ECOR Stock: electroCore Rockets on Distribution Agreement

electroCore, Inc. (NASDAQ: ECOR) is screaming for the top in the market this morning, trading on premarket gains of around 50%. The gains come after the company announced that it has entered into an agreement with Medistar2 surrounding the distribution of its newly approved product. Here’s what’s going on:

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electroCore Announces New Partnership

In a press release issued early this morning, electroCore said that it has entered into an agreement with Medistar2 PTY Limited, also known simply as Medistar. 

Under the terms of the agreement, Medistar will serve as the exclusive distributor of the gammaCore Sapphire non-invasive vagus nerve stimulator in Australia. ECOR reminded investors that the product is designed to provide a therapeutic option for patients suffering with primary headache disorders. 

Importantly, today’s announcement follows a recent announcement by the company that it has been granted regulatory approval from the Australian Therapeutic Goods Administration for the promotion and sale of its gammaCore Sapphire family of products. 

In the release, ECOR explained that the initial agreement term is three years and contains customary terms and conditions, such as minimum purchase commitments. However, the company didn’t go into detail as to what amounts were placed on minimum purchases. 

The official launch of the product will take place at the 2021 ANZHS Headache Annual Scientific Meeting, which will be held March 13th and 14th. 

Management Commentary

In a statement, Iain Strickland, Vice President of European Operations at ECOR, had the following to offer:

We are delighted to welcome Jeneth Boughen, Owner and General Manager of Medistar, and the team at Medistar into our growing network of select distribution partners. Medistar has demonstrable expertise in medical device distribution in Australia and we are incredibly excited to have its team working on behalf of electroCore.

The above statement was followed up by Jeneth Boughen, Owner and General Manager at Medistar, with the following:

Medistar is very excited to be partnering with electroCore to help Australians access gammaCore Sapphire (nVNS) therapy and assist healthcare professionals to add this treatment option to their medical practice.

Our mission is to partner with suppliers and health professionals to provide education and support for innovative technologies that improve efficiencies, patient well-being and outcomes. We see strong alignment between ourselves, electroCore and its non-pharmacological therapy for Australians who do not tolerate or respond well to current headache therapies.

Finally, Dr. Marc Russo, Specialist Pain Medicine Physician and Director-at-Large of the Neuromodulation Society of Australia and New Zealand said:

This is a welcome addition to the armamentarium in the treatment of refractory headache syndromes. We have good evidence of the efficacy of gammaCore, and being drug free, it reduces the medication side effect burden patients experience. 

Beside this, gammaCore is an exciting tool to explore interfacing with the vagus nerve and the anti-inflammatory pathway. Treating headache may just be the tip of the iceberg of what we can do with this device.

What Analysts Think About ECOR Stock

According to TipRanks, analysts seem to be in love with electroCore stock. In fact, there are currently three analysts covering the stock, all of which rate it a Buy. 

Price targets on ECOR range from $3.00 to $5.00, with a median price target of $3.83, representing the potential for significant gains ahead. 

Risks to Consider Before Buying ECOR Stock

If you want to dive into ECOR stock, it’s important that you consider the risks first. When it comes to electroCore stock, the most significant risks to consider include:

  • Profitability. Prior to the company’s recent approval, it was a clinical-stage biotech company. As a result, it hasn’t been able to generate revenue or profitability from the sale of its products. While the new product launch may change that, there’s no telling just how strong consumer adoption will, or will not be. If the company can’t reach profitability before the money in its bank account runs dry, a dilutive offering may be on the horizon. 
  • Speculation. While ECOR now has an approved line of products hitting the market, there’s no telling how much demand the products will face. As a result, the investment is riddled with speculation, which could become a very risky move. 
  • Penny Stock. Finally, ECOR is a penny stock. As a penny stock, the stock experiences high levels of volatility, which can make timing trades difficult and lead to significant losses over a relatively short period of time. 

Final Thoughts

Sure, there are risks to consider here, but all told, those risks seem to be outweighed by the potential electroCore brings to the table. The fact of the matter is that the company is launching a product that could quickly become a blockbuster. 

Moreover, with recent regulatory approval in Australia, we can expect to see positive regulatory news relatively soon in Europe and the United States, which could act as tremendous catalysts for the stock. All in all, if you’re not watching ECOR yet, you’re missing out!

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