Outset Medical Shares Jump On Resuming Tablo Hemodialysis For Home Use

Zinger Key Points
  • FDA says Tablo Hemodialysis for home use is as safe and effective as the predicate.
  • A "substantially-equivalent" FDA designation could potentially remove a significant concern for the company.
  • The FDA cleared Outset Medical Inc's OM previously disclosed 510(k) submission and resumption of Tablo Hemodialysis System shipments for home use.
  • Stifel noted that the decision means that "the new device is as safe and effective as the predicate.
  • In June, Outset Medical implemented a shipment hold on the distribution of its Tablo Hemodialysis System for home use pending the FDA review and clearance of a 510(k).
  • As Stifel awaits further information from management on the decision, next steps, and ship hold removal, the analyst still view this as highly encouraging for Outset. 
  • A "substantially-equivalent" designation by FDA would seem to remove a significant concern for the company and the 2022 outlook. 
  • Stifel mentions that it enables investors to refocus on the excellent Tablo technology and the substantial home hemodialysis opportunity.
  • The company also reported Q2 FY22 sales of $25.1 million, flat Y/Y and in line with the management guidance.
  • The gross margin was 15.1%, compared to 4.2% a year ago and 14.5% in Q1 FY22.
  • "As we look at the second half of the year, we see no underlying demand for Tablo change. However, we have reflected in our guidance the staffing and inflationary pressures our provider customers are facing, as well as the work we need to do to regain commercial momentum following the release of the Tablo ship hold," said Leslie Trigg, chairman & CEO.
  • The company held a cash balance of $295.4 million.
  • Guidance: Outset now projects 2022 revenue of $105 million - $110 million, up 2% - 7% Y/Y.
  • Price Action: OM shares are up 24.20% at $19.19 during the market session on the last check Monday.
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