Specificy makes the difference

Episurf develops and sells tailored knee implants for patients with early stage osteoarthritis. The market is large and growing. We see a natural place for Episurf’s implants, thus expecting strong sales growth to come.

Episurf is a medical technology company based in Stockholm, Sweden. Episurf develops, produces and sells knee implants for patients with early stage osteoarthritis (OA). OA is the most common source of pain in the joints. People all over the world are affected and the number of patients is growing. Treatment is available has shown clinically insufficient, thus, creating a treatment gap on which Episurf intend to capitalize.

Episurf’s implants are tailored to fit the patient’s specific anatomy and cartilage damage and together with the company’s unique cartilage damage assessment tool, numerous benefits are created. The first clinical report with Episurf’s implant, Episealer, was recently published with high patient scoring and zero revision surgeries. We have high expectations on strong sales growth during the upcoming years as the advantages of Episurf’s technology are highly valued when choosing between suitable treatment. Also, more clinical data is progressively being collected providing important support to the case. Furthermore, the company is connected to important key opinion leaders and the market has already been warmed up by the competitor Arthrosurface.

Sales is initially focused on Europe but the company is working on FDA-approval for the US which is the largest market in the world.

An investment in Episurf is accompanied with great up-side as well as down-side risk. Episurfs’ organization is going through an intensive investment phase resulting in high costs. These costs reduce the cash balance and sales figures are rising but still low. We start our coverage of Episurf with the recommendation Buy and target price SEK 21.3.

Källa: Jarl Securities