Medical devices company, TransEnterix (NYSEARCA:TRXC) is another small-cap growth stock that has sprung back to life in 2020. TRXC stock is up a whopping 1322% in the past six months. The company’s robotics platform will likely get significant traction this year, as regulatory approvals will support growth opportunities. The goal is for its “Senhance” robotics technology to gain widespread clinical adoption in the laparoscopic field. A few risks remain, though, and its inflated price limits TRXC stock’s attractiveness.
TransEnterix’s Senhance platform essentially reduces variability in surgical procedures and thus improves patient outcomes for laparoscopic procedures. The platform’s initial sales were encouraging but quickly dropped off, as it failed to meet physician expectations. However, the company has worked incredibly hard to fix its teething issues and invested in extensors such as its Intelligent Surgical Unit. FDA and CE Mark approvals are likely to bolster its growth opportunities this year. Moreover, the company continues to raise money through stock offerings and is limiting its debt burden to avoid hiccups in its platform development. Therefore, there’s a lot to look forward to with the TRXC stock, and 2021 could be its break-out year.
The Novelty of Senhance
For years now, the Da Vinci surgical system, developed by Intuitive Surgical (NASDAQ:ISRG), has been a mainstay in the surgical robotics realm. The system was commercialized in Europe in 1999 and was introduced in the US a year later in improving minimally invasive surgeries. For the first time in several years, a new entrant in TransEntrix is making significant waves with its Senhance platform.
The platform has several unique capabilities that set it apart from other alternatives in the market. It effectively combines AI, machine vision, and proprietary software technology to provide a robust solution. Additionally, it also includes haptic feedback controls, which allow for greater surgical precision. It uses familiar laparoscopic technologies, including eye-tracking, 3D visualization enhancements, and remote type controls.
Several aspects set it apart from the Da Vinci platform, including its improved seat positioning, reusability and includes the use of more articulate instruments. In many ways, the Senhance platform is tailor-made for laparoscopy, while the Da Vinci works best with other operations.
So far, the product has been used in over 4,000 operations and more than 80 unique surgical procedures. With the 10 million abdominal surgical procedures performed in UK and USA every year, there is hardly any robotic penetration. The company estimates that the $3.7 billion abdominal robotic surgery market will grow to $16 billion by 2023. Therefore TransEnterix has a massive addressable market that it can potentially tap in the coming years.
As we advance, the company’s investors have several things to look forward to this year. It has recieved a CE Mark in Europe to use its augmented intelligence technology called the ISU. Moreover, it expects to receive an FDA 510K, which provides a stamp of approval over its safety; on top of that, its clinical effectiveness will be analyzed by the scholarly resources this year.
The company’s great thing is that it has zero long-term debt, with a cash balance of $17.5 million. It raised $31.2 million through a direct offering for its liquidity purposes. Additionally, the management recently remarked that it has enough cash till the end of 2022. In terms of revenues, analysts point towards a 243% year-over-year increase in revenues in
Bottomline on TRXC stock
TransEnterix’s narrative is fascinating, and 2021 could be its breakthrough year and for the surgical robotics sector. Its Senhance platform provides several unique features for physicians in improving patient outcomes for laparoscopic procedures. Moreover, its regulatory advances continue to strengthen its case for widespread commercialization. However, it’s not quite a buy yet, as it needs to provide evidence of revenue growth in the coming quarters. Nevertheless, TRXC stock is one to keep tabs on.
On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article