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Three Investment Banks Initiate Coverage of Biodesix

NEW YORK — Investment banks William Blair, Canaccord Genuity, and BTIG on Monday initiated coverage of newly public diagnostics firm Biodesix, with ratings ranging from Buy to Outperform.

Boulder, Colorado-based Biodesix uses a range of technologies including PCR, next-generation sequencing, and its proprietary DeepMALDI mass spectrometry to develop diagnostics, primarily for lung disease. It currently offers blood-based assays for lung cancer, including Nodify XL2 and Nodify CDT for determining lung cancer risk based on nodule assessment, as well as SARS-CoV-2 tests with Emergency Use Authorization from the US Food and Drug Administration.

In October, Biodesix completed a $72 million initial public offering on the Nasdaq, with its shares floating at $18 apiece. 

In a research note, William Blair analyst Brian Weinstein gave Biodesix stock an Outperform rating, citing the $27 billion lung disease market the company's current products address and the expected uptake of the company's Nodify products following its push into the growing cancer risk assessment market.

Biodesix anticipates expanding its sales force to "just under 50 individuals by the end of 2021 and near 70 members by the end of 2022, all primarily targeting the pulmonology market," Weinstein wrote. "These investments are critical to helping improve market awareness and driving revenue meaningfully higher in the coming few years."

Canaccord Genuity's Max Masucci initiated coverage of Biodesix with a Buy rating and a $26 per share target price. He noted that Biodesix has a number of new tests in development that are expected to launch in 2023, including a host-immune profiling test to identify early-stage non-small cell lung (NSCLC) and a test to identify treatment-naive NSCLC patients eligible for immune checkpoint inhibitor regimens, and that it is already generating meaningful revenues with its SARS-CoV-2 tests.

Biodesix pulled in $5.3 million in the third quarter from its SAR-CoV-2 products and "while it's hard to predict the magnitude and duration of [the company's] COVID-19 testing opportunity, we believe expectations are appropriately set, and we see a two-year runway for COVID-19 testing revenues, at a minimum," Masucci wrote.

BTIG's Sung Ji Nam gave Biodesix a Buy rating with a $22 per share target price, highlighting the company's first-mover advantage in growing the lung nodule risk assessment market and its expertise in biomarker discovery, development, and validation, which is expected to drive industry partnerships. 

"Since inception, the company has performed over 245,000 tests associated with lung cancer, and has over 140,000 samples and related molecular profile/clinical data in its biobank," Nam wrote. "We believe the company's continuously expanding knowledgebase strengthens its value proposition to existing and potential biopharma partners, as well as competitively positioning internal pipeline development programs."