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MDxHealth (MDXH-BR): Prostate cancer test proves value in pre-biopsy screening
Recommendation: OUTPERFORM
Target Price: EUR9.00
Current Price: EUR3.68 (COB on 26^th June 2018)

KEY TAKEAWAY

Data published today at the Global Congress on Prostate Cancer demonstrates the potential of the MDxH SelectMDx urine-based test to reduce the need for expensive and complex MRI, as well as to help guide physicians in deciding for and against prostate biopsies in clinical practice. These positive results reinforce our view of SelectMDx as a substantial value driver for MDxHealth. We reiterate our OUTPERFORM recommendation and EUR9 / share target price.

SelectMDx reduces need for MRI - While multi-parametric MRI (mpMRI) has been shown to be a powerful potential tool in reducing the substantial problem of over-diagnosis and unnecessary treatment in prostate cancer detection, mpMRI not only requires expensive staffing and infrastructure, but also expert and experienced interpretation. Data suggests that SelectMDx could reduce the volume of men referred for mpMRI reducing the need for infrastructure and allowing mpMRI referrals to be targeted to physicians with the most appropriate expertise.

SelectMDx potential real clinical practice - Prostate biopsy is an expensive, unpleasant and potentially risky procedure that should be restricted to the most at risk patients. By stratifying high and low risk patients SelectMDx has now been shown to be an effective tool in guiding physicians in deciding whether to refer patients for biopsy.

SelectMDx a significant value driver - Already part of the European urological guidelines, these new data reinforce the significant clinical utility of the SelectMDx urine test and should support adoption into key US guidelines. These data support our view that SelectMDx already has considerable potential in guiding initial prostate diagnosis and intervention. Potential extension of use in monitoring of men with slow growing or potentially indolent disease could at least double the addressable market.

Now adequately funded - The successful completion of the $44m fundraising means that the company is now adequately funded to execute its business plan. We reiterate our OUTPERFORM recommendation and EUR9 / share target price.

Kind regards, Kind regards,

goetzpartners Healthcare Research Team | Research Team

Dr. Chris Redhead | Analyst

goetzpartners securities Limited

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