Alliance Global starts Profound Medical at buy; PT $1.60 (U.S.)

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Alliance Global Partners launched coverage of Profound Medical (OTCQX:PRFMF; TSX:PRN) with a “buy” rating and price target of $1.60. The stock closed at 70 cents on July 24.

Analyst Ben Haynor writes that the company's TULSA-PRO transurethral image- and thermometry-guided ablation system allows for complete or partial ablation of the prostate for the treatment of prostate cancer or benign prostatic hyperplasia in less than two hours. This compares favorably to the gold standard robotic or open radical prostatectomy procedure, which averages approximately three hours, he added. 

The TULSA-PRO device features a ultrasound applicator and endo-rectal cooling device, both consumables, which prevent injury to the urethra and rectum. The consumables for the procedure cost approximately $2,500, although “we believe higher pricing could be supported,” he said.

Mr. Haynor said that not only is the procedure faster and cheaper, compared with competing treatments, but also has been shown to significantly reduce complication rates.

“Pivotal study data already disclosed on the TULSA-PRO TACT clinical trial suggests FDA clearance is virtually assured,” he said, noting that initial data demonstrated that 95% of patientsmet the primary endpoint of a 75%-plus reduction in PSA, with a median reduction of 95%. 

“We await the 12-month follow-up data on the secondary endpoints, which is likely to be released in February 2019,” he added. “We would expect Profound to file a de novo 510(k) application shortly thereafter, targeting a mid-2019 approval.”

Profound Medical's, Sonalleve platform, acquired from Philips last year, allows for externally generated delivery of HIFU ablation and is also guided by MRI and MR thermometry. Sonalleve allows for the treatment of uterine fibroids and is the subject of some 200 clinical publications. 

Michelle Carr