We believe the 400% appreciation of Conformis (CFMS) in 2019 is not from any positive fundamental developments, but from hype and speculation.
Its customizable hip implant, reported at AAOS, is not new, has been FDA approved since 2017, and is too early in clinical evaluation to justify a rally from it.
CFMS business has many flaws: its customizable implants have not been shown to be an improvement to standard implants, yet they are more expensive and have a longer implant process.
The company made small improvements in Q418, but they do not address fundamental business flaws and increase CFMS risk exposure.
Strapped for cash and lacking market trust, CFMS was forced to collaborate with last resort financier, Lincoln Park Capital.
Read the full report on Seeking Alpha here.