 on Jan. 15.
Analyst William Plovanic writes that the company also is planning to launch a new marketing campaign to increase awareness of its transcranial magnetic stimulation (TMS) as an option for patients with major depressive disorder along with a recently expanded sales force.
“To drive increased patient flow to the accounts, Neuronetics will target patients who are looking for alternatives to drug therapy for major depressive disorder via digital and social media strategies,” he added.
Mr. Plovanic said Neuronetics also plans to drive growth through its regulatory pipeline, hoping to expand its TMS label to include bipolar depression. The company is currently in the early stages of the process and is working to set up a meeting with the FDA.
“Management seems confident that the data gathered via its TrakStar database – where physicians who are already treating bipolar depression off-label have been recording data – will be sufficient to support a 510k regulatory filing,” he added.
“Given this involves the same exact treatment protocol as major depressive disorder, and the data presented by physicians in the field is favorable, we believe there is a likely path forward for label expansion,” Mr. Plovanic said.
