Share prices for TransEnterix (NYSE:TRXC) have more than doubled since the robot-assisted surgery company won an important clearance from the FDA last week and CEO Todd Pope is optimistic about his companies chances against the undisputed market leader, Intuitive Surgical (NSDQ:ISRG).
Morrisville, N.C.-based TransEnterix, which acquired Senhance for $100 million in September 2015, finalized its clearance bid last month after applying in April; the federal safety watchdog granted 510(k) clearance last week, pushing TRXC shares up 92.5% to a $2.81 close yesterday; the stock had gained another 47.0% to reach $4.13 per share as of about 2:45 Eastern today.
Noting that most of the growth during Intuitive’s run – its flagship da Vinci platform hit the U.S. market in 2000 – came from the conversion of open surgeries to robot-assisted procedures, Pope told The Robot Report today that TransEnterix is aiming its Senhance device at converting laparoscopies.
“We’re really targeting more laparoscopic surgeries, which is a much larger volume of procedures,” Pope told us. “We’re not going head-to-head with the incumbent. We’re looking to establish our own space.”
Part of that will involve selling hospital administrators on the lower per-procedure cost for Senhance compared with conventional laparoscopy in addition to the system’s haptics capability and vision-controlled camera, he added.
“We’ve said that our capital cost is similar to the incumbent. Our differentiator is our per-procedure pricing,” Pope explained. “There’s not a separate reimbursement code for robotics – it uses mostly laparoscopy codes. When your cost per procedure can be closer to laparoscopy, the hospitals make a fair margin.”
The FDA clearance means TransEnterix’s nine direct sales reps can hit the streets and the company has plans to add about five more reps in the coming months, he said.
“There’s not only a tremendous interest from surgeons and hospital administrators and patients, but also a real desire from investors to have another strong robotics player,” Pope told us. “We believe robotic surgery is just in its infancy. We have different features and a differentiated price strategy. Robotic surgery and the technology it brings is so beneficial for patients that I think it will become the norm.”
Just last week the company escaped a shareholders lawsuit brought after it shelved its flagship SurgiBot last year, prompted by the FDA’s denial of its submission for 510(k) clearance.