Zynex – Double Shot of Good News
Brian Marckx, CFA
Zynex Inc. (ZYXI) announced more positive news over the last few days. In a September 23, 2011 8-K filing Zynex reported that they came to terms with Anthem Blue Cross Blue Shield relative to a dispute between the two companies over refund requests. As a reminder, in April 2010 Zynex received a refund request from Anthem in the amount of $1.3 million. Zynex estimated at the time that they had about $1.5 million worth of rebillings that were not properly reimbursed by Anthem – which would more than offset Anthem's claim.
The 8-K notes that, per a settlement agreement, Zynex will pay Anthem $226k and all claims will be resolved. Zynex will make an initial $60k payment and will pay the balance over the next 12 months. We view this settlement as good news for Zynex and removes an issue that had been hanging over the company since the initial claim was filed by Anthem.
Zynex came out with more encouraging news this morning with the announcement that NexWave, Zynex's next generation electrotherapy device, received FDA 510(k) clearance. While approval comes somewhat later than we had initially anticipated, we expect NexWave to be a solid complement to Zynex's current line-up of electrotherapy products and contribute to overall sales growth.
We cover Zynex with an Outperform rating.
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