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Investing.com - Piper Sandler has reiterated an Overweight rating and $15.00 price target on Orchestra BioMed Inc. (NASDAQ:OBIO), citing positive developments following the company’s recent capital raise. According to InvestingPro data, the company maintains strong gross profit margins of 93% and holds more cash than debt on its balance sheet, though its current market capitalization stands at $141 million.
The capital raise, which included investments from Ligand and Medtronic, will fund development of Orchestra BioMed’s BACKBEAT and Virtue technologies. Piper Sandler notes this funding will support enrollment completion in the BACKBEAT pivotal study and likely cover the data release as well. InvestingPro analysis shows the company’s current ratio of 2.1 indicates sufficient liquidity to meet short-term obligations, though the firm is quickly burning through cash.
According to Piper Sandler, BACKBEAT could generate more than $100 million in annual sales by the end of the decade and lead to profitability for Orchestra BioMed. The firm expects regulatory approval for BACKBEAT at the end of 2027, with Medtronic serving as the sales partner once cleared. Analyst consensus remains bullish, with targets ranging from $10 to $20 per share, significantly above the current trading price of $2.61.
The funding will also allow Orchestra BioMed to begin clinical trials for its Virtue drug-coated balloon later this year. While Virtue revenues are expected later than BACKBEAT (likely 2029 versus 2028), Piper Sandler believes this asset holds significant value.
Medtronic, with approximately 50% share of the 900,000 dual chamber pacemakers implanted worldwide annually, represents a strong partnership for Orchestra BioMed’s commercialization strategy, according to the research firm.
In other recent news, Orchestra BioMed Holdings, Inc. announced positive results from a study published in the Journal of the American College of Cardiology: Clinical Electrophysiology. The study showed that their atrioventricular interval modulation (AVIM) therapy significantly reduced systolic blood pressure in patients with uncontrolled hypertension who require pacemakers. Additionally, a new analysis from the MODERATO II study demonstrated improvements in cardiac function for patients with hypertension and diastolic dysfunction using AVIM therapy. In regulatory developments, the U.S. Food and Drug Administration expanded the eligibility criteria for Orchestra BioMed’s BACKBEAT global pivotal study, increasing the potential patient pool significantly.
On the financial front, H.C. Wainwright adjusted its price target for Orchestra BioMed to $10.00 from $12.00, while maintaining a Buy rating. Conversely, BTIG downgraded the company’s stock from Buy to Neutral, citing concerns about recent decisions and timeline delays. The downgrade followed a dilutive equity financing that resulted in over 30% dilution, which BTIG believes could impact future profitability. These developments highlight the ongoing progress and challenges faced by Orchestra BioMed in its therapeutic and financial strategies.
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