BTIG downgraded Acutus Medical (NASDAQ:AFIB) to “neutral” from “buy” and removed its price target, citing a forecast of flat sales in 2022, among other things. The stock closed at $2.46 on Jan. 19.
Acutus is a cardiac arrhythmia company that offers a full portfolio of products used in catheter ablation procedures to treat arrhythmias.
The company has announced a restructuring plan that will cut annualized operating expenses by $23-million to $25-million. “The cuts will postpone the need for funding, but we believe steeper cuts are needed, particularly if Acutus’ revenue outlook is affected by salesforce disruption and attrition,” writes analyst Marie Thibault.
She said Acutus is trading just above net cash per share, and though “we continue to think its pulsed field ablation (PFA) program makes it an attractive potential acquisition target, we acknowledge that the market is currently assigning little value to either the core business or the PFA pipeline.”
Ms. Thibault said M&A comparables in PFA have ranged from $450-million to $675-million (reportedly) in upfront cost for pre-revenue assets. “Acutus’ PFA program is at an earlier stage, and we think its use of a focal catheter for point-by-point ablation could allow it to be complementary to the ‘single-shot’ technologies in development.”
However, to remain at a “buy,” she estimated a hypothetical acquirer would need to assign an approximately $125-million enterprise value by year-end to reach an equity value that provides reasonable upside for investors from the closing price on Jan. 19. We are not convinced this will happen soon and so downgrade to neutral.”
