Deutsche Bank remains bullish on Inari stock amid overblown safety recall fears

On Wednesday, Deutsche Bank reiterated its Buy rating and $68.00 price target for Inari Medical Inc. (NASDAQ:NARI) stock, despite recent safety concerns regarding two of the company’s products involved in venous clot removal.

The analyst from the firm believes the market reaction to the safety issues is an overreaction, presenting an opportunity to buy into the medical technology company's stock.

Inari Medical's shares have seen a 10% decline since last Thursday, underperforming when compared to Penumbra (NYSE:PEN), which saw a 3% increase, and the broader market, which remained flat. The concerns stem from the ClotTriever XL catheter and the FlowSaver autologous blood return system.

The ClotTriever XL, designed for use in larger blood vessels, was the subject of a "Dear Doctor" letter issued on July 19th following reports of adverse events, including four patient injuries and six deaths.

The Food and Drug Administration (FDA) classified the field action for ClotTriever XL as a Class I recall, which is the most serious type. However, it was categorized as a correction rather than a withdrawal, indicating the problems may be related to usage technique rather than product design.

A survey conducted by Deutsche Bank of high-volume mechanical thrombectomy doctors revealed that while some have reduced use of the ClotTriever due to safety issues, many continue to use the product without changes.

According to discussions with Inari Medical's senior management earlier this week, the company does not anticipate any revenue impact from the field action. The analyst notes that even in the worst-case scenario where ClotTriever XL usage completely ceases, the impact on Inari's total ClotTriever volumes would be less than 5% due to the specific subset of patients affected by the updated instructions for use (IFU).

In conclusion, Deutsche Bank's position reflects confidence in Inari Medical's growth potential and suggests that the recent dip in share price might be a strategic point for investment in the company.

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