March 10, 2022 (Investorideas.com Newswire) This medical device company is improving its laser ablation system and working toward U.S. approval for its use in a second application, noted a Ladenburg Thalmann report.
Ra Medical Systems Inc. (RMED:NYSE) is expected to become a commercial entity again, and thus, Ladenburg Thalmann just initiated coverage on it, reported analyst Jeffrey Cohen in a March 9 research note. The financial services firm rates the medical device company Buy and assigns it a $1.10 per share target price. In comparison, Ra Medical’s current share price is $0.38.
“The management team is evaluating the best go-to-market strategy to maximize resources and drive topline expansion,” Cohen commented.
Rather than continue commercializing its device, Cohen highlighted, Ra Medical shifted its focus in two new directions: enhancing its product and getting it approved in the U.S. for a second application.
Ra Medical’s device is the DABRA (Destruction of Arteriosclerotic Blockages by laser Radiation Ablation), comprised of a console and a one-time use catheter. The DABRA is used to treat certain vascular diseases, including peripheral artery disease, which affects about 8.5 million Americans.
Currently, the DABRA is only approved in the U.S. for crossing chronic total occlusions in patients with lower extremity vascular disease. The company is working toward getting the DABRA cleared in the States for atherectomy, too. This procedure, the removal of plaque from arteries, is done in patients with peripheral artery disease (PAD), and roughly 8.5 million Americans suffer from this. (The DABRA is approved for both crossing chronic total occlusions and atherectomy in Europe.)
To achieve this approval goal, Ra Medical is now enrolling 125 patients for a clinical trial in atherectomy that could be completed this year. Enrollment is expected to be done by mid-year and the trial, which includes a six-month follow-up, by year-end. Were the study results positive, Ra Medical would submit a 510(k) application, likely in H1/23, with potential approval to follow in early to mid-2023.
“With proper execution, the company could benefit from leveraging the large market opportunity,” wrote Cohen.
Simultaneously, Cohen pointed out, Ra Medical is tweaking its product. It recently added an overbraided jacket to the DABRA catheter so it pushes and torques better and extended its shelf life to six months from two. The company is awaiting U.S. Food and Drug Administration clearance of this improved catheter for use in crossing chronic total occlusions. Approval could come in Q2/22.
Now, the company’s engineers are working on making the DABRA console compatible with standard guide wires and in H2/22 should lock in a final design. Ra Medical also is working on further extending the catheter’s shelf life, to 12 months.
“Our investment thesis is based on the current engineering progress to date, which includes the continual granting of patents to protect current and future designs and applications and the clinical progress to date,” Cohen wrote.
Also in the works, Cohen noted, Ra Medical’s engineering team is evaluating whether the DABRA catheter can be used for intravascular lithotripsy in patients with PAD.
“If approved, this could provide additional commercial upside,” Cohen wrote.
As for finances, Cohen indicated, Ra Medical is well-positioned with the $12.1 million it raised during its public offering that closed in February 2022.
1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise Reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
2) The following companies mentioned in this article are billboard sponsors of Streetwise Reports: None. Click here for important disclosures about sponsor fees.
3) Comments and opinions expressed are those of the specific experts and not of Streetwise Reports or its officers. The information provided above is for informational purposes only and is not a recommendation to buy or sell any security.
5) From time to time, Streetwise Reports LLC and its directors, officers, employees or members of their families, as well as persons interviewed for articles and interviews on the site, may have a long or short position in securities mentioned. Directors, officers, employees or members of their immediate families are prohibited from making purchases and/or sales of those securities in the open market or otherwise from the time of the decision to publish an article until three business days after the publication of the article. The foregoing prohibition does not apply to articles that in substance only restate previously published company releases.
6) This article does not constitute medical advice. Officers, employees and contributors to Streetwise Reports are not licensed medical professionals. Readers should always contact their healthcare professionals for medical advice.
Disclosures and Disclaimers, Ladenburg Thalmann & Co. Inc., Ra Medical Systems Inc., March 9, 2022
ANALYST CERTIFICATION: I, Jeffrey S. Cohen, attest that the views expressed in this research report accurately reflect my personal views about the subject security and issuer. Furthermore, no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report, provided, however, that:
The research analyst primarily responsible for the preparation of this research report has or will receive compensation based upon various factors, including the volume of trading at the firm in the subject security, as well as the firm’s total revenues, a portion of which is generated by investment banking activities.
Additional information regarding the contents of this publication will be furnished upon request. Please contact Ladenburg Thalmann, Compliance Department, 640 Fifth Avenue, 4th floor, New York, New York 10019 (or call 212-409-2000) for any information regarding current disclosures, and where applicable, relevant price charts, in regard to companies that are the subject of this research report.
COMPANY BACKGROUND: Ra Medical Systems manufactures the DABRA excimer laser and catheters for the treatment of certain vascular diseases. DABRA has been cleared by the FDA for crossing chronic total occlusions in patients with symptomatic infrainguinal lower extremity vascular disease and has an intended use for ablating a channel in occlusive peripheral vascular disease. In addition, DABRA has been granted CE mark clearance for the endovascular treatment of infrainguinal arteries via atherectomy and for crossing total occlusions.
VALUATION METHODOLOGY: We believe that Ra Medical Systems, Inc. should be valued in comparison with other innovative healthcare companies. The company should be valued more specifically on multiples to revenue at some time in the future. We have assembled a list of other comparable companies and measured their current revenue multiple valuations with anticipated revenues out three years.
Our list of Comparable Companies within the medical technology industries generated average EV/Revenue multiples. Based on this evaluation, we are applying a multiple of 6.0 to our FY-2026 revenue estimate of $18.6 million discounted by 12.0% and 3.0 years yielding a price target of $1.10.
RISKS: In addition to normal economic and market risk factors that impact most all equities, we believe that the primary risks to our recommendation and price target of an investment in Ra Medical Systems shares include, but are not limited to: Management and Board Stability: Significant loss of key personnel could prove to be damaging toward the operational efficiencies and further growth of the company. The departure of key personnel could materially affect the overall performance and strategy of the company going forward. The company is highly dependent on the services of its current management team and board.
Financing: In terms of cash position, RMED completed a public financing in Q1-2022 generating gross proceeds of $12.1 million. This brings the company’s current cash to approximately $25.0 million. It is possible the company will require additional funding to support regulatory and commercial efforts in the future.
Regulatory / Development Risks: Modifications or future iterations of the company’s products are subject to FDA and other regulatory body requirements in the United States and similar agencies in other countries. Products under current development may require extensive testing, studies, data submission and/or clinical evaluation prior to granting of proper licenses to sell in various geographies. If the company fails to comply with applicable regulatory requirements the FDA and other regulatory bodies could deny marketing clearance or approval, withdraw approvals, or impose civil penalties, including fines, product seizures or product recalls and, in extreme cases, criminal sanctions.
Commercialization: There are no assurances that the company will be able to execute a commercial strategy and generate our estimated revenues. There is the possibility that similar products will be developed or sold which could compete with Ra Medical’s current and anticipated offerings and take market share and revenues from our currently anticipated projections.
Competition & Adoption: As is the case within the healthcare industry, there exist various innovative and highly competitive corporations. The company could be negatively impacted by current and future competitive products into the marketplace. There can be no assurances that the existing product candidates will continue to be an attractive product as compared with other potential technologies or drug therapies which exist or are developed. Potential current and future market share and market acceptance of the company’s products will depend on its ability to demonstrate that its products represent an attractive alternative as compared with traditional offerings.
Intellectual Property: It may be possible that the company’s patents be called into question or determined to infringe on their portfolio. Likewise, the company could become engaged in legal disputes among other entities. Any potential litigation could negatively impact the company with regard to their freedom to operate, product limitations and/or could result in costly and lengthy litigation. The future expiration of the existing patents could also pose as a problem for the company’s technology as well as its growth strategies.
COMPANY SPECIFIC DISCLOSURES: Ladenburg Thalmann & Co. Inc. has managed or co-managed a public offering for Ra Medical Systems, Inc., Applied UV, Inc., electroCore, Inc., Helius Medical Technologies, Inc. and STRATA Skin Sciences, Inc. within the past 12 months.
Ladenburg Thalmann & Co. Inc. intends to seek compensation for investment banking and/or advisory services from Ra Medical Systems, Inc., Applied UV, Inc., Helius Medical Technologies, Inc. and STRATA Skin Sciences, Inc. within the next 3 months.
Ladenburg Thalmann & Co. Inc received compensation for investment banking services from Ra Medical Systems, Inc., Applied UV, Inc., electroCore, Inc., Helius Medical Technologies, Inc. and STRATA Skin Sciences, Inc. within the past 12 months.
Ladenburg Thalmann & Co. Inc had an investment banking relationship with Ra Medical Systems, Inc., Applied UV, Inc., electroCore, Inc., Helius Medical Technologies, Inc. and STRATA Skin Sciences, Inc. within the last 12 months.
Ladenburg Thalmann & Co. Inc. makes a market in Applied UV, Inc., electroCore, Inc., Helius Medical Technologies, Inc. and STRATA Skin Sciences, Inc. Ladenburg Thalmann & Co. Inc. acted as Psdlacement Agent in a securities offering for the subject company in the last 12 months. Firm/Employee is a beneficial owner of 1% or more of any class of common equity shares of .the subject company.
Information and opinions presented in this report have been obtained or derived from sources believed by Ladenburg Thalmann & Co. Inc. to be reliable. The opinions, estimates and projections contained in this report are those of Ladenburg Thalmann as of the date of this report and are subject to change without notice.
Ladenburg Thalmann & Co. Inc. accepts no liability for loss arising from the use of the material presented in this report, except that this exclusion of liability does not apply to the extent that such liability arises under specific statutes or regulations applicable to Ladenburg Thalmann & Co. Inc. This report is not to be relied upon in substitution for the exercise of independent judgment. Ladenburg Thalmann & Co. Inc. may have issued, and may in the future issue, other reports that are inconsistent with, and reach different conclusions from, the information presented in this report. Those reports reflect the different assumptions, views and analytical methods of the analysts who prepared them and Ladenburg Thalmann & Co. Inc. is under no obligation to ensure that such other reports are brought to the attention of any recipient of this report. Investors should consider this report as only a single factor in making their investment decisions.
Some companies that Ladenburg Thalmann & Co. Inc. follows are emerging growth companies whose securities typically involve a higher degree of risk and more volatility than the securities of more established companies. The securities discussed in Ladenburg Thalmann & Co. Inc. research reports may not be suitable for some investors. Investors must make their own determination as to the appropriateness of an investment in any securities referred to herein, based on their specific investment objectives, financial status and risk tolerance.
Past performance should not be taken as an indication or guarantee of future performance, and no representation or warranty, express or implied, is made regarding future performance. The price, value of and income from any of the securities mentioned in this report can fall as well as rise. The value of securities is subject to exchange rate fluctuation that may have a positive or adverse effect on the price or income of such securities. Investors in securities such as ADRs, the values of which are influenced by currency volatility, effectively assume this risk. Securities recommended, offered or sold by Ladenburg Thalmann & Co. Inc. (1) are not insured by the Federal Deposit Insurance Company; (2) are not deposits or other obligations of any insured depository institution; and (3) are subject to investment risks, including the possible loss of some or all of principal invested. Indeed, in the case of some investments, the potential losses may exceed the amount of initial investment and, in such circumstances; you may be required to pay more money to support these losses.
The information and material presented in this report are provided to you for information purposes only and are not to be used or considered as an offer or the solicitation of an offer to sell or to buy any securities mentioned herein. This publication is confidential for the information of the addressee only and may not be reproduced in whole or in part, copies circulated, or disclosed to another party, without the prior written consent of Ladenburg Thalmann & Co. Inc.
The historical performance results mentioned do not reflect the deduction of transaction and other charges, the incurrence of which would decrease the historical performance results listed. This information is provided for comparison purposes only. Past performance is not indicative of future results.
Comparisons to peers/industry averages and indices are provided for informational purposes only. Comparisons to this information have limitations and material characteristics that may differ from the subject company(ies). Because of these differences, these references should not be relied upon as an accurate measure of comparison. Investors cannot invest directly in an index.
Investing in low priced securities is speculative and carries a high degree of risk. You should independently investigate and understand all risks before making any investment. The markets for small cap stocks are highly speculative and this level of risk may not be appropriate for all investors. Some of the companies listed may be subject to the “Penny Stock Rule”. Under this rule, the SEC has defined a “penny stock” to be an equity security which has a market price of less than $5.00 a share, subject to certain exemptions. Such exemptions include equity listed on NASDAQ and an equity security issued by an issuers which has (i) net tangible assets of at least $2,000,000, if such issuers has been in continuous operational for (3) years; (ii) net tangible assets of $5,000,000, if such issuer has been in continuous operation for less than (3) years; or (iii) average revenue of at least $6,000,000 for the preceding three (3) years. Unless such exemption is available, regulations require delivery of a risk disclosure document explaining the penny stock market and the risks associated therewith prior to any transaction involving a penny stock. For stock not quoted on NASDAQ or at any time that the company has less than $2,000,000 in net tangible assets, the trading in common stock is covered under Rule 15g-9 under the Securities Exchange Act of 1934 for non-NASDAQ and non-exchange listed securities. Under such rule, broker-dealers who recommend covered securities to persons other than established customers and accredited investors must make a written suitability determination for the purchaser and receive the purchaser’s written agreement to a transaction prior to sale. Some securities may not be cleared for sale in all states or other jurisdictions and LTCO assumes no responsibility to apprise you of individual states and jurisdictions’ regulatory restrictions. Stocks in the microcap segment of market have risks that are not as common in other segments of market. These risks include, but are not limited to, liquidity risk, which can lead to higher volatility and low trade volume, company specific risks that contribute to lower valuation, higher probability of financial default and distress.
Links to third party web sites are provided for convenience only. Ladenburg Thalmann & Co. Inc. does not support the content of third party links, nor does it endorse such content. Ladenburg Thalmann & Co. Inc. is not responsible for content of third party web sites.
Member: NYSE, NYSE American, NYSE Arca, FINRA, all other principal exchanges and SIPC Additional Information Available Upon Request
©2022 – Ladenburg Thalmann & Co. Inc. All Rights Reserved.
This news is published on the Investorideas.com Newswire – a global digital news source for investors and business leaders
Disclaimer/Disclosure: Investorideas.com is a digital publisher of third party sourced news, articles and equity research as well as creates original content, including video, interviews and articles. Original content created by investorideas is protected by copyright laws other than syndication rights. Our site does not make recommendations for purchases or sale of stocks, services or products. Nothing on our sites should be construed as an offer or solicitation to buy or sell products or securities. All investing involves risk and possible losses. This site is currently compensated for news publication and distribution, social media and marketing, content creation and more. Disclosure is posted for each compensated news release, content published /created if required but otherwise the news was not compensated for and was published for the sole interest of our readers and followers. Contact management and IR of each company directly regarding specific questions.
More disclaimer info: https://www.investorideas.com/About/Disclaimer.asp Learn more about publishing your news release and our other news services on the Investorideas.com newswire https://www.investorideas.com/News-Upload/ and tickertagstocknews.com