On Wednesday, Needham maintained a Hold rating on Inari Medical Inc. (NASDAQ: NARI), in anticipation of upcoming clinical trial results. The company is set to present findings from its PEERLESS randomized controlled trial at the 2024 Transcatheter Cardiovascular Therapeutics (TCT) Meeting in Washington, DC, on October 29, 2024. The trial compares Inari's FlowTriever system to the traditional catheter-directed thrombolysis (CDT) for treating pulmonary embolism.
The FlowTriever is expected to show significant benefits over CDT, including lower all-cause mortality rates and reduced risks of intracranial hemorrhage, major bleeding, and intensive care unit admissions or stays. These results could bolster the device's market share against CDT. Despite these positive expectations, Needham suggests the PEERLESS II study, which compares FlowTriever to anticoagulation treatments, may have a greater impact on Inari's growth.
The PEERLESS II study, however, will not release its findings until late 2026 at the earliest. This timeline indicates that while the initial PEERLESS results may provide a near-term boost, the long-term growth trajectory for Inari Medical hinges on further research outcomes. Needham's current position reflects cautious optimism, acknowledging the potential of the FlowTriever system while also considering the extended period before more comprehensive data becomes available.
Inari Medical's strategic efforts to capture more of the market from CDT treatments are underscored by the anticipation of the PEERLESS study results. The company's growth prospects are tied to the effectiveness and safety profile of its FlowTriever product as it competes within the medical device sector for pulmonary embolism treatment solutions.
In other recent news, Inari Medical has been the subject of several recent developments. The company reported a modest revenue beat alongside a raised forecast in its second-quarter earnings report, showing approximately 17% growth in its core US Venous Thromboembolism business. However, the operational loss was larger than expected, which may raise concerns among investors.
On the management front, Kevin Strange is set to replace Mitch Hill in an unexpected Chief Financial Officer transition.
In the realm of analyst ratings, Stifel initiated coverage on Inari Medical with a Hold rating and a $50 price target, citing potential market growth against competitive and regulatory challenges. Deutsche Bank reiterated a Buy rating on Inari Medical, expressing confidence in the company's growth potential despite recent safety concerns. Truist Securities adjusted its price target for Inari Medical, decreasing it to $55 from the previous $60, while maintaining a Hold rating.
Piper Sandler reaffirmed a Neutral rating on Inari Medical, following a recent animal study investigating the company's FlowSaver technology. Despite an increase in plasma free hemoglobin levels after multiple uses of the technology, Piper Sandler maintained a cautious approach.
These are the latest developments in Inari Medical's journey.
InvestingPro Insights
As Inari Medical (NASDAQ: NARI) approaches the release of its PEERLESS trial results, InvestingPro data provides additional context to the company's financial position. Despite the anticipated positive outcomes from the FlowTriever system, Inari's current financials present a mixed picture. The company boasts impressive gross profit margins of 87.15% for the last twelve months as of Q2 2024, indicating strong pricing power for its innovative medical devices. This aligns with the potential market advantages the FlowTriever system might gain following favorable trial results.
However, InvestingPro Tips highlight that Inari is not currently profitable, with a negative P/E ratio of -66.8. This suggests that while the company is investing heavily in research and development, as evidenced by the ongoing clinical trials, it has yet to translate its technological advancements into bottom-line profits. The tip that "Net income is expected to drop this year" further underscores the financial challenges Inari faces as it awaits the full impact of its clinical trial outcomes.
Investors should note that Inari operates with a moderate level of debt, which could provide some flexibility as the company navigates the period between the PEERLESS and PEERLESS II study results. The stock's YTD price total return of -34.69% as of the latest data reflects the market's cautious stance, aligning with Needham's Hold rating.
For those seeking a more comprehensive analysis, InvestingPro offers 7 additional tips for Inari Medical, providing deeper insights into the company's financial health and market position.
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