Helius Medical Tech keeps Buy rating with Roth Capital

After a recent quarterly preview from medical device company Helius Medical Technologies (Helius Medical Technologies Stock Quote, Charts, News, Analysts, Financials NASDAQ:HSDT), Roth Capital Partners analyst Jonathan Aschoff held steady with a “Buy” rating on the stock in a Monday note to clients.

Newtown, Pennsylvania-based Helius Medical, which focuses on neurologic deficits and has a non-implantable platform, the Portable Neuromoduation Stimulator (PoNS) to promote neuroplasticity for patients with neurologic diseases, announced on Monday preliminary fourth quarter revenue in the range of $275K-$285K, which would represent a 40 per cent sequential improvement and put full-year 2022 revenue at between $780K and $790K, which would be up by half over 2021’s revenue. Helius said it looks to end the year with cash of $14.5 million compared to $16.7 million as of the end of the third quarter 2022. 

“We are very pleased with our preliminary fourth quarter revenue performance, which was driven in large part by the US commercial launch of PoNS Therapy earlier in the year,” said Dane Andreeff, President and CEO in a press release. “We believe Helius is in a strong position to greatly expand access to PoNS Therapy across North America in 2023 and beyond.”

Looking at the released numbers, Aschoff said revenue for the quarter was positively impacted by both the Q2 2022 US launch of the PoNS device for mild-to-moderate MS patients with gait deficit, while the company also increased PoNS traction in Canada at established and new treatment centres.

“While likely a small contributor to 4Q22 revenue beating our former projection by about 50 per cent, a PoNS system (i.e., not the mouthpiece) price hike in Canada of between five per cent and ten per cent, depending on treatment centre, occurred in 1Q23. Also in Canada, the relatively brief warm vacation season occurring mostly in the third quarter typically inclines patients to begin physical therapy, a required activity when using PoNS, after vacationing, thereby lending some additional strength to 4Q over 3Q,” Aschoff wrote.

Aschoff also noted that Helius has launched a new e-commerce site to facilitate PoNS’ commercialization and making for the first time the device is available online via telehealth and allowing for delivery to patients’ US residences.

On his 2023 projections, Aschoff is estimating revenue at $1.9 million and EPS at negative $0.43 per share. (All figures in US dollars.)

With his “Buy” rating, Aschoff reiterated a 12-month target price of $5.00 per share, which represented at press time a projected return of 1,251 per cent.