New York, NY - On April 3, 2013, Taglich Brothers released an updated research report on PLC Systems Inc. (PLCSF) and reiterated a Speculative Buy rating while reducing the 12-month price target to $0.57 per share from $0.60 due to issuance of more common shares and warrants. The report noted the following key investment considerations:
• Efficacy and cost effectiveness underlie potential for rapid acceptance of RenalGuard. Regulatory clearances in overseas markets should build revenue steadily as PLC awaits RenalGuard clearance by the FDA. We project FDA approval by 2014, after which RenalGuard sales should show a strong ramp.
• RenalGuard is the first device-based therapy to effectively prevent contrast induced nephropathy (CIN), of which there are roughly nine million cases annually in the US and Europe. Many of these patients suffer a stroke, heart attack, even death, as a consequence of exposure to contrast media. CIN costs the US healthcare system an average of $11,000 in added treatment costs per patient, a consequence mainly of extended hospital stays.
• Long-standing standard CIN preventives are inadequate. RenalGuard, already cleared in key overseas markets, performs forced diuresis, a process that minimizes kidney damage.
• We project sharp revenue gains, albeit off a small base, for 2013 and 2014. Due to a relatively low level of revenue and high R&D costs, PLC will lose an estimated ($0.11) and ($0.08) per share in 2013 and 2014, respectively.
• In 4Q12 (results reported Mar. 28, 2013), PLC reported a profit of $0.09 per share on revenue of $485,000. Excluding convertible note and warrant valuation adjustments, PLC lost ($0.03) per share in 4Q. We projected a ($0.05) loss per share loss on revenue of $303,000.
• Excluding convertible note and warrant valuation adjustments, PLC lost ($0.15) per share in 2012.
The full report can be viewed at http://www.taglichbrothers.com/EquityUniverse/Companies/plcsystems/plcsystems.aspx.
Company Description:
PLC Systems Inc. (PLCSF: OTC BB), a medical technology company headquartered in Milford, MA, has developed RenalGuard, a forced diuresis system for hydrating high-risk (with pre-existing renal failure) patients who are subjected to contrast-enhanced medical imaging procedures. Such patients are at risk for contrast-induced nephropathy (CIN), kidney damage stemming from exposure to intravenously administered contrast media. As standard hydration protocols do not adequately protect high-risk patients from CIN, RenalGuard potentially addresses an unmet need in millions of patients.
RenalGuard is an automated closed-loop fluid replacement controller. It promotes a high volume of urine output (diuresis) which it precisely monitors and measures. It intravenously replaces the exact amount of fluid that has been excreted, maintaining the proper fluid balance within the kidneys. By continuous fluid replacement and the use of a diuretic (which increase the formation of urine), RenalGuard aims to produce high urine flow rates, rapidly “flushing” potentially toxic contrast agents and minimizing damage to the kidneys.
RenalGuard is CE marked and is already on the market in Europe. A US Phase II/III clinical trial started in January 2012, setting the stage for US release after FDA approval.
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