Health and Healthcare
EndoLogix Recovers Slightly After Resuming Shipments
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Endologix Inc. (NASDAQ: ELGX) reported earlier this week that it would be placing a temporary hold on the shipments of its abdominal aortic aneurysms (AAA) products. Shares dropped about 27% on the news, but now that the company has announced that it is resuming shipments, the stock is up, although not to the previous levels.
Based on the positive testing results, Endologix has removed the temporary hold on all sizes of the AFX Endovascular AAA System and some sizes of the AFX2 Endovascular AAA System, which will allow these products to be shipped to customers and used in procedures, effective immediately.
The testing and process improvements for the remaining sizes of the AFX2 system are ongoing.
John McDermott, CEO of Endologix, had commented when the temporary hold was put into place:
The temporary hold on AFX is not related to any reported events from physicians and we continue to see very good commercial clinical results with the latest versions of AFX and AFX2. The manufacturing issue was identified through our on-going product testing and we are proactively implementing the hold to ensure we always provide the safest possible products for patients. We believe we will be able to lift the hold on some sizes in the near future, with the timing for the remaining sizes dependent on the outcome of our investigation. In addition, the AFX manufacturing issue is unrelated to the manufacturing process for Nellix and Ovation, which continue to be available in approved markets.
When the company said it would lift the hold in the “near future,” it’s likely that investors pictured this event a little farther in the future and may have overreacted in their selling.
Excluding the stock moves this week, Endologix had underperformed the broad markets, with the stock down about 27% year to date.
Shares of Endologix were last trading up nearly 14% at $6.06 on Thursday, with a consensus analyst price target of $9.18 and a 52-week trading range of $4.78 to $14.50.
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