EDAP: We Believe A Positive FDA Decision Is Now Unlikely, Says H.C. Wainwright
The Gastroenterology Urology Device Panel, which Wednesday reviewd EDAP TMS’s (EDAP) Ablatherm Pre Marketing Approval (PMA) application for the primary treatment of low-risk, localized prostate cancer, was unanimous in their negative opinion regarding efficacy and the benefit to risk ratio. The panel voted 3 Yes, 5 No, 1 Abstain for the safety of the device.
As a reaction to the panel outcome, H.C. Wainwright analyst Swayampakula Ramakanth yesterday reiterated a Buy rating on EDAP, but reduced his price target to $4.5 (from $6).
Ramakanth noted, “Considering the negative discussion regarding the selection of endpoints and lack of an appropriate comparator arm by the Panel we believe a positive FDA decision is unlikely. Accordingly, we have removed all US HIFU related revenues from our model. While a negative FDA decision could remove the anticipated upside in revenues, we believe Ablatherm will continue to grow its market share in Europe. Additionally, management continues to identify new markets for their lithotripsy products while managing their cost-base. Accordingly, we continue to believe EDAP has upside from its current valuation, but we are lowering our 12-month price target to reflect the removal of US Ablatherm revenues”.
According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform analyst Swayampakula Ramakanth has a -33.4% average return and a 0.0% success rate. Ramakanth has a -48.8% average return when recommending EDAP, and is ranked #3123 out of 3195 analysts.
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