Lucid Capital Markets initiated coverage of Envoy Medical (NASDAQ:COCH) with a “buy” rating and price target of $2.00. The stock closed at $0.66 on July 24.
Envoy designs, manufactures, and is working to commercialize fully implanted hearing devices for adults across the hearing loss spectrum. Through its technology that it calls “Invisible Hearing,” Envoy’s implants carry no external microphone, processor, or battery worn on the body. The company runs a single reportable segment built around two product platforms: the Acclaim cochlear implant which is an investigational Class III device that has completed pivotal trial enrollment, and the Esteem fully implanted active middle ear implant (FI-AMEI), which won FDA approval in 2010. While the Esteem remains commercially available, it is minimally sold in the U.S. today. Both products share a common technical architecture of a piezoelectric sensor implanted in the middle ear that draws mechanical energy from the ossicular chain and eardrum. These implants effectively use the patient’s own ear as the microphone rather than an external artificial microphone. Pair this with an implanted rechargeable battery and sound processor, it leads to a fully implantable hearing health device.
“Envoy is best described as a pre-revenue medical device company,” writes analyst Alex Nowak.
But, “backed by numerous patents, existing FDA approval on Esteem (Envoy’s fully implanted device for moderate to severe hearing loss), FDA breakthrough device designation, in-house design/manufacturing ready to scale to 2,500 units/year, and excellent interim results from the clinical study (full readout less than 1 year away), Envoy’s fully implantable CI is going to disrupt the space held by the legacy incumbents (Cochlear, Sonova/Advanced Bionics, and Med-El),” he adds.
