The stock has posted incredible gains over the past six months, but the party ain’t over yet for Profound Medical (Profound Medical Stock Quote, Charts, News, Analysts, Financials NASDAQ:PROF). That’s according to Raymond James analyst Rahul Sarugaser who reiterated a “Strong Buy” rating in a Wednesday update.
Profound Medical is a medical device company currently commercializing its TULSA-PRO technology for the incision-free ablation of pathologic prostate tissue. TULSA-PRO obtained 510(k) marketing authorization in the US in 2019 and recently was given three CPT reimbursement codes for the device, which will take effect in 2025.
Profound hosted a webinar on Tuesday where TULSA-PRO medical professionals shared their experiences with the device and management provided new five-year follow-up data from its TACT pivotal trial in 115 TULSA-treated patients.
The results showed that on a safety profile, TULSA yielded five-year urinary incontinence and erectile dysfunction rates of three and 13 per cent, respectively, which compare very attractively with the surgery route at 80 per cent and 60 per cent, respectively. On efficacy, TULSA yielded stable disease outcomes with a five-year cancer recurrence rate of 21 per cent, which is in-line with surgery at 20-25 per cent.
Sarugaser said the five-year results make for a critical milestone for any new cancer therapy, as they are a broadly-referenced benchmark for durability.
“The durability of these data does not surprise us, given the strength of the TACT 4-year data,” Sarugaser wrote. “Demonstrating materially improved safety versus standard-of-care therapy (i.e., robotic surgery) while proving in-line efficacy should, in our view, drive broad-based and long-term adoption of PROF’s TULSA treatment, particularly given the AMA’s recent establishment of three CPT codes for TULSA that will come into force in Jan. 2025.”
“Furthermore, we anticipate these TACT trial data being supported by data from PROF’s level-1 CAPTAIN trial—directly comparing TULSA head-to-head with robotic surgery—which we expect to begin rolling out in early 2025,” he said.
With his “Strong Buy” rating, Sarugaser maintained a one-year target price on PROF of $20.00, which at press time implied a return of 42 per cent.
On Profound’s financials, Sarugaser is expecting the company to generate an EBITDA loss of $23 million this year on revenue of $8 million and moving to an EBITDA loss of $18 million on $14 million in revenue in 2024.
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