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Investing.com -- Shares of Ondine Biomedical dropped 5.7% on Thursday as the company reported financial results that showed revenue growth but also an operating loss larger than expected.
The medical technology firm’s revenues increased by 70% in 2024 to $2.0 million, which was primarily attributed to more hospital deployments and a rise in per-hospital revenue.
However, the revenue fell short of forecasts by $800,000, a detail the company downplayed as not indicative of future challenges.
Despite the revenue shortfall, Ondine Biomedical managed to cut its sales and marketing expenses by 40% while increasing its gross margin to 64%, up from 58% the previous year.
This margin exceeded the 63% estimate from RBC. However, the operating loss for the year widened to $19.4 million, significantly above the anticipated $14.9 million, due to increased investments in clinical trials, FDA audit readiness, and operational infrastructure to support anticipated growth.
The company’s Phase 3 clinical trial for its Steriwave product in major surgery began in the first quarter of 2025, slightly behind the original schedule of the fourth quarter of 2024.
Still, Ondine Biomedical expects to complete the trial more swiftly by expanding it to more hospitals.
Despite the mixed financial results, RBC analysts reiterated their Outperform rating and 55p price target on Ondine Biomedical’s stock.
"We continue to believe that Ondine’s Steriwave addresses TAMs worth billions of dollars with a differentiated and effective technology. We highlight our conservative approach to forecasting, and see substantial potential upside to our estimates, as set out in our detailed analysis," according to RBC analysts.
"We expect data from the pivotal Phase 3 clinical trial (expected Q3) and the Canadian ICU trial (expected Q2/3) to be the next major catalysts for the shares," they added.
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