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Entellus Medical, Inc.: Initiation of Research Coverage

Monday, February 23, 2015

William Blair & Company initiated research coverage of Entellus Medical, Inc. (ENTL $23.09) with an Outperform rating and Aggressive Growth company profile. Entellus Medical, a pure-play on the chronic sinusitis market, sells unique technologies to improve procedural outcomes in both the office and surgical settings.

Analysts Ben Andrew and Margaret Kaczor estimated that the company would generate revenue of $59 million in fiscal 2015 and $73 million in fiscal 2016.

“We peg Entellus’s total addressable market at $955 million annually in the United States, “Andrew said. “However, we estimate that only about 25% of the total addressable procedures are being performed today. Given the clinical benefits associated with balloon sinus dilation (BSD) both in-office and in the surgical setting, we anticipate steady surgeon adoption over the next several years.”

Kaczor added, “About 70% of the total addressable opportunity lies in the office, and the two key drivers of physician adoption in this setting will be favorable reimbursement and continued clinical support of BSD. As this market develops, we believe that Entellus is most likely to benefit, since it has the most physician and patient-friendly product on the market for the in-office setting in particular. Given its differentiated technology and the tailwinds associated with this expanding market, we believe that Entellus can generate at least 20% top-line growth over the next three years.”

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