Analysts Shed Light on Transenterix (TRXC) Following Home Run Approval for Senhance

Following TRXC's expanded indication nods in inguinal hernia and cholecystectomy for its robotic surgical system, two analysts share the word on the Street.


Transenterix (NYSE:TRXC) investors got a taste of excitement this morning with a win that came early for the Senhance robotic surgical system, which won a nod for expanded indications of use: laparoscopic inguinal hernia and cholecystectomy (gallbladder removal) procedures. Present-day, the company’s innovative Senhance System now has approvals under its belt for laparoscopic colorectal, gynecological, inguinal hernia, and cholecystectomy surgery. In reaction, shares are on a 10% leap today.

Stifel analyst Rick Wise draws attention to the FDA nod that hit just around three months after TRXC’s mid-February filing as reassuring. Though the win was largely “expected,” Wise cheers that “the agency’s turn-around time is likely slightly ahead of expectations.”

Predicting these “broader procedure indications could accelerate Senhance market adoption,” the analyst reiterates a Buy rating on TRXC stock with a $ price target, which suggests a close to 16% upside from current levels. (To watch Wise’s track record, click here)

“Importantly, this indication expansion represents another important regulatory milestone for TransEnterix, as it continues to successfully navigate FDA. And, with a now broader set of surgical indications, we believe TransEnterix is better positioned today to engage both surgeons and hospital administrations in robotic acquisition discussions. While we are not increasing our projections, we believe this now ‘critical mass’ of indications could, over time, accelerate TransEnterix’s current commercial adoption trajectory. As well, just on the horizon, the company has a number of key instrumentation submission and approval ahead in 2018,” writes Wise.

In fact, the analyst continues, “With laparoscopic inguinal hernia and cholecystectomy (gallbladder removal) indications now in hand, Senhance’s US procedure opportunity nearly doubles to 3 million procedures annually.”

In another corner, Ladenburg analyst Jeffrey Cohen may lift his target expectations on the company, but retreats from the bulls on valuation, downgrading from a Buy to a Neutral rating on TRXC stock while increasing the price target from $3.50 to $4. This implies an almost 16% upside from current levels. (To watch Cohen’s track record, click here)

Ultimately, “We believe the company will successfully achieve the domestic and international milestones,” asserts Cohen, who recognizes a current addressable market that has jumped to circle 3 million for TRXC- between 760,000 inguinal hernia procedures coupled with 1.2 million laparoscopic cholecystectomy procedures in the U.S.

Cohen underscores, “The Senhance is now approved for the most commonly performed surgeries in more than 95% of hospitals nationally,” marking a green light that is just “one of many near-term milestones the company has mentioned.”

Glancing ahead, not only is TRXC angling expanded indications, but likewise the team intends to submit a 510(k) to the agency for 3mm devices that have won prior approvals in Europe. Presently, the biotech player eyes approval by the close of this year. Meanwhile, Transenterix is likewise developing 5mm articulating instruments with prospective FDA approval as well as CE Mark just around the corner, by the end of the year. On an international front, the company is simultaneously seeking a green light of the instruments in the fourth quarter of this year in Japan on back of a win in Taiwan.

TipRanks reveals a strong bullish camp on Wall Street surveying the surgical robot maker. Out of 4 analysts polled in the last 3 months, 3 rate a Buy on TRXC stock while just 1 maintains a Hold. The 12-month average price target stands at $4.13, marking just under 21% from where the stock is currently trading.

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