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Why Senseonics Holdings Stock Popped This Week

By George Budwell – Oct 22, 2021 at 8:00AM

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Investors appear to be betting that a key regulatory approval is close at hand.

What happened

Shares of Senseonics Holdings (SENS -4.00%) rose by nearly 10% by the end of trading Thursday afternoon this week, according to data from S&P Global Market Intelligence. Senseonics is a small-cap player in the high-value and ultra-high growth continuous glucose monitoring (CGM) system market. 

What sparked the stock's upswing this week? While the medical device company has so far maintained radio silence this week, investors are apparently piling into this stock in anticipation of a long-awaited approval for the 180-day version of the company's implantable Eversense device. Senseonics applied for a premarket approval to the U.S. Food and Drug Administration to extend the wearable life of the Eversense CGM system to 180 days on Sept. 30. 

A green chalkboard with an upward pointing trend line drawn on it.

Image source: Getty Images.

So what

Senseonics might be targeting one of the fastest growing areas in all of healthcare. But its Eversense CGM devices are fighting for market share against entrenched competitors from the likes of Abbott Laboratories, DexCom, and Medtronic. As a direct result of this exceedingly intense competition, Wall Street only expects Senseonics to generate about $14 million in total sales this year. That's not a whole lot of revenue for a company with a market cap north of $1.59 billion at the time of writing. Investors, for their part, are hoping that this six-month version of the Eversense CGM system will make the company far more competitive against these industry giants in 2022 and beyond.   

Now what

FDA PMA reviews can take around a year to complete. Armed with this insight, investors appear to be buying this small-cap biotech stock right now in the hopes of catching lightning in a bottle, so to speak. A six-month implantable CGM device, after all, could be a game changer for the company in terms of its top-line growth. Therefore, risk-tolerant investors may want to consider buying this speculative medical device stock ahead of this potentially explosive catalyst.  

George Budwell has no position in any of the stocks mentioned. The Motley Fool recommends DexCom. The Motley Fool has a disclosure policy.

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