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Jeffries report summary. Someone sent this to me, not sure where it's from so take it for what it's worth:
Jefferies starts Profound Medical at buy; PT $31 (Canadian)
Michelle Carr September 15, 2020
Profound Medical Logo
Jefferies launched coverage of Profound Medical (TSX:PRN; NASDAQ:PROF) with a “buy” rating and price target of $31 (Canadian). The stock closed at $18.69 on Sept. 14.
Analyst Raj Denhoy writes that Profound’s TULSA-PRO fits a large and largely underserved group in prostate treatment: men with benign disease for whom current technologies are not optimized and those with malignant disease not advanced enough for surgery or radiation.
“This link in the treatment chain is 600,000 men a year in the U.S. alone,” he added. “Routine reimbursement and more data will crack it wide open, but even targeting just early cancer with self-pay supports $100-million-plus (Canadian) in sales by 2024.”
Profound’s TULSA-PRO uses MRI imaging and focused ultrasound to ablate prostate tissue in a non-invasive, highly targeted/patient specific, and robotically controlled way.
Data from the U.S. pivotal TACT clinical trial in 115 low and intermediate cancer patients showed a better than 75% PSA reduction in 96% of patients; median prostate size reduction of over 90%; and 65% with no evidence of disease at one year. There were also very low rates of toxicity and other adverse events. TULSA-PRO was granted FDA approval in August 2019.
Mr. Denhoy said Profound is early in the U.S. commercialization of TULSA-PRO. There are three sites actively treating patients and seven more expected by year-end. Eight sites are treating in Europe and one in Japan.
Reimbursement for TULSA-PRO in the U.S. is evolving and payment is still mostly out-of-pocket. “While our forecasts do not assume reimbursement shifts, Profound has recently noted that TULSA could be covered under existing codes and a third-party memo supporting such a path has been circulated,” he added.
Mr. Denhoy said his forecasts are based on 125 U.S. sites performing 6,428 TULSA procedures in 2024, generating revenue of $65-million (Canadian). International markets are expected to add another $29-million (Canadian) in 2024 from 80 sites. Other revenue, including Profound’s Sonalleve device, which treats uterine fibroids, contributing $14-million. “In sum, we model $108-million in global revenue by 2024,” he said.
In addition, Mr. Denhoy said that with routine reimbursement, both site adoption and utilization should be much higher. “A model assuming 170 sites in the U.S. and higher use yields revenue in 2024 of $185-million (Canadian) in the U.S. alone.
PRN PROF
Is the Jeffries target $C 50? That's higher than the latest Raymond James target if so. Nice volume today on this buy rating.
Another analyst starts with a buy rating
September 15, 2020 09:01 AM ET (BZ Newswire) -- News
Jefferies analyst Raj Denhoy initiates coverage on Profound Medical (NASDAQ:PROF) with a Buy rating.Jefferies analyst Raj Denhoy initiates coverage on Profound Medical (NASDAQ:PROF) with a Buy rating.
I agree with you short term at least. I don't know what the hold up is.
But, long term I think we both know how good this procedure is and it will eventually become standard of care for most cases of both cancer and BPH. We may have to wait longer than planned and suffer short term losses from here but I'm willing to do that for the long term gain.
Think about it....if you had BPH or cancer would this not be the first thing you would consider? Eventually many more people will find out about this and they will all make the same decision you or I would.
They do a presentation this Thursday with a corporate update so lets see what they say. I am a little surprised there have not been any more installations.
Also, I just noticed this from last week:
September 10, 2020 11:46 AM ET (BZ Newswire) -- News
Lake Street initiates coverage on Profound Medical (NASDAQ:PROF) with a Buy rating and announces Price Target of $22.
What this stock needs is some real evidence this procedure is being adopted...as in more installations. The RJ analyst had 15 or more installed devices by year end in his most recent report I think. That's 11 more than we have now in the North America and there are only about 17 weeks left in the year. If he is right there should be a string of PRs for new installations which will move the stock. If not, it will drift flat to lower unless there is other news we don't know about.
I agree with you. It will be hard to cover that many shares even without news. If the analyst is right about 15+ machines by the end of the year we should get a steady stream of PRs on new installations between now and Jan 1. The only reservation I have is will a bad market hold it down.
I don't know if this site is accurate but it shows 344k shares short
http://shortsqueeze.com/?symbol=prof&submit=Short+Quote
PROF is also my largest holding and while I may trade a few shares along the way, I have a core set of shares I will not let go. I expect this could be the best investment I've ever made by the time it's over. Most likely it will end with a buyout but hopefully not for at least a few years.
My question back to fausthimself would be was the Recognia service right that first time they signaled a trade on PROF?
PROF presenting at Canaccord Growth conf today. Wonder if the presentation is sparking some buying. This company is still very unknown. Once the word gets out it is going to fly.
After the SA article in the comments section someone posted this link to an interview with the Dr running the first clinic in the US to get the Tulsa Pro. Very interesting.
https://biotuesdays.com/2020/08/11/profound-medicals-tulsa-pro-prostate-cancer-treatment-finds-early-adopter-in-dr-joseph-busch/
I forgot to mention the date. I noticed that too but it seemed like the date was wrong based on the comments. Not sure what to think of that.
Link to new Raymond James report. He raised target from $C 38 to $C 43 and 2024 target up to $C 443. I can't explain why the stock is down. Possibly not many people see this because it's a Canadian publication? Anyway I thought he would raise is estimates based on the report.
https://www.cantechletter.com/2020/08/the-skys-the-limit-for-profound-medical-says-raymond-james/
I would expect the RJ analyst to update his model with the new information and come out with something in the next few days. Seems likely he will up his estimates, especially longer term.
The per procedure fee will be 7710 and I believe the previous number I remember when combining disposables and machine use it added up to 6700 so this is a 15% boost in revenue model. Also, they would not promise but they felt there is a good chance insurance coverage will begin in 2021, not 2 years from now. That is key for this to really take off so I was glad to hear it. Time will tell on that.
My guess is RJ analyst adjusts his revenue model based on the 15% boost.
Also company stuck to the timeline of having 20 (or was it 25?) machines installed by Q2 2021. That is well above RJ analyst assumptions.
Overall I was very happy with the call but the one disappointment was the Q2 revenue mostly due to the CA installation not doing any procedures due to covid. Wonder what you do if you have cancer there, go to another state?
Dropping on the day they report does make you wonder what's coming out after the close. But, the fundamentals on this company are very sound. They have plenty of cash, no debt. Only negative right now that we know of is covid delays. I'm wondering why they raised more cash now when they had 3 years worth of cash. Hoping to hear this afternoon and hoping it's because they expect to ramp up installations faster than anticipated.
We'll see.
PROF offering closed and the full over allotment was taken...no surprise. It is bullish imo the over allotment was taken although it does cause additional dilution. Does anyone know if the stock is restricted for some period like 90 days? I remember reading the offering in Jan was restricted for 90 days.
If your details are right, it's not a terrible price but I agree with you I was hoping for 15+ and also agree why not wait until we are in the 20's? Again the only reason I can come up with is they need the cash to build more devices then they anticipated and if so that will end up as a huge positive. There should be a conf call in 2 or 3 weeks so hopefully we get details then.
Also, 14.50 $US should be a floor now because we know big buyers come in at that price.
I think you are right. I was bidding 15.15 in after hours but couldn't get the stock. Maybe tomorrow. This is a gift imo, but it is predicate on them getting a good price on the offering.
I believe they were funded into 2022 so my best guess is demand is so high that they need to raise cash early to build more devices for installation beyond the previous plan. They did change the model from selling machines to leasing them so that does eat up capital. This could end up being a huge positive.
I have a bid in in after hours but so far I'm being outbid. I agree, this is a bit suspicious regarding RJ and also the fact the stock has been weak in a strong market the last few days means this was leaked most likely. The important thing for us is what price they get. IMO, if you want to buy any substantial number of shares in this company this is the only way to get them because it trades too thin to buy on the open market. If I'm right they should get a very good price. They don't need the money now anyway so I hope they don't settle for too little.
Stock offering just announced...took me by surprise. After the last one the stock went straight up so lets see the terms. No size or price disclosed yet.
Great link, thanks!
I believe RJ analyst was projecting 7 machines by end of year. Two of those to radnet in Q3 (already agreed to but not installed yet), and 3 more in Q4. The one to Mayo seems to be a surprise, at least this early, so maybe we are at least 1 ahead of his estimate so far.
He has been more conservative on all his estimates than the company is guiding. For example when the company was guiding to 20 by end of year (might have been 17, not sure), RJ analyst was estimating 10. Now he is down to 7 due to covid delays but we may beat that.
My whole point is the RJ analyst is making conservative estimates below company guidance and yet he still has a 4 year price target of $C 390 assuming insurance coverage comes thru.
I agree with you, use dips in this one to build your position if you want more of this company.
The date of the article was July 9, last Thursday. So, at this point I guess they do not plan to PR this but I don't understand why they wouldn't. This is a huge affirmation of their technology.
Wow, RJ report link with new 2024 price target of $C 390 per share if they can use the existing C-code.
https://www.cantechletter.com/2020/06/profound-medical-gets-bullish-new-price-target-from-raymond-james/
I would hope not a buyout because I would rather go it alone for some time and in the end get a lot more out of this. A buyout now would mean probably $50 per share at best. I would rather wait for 3 figures prices.
We have smart management here and I think they indicated on one conf call they have received interest but at this time while they will listen to offers they are not likely interested. They know what they have.
My guess would be news of ability to use the existing CPT code which moves the timeline for insurance coverage up by at least 2 years if not 3. Another possibility is a multi-center deal. Another could be adoption by some urology medical organization. There are likely guidelines written for treatment of BPH and prostate cancer. It would be nice if our device was prominent in such a guideline...especially if it is the first choice option to consider.
Unfortunately though, my experience with stocks that rally and close near the high on Friday is there is no news Monday and the stock is down. Hopefully this is an exception.
I think it is 4k for consumables per procedure and I seem to remember 2600 for the machine rental (assuming the provider has not bought the machine). In the article he's using $6k per procedure so that is probably a good conservative estimate. Please post your revenue model when you complete it.
I think this was discussed in both of the last 2 calls. In the May call it was discussed in the Q & A when an analyst discussed the procedures per week was much higher than expected at a recent installation. In the call in March I think the company discussed it plus it was also clarified in the Q & A. I think the company was expecting 4 procedures per day but only 1 day a week so they would have time to evaluate the results before going forward. Eventually they expected 4 procedures every day. I could be wrong so please verify it. If you find anything can you post it?
Risks....
At one point I read somewhere that the PSA reduction could start to slip over time requiring a 2nd procedure. With the recent data I think that concern is gone.
This is clearly a superior way to treat prostate issues. There could be some risk adoption is slow, especially considering the covid-19 situation. As a matter of fact, no new installations have been announced in several months now. This could ultimately lead to more dilution if it goes on too long. However, the stock went straight up from 12 to 20 after the last dilution. The company got a great price for those shares and it was obvious many were willing to put up the cash to get into this stock...buying on the open market is hard for a big player.
One question I have is if they find they can use an existing CPT code, do they need anything from CMS? It seems like if CMS already pays for that CPT code they would not need anything from CMS.
Welcome MST. You seem to know what's going on. I assume you listened to the conf call if you know about the insurance code. If not go to the profound medical corporate website and all the conference calls are available. Also, if you google "cantech profound medical" you can find many articles with Raymond James analyst comments.
If they can get a CPT code now it would be 2 to 3 years ahead of schedule and would open the potential customer base to almost anyone. Right now all estimates are based on the estimated 5% of patients who would be willing to pay cash.
Also, read the most recent one I posted a link to today. They presented some outstanding data on results 2 years after treatment.
This is my 2nd largest holding and I don't know why it's not my largest.
Best of luck
Another Raymond James update. This is from 4 weeks ago but I just came across it today.
https://www.cantechletter.com/2020/05/profound-medical-is-still-undervalued-raymond-james-says/
No, I have not been able to find it. Maybe it was just a headline?
I don't think Cantech has published it yet. Maybe on Monday. PROF CEO said for unsolicited reviews from Tulsa patients go to www.inspire.com and use the search word Tulsa.
I found lots of posts. Interestingly many people were going to Europe to get the procedure before it was available in the US. So the patient demand I would say is pretty high. You don't go to that trouble unless you really want that procedure vs other options.
Will see if I can find the latest update from RJ on Monday.
The call went very well. Revenue was 1.56 million. RJ analyst had lowered estimate from 2 million to 1 million due to covid delays so they beat his updated estimate. They have a 3 prong approach to installations and one of them is teaching hospitals and of course that is delayed. They had project 20 installations by year end (RJ analyst has been using 10 and recently lowered to 7) and now say 20 may not happen until Q1 or Q2 of 2021.
They said for unsolicited reviews of procedure go to inspire.com and search for "tulsa"
Other updates:
One Dr commented the way he looks at it when he evaluates a patient he is considering when not to use tulsa instead of when to use----sounds like it's SOC at least for that Dr.
adding to list of facilities interested so even though delays with teaching hospitals now they seem to indicate they can make up for this with the other 2 prongs (although of note, they are pushing back the time to get to 20 installations in the US)
warrant conversion so cash position higher than expected , 60 million vs 53 million RJ estimate (if I heard this right...I want to listen again)
4 x number of procedures per week at 2nd installation vs 1st installation - RJ analyst impressed
may be able to use cost plus existing insurance code for mri intervention. This could be a huge plus as they thought 3 years until insurance coverage but it could happen much faster. They will let hospitals determine this and have to wait for them to open back up for determination.
Link to latest RJ report.
How did you know it had come out? Does not show up in my news feed at AMTD.
https://www.cantechletter.com/2020/04/profound-medical-is-a-strong-buy-right-now-raymond-james-says/
I have not, is it the one for patients? I think I saw that on the Profound website somewhere.
Latest Raymond James report....found it
https://www.cantechletter.com/2020/04/profound-medical-can-play-a-supportive-role-in-covid-19-crisis-says-raymond-james/
I have not found the latest report but here is a link to webcasts:
https://profoundmedical.com/investors/#webcasts
Also, near the end the CEO said the stock price was unhinged from what they are doing and he expects it to go back up. The stock was at $10 US on that day after getting as low as 6's.
Merger interest for Profound? Did anyone listen to the RJ webcast? Around minute 40 CEO was asked about M & A and he said they are getting phone calls and will listen to proposals but at this time they are focused on execution and won't consider anything unless it really enhances the value of the company.
I wouldn't be surprised to see this bought out in a few years after they have grown it.
Here are the last 2 I have, latest one first. If there is a newer one I have not seen it:
[url][/url][tag]https://www.cantechletter.com/2020/03/profound-medical-has-price-target-cut-at-raymond-james/
[url][/url][tag]https://www.cantechletter.com/2020/03/profound-medical-is-insulated-from-covid-19-says-raymond-james/