CHF Solutions Inc (NASDAQ: CHFS) is having an overwhelmingly positive start to the trading session this morning after announcing a distribution agreement. Of course, the announcement of the agreement led to excitement among investors, sending the stock screaming for the top. Nonetheless, there is a big concern with regard to the agreement. Today, we’ll talk about:
- The distribution agreement;
- what we’re seeing from CHFS as a result;
- what’s concerning about the agreement;
- and what we’ll be watching for ahead.
CHFS Gains On Distribution Agreement
As mentioned above, CHF Solutions is having a great start to the trading session after announcing a distribution agreement. In a press release issued early this morning, the company announced that it has entered into a distribution agreement with Dimedix Surgical. Under the terms of the agreement, Dimedix Surgical will distribute the company’s Aquadex FlexFlow System in Spain. In a statement, John Erb, Chairman and CEO at CHFS, had the following to offer:
Annual hospitalizations for heart failure exceed 1 million in Europe, and more than 90% are due to fluid overload… Our distribution agreement with Dimedix Surgical expands our existing reach in Europe and provides physicians in Spain the opportunity to treat patients with the Aquadex FlexFlow system when diuretics are no longer effective.
What We’re Seeing From The Stock
With the news that a distribution agreement has been signed by CHF Solutions, it’s no surprise to see that the stock is making a run for the top. After all, the agreement means that the company’s Aquadex FlexFlow will hit an entirely new market, expanding the audience in a massive way. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (9:46), CHFS is trading at $3.00 per share after a gain of $0.34 per share or 12.78% thus far today.
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There Is One Concern With The Distribution Agreement And May Be More
Take a look at the news above. Do you see anything missing about the distribution agreement? You caught it… absolutely everything! In the press release, CHFS said that the terms of the agreement were not disclosed. This means that we don’t know about the term of the agreement, how much revenue it will generate, and if any of this revenue will become profit. So, if you’re considering moving on this news, please be sure to do so with caution.
What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on CHFS. In particular, we’re interested in following the story surrounding the distribution agreement and following the numbers to see if this agreement proved to be in the best interest of the company and its investors. Nonetheless, we’ll continue to follow the news closely and bring it to you as it breaks!
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