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Here's Why ShockWave Medical Jumped Higher Today

By Brian Orelli, PhD – May 9, 2019 at 4:07PM

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The medical-device maker is off to a good start as a public company.

What happened

Shares of ShockWave Medical (SWAV 1.37%) are up 14.7% at 3:39 p.m. EDT. This follows the company reporting first-quarter earnings after the closing bell yesterday.

So what

Revenue at the medical-device company shot up 450% year over year, although it was off a relatively low base and revenue only came in at $7.3 million. Being early in the launch of its intravascular lithotripsy (IVL) devices, the company naturally lost money -- $12.8 million -- during the quarter.

Fortunately Shockwave has $138 million in the bank, thanks to a capital-raising initial public offering in March, so it has plenty of cash to get it closer to profitability.

In addition to the large year-over-year increase in sales, some of today's investor enthusiasm likely comes from management's guidance for 2019 revenue in the range of $33 million to $36 million, which suggests Shockwave will have quarter-over-quarter growth for the rest of the year.

Doctor talking to a patient sitting at a table

Image source: Getty Images.

Now what

ShockWave is currently going after peripheral artery disease with the M5 IVL device, but a bigger opportunity is in coronary artery disease, which will be treated with the C2 Coronary IVL. The company recently started the Disrupt CAD III clinical trial in the U.S. in coronary patients. A European study in the same types of patients, dubbed Disrupt CAD II, recently completed enrollment.

The C2 is already available for sale in Europe, but doctors will likely want to see the data from the Disrupt CAD II study before they start using the device in droves. In the U.S., ShockWave will need to wait for data from the Disrupt CAD III study to gain approval from the Food and Drug Administration, which is expected in the first half of 2021.

Brian Orelli has no position in any of the stocks mentioned. The Motley Fool recommends ShockWave Medical. The Motley Fool has a disclosure policy.

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