What happened

Shares of Glaukos Corporation (NYSE:GKOS), a mid-cap ophthalmic medical technology and pharmaceutical company, spiked by as much as 63.7% today on heavy volume.

The spark? Glaukos shares are rising in response to the news that Novartis (NYSE:NVS) will voluntarily remove its rival CyPass Micro-Stent product from the market due to a lack of efficacy. The CyPass Micro-Stent device was approved as a tool to lower intraocular pressure during cataract surgery in adult patients with mild-to-moderate primary open-angle glaucoma.

According to the press release, a five-year long safety study revealed that patients receiving the CyPass Micro-Stent implantation "experienced statistically significant endothelial cell loss compared to the group who underwent cataract surgery alone." In other words, the device simply doesn't work as advertised -- leading Novartis to advise surgeons to immediately cease further procedures.

An elderly man undergoing an eye exam.

Image Source: Getty Images.

Since its red-hot opening, Glaukos' shares have cooled off a bit, but remain up by a healthy 33.9% as of 12:00 p.m. EDT. 

So what

This news means that Glaukos' iStent Micro-Bypass franchise now will face considerably less competition moving forward. As such, the company's key product group could end up eventually topping Wall Streets' former peak sales estimate of $1 billion, and perhaps by a wide margin.

Now what

With Novartis' Cypass Micro-Stent sidelined, Glaukos' top line appears set to heat up in a big way. Interestingly enough, though, this medical-device stock was arguably already undervalued prior to today's positive news. Glaukos' shares, after all, were trading at less than two times iStent's peak sales forecast, which is a rock-bottom valuation for a medical-device company. Therefore, bargain hunters may want to take advantage of this news by grabbing some shares today.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.