This ASX biotech could nearly triple in value Bell Potter says

Junior medical device company EBR Systems Ltd (ASX: ABR) recently secured reimbursement for its devices in the US.

The analyst team at Bell Potter has examined the new announcements, and has reiterated its bullish price target on the company, which we’ll get to shortly.

First let’s have a look at what was announced.

More funds for heart implant procedures

EBR has developed a system called WiSE which it says is designed to overcome the limitations of conventional cardiac resynchronisation therapy and, “is the only leadless left ventricular endocardial pacing (LVEP) device”.

The company recently released a quarterly report and said that it had surpassed its hundredth commercial WiSE implant, “with multiple sites performing their first WiSE implants and numerous sites performing their 2nd, 3rd, 4th, and greater cases”.

In mid-September the company released another update, saying the base US Medicare inpatient reimbursement rates for eligible WiSE procedures had increased by about 58% and 93%.

The company added that assuming the maximum available New Technology Add-on Payment (NTAP), the total Medicare payment could reach about US$77,839 and $US66,566 respectively.

EBR Chief Executive Officer John McCutcheon said:

The final FY2027 Medicare payment rates represent a significant reimbursement and commercial milestone for WiSE. The increased inpatient reimbursement provides hospitals with a clearer and stronger payment pathway for eligible WiSE procedures, while better recognising the resources required to deliver this differentiated leadless technology. This outcome further strengthens the commercial foundation for WiSE as we scale our U.S. launch and work to expand access for heart failure patients who are not well served by conventional CRT.

The new pricing comes into effect on 1 October.

Analysts say this ASX biotech is looking cheap

Bell Potter said the increased reimbursements meant that, “financial considerations should not drive decision making in WiSE system utilisation, enabling physicians and hospitals to focus on the clinical criteria”.

The broker noted that the new payment schedules applied to inpatient procedures, which accounted for only about 20% of WiSE procedures.

Bell Potter has a price target on EBR shares of 70 cents, compared to the current price of 25 cents.

Fellow Broker Morgans has a much more bullish price target on the company, recently issuing a new research note with a price target of $1.95.

Morgans said regarding the company’s rollout:

With 17 sites already having completed ≥3 cases, we see an opportunity for utilisation to compound as physicians gain experience and WiSE becomes embedded in clinical workflows.

EBR Systems is valued at $202.9 million.

The post This ASX biotech could nearly triple in value Bell Potter says appeared first on The Motley Fool Australia.

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Motley Fool contributor Cameron England has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.