Can Neovasc Inc. (US) (NASDAQ: NVCN) Investors See Beyond Massive $70 Million Fine?


Beyond the loss of the litigation over breach of trade secrets, Neovasc Inc (US) (NASDAQ:NVCN) investors are beginning to look at the promising future ahead of the company. According to Neovasc’s CEO, Alexei Marko, their main focus remains on continuing work on Tiara valve implant. The company is conducting additional trials for Tiara.

The $70 million penalty

CardiAQ managed to convince the court that Neovasc Inc (US) (NASDAQ:NVCN) breached their non-disclosure agreement. As a result, the court slapped Neovasc with a $70 million fine, a move that somewhat doused investor appetite in the medical devices stock. But Neovasc said it would seek to overturn the ruling including through an appeals process, because the resolution of the court didn’t satisfy it.

There is life beyond litigation

But investors are quickly realizing that there is a future in Neovasc beyond the non-disclosure litigation. The management is also not allowing the CardiAQ issue to hold them back. The CEO Marko recently said that they had secured approval from the Canadian regulator to continue with the use of the 40mm Tiara valve for the Tiara-I Early Feasibility Trial.

Marko further added that Tiara implant was gaining traction in hospitals in the U.S., Canada and Europe. As such, he said that increasing hospital adoption of Tiara implant should increase enrollment for the study of the product.

Liquidity position Neovasc Inc (US) (NASDAQ: NVCN)

Last year, Neovasc Inc (US) (NASDAQ:NVCN) raised $87 million through equity. At the end of the most recent quarter, the company’s balance sheet reflected a cash balance of slightly more than $46.9 million. That was a decline from cash balance of $55 million at the end of the previous quarter, but the drop was easy to explain as the company has continued to advance its various pipeline programs. The management also didn’t raise the alarm that the company was facing an imminent cash shortage in the near-term.

What happened in 1Q?

Neovasc Inc (US) (NASDAQ: NVCN) generated revenue of slightly more than $2 million in 1Q2016 compared to revenue of $2.3 million in the like quarter a year ago. The management explained that the decline in topline figure was caused by the ongoing shift in Neovasc’s revenue streams.


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