electroCore (ECOR) is a commercial-stage bioelectronic medical device company, with a proprietary non-invasive vagus nerve stimulation, or nVNS, therapy.
nVNS is a “bioelectronic medical therapy that modulates neurotransmitters and immune function through its effects on both the peripheral and central nervous systems.”
I remain neutral about everCore. (See electroCore stock charts on TipRanks)
The company’s gammaCore therapy is its first U.S. Food and Drug Administration (FDA) approved, non-invasive, hand-held medical therapy applied at the neck to treat migraines and cluster headaches.
everCore generates revenues through its gammaCore Sapphire flagship model; a portable, rechargeable, reusable, and reloadable option that can be self-administered by patients. This is a prescription-only model.
Last week, the company announced that the U.S. Patent and Trademark Office had issued a patent to the company “relating to devices, systems and methods integrated with, or coupled to, smartphones that allow patients to self-treat medical conditions, such as migraine headache, by electrical non-invasive stimulation of nerves.”
The company is looking at building an intellectual property (IP) portfolio centered around smartphone-connected and smartphone-integrated non-invasive therapy.
ECOR expects that this IP could be the foundation for combining the company’s nVNS therapy with application-based digital health platforms.
When it comes to the second quarter, the company earned revenues of $1.3 million, a jump of 69% year-over-year. ECOR’s adjusted EBITDA net loss narrowed to $4.1 million in Q2, versus a loss of $4.3 million in the same period of last year.
The company has focused on its sales efforts through two channels: the U.S. Department of Veterans Affairs and the U.S. Department of Defense, and the United Kingdom.
Dan Goldberger, CEO of electroCore, stated, “We saw continued progress in operating metrics across all our revenue channels. Our cash balance of $23.7 million at June 30, 2021, together with the approximately $18.8 million raised in our subsequent public offering and lower operating burn, puts the company in an excellent position to execute on its plan through 2022.”
When it comes to its Q3, ECOR has projected net revenues of $1.5 million and the usage of cash, net of financing activities, to be around $4.5 million.
Following the Q2 results, JMP Securities analyst David Turkaly reiterated a Hold rating on the stock.
According to Turkaly, the company’s Q2 results represented “modest incremental progress in its commercial and clinical efforts, including sequential growth within its VA/DoD [U.S. Department of Veterans Affairs and U.S. Department of Defense] channel (+15% over 1Q21), and a multitude of new investigator-initiated studies featuring its gammaCore technology.”
However, Turkaly is of the view that while ECOR’s proprietary gammaCore therapy has numerous advantages, “the company has yet to establish a secular growth profile and the physician adoption that is paramount to building a sustainable business.”
This could change with the patent obtained by everCore last week, as the company stated that the possibility of Remote Patient Monitoring or Remote Therapeutic Monitoring with the patent could “enable future business models and revenue streams for the company’s products.”
Turning to the rest of the Street, Wall Street analysts are bullish about electroCore, with a Strong Buy consensus rating, based on three Buys and one Hold.
The average electroCore price target of $3 implies 158.6% upside potential from current levels.
Disclosure: At the time of publication, Shrilekha Pethe did not have a position in any of the securities mentioned in this article.
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