Senseonics Holdings Inc. (SENS) is a medical know-how firm that's centered on the commercialization and improvement of an implantable steady glucose monitoring (CGM) system. I'm impartial on this inventory.
The corporate has developed two such CGM programs, Eversense and Eversense XL, that measure glucose ranges in folks with diabetes by “an under-the-skin sensor, a detachable and rechargeable good transmitter, and a handy app for real-time diabetes monitoring and administration.”
Now let’s take a look at why H.C. Wainwright analyst Vernon Bernardino is upbeat in regards to the firm’s Eversense CGM system. (See Senseonics stock charts on TipRanks)
The analyst identified in a latest report that traditionally, CGM programs had poor uptake resulting from greater prices, boundaries to accessibility, lack of insurance coverage protection, and unfamiliarity with CGMs.
Nevertheless, the analyst mentioned that these boundaries to the adoption of Eversense have dissipated. It is because, in keeping with the analyst, “with super advances in know-how, similar to dimension (i.e., the Eversense sensor is the scale of a grain of rice) and longevity (i.e., the sensor might stay implanted for as much as 90 days vs. 6-14 days with competitor sensors)”, the accuracy of CGM values has additionally improved “approaching 90% of reference glucose values…”
Bernardino initiated protection of the inventory this month with a Purchase score, and a value goal of $6 (54.6% upside) on the inventory. He famous that Eversense was the one long-term CGM system available on the market in each the U.S. and Europe, and was extremely differentiated from different programs.
Development Potential within the CGM market
Bernardino identified that the COVID-19 pandemic resulted in exponential development within the space of telehealth and digital well being know-how. He added, “CGM programs grew to become acknowledged as superb for monitoring blood glucose ranges and remotely sharing information with a affected person’s caregiver.”
Moreover, in keeping with the analyst, the latest operational outcomes from Dexcom (DXCM) and Abbott Labs (ABT) point out that the market penetration for Kind 1 Diabetes is nearly 50%. Bernardino additional elaborated, “Thus, with prospects for development in CGM uptake stay very promising, practically each main participant within the CGM and insulin pump area has launched or has deliberate product launches this yr.”
The analyst additionally cited Dexcom’s CGM revenues of $595 million in its most up-to-date quarter, a development of 31.6% year-over-year to counsel “that development in CGM adoption could also be insulated from challenges in advertising and marketing and schooling that outcome from restrictions posed by COVID-19-associated lockdown circumstances.”
Commercialization Settlement with Ascensia
Final yr, Senseonics entered right into a commercialization settlement with Ascensia. Because of this settlement, SENS granted the corporate unique rights to distribute its 90-day and 180-day Eversense CGM programs, with sure geographical territory exceptions.
Bernardino expects that Ascensia will “assume business full duties later this yr,” whereas the U.S. Meals and Drug Administration (FDA) approval for Eversense’s 180-day sensor is more likely to are available in later this yr.
The analyst believes that the FDA approval might end in “accelerated Eversense income development” and initiatives that gross sales of Eversense CGM programs might attain $595 million yearly, at a Compounded Annual Development Fee (CAGR) of 15% by 2031.
In Q2, Senseonics generated revenues of $3.3 million, versus $0.26 million in the identical quarter final yr. Nevertheless, the corporate’s web loss widened to $180.32 million in Q2, from $7.52 million in the identical interval final yr. The rise in web loss was primarily a results of non-cash accounting prices.
The corporate had money and money equivalents of $215 million as of June 30.
For FY21, SENS has projected revenues to be within the vary of $12 million to $15 million.
Turning to the remainder of the Road, consensus is that Senseonics Holdings is a Sturdy Purchase, based mostly on three Buys and one Maintain. The average Senseonics Holdings price target of $4.50 implies an roughly 12.5% upside potential from present ranges.
Disclosure: On the time of publication, Shrilekha Pethe didn't have a place in any of the securities talked about on this article.
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