What happened

Only days after the company disclosed a voluntary hold on its best-selling device, Endologix, Inc. (NASDAQ:ELGX) shares are up 13.3% at 12:30 p.m. EST on Thursday, following news that the hold on some of its products is being lifted.

So what

Endologix shares collapsed 26% on Dec. 27 after management put a temporary hold on shipments of the company's AFX Endovascular AAA System.

At the time, management said that it was investigating a manufacturing issue with some sizes of the device. CEO John McDermott attempted to reassure investors by saying that "the temporary hold on AFX is not related to any reported events from physicians." However, his words fell on deaf ears as investors opted to play it safe and head for the exits. 

This morning, McDermott told investors that the investigation was complete on certain sizes of the AFX, allowing the company to resume shipments and doctors to resume their use of the devices. That's good news, but management is still testing some sizes of the AFX2, and that may be why the company's shares haven't regained all of their losses from the other day. 

Now what

Endologix got disappointing news earlier this year when the FDA told management they wanted to see two-year data before approving Nellix, the company's endovascular aneurysm sealing system for infrarenal abdominal aortic aneurysms. Management had hoped to win approval without that data, and the FDA delay could push off a launch of the device to 2018. 

Nellix's delay put pressure on the company because AFX revenue isn't high enough to offset its expenses. The company's $52.1 million in third-quarter sales increased on a pro forma basis by 10% from a year ago, but gross profit of $36.9 million was more than offset by $48.2 million in operating costs, resulting in a net loss of $15.2 million.

Obviously, a prolonged disruption to AFX shipments could have further taxed the company's financials, so the quick lifting of the hold on some of the AFX lineup is positive. However, investors might want to wait until the hold is lifted on all sizes before considering this company for their portfolios.