This New Emphysema Treatment Maker’s Shares May Rise 40%

On Monday, Wells Fargo raised its rating for Pulmonx shares from equal weight to overweight, adding that the firm is making progress after a difficult time during the Covid epidemic.

‍

The price estimate set by analyst Larry Biegelsen was increased from $10 to $15, representing a 44.6% increase over Friday's closing price.

‍

In a client note published on Monday, Biegelsen stated that "the company's Zephyr valves are supported by good clinical evidence and favorable reimbursement, which we believe will drive robust adoption of this novel medicine into a significant, underserved market opportunity in severe emphysema." 

‍

In particular, the company's Zephyr valves, which are implants used to treat the lung condition emphysema, were particularly harmed by Covid, according to Biegelsen. Zephyr was not widely implanted during the pandemic because patients would have to spend three nights in the hospital, taking up space that could have been used by Covid patients, according to the analyst.

‍

The fourth-quarter earnings of Pulmonx, however, he claimed, mark a "turning point" for the business. According to Biegelsen, the company reported revenue growth, with the U.S. increasing 30% year over year to $9.5 million.

‍

We were also encouraged by the growth in new customers in Q4 and the increased use at current accounts, the analyst continued.

‍

Wells Fargo believes that the Japanese market will have a large positive impact on the business. Recently, Pulmonx got permission for their Zephyr valves in Japan, which according to Biegelsen may bring in an additional $1 billion for the business.

‍

Following the upgrade, shares of Pulmonx increased by 8% on Monday. Although shares have risen more than 33% so far this year, they have fallen 54% over the last 12 months.