Canaccord resumes coverage of Neovasc at buy; PT $1.05

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Canaccord Genuity resumed coverage of Neovasc (NASDAQ:NVCN) with a “buy” rating and price target of $1.05. The stock closed at 53 cents on Jan. 18.

Analyst Jason Mills writes that Neovasc recently reported acceleration in enrollment in its TIARA-II transcatheter mitral valve replacement (TMVR) trial.

With total sites expected to double over the next three-to-six months, enrollment should continue to accelerate through the balance of 2018, “implying line-of-site to commercialization in Europe by late-2019/early-2020,” he added.

“We think these milestones represent valuable inflection points for a stock under pressure the past two years as it fought (and lost) an expensive litigation battle with CardiAQ/Edwards,” Mr. Mills said.

He suspended coverage of Neovasc in August 2016 because of litigation concerns, which created significant volatility in the business, and precariousness with respect to the future of the company. “Given the litigation cloud is now lifted and financing overhang removed (for now), Neovasc can focus exclusively on the clinical trial for its TMVR platform,” he added.

Mr. Mills said patient outcomes to date, coupled with checks at major medical meetings, suggest Neovasc’s Tiara is a safe and efficacious treatment for severe functional mitral regurgitation.

“We think enrollment trends could act as a positive catalyst for the stock, and think incremental progress on the path toward commercialization improves Neovasc’s attractiveness to potential acquirers,” he added.