Shockwave Medical is the IBD Stock Of The Day as its calcium-cracking efforts gain steam. Meanwhile, SWAV stock is finding support at its 21-day line.
The company launched in 2009 to test a theory that the electrical pulses used to break up kidney stones could also tackle calcifications in blood vessels. The theory panned out. Shockwave's sales are now on a strong trajectory and, in the second quarter, rocketed 116%.
Now, the company hopes to prove its technology outperforms standard treatments in women. Women often have poor outcomes with atherectomy, a traditional procedure that involves using a drill to remove soft, built-up plaque, Chief Executive Douglas Godshall told Investor's Business Daily.
They also tend to be under-represented in clinical studies and, those who do enroll, are often older and more frail. Despite those complications, women who received Shockwave's treatment in its first pivotal study had "remarkable" results, Godshall said.
"Based on everything we've seen in subsequent datasets, we expect that the exceptionally strong safety data we have seen to date will replicated in this (study)," he said. Shockwave expects the first patient to enroll in the first half of 2023. Godshall doesn't expect enrollment to take long.
SWAV Stock Finds Renewed Support
The results of the study in women could further buoy SWAV stock.
Today, shares are finding support at their 21-day line. The 50-day and 10-week moving averages are also catching up, according to MarketSmith.com. Shares ended trading Monday up 2.8% to 293.49.
Notably, SWAV stock was just added to IBD's Leaderboard. Shockwave also ranks first on the IBD 50, a list of high-performing stocks.
Following the strong second-quarter report, Shockwave boosted its full-year outlook to $465 million to $475 million in sales. At that level, sales would roughly double, rising 96%-100%. SWAV stock analysts are even more bullish. According to FactSet.com, they call for $475.9 million in sales this year.
The biggest upcoming challenge for Shockwave is the potential for other competitors to come into the space, Bank of America Merrill Lynch Securities analyst Travis Steed said in a July report to clients.
"A risk is Shockwave's success has gotten the attention of competitors, and while it's not clear how successful a competitive technology would be, it seems quite likely that Shockwave will eventually face competition," he said. "Other downside risks are any major changes in reimbursement and an inability to expand in new geographies."
Still, he kept his buy rating on SWAV stock.
Expansion In China And Japan
On the latter point, Shockwave isn't too concerned about geographic expansion. Godshall says doctors in 61 countries are using the company's generator and one-time use catheters. Shockwave sells four types of catheters with different sizes to treat different types of calcifications.
The catheters range in price from $3,000-$4,000 with generators going for under $10,000. Godshall notes the prices tend to vary between countries and whether there's insurance reimbursement. In areas like the U.S., where insurance covers treatment, the generator and catheters cost more.
Although generators cost more, the lion's share of sales stem from catheters.
In the June quarter, the company received approval in China to market its system and several catheters for some patients. Shockwave also noted it received a stocking order of about $3 million. Abroad, the company is just "scratching the surface," Godshall said.
Following the second-quarter report, SWAV stock soared more than 17%.
Meanwhile, Shockwave is already bracing for competition, likely in the 2025-26 timeframe. By then, the company hopes to have six or seven different catheters for use with its generator.
"If and when competition ultimately does show up, we want to make sure customers are using even better versions of the products than we have today, which will hopefully make it a lot less interesting for them to consider using someone else's device," he said.
Follow Allison Gatlin on Twitter at @IBD_AGatlin.
