Roth Capital Maintains Buy On Enteromedics Ahead Of 4Q14 Results


In a research report issued today, Roth Capital analyst Chris Lewis maintained a Buy rating on EnteroMedics Inc (NASDAQ:ETRM) with a $3 price target, as the company is scheduled to report its fourth-quarter results and provide a business update before the open on Wednesday, February 18.

Lewis noted, “With FDA approval now in hand, we look for ETRM to provide more granularity on the company’s commercialization and reimbursement strategies going forward as it evolves from a largely regulatory focused company to one of commercialization.” He continued, “For 2015, we expect ETRM’s main focus will be to implement a controlled commercial rollout in the U.S. by targeting 20-25 implanting centers while building a sales and marketing team of 30-35 people within 12 months.” Furthermore, “ETRM will continue to work on securing reimbursement coverage. On the call, we look for ETRM’s expectations regarding self-pay and commercial reimbursement milestones over the coming years.”

Regarding the financial situation, the analyst expects the company’s cash burn to remain around $5-6 million per quarter and therefore he believes the company will need additional capital going forward, particularly considering the required investments to build out its U.S. commercial infrastructure.

According to TipRanks.com, which measures analysts’ and bloggers’ success rate based on how their calls perform, analyst Chris Lewis has a total average return of 0.5% and a 50.8% success rate. Lewis has a -16.7% average return when recommending ETRM, and is ranked #2172 out of 3510 analysts.