Ahead of the company’s fourth quarter results, Paradigm Capital analyst Rahul Sarugaser is more than bullish on Profound Medical Corp. (Profound Medical Corp Stock Quote, Chart: TSX:PRN)
On March 7, PRN will report its Q4 and fiscal 2018 results. In January the company guided that it would post revenue of $1.6-million, which the analyst notes was a beat over the consensus $1.0-million topline at that time.
In recent updates, Sarugaser said there are multiple reasons why 2019 is Profound Medical’s year.
Today, the analyst listed three more catalysts.
The first, he says, is that a pivotal Phase Three (TACT) trial completion is imminent.
“On January 31, 2018, PRN announced that it had recruited the last patient into its Phase 3 trial. Given that the trial has a 12-month readout, the final patient data should be coming in as we speak. As such, we estimate that PRN should likely announce completion of the trial sometime in March, an event that should drive the stock higher.
Second, the analyst says the final data will be presented from the TACT trial at AUA in the first week of May.
“PRN plans to unveil the data from the TACT trial at the American Urological Association (AUA) meeting in Chicago during the first week of May. As we previously highlighted, cancer therapy companies are known to see their valuations, on average, double (sometimes triple) during the five months leading up to the presentation of Phase 3 trial data, so we expect to see a similar run-up in PRN’s stock.
Lastly, he says its Phase 3 clinical trial is on track for FDA 510(k) submission, something he thinks will happen in early in the second quarter.
“With the completion of patient recruitment (see above), combined with strong clinical data presented at the American Urological Association (AUA) meeting last May, PRN remains on track to complete the trial and submit its 510(k) application to the FDA in late Q1 or early Q2/19.
In a research update to clients today, Sarugaser maintained his “Buy” rating and one-year price target of $4.00 on Profound Medical, implying a return of 406 per cent at the time of publication, including dividend.
The analyst thinks PRN will post EBITDA of negative $19.1-million on revenue of $2.5-million in fiscal 2018. He expects those numbers will improve to EBITDA of negative $8.3-million on a topline of $13.3-million the following year.
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