What happened

After announcing positive regulatory news, shares of TransEnterix (NYSEMKT:TRXC), a medical device company focused on robotic surgery, soared 13% as of 9:57 a.m. EDT Tuesday.

So what

TransEnterix announced that it has received FDA clearance for a number of label expansion claims for its Senhance Surgical System. Specifically, the device can now be used for laparoscopic inguinal hernia and laparoscopic cholecystectomy surgeries.

A silhouette of a bull on a pice of paper with lists of numbers.

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The company estimates that this label expansion claim will widen its addressable market opportunity by nearly 2 million procedures annually. That represents a more than doubling of its current opportunity.

Here's what TransEnterix's CEO Todd Pope had to say about the approval:

"This indication expansion immediately doubles the addressable market for Senhance in the US and validates our regulatory strategy to successfully add to our indications for use,. These expanded procedures are commonly performed at over 95% of hospitals in the United States. We believe this indication expansion will significantly increase the applicability of Senhance to more institutions, particularly those with a busy general surgery practice."

Given the news, it isn't hard to figure out why investors are having a great day.

Now what

The news out of TransEnterix has been extremely positive in recent months. A few weeks ago we learned that the company sold five Senhance systems so far in 2018, which I think is very impressive. Last week the company announced that it secured a $40 million debt financing agreement. The move extended the company's runway in a non-dilutive manner. When adding in today's regulatory news, it is understandable why shares have almost doubled since the start of the year.

TRXC Chart

TRXC data by YCharts

Will this label expansion claim help the company to win over some of the naysayers and accelerate system sales? That question remains an unknown, so I continue to believe that taking a wait-and-see approach to this stock makes the most sense. However, there's no doubt that the company is making progress to improve its financial position and increase the commercial viability of its product. If the company can continue to execute against its promises, then it won't be long before I officially count myself as a bull.

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.