The outlook for bioelectronic medicine firm, electroCore Inc. (ECOR:NASDAQ), in 2023 is positive, given its recent and projected revenue growth, reported H.C. Wainwright & Co. analyst Dr. Swayampakula Ramakanth in a Jan. 18 First Take research note.
"We are encouraged by the preliminary financial results the company achieved in 2022 and management's ability to continuously seek new avenues to drive revenue growth," Ramakanth commented.
This company, developing noninvasive vagus nerve stimulation therapy to treat multiple medical conditions, offers investors significant potential return. This is indicated by the large difference between electroCore's current share price (US$0.40) and H.C. Wainwright's per-share target price on the company (US$2.75). ElectroCore is Buy rated.
Revenue Growth Expected
The New Jersey-based company is expected to increase revenues this year by 72%, generating about US$14.6 million (US$14.6M) as a result, noted Ramakanth. This would follow a 52% year-over-year revenue growth in 2022, totaling US$8.5M and up from US$5.5M.
"We are encouraged by the preliminary financial results the company achieved in 2022 and management's ability to continuously seek new avenues to drive revenue growth," Ramakanth commented.
Last year's Q4 was particularly strong, Ramakanth pointed out. Revenue for that quarter alone is estimated to be US$2.5M, 68% higher than Q4/21's US$1.5M. This growth is due, in part, to electroCore's sales of gammaCore products to the Veterans Affairs (VA)/Department of Defense (DOD).
"With VA centers returning to pre-pandemic patient traffic and with published clinical data regarding the efficacy of gammaCore in reducing symptoms associated with acute withdrawal in opioid use disorder patients, we expect deeper penetration of the device within the VA system in 2023," wrote Ramakanth.
New Revenue Streams
Revenue is expected to come from three additional places this year, according to Ramakanth. If they "are successful and become meaningful contributors, our current full-year 2023 revenue estimate could prove conservative."
One source of revenue is electroCore's distribution agreement with Joerns Healthcare to sell gammaCore to patients in certain managed care health systems. Incoming revenue from this is expected to start in H2/23.
Another revenue channel, which opened in Q4/22 but is expected to also ramp up in H2/23, is sales of TAC-STIM, a new product for offering under the BOOST, or Air Force Biotech Optimized for Operational Solutions and Tactics, program, for human performance, noted Ramakanth. Full product deployment is anticipated later this year.
The third revenue stream is from sales of Truvaga, electroCore's handheld noninvasive vagus nerve stimulator launched online in December 2022.
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Disclosures For H.C. Wainwright & Co., electroCore, Inc., January 18, 2023
H.C. Wainwright & Co, LLC (the “Firm”) is a member of FINRA and SIPC and a registered U.S. Broker-Dealer. I, Swayampakula Ramakanth, Ph.D., Arthur He, Ph.D. and Sean Lee , 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 electroCore, Inc. (including, without limitation, any option, right, warrant, future, long or short position). As of December 31, 2022 neither the Firm nor its affiliates beneficially own 1% or more of any class of common equity securities of electroCore, Inc..
A family member of the Research Analyst serves as an intern at electroCore, Inc. and, while the firm policy prohibits sharing of information between family members we are disclosing this matter for your consideration. Additionally, the Research Analyst’s family member does not have a financial interest in electroCore, Inc.. 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 electroCore, Inc. for non-investment banking services in the previous 12 months. The Firm or its affiliates did not receive compensation from electroCore, Inc. for investment banking services within twelve months before, but will seek compensation from the companies mentioned in this report for investment banking services within three months following publication of the research report. The Firm does not make a market in electroCore, 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.
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