Here's Why TransEnterix Is Soaring Today
What happened
In response to the company announcing the FDA approval of a few new instruments, shares of TransEnterix (NYSEMKT: TRXC), a medical device company focused on robotic surgery, jumped 10% as of 2:45 p.m. EDT on Thursday.
So what
TransEnterix stated that it has won FDA approval for its 3-millimeter instrument set as well as some additional 5-millimeter instruments. These new products will be used in conjunction with the company's Senhance system in digital laparoscopy procedures.
The company believes that these tiny products will enable surgeons to operate through incisions that are so small that they will be considered "virtually scarless" for patients.
TransEnterix's CEO Todd Pope was thrilled with the news:
Dr. Steven McCarus, a user of the Senhance system, also heaped praise on the potential of the new instruments:
Given the news, it isn't hard to figure out why investors are celebrating today.
Now what
2018 is shaping up to be a good year for TransEnterix. The Senhance is selling well, the company's balance sheet has been improved, and the company has posted a series of regulatory wins.
Can the momentum continue? The odds look favorable that the answer to that question is yes. However, TransEnterix still has a ways to go before it reaches profitability, so it is still a bit too high risk for my taste. That's why my plan is to continue to root for this company's success from the safety of the sidelines.
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Brian Feroldi has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.