In an Aug. 10 research note, analyst Jeffrey Cohen with Ladenburg Thalmann reported that in Q2/18, Viveve Medical Inc. (VIVE:NASDAQ) reported Q2/18 revenue of $5.5 million, which surpassed consensus' estimate of $5.3 million. Net loss was $11.5 million, higher than Ladenburg and consensus' expectations of $10.7 million and $10.9 million, respectively. Loss per share was $0.37, in line with consensus but higher than Ladenburg's forecast of $0.36.
Cohen highlighted that the sales force for Viveve sold 85 systems in Q2/18, taking the total of installed units to date to 582. The bulk of the 85 units, or 69 of them, went to medical practices in North America. During Q2/18, 2,750 treatment tips were used, which is much lower than Ladenburg's expectation of 5,802 used tips.
This miss is due to minor manufacturing delays that resulted in 1,000 tips being put on back order along with the buy one, get one free (BOGO) offer in place for tips used in stress urinary incontinence procedures. "We anticipate the BOGO program will be eliminated in Q4/18 as the company develops an enhanced treatment tip," the analyst noted.
Viveve's operating expenses during Q2/18 came in at $13.1 million, higher than Ladenburg's forecast of $12.7 million. The $0.4 million difference was in the research and development (R&D) category. "The increase of opex reflects the growth of the commercial sales force, expansion into international territories and R&D efforts related to clinical activity and altered tip design," explained Cohen.
As for opportunities for future sales, the medical device company now has 49 individuals representing it in North America. It also has a partnership with Aesthetic Management Partners, which should "increase bundling opportunities with Viveve's products at the forefront," Cohen wrote, and bundles appeal to physicians wanting to enter the space. Additionally, "internationally, the hybrid distribution model continues to drive awareness and utilization."
In other news, Viveve received FDA clearance to continue enrollment for its VIVEVE II trial. Ultimately, for the study, 250 patients from 25 centers will be enrolled, and after a year, the mean change from their baseline Female Sexual Function Index will be assessed.
About Viveve overall, Cohen indicated, "We continue to believe the company is positioned well in domestic and international markets. Consistent clinical data and progression with VIVEVE II, LIBERATE U.S. and LIBERATE International provide various catalysts for the company moving forward."
As such, Ladenburg Thalmann has a Buy rating and an $8.50 per share target price on the biotech, a reduction from $10 "as a result of an adjustment of shares outstanding." Viveve shares are trading at around $3.08 per share.
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Disclosures from Ladenburg Thalmann, Viveve Medical Inc., August 10, 2018
ANALYST CERTIFICATION: I, Jeffrey S. Cohen, attest that the views expressed in this research report accurately reflect my personal views about the subject security and issuer. Furthermore, no part of my compensation was, is, or will be directly or indirectly related to the specific recommendation or views expressed in this research report, provided, however, that:
The research analyst primarily responsible for the preparation of this research report has or will receive compensation based upon various factors, including the volume of trading at the firm in the subject security, as well as the firm’s total revenues, a portion of which is generated by investment banking activities.
COMPANY SPECIFIC DISCLOSURES:
Ladenburg Thalmann & Co. Inc. makes a market in Viveve Medical, Inc.
Ladenburg Thalmann & Co. Inc. has managed or co-managed a public offering for Viveve Medical, Inc. within the past 12 months.
Ladenburg Thalmann & Co. Inc received compensation for investment banking services from Viveve Medical, Inc. within the past 12 months.
Ladenburg Thalmann & Co. Inc had an investment banking relationship with Viveve Medical, Inc. within the last 12 months.
