WB ups Sientra to OP

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William Blair upgraded Sientra (NASDAQ:SIEN) to “outperform” from “market perform,” saying the company’s corporate strategy should begin to pay off over the next six-to-18 months.

Sientra is a medical aesthetics company focused on selling differentiated, highly cohesive silicone implants used in breast augmentation and reconstruction procedures.

Analyst Margaret Kaczor writes that while the company has been reporting stable sales of its breast implants since losing access to its third-party manufacturing supplier in late 2015, it refiled for FDA approval for a new manufacturing facility in the U.S.

“Approval is expected by year-end and should lead to growth for its clinically differentiated breast implant franchise, which has been capacity constrained since 2015,” she said, adding that a recently conducted survey with plastic surgeons “supports our belief.”

In addition, Ms. Kaczor said Sientra’s mid-2017 acquisition of Miramar Labs is the company's third and largest to date. With the recent closing of the acquisition, Miramar is now over one-third of Sientra's overall business.

“We have long been believers of the platform, given the strong clinical data supporting its use, and we view the deal as compelling from both a strategic and financial perspective,” she added.