After the small-cap medical device company announced the Food and Drug Administration approval of its Senhance Surgical Robotic System, shares of TransEnterix (ASXC -4.00%) jumped 75% as of 9:55 a.m. EDT on Monday.
TransEnterix's long-suffering bulls finally have reason to celebrate: The FDA has granted 510(k) clearance to its Senhance Surgical Robotic System.
Here's what CEO Todd Pope had to say about the approval:
The clearance of the Senhance System in the US is a milestone in the progress of robotics and is expected to deliver improvement in the efficacy, value and choices offered to patients, surgeons and hospitals. Millions of surgical procedures in the US are performed each year laparoscopically with basic manual tools that limit surgeons' capability, comfort and control. New choices are needed that enhance the senses, control and comfort of the surgeon, minimize the invasiveness of surgery for the patient, and maximize value for the hospital. Senhance is this new choice.
Traders cheered the win, which is why shares are skyrocketing today.
The FDA approval of the Senhance system marks the end of an era for Intuitive Surgical (ISRG -1.07%). Intuitive's da Vinci system has enjoyed near-monopoly status in the U.S. since it was first approved for sale in 2000, so this will be the first time in almost two decades that it will face head-to-head competition.
Will the Senhance system be attractive enough as an alternative to lure away market share? That's still an unknown at this point, but TransEnterix claims that it offers haptic feedback, eye-sensing camera control, and fully reusable instruments. Those benefits could persuade at least a few hospitals to choose Senhance.
For what it's worth, Wall Street doesn't appear to be worried about the incoming competition. Intuitive's stock was only down about 2% in early-morning trading on Monday.
TransEnterix also announced that it is holding a conference call with investors on Tuesday morning to discuss the FDA clearance in more detail. Bulls and bears alike would be well advised to tune in.