TransEnterix Due Diligence

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TransEnterix Due Diligence

TheWallStreetFox
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Feel free to discuss TransEnterix below. Trying to block out all the constant pump/dump hype noise on other streams and trying to stick to insightful posts that add value. Technicals, fundamentals all welcome. Opposing views definitely welcome. Stick to the facts. No spam/hype etc.

Cup and handle chart below. I see a $1.50 measured move, pointing to short term target of $5.75, which was met today. Long term horizontal resistance and an important fib line is at $6.30. I expect some big resistance there.

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Re: TransEnterix Due Diligence

Radder1
Mr. Fox, man is the weather nice in here, thanks!!!!
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Re: TransEnterix Due Diligence

MikeT
In reply to this post by TheWallStreetFox
Mr. Fox, I appreciate all the articles about trxc. I'm a novice investor but stumbled across this one and simply love everything ive read about it, including your articles - the mgmt, the potential market, the advantages over da Vinci etc.. Very excited and definitely long on this one. With that said I'll keep following for updates as well as trying to grasp if I should take some profit at a certain point and buy back in. I think that's too risky right now but I'm interested if you think we'll get to a point where there will be a short term dip opportunity, maybe post fda news
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Re: TransEnterix Due Diligence

Radder1
I'm not the Fox but I had 100% of two accounts in TRXC, I've been selling up into today at 5.72...Down to 500 shares.. I think we get another shot at this before actual news...Also, companies first hurdle FDA, sales are next.  I think they have or will start to sell some ATM, to limit the amount of shares they need to sell and raise cash. We'll know that answer sooner or later. This will breath at some point,  when that is, is anyone's guess.
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Re: TransEnterix Due Diligence

TheWallStreetFox
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Radder I agree. Breathing/consolidation period is necessary. This feels too far too fast right now. Huge resistance at $6.30. Definitely expecting some more short articles to attempt to bring it down. And then, after FDA approval, all that matters is sales and execution by management. Will take time to play out. The average capital sales cycle for a $1M+ da vinci is over a year. So selling to a hospital does not happen over night. I think, fundamentally, 2016 will serve as a spring going into 2017 with strong momentum.
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Re: TransEnterix Due Diligence

TheWallStreetFox
Administrator
In reply to this post by MikeT
Mike, this is a low float stock. If TRXC announces FDA approval and a positive update on ALF-X sales, this could run to double digits.
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Re: TransEnterix Due Diligence

Radder1
It's almost too easy.. But I don't want to get cocky.  It always gives wild swings and entries and exits... So I'll keep holding some and trading a lot... Thanks for finding this stock.  Rode it from $2.00 to $6.00 back in 2014 and been with it ever since!

$TRXC  #Bullish
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Re: TransEnterix Due Diligence

Radder1
In reply to this post by TheWallStreetFox
Fox, we need to drum up some business around here...

But then again, I always enjoy talking to myself!

#We'reAllGoingToBeRich
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Re: TransEnterix Due Diligence

MikeT
In reply to this post by TheWallStreetFox
Any real news driving today's sell off? Is it the one downgrade article or something else?
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Re: TransEnterix Due Diligence

MikeT
Still believe in the technology and the market this company is tatgeting. But how long of a delay can they actually survive? I would hate to wait until 5/10, hope we get some info before then
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Re: TransEnterix Due Diligence

Magirus
In reply to this post by TheWallStreetFox
These are the options given by FDA after an NSE notification. Quoted directly from FDA.
"A device may not be marketed in the U.S. until the submitter receives a letter declaring the device substantially equivalent. If FDA determines that a device is not substantially equivalent, the applicant may:

    -resubmit another 510(k) with new data,
    -request a Class I or II designation through the de novo process
    -file a reclassification petition, or
    -submit a premarket approval application (PMA)"
Hopefully the ALF-X can ease the pain with a sale or two from europe.


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Re: TransEnterix Due Diligence

MikeT
I'm sure this is what they are currently planning out and from what I've read the de novo process seems to make the most sense. Hopefully they are gaining insight into whether it's viable for them to pass if they went that route. I think they would be bankrupt before they could ever get through PMA based on the timelines. I agree that we need to see some Alf X sales to give them some cash and prove that their 'B' product is viable as well. (I think surgibot has the better opportunity given the cost advantages over da Vinci, hence the last comment)

Personally I have invested longer term in more 'safe' stocks. This was my homerun swing and I dropped a lot into it bc the more I read the more I liked. I'm not experienced in being a day trader so have yet to recoup any losses playing the daily dips. Right now I'm holding and hoping.
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Re: TransEnterix Due Diligence

TheWallStreetFox
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Yep, sorry I haven't been checking forum for a few weeks. Busy studying for CMT exam.

Definitely frustrating, disappointing news. I think price action is a bit overdone. It's being treated like a one trick pony biotech company that just failed its pivotal Phase III trial, which is certainly not the case.

They still have ALF-X sales in Europe and ISRG said on their earnings call earlier this week that sales of da Vinci have slowed down in Europe because the hospitals are evaluating ALF-X before they make a decision. That's big. How many will choose ALF-X over da Vinci? Definitely not the majority, given ISRG's presence, but even if they get one sale, that revenue is equivalent to 4 SurgiBot sales. Either they secured their first ALF-X sale in Q1, or they will in Q2....for the sake of the stock price, hopefully they have an alf-x sale to announce on may 10th.

May 10 being the day for update is a bit disappointing. In a perfect would, they'd have a strategy update within the day, but let's be clear, TRXC was just as blindsided by the FDA decision as we were. So, let them evaluate all of their options, and make the best possible decision.

Now, I'm purely speculating. TRXC has a few options. To me, the LEAST likely option is for them to entertain a buyout offer from JNJ (CEO was former exec @JNJ), or Opko Health (CEO and CTO own a combined 8% of TRXC) or another medical device maker that's looking at robotic surgery (SYK, MDT, BSX, STJ, EW who knows). I'd guess a $500M - $800M offer, or ~$5 - $8 per share. I think that is last resort, not going to happen.

TRXC can apply for De Novo process. 4 month review process for 510Ks that failed because device "not substantially equivalent" to predicate device (in this case, SurgiBot to SPIDER). SurgiBot is now classified automatically as a Class III device. These devices need a ton of trials/data (think heart valves, artificial hearts, breast implants....things that stay within the patient). All TRXC needs to do is show the FDA that SurgiBot is not as dangerous as Class III device and is just as safe, if not safer than class II device (ISRG da Vinci is class II device).

I think that's doable. I think, best case scenario, is TRXC applies for De Novo petition, by June 2016, and obtains US approval in Sept/Oct 2016. Worst case scenario is FDA says TRXC needs to collect more data and they don't get approval until mid/late 2017.

If the latter is the case, I'd expect TRXC to focus 100% on Europe. Focus on ALF-X sales, and apply for CE Mark for SurgiBot, which is not as rigorous as FDA approval process. Keep in mind, that Europe has double the amount of hospitals as the US and robotic market penetration stands at less than 1%, compared to ~5% in U.S.  European hospitals are more cost sensitive than U.S. hospitals, as many European hospitals are State owned/partnered.

Keep in mind, I have always been long term on TRXC. Invested in this company since 2013. To me, it's another chance to accumulate shares and build up my position for the long term. I understand those who don't have as long as an investment timeframe as me will sell out of frustration, take the loss and move on. But I am fairly confident, in the end, after all of this plays out, TRXC will be a success.

They had $47M in cash as of late February 2016. That was enough to last until the beginning of 2017. On top of that, I'd assume that the CFO took advantage of the $4-$6 range recently and sold shares through their $40M ATM on file. So, they may have even more cash than $47M to last them until mid-2017. Hopefully ALF-X is a hit and can bring in revenue quickly. I don't think they'll be diluting shareholders at current price.

Good luck! I'll be taking advantage of current share price, for the long term.

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Re: TransEnterix Due Diligence

MikeT
Thanks for the recent articles Fox. Here's hoping for good news this afternoon.
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Re: TransEnterix Due Diligence

MikeT
I'll have to listen to replay, couldn't catch the whole call due to work. Not the best news, not the worst. It really does sound like the FDA screwed them with the surgibot since they were following their guidance the whole time. One of the most interesting comments I caught was that intuitive is selling refurbished models to compete against Alf X, that is telling. Sounds as if they could be worried about feature and price advantages of the Alf X.

Expect the stock to be hammered for a while but will buy back in with what I have left after it settles down.

The stocktwits board is a freaking joke