On Tuesday, Canaccord Genuity maintained a Buy rating on Koru Medical Systems Inc. (NASDAQ: KRMD), with a steady price target of $3.00. The firm's positive outlook is based on the recent regulatory clearance that allows the company's FreedomEdge syringe infusion system to be used with Cuvitru in Japan. This development presents Koru Medical Systems with new opportunities in both a fresh market and with a new drug.
The company, which specializes in subcutaneous immunoglobulin (SCIg) therapies, did not initially include significant contributions from the Japanese market in its 2024 guidance. However, the successful clearance in Japan could lead to potential upside if the product's launch and adoption happen quickly. During the first quarter earnings call, Koru Medical Systems reported a 63% growth in overseas revenue, which adjusts to 40% when excluding expedited inventory related to the BSI determination.
Despite the international growth, Koru Medical Systems has kept its total revenue growth forecast for 2024 unchanged at 10-13%. The company expects the first half of the year to be on the lower end of this range, with the second half showing more robust performance, particularly due to international market expansion. Canaccord Genuity's projections for the company's fiscal year 2024 include a total revenue growth of 12% and an international growth of 37%.
The firm's reiteration of the Buy rating reflects confidence in Koru Medical Systems' conservative guidance and its ability to capitalize on the international expansion, especially with the recent regulatory approval in Japan.
In other recent news, KORU Medical Systems has made significant strides in its business operations and product development. The company reported a record-breaking revenue of $8.2 million in Q1 2024, marking a 14% growth in its core business. International revenue also saw an impressive 63% increase, and the company reduced its cash burn to $700,000, aiming to be cash flow positive by the fourth quarter of 2024.
KORU Medical has also announced a partnership with a global pharmaceutical firm to conduct a feasibility study using its Freedom Infusion System for a subcutaneous oncology biologic drug. The Freedom System, used by over 40,000 patients worldwide, could potentially simplify treatment protocols and enhance patient quality of life.
Furthermore, KORU Medical has initiated a Phase III clinical trial for a novel enzyme replacement therapy aimed at treating a rare endocrinological disease. The therapy, which has received multiple designations from the FDA, could become the first disease-modifying treatment for approximately 10,000 patients globally suffering from this genetic disorder.
InvestingPro Insights
As Koru Medical Systems Inc. (NASDAQ: KRMD) navigates new market opportunities in Japan, a glance at the company's financial health and market performance through InvestingPro data reveals key insights. With a market capitalization of $105.49 million and a Price / Book ratio of 5.53 as of Q1 2024, the company is trading at a higher valuation relative to its book value. Despite a modest revenue growth of 0.96% in the last twelve months as of Q1 2024, analysts have revised their earnings downwards for the upcoming period, aligning with the projection that the company may not achieve profitability this year.
InvestingPro Tips further highlight that while the stock has taken a significant hit over the last week, with a 21.4% decline in total return, Koru Medical Systems has demonstrated a high return over the last decade. Additionally, the company's liquid assets currently exceed its short-term obligations, suggesting a stable liquidity position. However, it's worth noting that the company does not pay a dividend to shareholders, which may influence investment decisions for those seeking regular income.
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