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BTIG, Canaccord Genuity Initiate Coverage of Lucid Diagnostics With Buy Ratings

NEW YORK ─ Investment banks BTIG and Canaccord Genuity on Monday initiated coverage of test developer Lucid Diagnostics with Buy ratings.

BTIG initiated coverage with a price target of $14 and Canaccord Genuity initiated coverage with a price target of $18 on Lucid Diagnostics shares.

Canaccord Genuity analyst Kyle Mikson said in a research note that Lucid Diagnostics "offers a unique test (EsoGuard) and cell collection device (EsoCheck) that we believe should help enable widespread screening of Barrett's esophagus (BE) and esophageal adenocarcinoma (EAC)." Lucid expects a final Medicare reimbursement decision in the near term, he noted.

"Importantly, Lucid's offering could be the first and only widespread screening tool for BE-EAC, a potentially $25 billion market," Mikson added.

EsoGuard examines individual DNA molecules for the presence or absence of cytosine methylation at 31 different genomic locations. EsoCheck is a cell collection device that is designed to collect cells of a targeted region of the esophagus without the need for endoscopy.

Both Mikson and BTIG analyst Mark Massaro wrote in separate research notes that Lucid's products have a total addressable market similar to that of Exact Sciences' Cologuard test for colon cancer screening.

"While EsoGuard is a lab-developed test (LDT), Lucid has [US Food and Drug Administration] Breakthrough Device Designation and plans to secure FDA approval by 2023," Massaro said, adding that given ultra-low compliance, less than 10 percent, for the current invasive standard-of-care procedures, Lucid's test "is well positioned to increase screening for the [more than 13 million] high-risk Americans for esophageal cancer."

Massaro said that EsoGuard has demonstrated 95 percent sensitivity and 91 percent specificity in a 408-patient multicenter clinical study, and the Centers for Medicare and Medicaid Services has agreed to pay $1,938 per test.

Lucid went public on the Nasdaq in October at $14 per share.