ClearPoint Neuro Inc. (Nasdaq: CLPT) is winning favor on Wall Street.
Shares of the Irvine-based medical device maker approached $9 last month before settling to around $8.25 and a $137 million market cap at press time. It was trading at around $3 as recently as July.
The company’s hardware and software platform is used to perform minimally invasive brain procedures while the patient is inside an MRI scanner. Its hardware platform is in 60 top hospitals in the U.S. and continues to achieve double-digit growth.
“After three years, we’ve begun to build a track record and credibility among investors. People understand the conditions we help treat, and see our technology could unlock therapies for very sick patients,” Chief Executive Joe Burnett told the Business Journal.
Meanwhile, its gene therapy and biologics business that provides navigation, drug delivery and case support to about 25 clinical-stage drug developers, Burnett said.
The gene therapy and biologics business, the development of which Burnett has spearheaded since coming on board in late 2017, is interesting because “it gives its partners the chance to do a moon shot if any single trial is approved, yet it has none of the risk associated with biotech investments,” Catalyst Capital said in an analyst report last month.
Sales in 2019 climbed 42% to $9.5 million while its net loss narrowed to $5.5 million. The two analysts who cover the company expect a 19% increase this year to $11.3 million and then a 35% acceleration to $15.2 million in 2021.
On Nov. 10, it reported third quarter sales climbed 20% to $3.5 million and its loss widened to $1.3 million.
New Names and Faces
ClearPoint originated as SurgiVision in Tennessee in 1998.
The company changed its name to MRI Interventions in 2011 and went public in 2012. It relocated its headquarters to Irvine in 2015.
CEO Burnett, who has biomedical engineering and MBA degrees from Duke University, was brought on after several years with Philips Healthcare, which he joined following its acquisition of vascular imaging firm Volcano Corp.
Since joining, Burnett has nearly doubled the size of the company; several former Volcano coworkers have joined the team including Danilo D’Alessandro, who will start as chief financial officer on Jan. 1. D’Alessandro most recently served as the global head of finance of the image guided therapy devices division at Philips, a business unit representing cumulative inorganic investments of approximately $4 billion and more than 3,000 employees.
In mid-2019, ClearPoint uplisted to the New York Stock Exchange before moving to the Nasdaq Global Market, citing enhanced visibility among biotech companies, near the end of the year.
The company became ClearPoint, after its namesake product, at the beginning of 2020.
Breadth of Conditions
The ClearPoint system—“arguably the most precise tool available” per Burnett—helps with procedures that treat several conditions such as Parkinsons and Huntingtons disease, brain tumors, epilepsy and childhood genetic disorders.
The hardware and software costs up to $150,000 while disposables and services range from $6,000 to $12,000 per procedure.
On the biologics side of the business, the company helps its partners deliver therapeutic injections to precise areas of the brain.
These companies often aim to treat rare orphan diseases such as AADC deficiency syndrome, a condition that prevents children from movement because they lack the enzymes needed to create communication channels between the nerves and brain.
Based on the company’s 20 partners and their potential patient populations, Catalyst Capital estimated the opportunity here to be roughly $1.8 billion to $5 billion per year.
ClearPoint said in its second quarter report it expects at least one of its partners to receive federal approval for its therapeutic by the end of 2020.
