FDA closes PolarityTE inspection with no action taken, says Piper Jaffray

The FDA has issued a final classification for the inspection that occurred at PolarityTE’s manufacturing facility last summer and it is now closed out with a Voluntary Action Indicated status, Piper Jaffray analyst Tyler Van Buren tells investors in a research note titled “Consider The Key Bear Thesis Removed: Manufacturing Resolution Reached W/ FDA.” The analyst believes investors can safely assume that no enforcement action will be taken or a warning letter issued. He finds this important as the single most common criticism he’s heard from investors is related to the Form 483 manufacturing observations. Van Buren also believes the lack of action cements SkinTE’s status as a 361 product, which he says was another common point of contention. This as a very positive development and removes one, and likely two, key bear theses on PolarityTE shares, Van Buren contends. As such, he expects the shares to be up on Monday, “especially considering the high short interest.” The analyst keeps an Overweight rating on PolarityTE with a $30 price target. PolarityTE closed Friday down 51c to $13.44.

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