VRS.V - On-Track For 2012 Launch

Zacks Small Cap Research

By Brian Marckx, CFA    

In early May Verisante (OTC Markets:VRSEF) / (VRS.V) announced completion of the beta version of Aura, two of which were used by Starfish Medical, Verisante's development partner, to develop the commercial version of the device.  This morning (7/25/2012) Verisante announced that they received back from Starfish two pre-production units which will now go through final testing prior to commencement of commercial production, which is still expected to happen by year-end.  Verisante also recently released pictures of the pre-production units (below).    

Verisante notes that they are still on track to hit expected milestones and continues to report that feedback from their interactions with industry professionals has been overwhelmingly positive - even noting that a recent anonymous survey conducted at a meeting of skin specialists indicated strong interest in Aura.  Clarion, Verisante's Canadian distributor also notes that their preliminary market research is "showing great interest in Aura."  

We continue to remain highly positive on Verisante and Aura and note that the news flow and progress towards commercialization have been very encouraging.  We continue to model a launch in late 2012 with insignificant revenue in the current year but showing a steep ramp throughout 2013.         

We are maintaining our Outperform rating and $2.60/share price target.  


Aura Pre-Production Units

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Near-to-Mid Term Milestones (not necessarily in chronological order)

  •     Final testing of pro-production units
  •     Commence commercial production
  •     Distribution agreements for Europe and Australia (agreement already in place for Canada with Clarion Medical Technologies
  •     Commercialization in Canada, Europe, Australia
  •     Publication of 1,000 lesion study in Cancer Research.  The study was already published in the on-line version of the journal in late March (see below from our last update on VRS on April 5th)
  •     Feedback from FDA regarding U.S. regulatory approval pathway for Aura
  •     Registration to sell Aura in Mexico and Brazil
  •     Completion and data analysis of clinical study of Core for lung cancer being conducted at the Lung Tumor Center at Vancouver General Hospital
  •     Regulatory approval of Core in Europe, Canada, Australia

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