Transenterix Robot Approval Is a Big De-Risking Event
Transenterix Inc (NYSEAMERICAN:TRXC) shares were skyrocketing 92% yesterday and continue to fly 9% in pre-market trading today after scoring a green light from the FDA for its Senhance Robot, designed to assist doctors perform surgery. In fact, the agency believes Senhance’s effectiveness in gynecological and colorectal procedures rivals that of the only robot that has been in the general surgery arena so far: Intuitive Surgical’s da Vinci Surgical Robot.
In reaction to the news, the stock has shot past $3 on back of the bulls running to take a slice of the buzzing biotech action, and BTIG analyst Sean Lavin deems this FDA win a “meaningful positive” for the surgical robot maker, anticipating shares will “trade up.”
For now, the analyst reiterates a Neutral rating on TRXC stock without listing a price target. (To watch Lavin’s track record, click here)
Lavin asserts: “This is a major milestone for the company. Investors expected approval by YE17 based on mgmt. comments but most felt there was some risk since the FDA did not approve SurgiBot previously. Focus will now turn to the US launch. The EU has produced modest results thus far, having sold 2 systems (plus a 3rd in Japan) so we feel investors will focus on how the US rollout goes. The US is a much larger robotics market.”
“With TRXC’s shares rallying since last quarter from $0.65 to $1.46, we believe investors were more confident about FDA approval. We wouldn’t be surprised if shares open up significantly. There are warrants exercisable upon FDA clearance. This may cause a small pullback but we believe the approval will carry the day. The ~$25M TRXC could pick up from the warrants is a positive,” adds Lavin.
However, considering Intuitive Surgical poses quite a threat to Transenterix, who “still has commercial hurdles as it attempts to compete,” the analyst prefers to assess TRXC from a cautious stance. Even if a bigger biotech shark buys out the surgical robot maker, the analyst concludes: “This could be a reason to Buy shares but not enough for us to have a Buy rating given the limited EU sales and likely dilution.”
Additionally, according to TipRanks, out of 3 analysts polled in the last 12 months, one is bullish on Transenterix stock while 2 remain sidelined. With a loss potential of 27%, the consensus target price stands at $2.23.
Exelixis Comes Out Swinging Where Most Have Missed the HCC Boat
Exelixis, Inc. (NASDAQ:EXEL) was a lightning rod of the biotech world yesterday, with shares rising 17% after its Phase III CELESTIAL trial evaluating cabozantinib in patients suffering from advanced hepatocellular carcinoma (HCC). The verdict? The liver cancer drug realized statistical significance, achieving its primary endpoint of extending overall survival (OS). On back of these exciting results, the drug maker has its gaze set on submitting a supplemental New Drug Application (sNDA) to the FDA by the first quarter of next year.
Oppenheimer analyst Leah R. Cann affirms, “This is in line with our expectations, and supports our outlook for the timing of a launch in the HCC setting,” adding that this carves out an “important market opportunity for Exelixis.”
Providing some context on the study that tested the small molecule tyrosine kinase inhibitor already approved to treat patients with advanced renal cell carcinoma (RCC) that have undergone past antiangiogenic therapy, the analyst highlights: “According to Exelixis, the study met its primary endpoint of overall survival relative to placebo and showed safety was consistent with the established profile of cabozantinib.”
Ultimately, “Having met the primary endpoint in this setting, Exelixis has made an important achievement. HCC is a setting where many clinical studies have failed, which we believe has historically made CELESTIAL a high risk study in most investors’ assessments. Therefore, we believe positive data in this setting offers an important market opportunity for Exelixis,” underscores Cann.
Further detailed data is set to be presented at a forthcoming medical conference, but presently, the analyst hedges her bets, maintaining a Perform rating on EXEL stock without suggesting a price target. (To watch Cann’s track record, click here)
Wall Street looks on with cautious optimism on this drug maker, considering TipRanks analytics showcase EXEL as a Buy. Based on 9 analysts polled by TipRanks in the last 3 months, 6 rate a Buy on Exelixis stock while 3 maintain a Hold. The 12-month average price target stands at $31.71, marking a 9% upside from where the stock is currently trading.