- Needham downgraded Surmodics Inc SRDX To Hold Buy.
- In January, surmodics received a letter from the FDA regarding its Premarket Authorization (PMA) application for the SurVeil Drug Eluting Balloon (DCB). The letter states that certain information in two broad categories – biocompatibility and labeling – needs to be added through an amendment to the company’s PMA Application for placement in an approvable form.
- The Company is currently preparing a request for feedback from the FDA and management expects to receive the FDA’s response in May. Assuming Surmodics has to do additional animal testing, which would take a few months, the company will likely submit its amendment to the FDA in the fall.
- The analyst writes that SurVeil is unlikely to receive FDA approval until the end of 20223.
- Pounce and Sublime sales are growing, but they’re still too small to make much of an impact on the overall growth rate.
- SRDX recently downsized its direct sales force from 28 area managers to 21 area managers, which creates short-term headwinds for growth, Needham says.
- The analyst says so too Abbott Laboratories AWAY Takeover from Cardiovascular Systems Inc CSII for $890 million adds further uncertainty about SurVeil.
- ABT is SRDX’s distribution partner for SurVeil. If SurVeil is not approved by the end of fiscal 23, Abbott may exit the business without paying a $24 million milestone payment to SRDX.
- The analyst also notes CSII’s agreement with Chansu Vascular Technologies to develop peripheral and coronary DCBs using everolimus instead of the widely used paclitaxel.
- Price promotion: SRDX shares are down 8.39% to $26.53 on the latest check Monday.
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