BioTuesdays

Analysts start Minerva Surgical at OW, OP; PT $17

Piper Sandler and SVB Leerink launched coverage of Minerva Surgical (NASDAQ:UTRS) with “overweight” and “outperform” ratings, respectively, and price targets of $17. The stock closed at $9.62 on Nov. 15.

Minerva, which went public in October 2021, provides a number of unique products to treat abnormal uterine bleeding, which is an issue that affects millions of women in the U.S. 

“We believe the company is in excellent position to capture meaningful share in the nearly $1-billion domestic total addressable market for its technologies going forward,” writes Piper analyst Matt O’Brien. 

Minerva’s non-structural technology, known as Minerva ES, has demonstrated much better complete cessation of bleeding rates than the market leader, Novasure from Hologic, he added. 

SVB Leerink analyst Danielle Antalffy writes that within the endometrial ablation segment, Minerva is poised for “near-term share gains given its full product portfolio, cross-selling opportunities, and strong clinical evidence.” 

She said endometrial ablation market expansion represents the longer-term opportunity, as Minerva invests in a market that has historically been under-invested in.

Mr. O’Brien said Minerva has added important new products for structural abnormal uterine bleeding that allow it to fight the bundling strategy that many of the company’s competitors have employed within the space. 

“We encourage investors to take advantage of an unwarranted pullback in the stock following the company’s recent IPO as the valuation, about 2.7 times our 2023 sales target, and outlook here is quite attractive, in our view,” Mr. O’Brien said.

Ms. Antalffy said she believes Minerva has a sustainable double-digit sales growth trajectory, and “we expect sales to reach approximately $100-million as the company works to increase patient awareness through DTC, leverages cross-selling opportunities, and expands its sales force.” 

In addition, she said there is significant gross margin expansion on tap that will help the company reach adjusted EBITDA breakeven in 2024.

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