What happened
Shares of Orchestra BioMed (OBIO -1.13%) were up 17% as of 11:30 a.m. ET on Tuesday after the company released news regarding a study for a hypertension therapy it is helping to develop. The stock is down less than 2% so far this year, though up more than 95% the past five days.
So what
Orchestra is a healthcare company that specializes in collaborating with medical equipment manufacturers on devices that it has developed. The company went public via a special purpose acquisition company (SPAC) merger in January.
Orchestra announced on Tuesday that the Food and Drug Administration had given its Investigational New Device approval for Orchestra to begin a pivotal study of its BackBeat Cardiac Neuromodulation Therapy (CNT) to treat hypertension in pacemaker patients. According to Orchestra, hypertension affects more than 70% of pacemaker patients worldwide.
The company is working on a collaboration with medical equipment maker Medtronic to develop and commercialize BackBeat CNT. The study is expected to begin before the end of the year. If approved, Medtronic would commercialize the product and Orchestra would share in the revenue.
Now what
The company said it sees the potential for $10 billion in annual sales for the BackBeat CNT. As a relatively new company, there's plenty of risk attached to its stock. Orchestra doesn't have any approved products yet. The only other device in its pipeline is the Virtue Sirolimus Angioinfusion Balloon (SAB), in partnership with Terumo. The Virtue SAB is designed to fight artery disease.
As of the second quarter, Orchestra said it had $117.7 million in cash, enough to fund operations into 2026. The company had only $900,000 in second-quarter revenue attached to its agreement with Terumo, so the addition of the BackBeat CNT will now likely mean collaboration revenue from Medtronic.
