$CLPT
$CLPT (2/23/25)
- NSGY navigation company.
- Use cases: Deep brain stimulation (DBS), laser ablation (LITT), and gene drug delivery (7 clinical trials currently, with no FDA approvals).
- Differentiation from other NSGY hardware companies: MRI guidance for procedures (MRI compatible hardware), and partnering with Pharma early in clinical trial to be the approved delivery for their drugs.
- Differentiation for LITT (laser ablation) they are MRI compatible with ablation only being performed in MRI machine for safety.
- Drug delivery: Only option currently; but still in trials only, no drugs approved. The key here is they are in the FDA approval paperwork as the delivery method so it doesn’t make sense for Pharma to test and have to approve other methods. In return Pharma companies get their expertise and don't have to spend developing a device team for expertise — and risk delays on this end — focusing on the drug (seems very valuable). They also have software called Maestro to show drug delivery volume, coverage, leakage, etc.
- INVESTMENT THESIS SO FAR: Differentiated on laser ablation, with limited addressable market due to MRI time restrictions.
- Financial side: MC 461M, EV 443M, debt free, ~20M cash. Revenues trending up with 30M TTM, negative operating cash flow but burn rate slowing to 8M TTM, expecting break even Q4 2025.
- Financial summary: Good balance sheet, positive trends, but expensive. Significant growth depends on drug delivery segment of the business which is more difficult to predict. Expansion into OR (non MRI) is good but competition with industrial titans and competition from robotics.
- Neurosurgeon explanation w/ examples: https://www.youtube.com/watch?v=ZMldkSSr_T0
- Good info discussed on the few slides he discusses at 23:40 - 30:00 highly recommended to get a surgeons view on why it’s useful.
- Best write up and summary of bull/bear thesis:
- Literature on asleep DBS vs awake; similar outcomes w obvious patient preference for asleep:
- TAM: Currently has around 5-10% share of cases performed per year depending on source. Focusing on academic centers where these procedures are more common.
- Potential triggers: Russell Index next inclusion in 2025 (headwind becomes tailwind), Tesla 1.5 magnet approval pending, currently just 3.0 machines — opens up 50% more cases. Gross margin expansion from 60% to 70% expected eventually. Drug approvals.
- Risk/reward: A bet on growth, with limitations in certain segments, have to bet on the biologic drug delivery being approved and could argue thats priced in and expected. Likely goes up with triggers above, although drug denial would be very bad for price. Not much evidence outcomes for DBS with MRI guidance have improved outcomes, ongoing research.
- Conclusion: Believe it goes up, but hard to predict revenues based on drug approvals. Watch list, with case for 0.5 unit bet.