What happened
Shares of Organogenesis (ORGO 0.34%) were up 15.4% Wednesday afternoon after being up as much as 21.2% Wednesday morning. The healthcare company sells advanced wound care products for surgical and sports medicine applications.
So what
Integra LifeSciences said on Tuesday that it was doing a voluntary recall of products, which could be worth as much as $60 million if the recall lasts all of 2023. Integra said it was doing a global recall of all SurgiMed, PriMatrix, Revize, and TissueMend surgical tissue made at its Boston facility and manufacturing at the site will be halted for now.
Based partly on that news and a better-than-expected first-quarter report for Organogenesis, BTIG analyst Ryan Zimmerman upgraded his rating from neutral to buy for Organogenesis, with a price target of $10.
In the first quarter, the company said it expected revenue to rise by 1% to 3% this year, but that was before Integra announced its recall. In the quarter, Organogenesis reported revenue of $107.6 million, up by 10% year over year.
Now what
The next catalyst that could boost Organogenesis is whether it can get Food and Drug Administration (FDA) approval for ReNu, its knee osteoarthritis therapy that uses amniotic suspension allograft (ASA) injections to reduce pain and inflammation in the knee. The therapy is in phase 3 trials, with the efficacy portion of one trial expected to finish in July and the overall trial expected to conclude in the fourth quarter. The company said it hopes to submit a Biologics License Application for ReNu by 2024.
