BioTuesdays

AGP ups ReShape Lifesciences PT to $18.50 from $12

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Alliance Global Partners raised its price target for ReShape Lifesciences (NASDAQ:RSLS) to $18.50 from $12, citing an improved outlook and lower-than-anticipated share count following it’s merger with Obalon Therapeutics. The stock closed at $6.40 on June 16.

“We see the merger as bringing together the two most impressive obesity devices on the market, both with solid safety and efficacy profiles,” writes analyst Ben Haynor. “Despite some challenging circumstances in the history of both devices, we think ReShape is poised to deliver.” 

ReShape’s Lap-Band has been implanted in more than a million patients since its introduction nearly three decades ago. “It is the only device, to our knowledge, that can market with a weight loss claim and also the only device with widespread reimbursement in the U.S., Mr. Haynor said.

The Obalon gas-filled intragastric balloon (IGB) has a superior safety profile to other, liquid-filled, IGBs that have been marketed in the U.S. and internationally, he added. 

“Our analysis of recent search engine data suggests to us a significant snap-back in bariatric procedures is on the horizon,” Mr. Haynor said. “We are raising our 2022 revenue estimate, but our expectations remain highly conservative relative to the forecasts ReShape furnished for their SEC filings in conjunction with the merger.”