Uroplasty shares soar after winning reimbursement from Medicare

Do you hear that? That’s the sound of some mighty back-slapping at Uroplasty Inc.’s (NASDAQ:UPI) headquarters in Minnetonka, Minnesota.

After winning Medicare reimbursement Wednesday for its urinary incontinence therapy, the company has seen its stock price jump more than 20 percent to around $5.35 per share.

Uroplasty estimates Medicare will pay a base price of $97.49 per procedure, during which a pulse generator shoots low levels of electricity into the spinal nerves that control bladder function.

However, Charles Haff, an analyst with Dougherty & Co., an investment bank in Minneapolis, thinks doctors will ultimately receive $126.47 per procedure.

Haff breaks it down this way: $65 to Uroplasty and $61.50 to the physician. Assuming the patient receives 12 neurostimulation sessions, doctors would generate revenue of $738 per patient. That’s well above the $450 doctors told Haff they would need in order to adopt the technology.

“With this higher-than-expected profitability for physicians to prescribe Urgent PC for their patients, we expect much more rapid adoption of the technology,” Haff wrote in a research note. “We would be strong buyers of the stock here.”

As a result, Haff boosted his fiscal 2012 sales forecast for Uroplasty to $26.1 million from $18.2 million. He also upgraded his fiscal 2013 sales estimate to nearly $40 million from $28.7 million.