Analysts at Jefferies have expressed growing confidence that Teleflex can beat its official 6% to 7% organic sales growth over the coming years.
In a note to investors Monday, the analysts tallied up growth forecasts for devices including the prostatic urethral lift implant UroLift to predict Teleflex can achieve at least 8% annual growth in 2020 and 2021.
The forecast rests, in part, on the belief that sales of Teleflex’s Manta vascular closure device will benefit from the rise of transcatheter aortic valve replacements.
The Jefferies team is more bullish than many other analysts about the prospects of Teleflex. At 8.2%, Jefferies said in the note to investors its growth forecast for Teleflex's next two years is toward the top of the Street’s range and above Teleflex’s outlook. However, after spending time with Teleflex CEO Liam Kelly, the Jefferies analysts said the company can meet or even exceed their forecast.
Jefferies' forecast is based on a breakdown of the growth drivers available to Teleflex. The analysts expect UroLift, an implant Anthem recently agreed to cover in benign prostatic hyperplasia (BPH), to contribute two to three percentage points of growth.
"With more docs still being trained, the average urologist seeing 75 BPH patients a month and supportive reimbursement, there doesn't seem to be much to slow this train," the analysts wrote.
The Jefferies team expects Teleflex’s portfolio of established products, which include the Pilling and KMedic lines of surgical instruments, to add another four to five percentage points of growth. With new products such as Manta and EzPlas forecast to add another percentage point, the analysts said a 7% to 9% growth range is more likely than Teleflex's 6% to 7% forecast.
Belief Manta will contribute to growth is underpinned by the predicted effect of the rise of TAVR and endovascular aneurysm repair (EVAR) on demand for vascular closure devices.
"With 90k TAVRs and 50-60k EVARs expected next year in the US, the product in the US alone has a $120 million to $180 million potential and 2-3x that around the world," the analysts wrote.
That growth is expected to be boosted in part by FDA's recent authorization of TAVR systems' use in patients at low risk of complications in open heart surgery.
The Jefferies analysts said Manta can claim a slice of the growing market despite competition from Abbott’s Perclose although they acknowledge a delayed launch could result in growth coming in below their forecasts.
Jefferies released the note shortly after a Teleflex-paid consultant published an article in Urology Times that framed UroLift as part of "a renaissance in the care for patients with benign prostatic hyperplasia."