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Oppenheimer Initiates Coverage of MDxHealth at Outperform

NEW YORK – Oppenheimer has initiated coverage of MDxHealth with an Outperform rating and a price target of €2 per share.

In a note to investors on Monday, analyst Kevin DeGeeter cited the investment bank's expectation that the US Centers for Medicare and Medicaid Services will likely issue a positive Local Coverage Determination in 2021 for the use of the company's SelectMDx prostate cancer diagnostic in men considering a biopsy for prostate cancer detection.

DeGeeter also noted that there is potential for the company's stock to be listed on a US-based exchange this year, which would expand the access of US-based specialist healthcare investors to MDxHealth's common stock. The company's shares are currently only listed in Europe. Further, he added, Oppenheimer expects that changes in the firm's executive and commercial leadership will drive more sustainable growth. The company appointed diagnostics and medical devices industry veteran Michael McGarrity as CEO in February 2019, replacing the previous CEO Jan Groen.

Finally, DeGeeter said, MDxHealth has recorded negative reported revenue growth over the past two years as the new leadership tightened financial reporting standards and focused on driving test volume from more profitable repeat customers that used both SelectMDx and ConfirmMDx products. "We view this transition as painful but necessary to prepare MDxHealth for better operating leverage following expanded reimbursement coverage for SelectMDx," he wrote.

The company is set to report its full-year 2020 earnings on Wednesday.

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