On Tuesday, Roth/MKM adjusted its outlook on Helius Medical Technologies, Inc. (NASDAQ:HSDT), significantly increasing the price target to $24.00, a substantial rise from the previous $5.00 target, while reiterating a Buy rating on the stock. The firm's decision follows the recent assignment of HCPCS Level II codes to Helius Medical's Portable Neuromodulation Stimulator (PoNS) device, marking an important step toward reimbursement.
The Centers for Medicare & Medicaid Services (CMS) has designated HCPCS Level II codes A4593 and A4594 for the PoNS controller and mouthpiece, respectively. These codes are expected to be fully effective starting October 1, 2024, paving the way for future reimbursement scenarios. This development is anticipated to increase patient access to the PoNS therapy through various programs, including the PoNSTEP and cash pay options.
The analyst from Roth/MKM highlighted the significance of these codes in potentially boosting patient exposure to the PoNS treatment. Increased usage is projected to assist Helius Medical in gathering the necessary data for third-party reimbursement, which is essential for the company to reach its full commercial potential.
The substantial revision in the price target to $24 from $5 is attributed to a combination of the 1-for-50 reverse stock split and several model adjustments. The reverse split is often used by companies to boost the share price by reducing the number of shares outstanding, which can make the stock more appealing to investors.
Helius Medical Technologies is focused on developing medical devices for the treatment of neurological symptoms caused by disease or trauma. The PoNS device is one of their key products, designed to deliver neuromodulation therapy through the tongue to enhance the brain's ability to compensate for damage.
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