Medical Device Co. Completes Merger in Q1/23
Source: Jeffrey Cohen
June 9, 2023 (Investorideas.com Newswire) Due to the acquisition, the U.S.-based firm generated 844% more revenue during the quarter than it did a year earlier, noted a Ladenburg Thalmann report.
Ra Medical Systems Inc. (RMED:NYSE) "accomplished several key milestones in Q1/23," reported Ladenburg Thalmann analyst Jeffrey Cohen in a June 7 research note.
Noteworthy Possible Return
Cohen pointed out that Ra Medical warrants a US$7 per share price target. This figure represents a significant 519% potential upside from the company's current share price of about US$1.13.
The company is a Buy.
Until Q1/23, Ra Medical Systems' core business was the development and manufacture of excimer lasers and catheters used in the treatment of certain vascular diseases. However, it expanded its medical device portfolio when, in early Q1/23, it acquired Catheter Precision, a corporation specializing in cardiac electrophysiology, Cohen reported.
During Q1/23, Catheter Precision added five direct salespersons and many field clinical personnel to support the U.S. launch of VIVO, its noninvasive cardiac imaging system. Also, it introduced another product, LockeT, a device for closing catheter insertion sites.
Revenue, Opex Increases
Thanks primarily to Catheter Precision's VIVO and other products, Ra Medical notably grew its revenue in Q1/23, highlighted Cohen. Totaling US$85,000, this amount was 844% higher than in Q1/22.
Given the merger and related restructuring, Ra Medical's Q1/23 selling and general and administrative expenses were 345% higher year over year (YOY), Cohen wrote. This resulted in a 93% higher YOY operating expense of US$10.4 million ($10.4M).
On the other hand, the company's research and development expenses in Q1/23 were down YOY, by 92%, for a total of US$0.2M. This was due to Ra Medical shifting its focus to VIVO.
Overall, for Q1/23, the medical device firm posted a net loss of US$66.4M.
Cohen noted some of Ra Medical's other Q1/23 operational highlights.
For one, the company secured US$8M in new financing.
Also, the company addressed some of its open executive positions. It appointed David Jenkins as its interim chief executive officer as the previous CEO, Will McGuire, resigned. Ra Medical hired Steve Passey as its new chief financial officer.
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