Axonics Positioned For Rapid Penetration In Underserved Market, Analyst Initiates With Bullish Tone

KeyBanc Capital markets initiated coverage on Axonics Inc AXNX with an Overweight rating and a price target of $70.

The analyst says the company is well-positioned to continue driving rapid penetration of its portfolio in a largely underserved market and sees an opportunity to improve investor sentiment as some NT tension points are addressed. 

Axonics has pioneered significant advancements in Sacral Neuromodulation (SNM), addressing moderate-to-severe Urge Urinary Incontinence (UUI) for women. 

The analyst is confident in the company's ability to meet or exceed consensus growth expectations, and the market model supports a durable 20%+ growth trajectory for AXNX in SNM. 

It sees a sustained runway given the under-penetration of the therapy (~3%) within a large total addressable market. 

Additionally, AXNX is well-positioned to drive further share gains, given its level of focus and multiple technological advantages vs. its competitor, KeyBanc analyst writes. 

A few tension points are currently weighing on sentiment, including an IP lawsuit from Medtronic Plc MDT and potential emerging competition, which may be overstated, notes the analyst. 

Medtronic has sued Axonics for infringing the two patents and five others in California federal court. That lawsuit is set to go to trial next month.

While the outcome of litigation is difficult to predict, AXNX can manage through a wide range of scenarios, and there could be progress toward resolution this year, the analyst writes.

Price Action: AXNX shares are up 5.26% at $51.20 on the last check Thursday.