Analysts start coverage of Vapotherm at buy; PTs $25, $26

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Analysts at Canaccord Genuity and BTIG launched coverage of Vapotherm (NYSE:VAPO) with “buy” ratings and price targets of $25 and $26, respectively. The stock closed at $20.93 on Dec. 7.

Vapotherm sells Precision Flow, a system that delivers heated, humidified oxygen at a high velocity to provide respiratory support. Known as high-velocity nasal insufflation (Hi-VNI) technology, “we believe this offering provides support to patients in respiratory distress as well as or better than the standard of care, with additional comfort, workload and cost benefits,” writes BTIG analyst Dr. Sean Lavin. “We expect Vapotherm sales to grow at about a 20% CAGR through 2021.”

Canaccord analyst Jason Mills said he believes Vapotherm could eventually become the “standard-of-care treatment for patients experiencing undifferentiated respiratory distress.”

Mr. Mills figures Vapotherm’s total addressable market is about 4.3 million patients in the U.S. annually, and potentially twice that number outside the U.S. He cites myriad tailwinds, including an aging population and growing prevalence of heart failure and COPD, for the company’s compelling growth story.

Dr. Lavin and Mr. Mills both note Vapotherm’s strong IP portfolio, robust clinical literature dossier and a recently announced new FDA indication, which elevates the Hi-VNI therapy to parity with the current standard of care, nasal intermittent positive pressure ventilation.

“On the catalyst front, we are also bullish about the upcoming launch of the firm’s first stand-alone platform (disconnecting from hospital wall air source), which will allow the firm to take Precision Flow/Hi-VNI therapy into mobile settings, such as EMS and the home,” Mr. Mills added.

Stephen Kilmer