What happened
In response to the company announcing the sale of its first Senhance Surgical Robotic System in the U.S., shares of TransEnterix (ASXC -0.82%) rose as much as 15% in early-morning trading on Monday. Shares have since settled down but were still up 7% as of 11:40 a.m. EST.
So what
TransEnterix announced today that Florida Hospital -- a member of one of the largest not-for-profit healthcare systems in the country -- has agreed to purchase a Senhance system. This news marks the company's first sale since the Senhance System received FDA approval about a month ago.
Here's what Dr. Steve Eubanks -- a surgeon and executive medical director at the hospital -- had to say about the purchase decision:
The digital operating room of the future has arrived, and our surgeons will continue to be leaders in applying robotic technology, like the Senhance, to benefit our patients across a full range of procedures and specialties. Our team of clinicians selected the Senhance Surgical System to further our minimally invasive offerings. We believe this robotic system will support our surgeons in maximizing their precision and control during procedures while minimizing costs.
Traders cheered the company's first U.S. sale, which prompted a rally in shares today.
Image source: TransEnterix.
Now what
It might seem crazy to think that a company's stock deserves to rally from the news of a single sale, but in TransEnterix's case, the market's reaction appears warranted. After all, TransEnterix had previously sold a grand total of three Senhance Systems worldwide since acquiring the company that developed the device in September 2015. That's not exactly a blazing fast start, so it is understandable that investors were skeptical about the company's ability to compete against companies like Intuitive Surgical in the U.S. Today's news should help to alleviate that concern (at least a little bit).
On the flip side, it is worth pointing out that Florida Hospital and Dr. Eubanks already have an established history with TransEnterix, so investors probably shouldn't credit this sale to the company's commercial team. In fact, TransEnterix had previously announced that it had established an "innovation center" at Florida Hospital, Orlando that will serve as a clinical training and procedural development site. Eubanks was even quoted in the press release announcing the center, so he clearly has an established relationship with the company.
So was this sale already in the bag? Or would Florida Hospital have purchased a Senhance System even if it did not have an established relationship with the company? Since there's no real way to answer that question, my view is that TransEnterix's bulls should remain optimistic about the company's potential, but should also take today's news with a grain of salt.
