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Surmodics (SRDX) Stock Skids 32% on Negative Regulatory Update
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Shares of Surmodics, Inc. (SRDX - Free Report) have declined 31.8% since the close on Jan 18, following disappointing regulatory update related to its SurVeil drug-coated balloon (“DCB”). In fact, the company’s shares have declined 33.3% in the past six months against the industry’s 0.9% increase. The S&P 500 Index has declined 0.4% in the same time period.
Regulatory Update
Surmodics announced last week that it has received a letter from the FDA indicating that a premarket approval (“PMA”) application for its SurVeil DCB is not currently approvable. The company completed the submission of the PMA application for SurVeil DCB in the third quarter of 2021, based on data from clinical trial — TRANSCEND. The study evaluated the safety and efficacy of SurVeil DCB, a next-generation device for the treatment of peripheral artery disease (PAD). The study compared the results with Medtronic’s (MDT - Free Report) IN.PACT Admiral DCB, which was evaluated in the comparator-arm, for non-inferiority.
TRANSCEND Study Data
Data from the TRANSCEND study demonstrated compelling performance for SurVeil DCB. Data from the TRANSCEND 12-month pivotal clinical trial showed that SurVeil DCB met both the primary safety and primary efficacy endpoints that were found to be non-inferior compared to Medtronic’s IN.PACT Admiral DCB. SurVeil DCB also delivered a substantially lower drug dose versus MDT’s IN.PACT Admiral DCB. A 24-month data from the TRANSCEND study demonstrated continuous improvement in functional outcomes for treated patients, which was comparable to Medtronic’s IN.PACT Admiral DCB.
Per Medtronics website, IN.PACT Admiral DCB is the market-leading DCB that has demonstrated durable, consistent, and safe outcomes across multiple clinical trials.
Image Source: Zacks Investment Research
The FDA Letter
The letter received by Surmodics from the FDA related to SurVeil DCB PMA application stated that it is currently unapprovable, and also provided specific guidance for path forward. The FDA suggested adding certain information within two general categories — biocompatibility and labeling — through an amendment to the company’s PMA application. The new information requested by the FDA to put the PMA application in approvable form will require additional testing and analysis. However, the letter from the FDA did not raise any question on the human clinical data from the TRANSCEND study.
Surmodics will now perform the required testing and analysis for submitting the requested data. The company is currently evaluating the issues raised in the letter and will meet the agency’s representatives for discussing the letter’s content and conclude the path forward for the PMA application. It will provide additional update on this issue during its upcoming first-quarter fiscal 2023 earnings call.
European Approval
Surmodics gained a CE-mark for SurVeil DCB in 2020, a prerequisite for commercialization in Europe. The company is developing the device candidate under an agreement with Abbott (ABT - Free Report) . Per the agreement, ABT has the exclusive worldwide commercialization rights for the SurVeil DCB. Although the device has gained a CE-mark, the timeline for its commercialization in Europe is to be determined at the discretion of Abbott, as per the terms of the agreement between the companies.
Surmodics currently carries a Zacks Rank #3 (Hold).
Lantheus (LNTH - Free Report) is a better-ranked stock to consider from the same industry, sporting a Zacks Rank #1 (Strong Buy). Lantheus has an estimated earnings growth rate of 10% for 2023. LNTH’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 51.09%. Lantheus has declined 24.2% against the industry’s 1% growth in the past six months.
Image: Bigstock
Surmodics (SRDX) Stock Skids 32% on Negative Regulatory Update
Shares of Surmodics, Inc. (SRDX - Free Report) have declined 31.8% since the close on Jan 18, following disappointing regulatory update related to its SurVeil drug-coated balloon (“DCB”). In fact, the company’s shares have declined 33.3% in the past six months against the industry’s 0.9% increase. The S&P 500 Index has declined 0.4% in the same time period.
Regulatory Update
Surmodics announced last week that it has received a letter from the FDA indicating that a premarket approval (“PMA”) application for its SurVeil DCB is not currently approvable. The company completed the submission of the PMA application for SurVeil DCB in the third quarter of 2021, based on data from clinical trial — TRANSCEND. The study evaluated the safety and efficacy of SurVeil DCB, a next-generation device for the treatment of peripheral artery disease (PAD). The study compared the results with Medtronic’s (MDT - Free Report) IN.PACT Admiral DCB, which was evaluated in the comparator-arm, for non-inferiority.
TRANSCEND Study Data
Data from the TRANSCEND study demonstrated compelling performance for SurVeil DCB. Data from the TRANSCEND 12-month pivotal clinical trial showed that SurVeil DCB met both the primary safety and primary efficacy endpoints that were found to be non-inferior compared to Medtronic’s IN.PACT Admiral DCB. SurVeil DCB also delivered a substantially lower drug dose versus MDT’s IN.PACT Admiral DCB. A 24-month data from the TRANSCEND study demonstrated continuous improvement in functional outcomes for treated patients, which was comparable to Medtronic’s IN.PACT Admiral DCB.
Per Medtronics website, IN.PACT Admiral DCB is the market-leading DCB that has demonstrated durable, consistent, and safe outcomes across multiple clinical trials.
Image Source: Zacks Investment Research
The FDA Letter
The letter received by Surmodics from the FDA related to SurVeil DCB PMA application stated that it is currently unapprovable, and also provided specific guidance for path forward. The FDA suggested adding certain information within two general categories — biocompatibility and labeling — through an amendment to the company’s PMA application. The new information requested by the FDA to put the PMA application in approvable form will require additional testing and analysis. However, the letter from the FDA did not raise any question on the human clinical data from the TRANSCEND study.
Surmodics will now perform the required testing and analysis for submitting the requested data. The company is currently evaluating the issues raised in the letter and will meet the agency’s representatives for discussing the letter’s content and conclude the path forward for the PMA application. It will provide additional update on this issue during its upcoming first-quarter fiscal 2023 earnings call.
European Approval
Surmodics gained a CE-mark for SurVeil DCB in 2020, a prerequisite for commercialization in Europe. The company is developing the device candidate under an agreement with Abbott (ABT - Free Report) . Per the agreement, ABT has the exclusive worldwide commercialization rights for the SurVeil DCB. Although the device has gained a CE-mark, the timeline for its commercialization in Europe is to be determined at the discretion of Abbott, as per the terms of the agreement between the companies.
Surmodics, Inc. Price
Surmodics, Inc. price | Surmodics, Inc. Quote
Zacks Rank & Stock to Consider
Surmodics currently carries a Zacks Rank #3 (Hold).
Lantheus (LNTH - Free Report) is a better-ranked stock to consider from the same industry, sporting a Zacks Rank #1 (Strong Buy). Lantheus has an estimated earnings growth rate of 10% for 2023. LNTH’s earnings surpassed the Zacks Consensus Estimate in all the trailing four quarters, the average beat being 51.09%. Lantheus has declined 24.2% against the industry’s 1% growth in the past six months.
You can see the complete list of today’s Zacks #1 Rank stocks here.