Analysts At BTIG Confident In Endologix Following Meeting With Top Executives

by Jayson Derrick

August 25, 2014 3:42 PM | 2 min read | Make a Comment

Sean Lavin of BTIG upgraded shares of Endologix ELGX to Buy. What's notable about the upgrade is that just a few weeks ago on July 7 shares were downgraded to Neutral from Buy. Lavin's decision to return to a Buy rating follows a visit to the company's head office. The analyst notes that the CEO displayed a degree of confidence that hasn't been seen throughout 2014. In terms of company morale, Endologix's management told Lavin that most of the doctors were upset over not playing a role in the Nellix trial “have now come around.” The doctors who are still upset “could be won back over time.” Endologix continues to work on Ventana and is exploring several options, Lavin noted. The analyst believes that investors are giving “little to no” value to Ventana and that any positive update would have a bigger impact on the stock than any negative update would have on the shares. Lavin also believes that manufacturing for Nellix remains on track for the fourth quarter and that the company's current facilities are “spacious and well built-out.” According to Endologix's management, Nellix could take a 30 percent market share over time. However, the analyst notes this figure is a “guesstimate” based on feedback the company has received so far and does not represent an official guidance number. Lavin asked Endologix about competitive threats. The company feels that Medtronic is more focused on drug-coated balloons while Cook Medical is “chugging along.” W.L Gore is making smaller devices. Management did admit to Lavin it is unsure where Johnson & Johnson is in terms of a competing product launch. In terms of the company's international operations, management disclosed that European demand for Nellix “has simply required more bodies” while an expansion to Japan is possible a year or so after the U.S. based on normal regulatory timelines. Endologix's management further stated that Asians tend to have shorter and wider iliac arteries, making them more challenging EVAR procedures that could benefit from Nellix's technology. Shares are Buy rated with a $17 price target.

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Posted In: Analyst Color Upgrades Analyst Ratings btig endologix Nellix Sean Lavin

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