Varex shares fall on Q4 miss

Varex Imaging logoShares in Varex Imaging (NSDQ:VREX) fell today after the company missed earnings expectations on Wall Street with its fourth-quarter financial results.

The Salt Lake City, Utah-based company posted profits of $200,000, or 1¢ per share, on sales of $204.8 million for the three months ended Sept. 28, for a sales loss of 5% compared with the same period last year. The company’s profits fell from $15 million in Q4 last year.

Adjusted to exclude 1-time items, earnings per share were 29¢, behind consensus on The Street.

“While our revenues for the fourth quarter of fiscal year 2018 decreased from record revenues in the prior year quarter, revenues increased 7% sequentially from the third quarter of fiscal year 2018 driven by growth in the CT, mammography and industrial markets,” CEO Sunny Sanyal said in prepared remarks. “In the fourth quarter, we continued to see pressure on our gross margins and we began to be directly impacted by China-related tariffs. We estimate that tariffs reduced our gross profit by $2 million for the quarter.”

For the full year, Varex posted revenues of $773 million, up 11% compared to the prior year. Net earnings for the year were $27 million, or 72¢ per share, compared to $52 million in 2017.

VREX shares were trading at $24.66 apiece today in mid-morning activity, down -5.6%.

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ResMed closes $750m MatrixCare buy

ResMed acquires MatrixCareResMed (NYSE:RMD) said today that it closed the $750 million acquisition of MatrixCare and its post-acute-care software.

The San Diego-based respiratory care giant said it funded the buyout, which represents a 25x EBITDA multiple, using its credit facility. Bloomington, Minn.-based MatrixCare put up sales of $122 million last year, ResMed said.

“We’re all excited to have quickly closed this important deal and can officially welcome MatrixCare to the ResMed family,” ResMed CEO Mick Farrell said in prepared remarks. “ResMed is the world’s top tech-driven medical device company, and we are well on our way to being the top provider of out-of-hospital software. It all fits into our mission of changing millions of people’s lives, whether it’s by treating and preventing the advance of chronic disease or helping someone easily navigate out-of-hospital healthcare settings so they and their loved ones can live their best life.”

ResMed said the deal is expected to immediately add to its adjusted earnings per share. All stock buyback activity is set to stop after the deal closes, the company added. MatrixCare is due to run as a standalone business within ResMed’s SaaS operation, with MatrixCare CEO John Damgaard reporting to software-as-a-service president Raj Sodhi.

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Losses widen in Q3 for DJO Global

DJO GlobalDJO Global‘s third-quarter losses widened on low-single-digit sales growth as the orthopedics company nears the end of a second year of restructuring.

San Diego-based DJO, which is privately held, posted losses of -$29.5  million on sales of $294.1 million for the three months ended Sept. 29, marking a red ink expansion of 30.0% on sales growth of 1.1% compared with Q3 2017.

Adjusted to exclude one-time items, including more than $21 million in restructuring charges, earnings before interest, taxes, depreciation & amortization were up 8.1% to $72.2 million.

“Our growth initiatives are working,” president & CEO Brady Shirley said in prepared remarks. “We’re seeing revenue growth return in key segments and ongoing margin expansion, evidence that our efforts are driving results, and we continue to anticipate a stronger trajectory for the remainder of our fiscal year.”

“We have made such great progress in our transformation journey. Productivity was strong again in the quarter, as it has been the last several quarters, with Adjusted EBITDA for the quarter increasing 8.1%, or 2.9 times the growth in revenue, and margins improving about 120 basis points,” added CFO/COO Mike Eklund.

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NeoChord raises $21m

NeoChord

NeoChord has raised $20.6 million in a new round of equity financing, according to a recently posted SEC filing.

The St. Louis Park, Minn.-based company offered Series D preferred stock in the round, with the first sale noted on October 31, according to the filing.

A total of 27 anonymous investors have joined in the offering, according to the filing. NeoChord is looking for an additional $8.8 million before closing the round, bringing the total raised up to a hoped for $29.4 million.

The company has not yet stated how it plans to spend funds in the round.

Earlier this month, NeoChord said that it closed a $25 million Series D equity financing round to help support its mitral valve repair system intended to treat mitral valve regurgitation.

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BTG invests $20m in Veran Medical’s thoracic guidance tech

BTGBTG (LON:BTG) said this week that it invested $20 million in Veran Medical Technologies and its thoracic navigation system.

Veran’s thoracic navigation system is designed to help lung specialists diagnose lung cancer earlier, enabling a smooth transition between an endobronchial and transthoracic approach. The technology is also used to localize and mark lung nodules in the operating room prior to resection.

The London-based company has an option to acquire Veran, exercisable from January 2020.

“We are excited to announce BTG’s investment in Veran and look forward to collaborating with them,” Veran Medical CEO Jason Pesterfield said in prepared remarks. “BTG and Veran have the shared goal of helping physicians diagnose and treat lung cancer earlier in order to save lives.”

“We are pleased to enter into this partnership with Veran and support the company’s growth,” Peter Pattison, BTG’s head of interventional oncology, added. “Veran’s technology supports the shift towards minimally invasive treatment of lung cancer, an area of strategic interest to BTG.”

BTG also announced its financial results for the first half of 2018, touting the company’s revenue and profit growth.

BTG posted profits of $76.7 million, or 20¢ per share, on sales of $495.7 million for the six months ended Sept. 30, for bottom-line growth of 12.6% on sales growth of 12% compared with the same period last year.

“I am pleased to report that in the first six months we have delivered 10% sales growth with good operating leverage in our product business and 35% adjusted operating profit growth for the group. The second half of the year has started well.” CEO Louise Makin said in prepared remarks. “Our growth strategy is delivering. We remain ambitious to use our strong financial resources to augment this positive organic momentum with further investments and acquisitions to deliver on our vision of being a world leader in interventional medicine, transforming patient care and creating significant long-term value for our stakeholders.”

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Vapotherm prices $56m IPO

VapothermVapotherm yesterday priced an initial public offering, aiming to raise $56 million for its respiratory device.

Exeter, N.H.-based Vapotherm developed the Precision Flow line of devices to provide high-velocity heated, humidified and oxygenated air to treat patients with conditions such as pneumonia, chronic obstructive pulmonary disease, asthma and heart failure. Some 1,200 of the devices have been sold in the U.S., mostly into hospital ICUs, the company said.

Vapotherm said it plans to issue 4 million shares at $14 apiece, hitting the low end of its prior range. The offering also includes a 30-day underwriters option that could add $8.4 million if fully exercised.

Proceeds from the flotation are earmarked for expanding its sales and marketing teams and increase its marketing footprint in the U.S. and overseas, the company has said. Some of the cash will also go toward R&D, working capital and general expenses, according to a regulatory filing.

The company plans to list on the New York Stock Exchange under the “VAPO” symbol, with trading slated to start today.

Vapotherm posted losses of -$31.0 million, or -$3.20 per share, on sales of $35.6 million last year, widening its losses by 34.4% on sales growth of 18.2% compared with 2016. For the nine months ended Sept. 30, Vapotherm reported losses of -$29.6 million, or -$2.54 per share, on sales of $30.7 million, increasing its losses by 34.7% on sales growth of 21.8% compared with the first three quarters of 2017, according to the filing.

BofA Merrill Lynch and William Blair are joint book-runners for the offering, with Canaccord Genuity as lead manager and BTIG as co-manager, Vapotherm said.

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Xeris Pharmaceuticals touts data for glucagon auto-injector

Xeris Pharmaceuticals - updatedXeris Pharmaceuticals (NSDQ:XERS) touted data this month for its ready-to-use glucagon auto-injector, highlighting the device’s efficacy and usability.

The Chicago-based company’s rescue pen is under review for approval by the FDA as a treatment for severe hypoglycemia in people with diabetes.

Get the full story at our sister site, Drug Delivery Business News.

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Valeritas inks Middle East distro deal for V-Go insulin delivery device

Valeritas logo - updatedValeritas (NSDQ:VLRX) said today that it signed an exclusive distribution deal with Julphar for the commercialization of its V-Go wearable insulin delivery device in the member states of the Gulf Cooperation Council.

Valeritas has deals in place to bring its V-Go device to 14 countries and territories, including Australia, Slovenia and Puerto Rico. The company is also working to win regulatory approval for the product in China.

Get the full story at our sister site, Drug Delivery Business News.

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Abiomed shares slide despite Impella CP trial success

Abiomed

Abiomed (NSDQ:ABMD) shares fell approximately 13.1% yesterday despite the company announcing positive results from a pilot trial of its Impella CP heart pump that will clear the way for a pivotal that could nearly double the device’s total addressable market.

The company announced on Sunday that a pilot study of its Impella CP, used to unload the left ventricle for patients presenting with anterior ST-segment elevation myocardial infarction without cardiogenic shock met its primary endpoints and that it plans to launch a pivotal trial during the second half of next year.

Leerink Partner analyst Danielle Antalffy said that they expected that results from the trial might end up having a positive effect on the company’s shares, according to a letter to investors.

“While [Abiomed] shares have run in the last few days – +25% off recent lows – we do think investors will likely focus on these encouraging trends in infarct size, and shares could move moderately higher on this data,” Antalffy wrote in a letter on Sunday.

Abiomed saw its shares drop approximately 13.1% on Monday, opening at $388.99 and closing at $337.86. The drop was reportedly due to the high expectations of the company’s investors, according to another letter to investors from Antalffy released today.

“Despite the pilot trial’s success, [Abiomed] shares sold off yesterday, likely caused by: (1) Elevated investor expectations for more definitive positive trends favoring the unloading arm, which would have been incredibly difficult in such a small trial; (2) what may be perceived as a modest delay in initiation of the pivotal trial, with [Abiomed] targeting 2H19 vs 1H19; and (3) a broader selloff in MedTech, and specifically in growth/momentum stocks,” Antalffy wrote.

They went on to state that at its reduced price, shares in the company reflect “very little STEMI, which we peg to be nearly $140/share based on our DCF”.

If the pivotal trial of the device is successful, Abiomed could see a nearly double increase in its total addressable market, Antalffy said, who was bullish on the company’s efforts.

“With or without STEMI, we believe [Abiomed] has a monopoly in a large and under penetrated market that ultimately could prove to be multiples of its current size. More importantly, we believe the company will most likely revise its multi-year vision set at the 2015 analyst meeting – $1B+ in revenue from the current high risk PCI and cariogenic shock indications alone by FY2021 and ~30% operating margins – with the company clearly tracking ahead of this goal already on operating margins and pushing close to $1B insoles next year, based on our estimates,” Antalffy wrote in a letter to investors.

Shares in Abiomed have dropped a much smaller 0.3% today, at $336.72 as of 11:15 a.m. EST.

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Report: GE could put more of GE Healthcare on the table in spin out, IPO

General Electric

General Electric (NYSE:GE) may be looking to put more of its healthcare business on the table in a planned upcoming spin-off and initial public offering, growing from a previous announcement of 20% to as much as 49.9% of the division, according to a Boston Business Journal report.

CEO Larry Culp reportedly made remarks suggesting that an increased portion of the healthcare biz might be included in the deal during a CNBC interview. The move comes as the company looks to reduce its debt, according to the Business Journal, having seen its stock price drop by more than 20% since releasing its earnings late last month.

GE announced in June that it was looking to sell 20% of the healthcare division with the rest distributed to existing shareholders in a deal expected to take 12 to 18 months.

“We talked in June about an IPO there, where we’d take 19.9% of the proceeds as cash. We have flexibility, we have options there. We could preserve our tax-free spin status while selling up to 49.9%. There’s a lot of cash there, given some of the estimates of value that are out there,” Culp said in the CNBC interview.

Culp is following the turnaround strategy set out by his predecessor, John Flannery, in June, according to the BBJ. The plan includes deleveraging the company and decentralizing its structure, according to the report.

No changes to the company’s future Boston headquarters were mentioned in the interview, according to the report.

Shares in GE have risen 4.5% so far today, at $8.35 as of 10:59 a.m. EST.

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