Opsens is a prime take-out candidate, says Paradigm

A better than expected quarter has Paradigm Capital analyst Christopher Lam feeling bullish about Opsens (Opsens Stock Quote, Chart, News: TSXV:OPS).

Yesterday, Opsens reported its Q2, 2016 results. The company lost $1.52-million on sales of $2.74-million, a 20 per cent topline increase over the $2.28-million the company posted in last year’s second quarter. Revenue from the company’s fractional flow reserve (FFR) offering came in at $1,252,000 up from just $112,000 in the same period last year.

“Almost everything is in place for the expansion of our marketing activities in FFR,” said CEO Louis Laflamme. “In addition, the very positive feedback on the performance of the OptoWire II allows us to believe that we hold all the elements to gain share in the growing FFR market and reach our goal to become the first choice of cardiologists.”

Lam says the quarter bested his expectations.

“Q2 was clearly a positive quarter for Opsens as FFR sales continue to demonstrate a strong upward trend. Demand from the Japanese market appears to be strong which we believe bodes well for the targeted U.S. launch initiated last month. Additionally, the move to the new facility and the achievement of Optowire II approval in the U.S. serve as further de-risking events for Opsens. As such, we view Opsens as an increasing attractive risk/return opportunity and expect significant production ramp-up and revenue growth through Q3 and Q4.”

Lam says he thinks the accuracy and usability of fiber optic-based devices make them the next-generation of fractional flow reserve devices. As a result, he thinks this makes Opsens a prime take-out candidate for companies such as Medtronic, St. Jude Medical, or Volcano.

In a research update to client today, Lam maintained his “Buy” rating and one-year price target of $2.15 on Opsens.