In a Nov. 8, 2017, press release, Viveve Medical Inc. (VIVE:NASDAQ), a women's health and wellness company, announced record Q3/17 sales of $4.1 million," a 120% year-over-year (YOY) increase. "These results demonstrate continued strong demand for our innovative technology and the Geneveve treatment globally, particularly in North America, our largest commercial market," said Patricia Scheller, the corporation's CEO and director.
Revenue derived from the sale of 60 systems, 47 in North America, and 2,724 treatment tips. "The increasing demand we have seen since launching the Viveve System in Q3/15 reinforces the size of the worldwide opportunity and sets the stage for continuing global adoption through the remainder of the year and into 2018," Scheller concluded.
Viveve's Q3/17 global sales led to greater gross profit of $2 million, or 49% of revenue. This compares to that of Q3/16, which was $691,000, or 37% of revenue.
Q3/17 total operating expenses were $10.8 million, more than double those of $5.3 million in Q3/16. This primarily resulted from "increased costs to support United States commercialization and expansion into new international markets, research and development efforts, strategies to protect our intellectual property and other general corporate expenses," the press release noted.
At the quarter's end, Viveve had cash and cash equivalents of $19.2 million, which represents an $11.2 million increase since year-end 2016.
The press release also reported milestones the company achieved during Q3/17. It reached a total global installed base of 364 Viveve Systems. It received additional regulatory approvals and clearances, taking the total obtained this year to nine. It launched InControl Products by Viveve in the U.S.
In a Nov. 15, 2017, report, Zacks Small-Cap Research analyst Brian Marckx noted that Viveve "set several new records" in Q3/17, including number of consoles sold, total revenue and gross margin. Treatment tip sales, at 2,724, were "relatively strong" and "the second highest on record." Zacks expects growth to continue in all of these areas. It anticipates Q4/17 revenue of $5.2 million, "which implies YOY and sequential growth of 113% and 28%," respectively.
Greater sales in the U.S. are due to Viveve boosting its domestic sales force from 10 to 23 since May and the scope of clinical data supporting Geneveve's use, Marckx wrote. The latter has led to new adopters and has captured market share from competitors.
In contrast to strong U.S. sales, console placements outside of the U.S. (OUS) were weaker than expected in Q3/17, Marckx indicated. Whereas Zacks anticipated 18 would be sold, the number attained in Q2/17, only 13 were. Marckx attributed this to potential headwinds in China, including the China Food and Drug Administration possibly mandating regulatory approval of radiofrequency medical devices. He added that strong U.S. sales, however, have more than offset "softer" OUS sales.
In a Nov. 9, 2017, research report, Anthony Vendetti, an analyst with Maxim Group, described Viveve's Q3/17 numbers as "in line" and noted, "we would continue to be buyers" of the stock. The company's "strong performance in the U.S." and its plan to add 30 reps to its North American sales team by year-end are encouraging, "especially as its China business could potentially face new regulatory hurdles," he wrote.
Maxim sees potential for the greatest growth of the Viveve System in "an expanded FDA approval for the improvement of female sexual function," Vendetti explained. The start of the Viveve II study has been delayed one or two quarters, to possibly Q1/18, due to the U.S. Food and Drug Administration's (FDA's) request for more data. "Nonetheless, we are optimistic about the outcome of the study and believe it could further bolster adoption of the Geneveve system," he added.
Ladenburg Thalmann analyst Jeffrey Cohen called Viveve's Q3/17 financial results "robust." He noted that Viveve's Q3/17 revenue of $4.1 million came in above Ladenburg's estimate of $3.9 million. "Viveve's commercial and clinical activities continue to drive adoption and penetration in the marketplace, particularly in the U.S.," he said.
However, following Viveve's release of its Q3/17 results, Ladenburg lowered its price target to $15 from $18.50, "generally as a result of the overall three to four quarters of additional time estimated for expanded labeling in the U.S." for its Viveve System, Cohen explained. This delay is due to the FDA requiring additional information with respect to Viveve's investigational device exemption application. "The company remains optimistic that it can begin enrolling patients in the Viveve II study in Q1/18," he added.
Zacks and Maxim have an $11 per share target price on Viveve; Ladenburg has a $15 target price on it. The biotech's stock is currently trading at around $5.04. Maxim and Ladenburg have a Buy recommendation on Viveve; Zacks doesn't rate the company.
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1) Doresa Banning compiled this article for Streetwise Reports LLC and provides services to Streetwise reports as an independent contractor. She or members of her household own securities of the following companies mentioned in the article: None. She or members of her household are paid by the following companies mentioned in this article: None.
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Disclosures from Zacks Small-Cap Research, Viveve Medical Inc., Nov. 15, 2017
I, Brian Marckx, hereby certify that the view expressed in this research report accurately reflect my personal views about the subject securities and issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the recommendations or views expressed in this research report. I believe the information used for the creation of this report has been obtained from sources I considered to be reliable, but I can neither guarantee nor represent the completeness or accuracy of the information herewith. Such information and the opinions expressed are subject to change without notice.
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Disclosures from Maxim Group, Viveve Medical, Nov. 9, 2017
I, Anthony Vendetti, attest that the views expressed in this research report accurately reflect my personal views about the subject security and issuer. Furthermore, 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.
The research analyst(s) primarily responsible for the preparation of this research report have received compensation based upon various factors, including the firm’s total revenues, a portion of which is generated by investment banking activities.
Maxim Group makes a market in Viveve Medical, Inc.
Maxim Group managed/co-managed/acted as placement agent for an offering of the securities for Viveve Medical, Inc. in the past 12 months.
Maxim Group received compensation for investment banking services from Viveve Medical, Inc. in the past 12 months.
Maxim Group expects to receive or intends to seek compensation for investment banking services from Viveve Medical, Inc. in the next 3 months.
Disclosures from Ladenburg Thalmann, Viveve Medical Inc., Nov. 9, 2017
ANALYST CERTIFICATION: I, Jeffrey S. Cohen, attest that the views expressed in this research report accurately reflect my personal views about the subject security and issuer. Furthermore, 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, provided, however, that:
The research analyst primarily responsible for the preparation of this research report has or will receive compensation based upon various factors, including the volume of trading at the firm in the subject security, as well as the firm’s total revenues, a portion of which is generated by investment banking activities.
COMPANY SPECIFIC DISCLOSURES:
Ladenburg Thalmann & Co. Inc. makes a market in Viveve Medical, Inc.
Ladenburg Thalmann & Co. Inc. has managed or co-managed a public offering for Viveve Medical, Inc. within the past 12 months.
Ladenburg Thalmann & Co. Inc received compensation for investment banking services from Viveve Medical, Inc. within the past 12 months.
Ladenburg Thalmann & Co. Inc had an investment banking relationship with Viveve Medical, Inc. within the last 12 months.