BTIG ups Acutus Medical to buy; PT $2

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BTIG upgraded Acutus Medical (NASDAQ:AFIB) to “buy” from “neutral” with a price target of $2, after the company announced a debt refinancing and the sale of its left-heart access product portfolio that should extend its cash runway into early 2024. The stock was quoted at 95 cents, up 15 cents, or 19%, at midday on April 27.

Acutus is a cardiac arrhythmia company that offers a full portfolio of products used in catheter ablation procedures to treat arrhythmias. 

The debt refinancing includes replacing the existing debt facility, which was due in May 2024, with a new debt facility due in five years. The left-heart access portfolio is being sold to Medtronic for a $50-million upfront cash payment, with potential for additional contingent consideration payments over time. 

Analyst Marie Thibault writes that the left-heart access portfolio was a contributor to revenue and was expected to be a growth driver. “Accordingly, we reduce our revenue forecast,” she added. 

Ms. Thibault said the refinancing offers the company immediate relief on its financing concerns and gives management time to show sustainable commercial traction. 

“However, our outlook remains cautious and our $2 price target, based on a multiple of two times enterprise value/sales applied to our 12-to-24 month revenue forecast, is roughly in line with net cash per share,” she said.