Asensus Surgical Investors Need To Take Long-Term View on Its Technology
On the surface, Asensus Surgical (NYSEAMERICAN:ASXC) stock looks like just another sputtering SPAC.
But it’s not a SPAC. This company came public as TransEnterix back in 2014. It raised $52 million for a robotic surgery system then called SurgiBot. This was a hot stock in 2018, rising as high as $84 a share before collapsing. It was soundly beaten in the market by Intuitive Surgical’s (NASDAQ:ISRG) DaVinci robot, which has since reached a market capitalization approaching $100 billion.
Now the former TransEnterix is back, with a new name, a new ticker symbol, and a new concept. It is selling Senhance, specializing in abdominal procedures done through tiny “keyhole” incisions. Senhance uses haptic feedback, eye-tracking camera control and 3D visualization to manage instruments as small as 3 mm.
Since changing the ticker symbol to ASXC in early March, the shares are down 36%. Given its first quarter numbers, a loss of $19 million, 8 cents per share, on revenue of $2 million, even its market cap of $564 million may seem generous.
But if Senhance really is the breakthrough the company’s press shop makes it out to be, today’s speculators may find themselves with champagne living and caviar dreams.
The March of Press
Over the last six months Asensus has churned out a steady stream of press releases concerning the take-up and potential utility of Senhance.
The company has launched a training center in the Netherlands. Five German hospitals have initiated programs to use the system. Senhance has also won approval for general surgery. It was originally approved just for use in abdominal procedures, things like the removal of possibly cancerous colon polyps.
At an Oppenheimer conference this past week Asensus executives called what they’re doing Performance-Guided Surgery. But Intuitive’s DaVinci remains the 800-pound gorilla in the space. Asensus’ latest presentation claims its system can perform a hysterectomy for less than half the cost of DaVinci once it’s installed.
There are now just 28 Senhance units installed at 13 sites in the U.S., Europe and Japan. Asensus is focused on getting FDA approval for its articulating instruments and Intelligent Surgical Unit.
Meanwhile, the sales effort goes on.
The March of Money
Because Senhance is a very considered purchase for even large hospitals, Asensus is still burning cash, as the first quarter results show. It’s raising cash through new stock sales. Oppenheimer, which has one of two analysts following the stock, is one of the sellers.
In March I wrote that you need to be patient with ASXC. This is not a stock to be traded. It’s a speculation that will take years to play out. But expecting patience from Wall Street is like expecting civility from a Knick’s fan. During 2021 the stock has sold for as much as $6.32 a share and for as little as $1.52. Its current price is based on a two-week move off $1.60.
As our Robert Lakin wrote last week, the latest move is based on H.C. Wainwright initiating coverage with a “buy” rating. This caused excitement among penny stock investors. The coverage sent shares up 27% in just one day. That’s a reflection of how small the current market cap is.
ASXC Stock Needs Patience
Our Louis Navillier gives ASXC stock a “B” rating, although he’s impressed with the firm’s progress. Faisan Farooque also likes it for the long haul.
The long haul is the only way to play this. This is a true venture investment, where patience is a virtue. Risk comes with the territory.
Asensus isn’t due to report again until Aug. 11. With only two analysts following it , and few short sellers in it, you can get in at your leisure and wait for news. Don’t pay much attention to the daily price swings, and don’t put in any money you can’t afford to lose. Remember TransEnterix, but be an investor, not a trader. Let time work its magic and let management do its work.
On the date of publication, Dana Blankenhorn did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
Dana Blankenhorn has been a financial and technology journalist since 1978. He is the author of Technology’s Big Bang: Yesterday, Today and Tomorrow with Moore’s Law, available at the Amazon Kindle store. Write him at danablankenhorn@gmail.com, tweet him at @danablankenhorn, or subscribe to his Substack newsletter.
