Canaccord analyst William Plovanic reiterated a Buy rating and $43.00 price target on Heartflow Inc (NASDAQ: HTFL)

The analyst commented, "HeartFlow announced it has initiated IP infringement litigation with multiple claims on six patents against Cleerly. While we are not patent attorneys, and won’t make a prediction as to the outcome, we thought it would be helpful to provide our high-level thoughts after reading through the 180-page complaint and speaking to the company. 1) Fact pattern seems to be in HeartFlow’s favor - From a fact pattern perspective, we believe it does not look great for Cleerly given the Founder/CEO was deeply engaged with consulting for HeartFlow when Cleerly was founded, and per HeartFlow there were consulting agreements in place that included confidentiality obligations, non-compete restrictions, and invention assignment obligations. 2) Future capital raises may now be more difficult for Cleerly – from our prior conversations with Cleerly management the company has been engaged in raising a substantial round since last summer, which has yet to close. We believe the noise around the KETO-CTA study (see our note here) and now the HeartFlow IP litigation suit (see link here) could make it more difficult for Cleerly to raise the capital to drive continued market adoption for its products (FFRct and Plaque) and could further benefit HeartFlow. 3) Costs of IP litigation embedded in HTFL guidance – per our conversation with the company, any IP litigation expense were embedded in future guidance and therefore are not expected to have a material impact on future cost expectations."

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Shares of Heartflow Inc closed at $26.95 yesterday.