Needham reiterated a Buy rating, and 12-month price target of $2.50, on Lucid Diagnostics (LUCD) after attending the company’s investor day event on Tuesday.
Needham attended Lucid’s investor day meeting on New York Tuesday where the medical company outlined their operating model and strategy to commercialize its EsoGuard test for esophageal pre-cancer/Barrett's Esophagus (BE) in high-risk patients.
LUCD invited two gastroenterologists to share their insights on EsoGuard. Both experts on the panel emphasized that EsoGuard effectively fulfills an essential gap in diagnosing Barrett's Esophagus (BE) or pre-cancerous conditions.
The experts highlighted that instead of cannibalizing their practices and procedure volumes, the adoption of EsoGuard has led to their expansion. One expert pointed out that given the availability and success rates of BE treatments (including RF ablation), he now feels compelled to screen all high-risk patients using EsoGuard. He further mentioned that none of the patients he diagnosed and treated for Barrett's Esophagus have gone on to develop esophageal cancer.
Management went on to discuss potential financial scenarios to illustrate the effects of enhanced revenue realization and test volume expansion.
According to management's estimations, by maintaining operating expenses and test volume at a constant level while increasing revenue realization from the current 16% to 90% by the second half of 2025, LUCD anticipated a reduction in its cash burn by 42%.
Furthermore, if test volume continued to grow at a sequential rate of 8.5%, LUCD could achieve a cash flow breakeven point by the conclusion of the second quarter of 2025.
Needham analysts wrote in a note, “We believe that increases in LUCD's revenue realization will be the main driver towards profitability, and we believe that LUCD has made good progress in physician adoption and payor reimbursement to date.”
Shares of LUCD are down 0.73% in pre-market trading Thursday morning.