Rodman & Renshaw’s Raghuram Selvaraju mentioned that TearLab Corp TEAR's Osmolarity System for the diagnosis of dry eye disease (DED) is “the first and only objective DED diagnostic test in the U.S. that has FDA clearance and CLIA waiver.”
Selvaraju initiated coverage of the company with a Buy rating and price target of $2.
A Differentiated Test
The analyst believes that TearLab’s Osmolarity System is differentiated from other DED tests available, given that it measures the osmolarity of tears, which is a specific and objective biomarker for the disease.
“Furthermore, TearLab's osmolarity test requires only a few nanoliters of tear film and takes approximately two minutes to conduct. Due to its simplicity, rapidity and cost effectiveness, the osmolarity test can be easily performed at the point of care in a physician’s office,” Selvaraju stated.
Apart from the FDA 510(k) clearance and CLIA waiver, the osmolarity test has received CE Mark in Europe, as well as approval in Canada.
Meaningful Potential
Given the DED is underdiagnosed, the analyst believes that this objective test had the potential to meaningfully enhance timely diagnosis and improve the efficacy of treatment.
“The company recorded $25.2 million in total revenue in 2015, including $23.6 million in the U.S. and $1.6 million internationally, up from total revenue of $4.0M in 2012,” according to the Rodman & Renshaw report.
The analyst estimates revenues for 2016 and 2017 at $28.9 million and $35.2 million, respectively, with more than $40 million in revenue expected for 2018.
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