TLDR
- PAVmed (PAVM) stock surged over 220% after subsidiary Lucid Diagnostics secured a U.S. Department of Veterans Affairs contract for its EsoGuard Esophageal DNA Test
- The contract enables VA hospitals nationwide to procure EsoGuard through a single national framework with pricing matching Medicare reimbursement rates
- The VA serves over nine million enrolled veterans annually, making this one of the largest integrated healthcare systems in the U.S.
- EsoGuard is designed to detect precancerous changes in the esophagus for early cancer prevention
- Ascendiant analyst Edward Woo rates PAVM a Buy with a $17 price target, while TipRanks AI shows a Neutral rating with concerns about ongoing losses and negative cash flow
PAVmed stock exploded higher on Wednesday, climbing over 220% after the medical technology company announced a major contract win for its subsidiary Lucid Diagnostics. The news sent shares soaring as investors reacted to what could be a game-changing validation for the company’s flagship diagnostic test.
Lucid Diagnostics secured a contract from the U.S. Department of Veterans Affairs for its EsoGuard Esophageal DNA Test. The VA operates the largest integrated healthcare system in the country, serving more than nine million enrolled veterans each year. Getting a foot in the door of an organization this size is no small feat.
The contract operates under the VA Federal Supply Schedule. This allows VA hospitals and healthcare facilities across the country to procure EsoGuard through a single national framework. The pricing has been pre-negotiated to match the Medicare reimbursement rate established by the Centers for Medicare & Medicaid Services.
That pricing alignment matters. It removes a major friction point that often slows adoption of new medical technologies. Clinicians across the VA system can now order the test without dealing with complicated pricing negotiations or approval processes.
EsoGuard tests for precancerous changes in the esophagus. Early detection of these changes can prevent full-blown cancer from developing. While Lucid has been building clinical evidence and commercial traction, landing a contract with the VA represents a different level of institutional backing.
Clinical Validation at Scale
Shaun O’Neil, President and Chief Operating Officer of Lucid Diagnostics, emphasized what this contract signals. “The VA operates at significant clinical and operational scale, and selection by a healthcare system of this size reflects the strength of the clinical evidence supporting EsoGuard,” he said. The company plans to work with the VA and other integrated health systems to incorporate EsoGuard into standard clinical practice.
The trading volume told the story of investor enthusiasm. PAVmed saw roughly 8 million shares change hands, compared to a three-month daily average of about 377,000. Lucid Diagnostics stock also jumped, up nearly 10% in pre-market trading, with volume hitting 1.5 million shares versus a typical 594,000.
Mixed Wall Street Reception
Ascendiant analyst Edward Woo rates PAVmed shares a Buy with a $17 price target. That suggests he sees plenty of upside even after the massive Wednesday rally. But not everyone shares that optimism.
The analysis does credit progress on reimbursement for EsoGuard and an extended funding runway at Lucid. But it also flags bearish technical indicators versus long-term averages. The company’s recent reverse split adds another layer of risk to the equation.
PAVmed shares had fallen 6.5% year-to-date before Wednesday’s surge and were down 65% over the past 12 months. Lucid Diagnostics stock had performed better, up 11% year-to-date and nearly 47% over the past year.
The VA contract includes pre-negotiated pricing matching the established Medicare payment rate determined by CMS. VA hospitals and healthcare facilities nationwide can now access EsoGuard through the single national VA procurement framework.
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