Coverage Initiated on Firm with Paradigm-Shifting Colonoscopy Device

The Life Sciences Report |

Source: Streetwise Reports   09/05/2018

In an Aug. 30 research note, analyst Jeffrey Cohen reported that Ladenburg Thalmann initiated coverage on medical device company Motus GI Holdings Inc. (MOTS:NASDAQ), with a Buy rating and a $14.50 per share target price. The current share price is about $6.68.

Motus plans to globally commercialize Pure-Vu, a system used to clear poorly prepared colons during colonoscopy. The device uses air and water to loosen contents from the colon walls while simultaneously vacuuming them out. "The Pure-Vu is compatible with standard colonoscopes and has proven to greatly enhance visibility," Cohen added.

An obvious market for Pure-Vu exists, Cohen points out in the report. The device would benefit patients who cannot properly follow the 24- to 48-hour preprocedure regimen, patients who cannot achieve an empty colon because of medication interactions, patients who prep inadequately and must try again and patients who require an emergency colonoscopy. "Providing an intraprocedural solution greatly reduces time and costs for patients and hospitals," the analyst noted.

Currently, about 15 million colonoscopies are done in the United States and "upwards of 30 million worldwide annually," Cohen indicated, citing Centers for Disease Control statistics.

That does not include the numbers of individuals who elect not to get the procedure done to avoid the required preparation. "The U.S. National Library of Medicine National Institutes of Health determined that more than 74% of people consider the preparation process the greatest barrier to screening," Cohen relayed.

Today, Motus continues to gather clinical and economic data related to Pure-Vu. "We anticipate the company will initiate a lower GI bleed inpatient study as well as additional studies related to high medical need individuals in an outpatient setting," wrote Cohen.

In mid-2019, the company is expected to start selling Pure-Vu to the inpatient market in the U.S. and subsequently internationally.

Ladenburg estimates yearly revenue generated from Pure-Vu systems and consumables sales between 2019 and 2022 to be $5.7 million ($5.7M), $40.8M, $82.7M and $125M, respectively.

It forecasts 2018 opex to be $16.4M and total annual opex between 2019 and 2022 to be $20.3M, $25.6M and $30.2M.

Lastly, the financial services firm projects Motus would need an additional $18–22M to become profitable.

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Disclosures from Ladenburg Thalmann, Motus GI Holdings Inc., August 30, 2018

ANALYST CERTIFICATION: I, Jeffrey S. Cohen, attest that the views expressed in this research report accurately reflect my personal views about the subject security and issuer. Furthermore, no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report, provided, however, that:

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The research analyst primarily responsible for the preparation of this research report has or will receive compensation based upon various factors, including the volume of trading at the firm in the subject security, as well as the firm’s total revenues, a portion of which is generated by investment banking activities.


Ladenburg Thalmann & Co. Inc. makes a market in Motus GI Holdings, Inc.

( Companies Mentioned: MOTS:NASDAQ, )

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