William Blair initiated research coverage of MDxHealth SA (MDXH $2.86), a commercial-stage diagnostics company providing actionable molecular diagnostic information to personalize diagnosis and treatment of prostrate cancer and other urologic diseases.
Analyst Andrew Brackmann stated that near- and intermediate-term growth for the company should be driven by its expanded commercial efforts, upcoming catalyst for Select mdx reimbursement, and what is still a vastly underpenetrated market opportunity.
“At its core, MDxHealth is a commercial-stage organization focused on delivering patients and physicians clinically actionable information to treat urologic conditions—namely, those in prostate cancer,” said Brackmann. “MDxHealth is the only public diagnostics company focused solely on the urology channel to offer prostate cancer–specific tests at major junctures of the patient odyssey. Targeting a cancer opportunity today valued at $2.3 billion and a total longer-term opportunity valued at $4.8 billion, MDxHealth is uniquely positioned to be a leading provider of solutions for urology practices, in our view, unlocking cross-selling synergies and accelerating growth.
“MDxHealth’s commercial strategy was advanced significantly following the company’s acquisition of Exact Sciences’ Genomic Prostrate Score test business in August 2022, which added an entrenched testing solution in the treatment decision segment of the market to MDxHealth’s portfolio,” added Brackmann. “Filling this void in the product bag allows the company to advance its commercial efforts in several ways, including by providing the company with a clinically proven, NCCN guideline–included and Medicare reimbursed test with a well-known and established brand, Oncotype DX, and also by accelerating MDxHealth’s position in the urology and prostrate diagnostics space, making it one of the definitive leaders. All told, we believe MDxHealth is extremely well positioned and has the pieces in place to drive this commercial strategy forward. Execution on this strategy and the sale of this menu of tests will be what unlocks value for the company, and we believe this should play out positively over the intermediate term. This acquisition has also served as a catalyst to broaden the company’s commercial salesforce. This team is currently being trained on the complete menu, and once completed, we believe the team should be able to accelerate growth of its portfolio and drive leverage.”
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Current Ratings Distribution (as of 3/24/23)
Outperform (Buy): 73%
Market Perform (Hold): 27%
Underperform (Sell): 1%
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Outperform (Buy): 7%
Market Perform (Hold): 4%
Underperform (Sell): 0%
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