Novadaq Technologies, Inc. Research Update Released  
5/13/2013 9:35:40 AM

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New York, NY - On May 10, 2013, Taglich Brothers released an updated research report on Novadaq Technologies Inc. (NVDQ) and reiterated a Buy rating with the 12-month price target raised to $15.10 per share from $11.60 due to higher sector and stock valuations. The report noted the following key investment considerations:

• Reconstructive, cardiac and urological surgery markets have been penetrated to an extent that has madeNovadaq cash flow positive. Revenue earned in these markets should be well sustained even as Novadaq independently commercializes its SPY-based PINPOINT® and LUNA™ technologies during the next year.

• Having raised more than $90 million through common stock sales since April 2012, Novadaq is well funded and is strongly positioned to pursue development and commercialization of new SPY applications.

• Despite strong revenue gains, profitability could be elusive due to heavy spending on development and launch costs for PINPOINT and LUNA. But if these new products are accepted as readily as SPY was in the breast reconstruction and cardiology markets, the company could potentially turn profitable by 2015.

• Our $34.2 million 2013 revenue forecast is unchanged but we now project a wider loss due in anticipation of heavy R&D and sales/marketing spending. We project a loss of ($0.07) per share on revenue of $34.2 million. In 2014, the revenue should increase dramatically, narrowing the company’s loss considerably.

• For 1Q13 (results released Apr. 29, 2013) Novadaq reported a loss of $2.9 million, or ($0.07) per share, on revenue of $7.3 million. Excluding warrant revaluations, NVDQ lost ($0.02) per share. We projected a loss of ($0.03) per share on revenue of $7.2 million. In the year-earlier quarter, the company lost ($0.03) a share (before warrant revaluations) on revenue of $4.8 million.

The full report can be viewed at

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Company Description:

Novadaq has commercialized SPY Imaging, a patented visualization technology that enables surgeons to monitor circulation and tissue perfusion intraoperatively, facilitating surgical mapping and revisions during major procedures. The technology can also visualize lymphatic systems, potentially detecting the extent of lymph node involvement in cancer cases, and differentiate between normal and cancerous tissue on the margins of a surgical resection.

Recent studies have demonstrated improvements in surgical outcomes, reductions in post-operative complications and cost savings stemming from the adoption of fluorescence angiography. These results should underlie wide acceptance of Novadaq’s SPY systems, which are adaptable for use in a wide variety of major surgeries. SPY systems have so far been used widely in post-mastectomy breast reconstruction and coronary artery bypass graft procedures. Variants of SPY have been developed for use in urological, gastrointestinal, and organ transplant procedures. The technology has also been refined by Novadaq for use in a number of open, minimally invasive, and robotic surgical procedures.

Novadaq’s growth strategy is based in part on strategic partnerships, the first of which, with Intuitive Surgical, could potentially boost revenue substantially in 2010.

Taglich Brothers:

Taglich Brothers, Inc. is full-service broker dealer focused exclusively on microcap companies. The Company defines the microcap segment of the equity market as companies with less than $250 million in market capitalization. Taglich Brothers currently offers institutional and retail brokerage services, investment banking and comprehensive research coverage to the investment community.

The Taglich Brothers' Equity Research department is dedicated to providing research reports that are informative, insightful and illuminating. Reports are designed to distill volumes of investment information into a concise, straightforward format so that busy professional investors can make informed investment decisions.


The information and statistical data contained herein have been obtained from sources, which we believe to be reliable but in no way are warranted by us as to accuracy or completeness. We do not undertake to advise you as to changes in figures or our views. This is not a solicitation of any order to buy or sell. Taglich Brothers, Inc. is fully disclosed with its clearing firm, Pershing, LLC, is not a market maker and does not sell to or buy from customers on a principal basis. The above statements are the opinion of Taglich Brothers, Inc. and are not a guarantee that the target price for the stock will be met or that predicted business results for the company will occur. There may be instances when fundamental, technical and quantitative opinions contained in the reports are not in concert. We, our affiliates, any officer, director or stockholder or any member of their families may from time to time purchase or sell any of the above-mentioned or related securities. Analysts and members of the Research Department are prohibited from buying or selling securities issued by the companies that Taglich Brothers, Inc. has a research relationship with, except if ownership of such securities was prior to the start of such relationship, then an Analyst or member of the Research Department may sell such securities after obtaining expressed written permission from Compliance. All research issued by Taglich Brothers, Inc. is based on public information. Taglich Brothers, Inc. does not currently have an Investment Banking relationship with the company mentioned and was not a manager or co-manager of any offering for the company within the last three years. The company will pay to Taglich Brothers, Inc. a monetary fee of US$15,000 for the creation and dissemination of research reports for a nine-month period. Payment shall be made in US$3,000 increments on each of the following dates: October 1, 2009: January 1, 2010, and April1, 2010. For further information and Taglich Brothers, Inc. ownership data please refer to each individual report.


Richard Oh


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