The company said it will work with the agency to reach a resolution and expressed confidence in its clinical data.
- Roth Capital sees potential FDA clearance for the software.
- The FDA may want the company to use a different predicate device, pursue a different regulatory pathway, or provide additional data, the analyst said.
- HeartBeam is now evaluating launching its 3D ECG system, which received FDA clearance in December 2024.
Shares of HeartBeam, Inc. (BEAT) slumped 58% on Friday afternoon after the company said that the U.S. Food and Drug Administration refused clearance for its 12-Lead Electrocardiogram (ECG) Synthesis Software for arrhythmia assessment.
The medical technology company said that it received a ‘not substantially equivalent’ letter from the FDA. A “Not Substantially Equivalent” (NSE) letter is an official notification from the FDA stating that a new medical device is not considered substantially equivalent to a legally marketed predicate device.
The company said that it will be working with the agency to get to a resolution and expressed confidence in its clinical data. Earlier this month, HeartBeam had touted FDA clearance for the software as a major inflection point for the company.
The company is now evaluating launching its 3D ECG system which received FDA clearance in December 2024.
Analyst Takeaway
Roth Capital, however, sees potential FDA clearance for the software. The FDA may want the company to use a different predicate device, pursue a different regulatory pathway, or provide additional data, it said.
While resolving the pathway for the 12-lead ECG synthesis software, management may decide to roll out the foundational 3D ECG system to concierge medical practices, preventive cardiology clinics, and hospital-at-home programs, the analyst said, as per The Fly.
The analyst kept a ‘Buy’ rating on HeartBeam with a $4 price target. The price target represents a potential upside of over 138% from the stock’s closing price on Thursday.
How Did Stocktwits Users React?
On Stocktwits, retail sentiment around BEAT stock rose from ‘bearish’ to ‘extremely bullish’ territory over the past 24 hours, while message volume rose from ‘high’ to ‘extremely high’ levels.
A Stocktwits user echoed Roth Capital’s opinion and said that the stock would beat $5 on FDA approval.
Another noted that an NSE letter is not the end.
BEAT stock is down by 70% this year and by about 75% over the past 12 months.
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