In today’s Daily Alert, Canaccord Genuity analyst Jason Mills recommends a maker of small heart pumps that can be implanted adjacent to the heart, which is less invasive than traditional implantation through abdominal surgery.
“We continue to recommend investors increase exposure to HeartWare International, Inc. (HTWR, $90), which a few weeks ago preannounced Q4 revenue of ~$32 million (+38.5% Y/Y), exceeding our estimate of $30.8 million (+33.7% Y/Y) and blowing past consensus of $27.8 million. U.S. sales were ~40% of total revenue — implying $12.8 million — handily beating our $8.4 million estimate. We estimate HTWR sold 130 HVAD [HeartWare Ventricular Assist Device] units vs. our 85 forecast. We think this sets the stage for HTWR to deliver a very strong 2013, especially in the U.S., where our checks continue to portend upside to our current expectations.
“To wit, by mid-December, HTWR had converted 47 of 50 ADVANCE sites from clinical to commercial centers, and several non-trial sites were already trained and implanting HVAD. HTWR’s execution of trial site conversion and in ramping new center training was well above our expectations, and lays the groundwork for potentially more upside to consensus’ 2013 estimates. What’s more, judging by these Q4 HVAD results, early adopters did not seem at all deterred by stroke data written into HVAD’s IFU, which is spot-on with our hypothesis coming out of our recent HVAD survey.
“From a longer-term perspective, we also favor HTWR based on its product pipeline — namely MVAD [Miniature Axial-Flow Ventricular Assist Device, a development-stage heart pump that could be implanted with less-invasive surgery], for which we continue to expect FIM [first-in-man] studies to commence soon. Raising price target to $114; maintain BUY.”
- Jason R. Mills, Canaccord Genuity Research, February 5, 2013