Intratubal Insemination Device Shown Effective, Safe
Research Report

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Disclosures for H.C. Wainwright & Co., Femasys Inc., November 26, 2024

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H.C. Wainwright & Co, LLC (the “Firm”) is a member of FINRA and SIPC and a registered U.S. Broker-Dealer. I, Emily Bodnar , certify that 1) all of the views expressed in this report accurately reflect my personal views about any and all subject securities or issuers discussed; and 2) 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; and 3) neither myself nor any members of my household is an officer, director or advisory board member of these companies. None of the research analysts or the research analyst’s household has a financial interest in the securities of Femasys Inc. (including, without limitation, any option, right, warrant, future, long or short position). As of October 31, 2024 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of Femasys Inc.. Neither the research analyst nor the Firm knows or has reason to know of any other material conflict of interest at the time of publication of this research report.

The research analyst principally responsible for preparation of the report does not receive compensation that is based upon any specific investment banking services or transaction but is compensated based on factors including total revenue and profitability of the Firm, a substantial portion of which is derived from investment banking services. The firm or its affiliates received compensation from Femasys Inc. for non-investment banking services in the previous 12 months. The Firm or its affiliates did receive compensation from Femasys Inc. for investment banking services within twelve months before, and will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report. H.C. Wainwright & Co., LLC managed or co-managed a public offering of securities for Femasys Inc. during the past 12 months. The Firm does not make a market in Femasys Inc. as of the date of this research report. The securities of the company discussed in this report may be unsuitable for investors depending on their specific investment objectives and financial position. Past performance is no guarantee of future results. This report is offered for informational purposes only, and does not constitute an offer or solicitation to buy or sell any securities discussed herein in any jurisdiction where such would be prohibited. This research report is not intended to provide tax advice or to be used to provide tax advice to any person. Electronic versions of H.C. Wainwright & Co., LLC research reports are made available to all clients simultaneously. No part of this report may be reproduced in any form without the expressed permission of H.C. Wainwright & Co., LLC. Additional information available upon request. H.C. Wainwright & Co., LLC does not provide individually tailored investment advice in research reports. This research report is not intended to provide personal investment advice and it does not take into account the specific investment objectives, financial situation and the particular needs of any specific person. Investors should seek financial advice regarding the appropriateness of investing in financial instruments and implementing investment strategies discussed or recommended in this research report. H.C. Wainwright & Co., LLC’s and its affiliates’ salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies that reflect opinions that are contrary to the opinions expressed in this research report. H.C. Wainwright & Co., LLC and its affiliates, officers, directors, and employees, excluding its analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or derivatives (including options and warrants) thereof of covered companies referred to in this research report. The information contained herein is based on sources which we believe to be reliable but is not guaranteed by us as being accurate and does not purport to be a complete statement or summary of the available data on the company, industry or security discussed in the report. All opinions and estimates included in this report constitute the analyst’s judgment as of the date of this report and are subject to change without notice. Securities and other financial instruments discussed in this research report: may lose value; are not insured by the Federal Deposit Insurance Corporation; and are subject to investment risks, including possible loss of the principal amount invested.

Femasys Inc.'s (FEMY:NASDAQ) FemaSeed tubal insemination device led to "impressive pregnancy rates in women with male factor infertility," according to newly published pivotal trial results, H.C. Wainwright & Co. analyst Emily Bodnar reported in a Nov. 26 research note. FemaSeed delivers washed sperm directly into the fallopian tube.

"The data demonstrate positive experiences with FemaSeed in a historically difficult subgroup of couples with infertility which have low success with intrauterine insemination," Bodnar wrote. "We view FemaSeed as a potentially preferred infertility solution in subjects with male factor infertility."

Target Reflects 990% Gain

The stock of this Georgia, U.S.-based medical device firm offers investors a potential return of 990%, noted Bodnar. This is derived from H.C. Wainwright's US$12 per share price target on the company, and its share price at the time of the report was about US$1.10.

Femasys remains a Buy.

Recap of Trial Design

Bodnar described this single-arm, historical control study, conducted at 12 academic and private medical centers in the U.S. Participants were females with male factor or unexplained infertility and a very low total motile sperm count, between 1 and 20 million (1–20M). The women were between 19 and 40 years of age, 32 on average. Of the participants, 38% had prior intrauterine insemination, and 85% had received controlled ovarian stimulation and human chorionic gonadotropin injection. The mean infertility years among subjects was 3.6.

Sperm preparation was split 50%/50% between wash-and-centrifugation and density gradient.

Patients were given intratubal insemination using FemaSeed in a minimally invasive, nonsurgical procedure averaging 7.24 minutes. It was done in a doctor's office without anesthesia. Bodnar noted the efficiency and convenience of the FemaSeed procedure.

Efficacy Exceeds Target

Bodnar presented the efficacy and safety highlights of the FemaSeed pivotal trial results, reporting they were published in the recent Journal of Gynecology & Reproductive Medicine issue.

"This publication could be utilized to support marketing and commercial efforts of FemaSeed to infertility clinics and to consumers directly," added Bodnar.

Using the catheter-based FemaSeed device, the pregnancy rate exceeded the company's 7% goal based on historical control of intrauterine insemination during 1,115 cycles. With FemaSeed, 26% of patients, or 10 out of 38, got pregnant. Per cycle, 17.5% of patients, or 10 out of 57, conceived.

The conception rate on the first intratubal insemination cycle was 60%. Eighty percent of participants received ovarian stimulation.

The cumulative pregnancy rate through the first cycle was 15.8%, and through the second cycle, 30.7%.

Among women with single female factor and normal total motile sperm count higher than 20M, the pregnancy rate was 13.3%, or in 2 subjects out of 15. The overall pregnancy rate among all 133 participants was not stated in the article.

FemaSeed exhibited a favorable safety profile with low rates of adverse events occurring with the procedure, reported Bodnar. Results showed safety to be consistent with that of intrauterine insemination. Out of 222 FemaSeed pregnancies, only one was ectopic, a rate of 0.5%. Uterine perforation did not happen at all.

Site Visit Takeaways

Also, in her report, Bodnar gave her impressions from a Nov. 25 visit to Femasys' 41,000-square-foot manufacturing facility in Georgia. She reported the company has streamlined its manufacturing processes to achieve better quality and improved gross margins. Now Femasys can manufacture products at the level needed for clinical trials and commercial sales and can do so quicker and more efficiently because all of its products are similarly designed.

Currently, Femasys is growing its FemaSeed inventory to meet initial demand. It, too, is fulfilling orders for its infertility clinic partners, such as Boston IVF in Massachusetts.

More Orders, Partnerships Expected

With marketing efforts ramping up and understanding of FemaSeed increasing, Femasys and H.C. Wainwright expect sales of both FemaSeed and FemVue, the biomedical firm's Fallopian tube ultrasound test, to grow and additional partnerships to come to fruition.

Femasys is marketing its existing product FemVue as a companion diagnostic tool to FemaSeed, a solid strategy, noted Bodnar, given many clinics already use FemVue and are familiar with the company and its products.

As such, H.C. Wainwright expects a boost in FemVue sales due to joint marketing with FemaSeed and increased marketing of the intratubal insemination device.

Femasys is expected to start direct-to-consumer marketing of FemaSeed in 2025. This could "drive additional demand for the product, which is the only new innovation for infertility in decades," Bodnar wrote.

H.C. Wainwright forecasts Femasys will generate US$1.2 million (US$1.2M) from FemaSeed sales this year, increasing next year. Already in 2024, in Q3/24, following the product launch, sales totaled about US$0.3M, exceeding H.C. Wainwright's estimate of US$0.13M.