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Profound Medical has a 215 per cent upside, says Raymond James

Raymond James is staying bullish on medical tech company Profound Medical (Profound Medical Stock Quote, Charts, News, Analysts, Financials NASDAQ:PROF), with analyst Rahul Sarugaser reiterating a “Strong Buy” rating on the stock in a Thursday update to clients. 

Raymond James attended meetings this week in Chicago for the Radiological Society of North America, where Profound Medical presented two scientific sessions and three educational exhibits. Profound is currently in the middle of commercializing the TULSA-PRO, a combined MRI and ultrasound device for the ablation of pathologic prostate tissue, and the company received 510(k) marketing authorization in the US in 2019 and is now installing TULSA-PRO units across the country. 

On the meetings, Sarugaser said the “very strong” safety profile on the TULSA-PRO demonstrated in the company’s four-year pivotal follow-up data stood in stark contrast to the much poorer standard-of-care’s surgery outcomes. This left the radiologist physician audience “visibly and audibly impressed,” Sarugaser said.

“New analyses demonstrate that as TULSA operators’ experience with the procedure increases, patients’ already-low treatment-associated adverse event (AE) profile improves further (ED: 0 per cent, down from 13 per cent; UI: stable at one per cent). Also, the data show TULSA’s broadening utility into BPH: 85 per cent of patients’ BPH symptoms resolved following TULSA treatment,” Sarugaser wrote.

Overall, Sarugaser said Profound presented limited new data at the meetings, leaving him watching for the FARP trial results in March of 2023 and then the CAPTAIN trial’s 12-month topline readout in mid-2024, both potential catalysts for the stock, he said.

At the same time, Sarugaser pointed to a session talk by Dr. Ali Bassir of UCLS School of Medicine who highlighted the TULSA-PRO’s four-year data from the company’s TACT trial, which showed a cumulative adverse event (AE) rate of urinary incontinence and erectile dysfunction at about 13 per cent.

“This was in stark contrast to an AE rate of ~75 per cent shown in a previously-presented talk on a laser-ablation technology, the outcomes of which were in-line with the ~75 per cent AE rate seen in standard of care surgery (RP). When presented with PROF’s data, we noted distinct ‘impressed’ expressions on the faces of the radiologist physician audience,” he said.

Sarugaser said in a second session, Dr. Leonhard Steinmeister from Alta Klink in Germany presented on retrospective outcomes from 100 patients on the TULSA-PRO, with results including zero per cent erectile disfunction, one patient with worsened urinary incontinence and 85 per cent symptom relief.

“This latter presentation tells us that, with improving operator experience, AEs associated with TULSA continue to improve beyond the TACT 4-yr data. While UI remained consistent at ~1 per cent, rates of ED improved from 13 per cent to 0 per cent. Equally importantly, with 85 per cent of patients experiencing BPH relief, this study demonstrated broadening utility of TULSA into BPH,” Sarugaser wrote.

With his “Strong Buy” rating, Sarugaser maintained a target price of US$15.00 on PROF, implying at press time a projected one-year return of 215 per cent.

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