Nova Eye Medical (EYE) Discussion, page-38

Yeah exactly, it’s the classic case of the market incorrectly valuing a company, just a huge example of it in this case. Based on valuations of peer companies, the share price should already by several times higher (without FDA clearance), and when iTrack Advance is cleared by the FDA in the coming weeks the revenue potential could be enormous. The half year results will be a big event this year I’m sure.

I think an issue as well was that iTrack Advance was supposed to be cleared at the end of last year, however it was delayed. It’s very common for FDA to delay things, but the company did not inform the market about why it was delayed which is why the price fell, however we now know that it was simply admin (again, the most common reason for delays in FDA processes) and nothing to worry about. This was exacerbated by the capital raise, which was necessary for the company to invest in growth initiatives (like our competitors) in order to gain market share for iTrack Advance. Luckily, iTrack itself was one of the earliest MIGS procedures, and pioneered the canaloplasty market, so the predecessor device is well know and respected already meaning that the company already benefits from a fantastic track record of high safety and efficacy and therefore won’t have to spend nearly as much on marketing etc compared to our competitors. I expect for this reason as well that EYE will return to profitability again much sooner than most expect.

Of course, the company has also experienced a surge in sales growth since clearing the new device in Europe, but I reckon the market wants to see that iTrack Advance can continue to accelerate growth in sales, especially within the USA post-FDA clearance.

Now that iTrack Advance is almost certain to be cleared by the FDA before the end of the month, and that the cap raise is done and dusted, it seems like there’s only upside from here which is why I’ve added several hundred thousand units to my position in recent weeks. iTrack Advance will certainly be transformative for EYE’s sales, and the launch is actually perfectly timed. There have been recent changes in reimbursement which make canaloplasty significantly more cost efficient than stents etc and there is growing popularity for procedures like canaloplasty which naturally restore the conventional outflow and can target all points of resistance (rather than stents etc which tear and damage). There’s also increased popularity in combining canaloplasty with other MIGS procedures, which could mean that this procedure is performed even when competitor procedures are performed.

For 2RT, given that the company has announced it is in advanced discussions with multiple potential partners, we could expect a partnership announcement for that in the coming months which would also be an incredibly bullish event.

Certainly lots to look forward, 2023 should be a transformation year for this company