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Why TransEnterix Fell 10.5% in March

By Brian Feroldi – Apr 5, 2018 at 10:55AM

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The volatility continues.

What happened

Shares of TransEnterix (ASXC -3.56%), a medical-device maker focused on robotic surgery, fell 10.5% in March, according to data from S&P Global Market Intelligence. The slide came even though the company posted a decent fourth-quarter and full-year earnings report and projected optimism about the future.

So what

TransEnterix had already told investors how many Senhance systems were sold during the final quarter of 2017, so the company's quarterly revenue of $3.4 million was quite close to what Wall Street was expecting. However, the company didn't fare quite as well on the bottom line. GAAP net loss for the quarter came in at $74.9 million, though the majority of that huge loss was related to the noncash charges from the change in fair value of warrant liabilities. On an adjusted basis, net loss was $14.1 million, or $0.08 per share. That figure was still a penny worse than what analysts were projecting.

Stressed-looking man with his head propped up on his hand. There is a laptop and coffee cups on the table in front of him.

Image source: Getty Images.

On the conference call with investors, management said that the company had already sold two more Senhance systems during the first quarter. Executives also expressed enthusiasm for coming product enhancements and label-expansion claims that are in the works. 

TransEnterix ended the year with $97 million in cash and restricted cash on its books. That should be enough to keep the doors open for several more quarters. More cash is expected to be added to the balance sheet in the first quarter as well, thanks to the recent deal to monetize the company's SurgiBot assets.

Now what

2018 is going to be a pivotal year for TransEnterix. With FDA approval in hand and a commercial team in place, the company has the ingredients to turn the Senhance system into a commercial success -- provided it can hold its own against competitors like Intuitive Surgical.

Success is not guaranteed. That's why my plan is to watch this company's progress like a hawk from the safety of the sidelines.

Brian Feroldi owns shares of Intuitive Surgical. The Motley Fool owns shares of and recommends Intuitive Surgical. The Motley Fool has a disclosure policy.

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