If it has come to your ears that Transenterix Inc. (NYSEMKT: TRXC) has made its first robotic sale, what you have heard is correct. But you have to know that the product that Transenterix has sold is not the one that it developed internally from scratch. Its own internally developed surgical robot was rejected by the FDA earlier this year, forcing the company to realign its priorities.
But that priority realignment has not disappointed considering the information that the company has shared with investors. It has managed to sell a surgery robot in Italy, which markets its first robotic product sale.
Understanding what happened
Internally Transenterix Inc. (NYSEMKT: TRXC) was developing a surgery robot called SurgiBot. It put all the effort and money it could afford to develop the product, but when it turned to the FDA to give it commercialization clearance, the agency declined.
The rejection of SurgiBot nearly crashed Transenterix. Luckily, the company had last year spent some $100 million to acquire a surgical robotic technology called ALF-X from an Italian healthcare company. By the time Transenterix acquired ALF-X, it had already received European approval for general, urology, thoracic and gynecology surgery.
So when the FDA couldn’t approve SurgiBot, Transenterix quickly shifted its attention to ALF-X. But selling the product wasn’t easy until now when Transenterix has announced the first sale of ALF-X in Italy to a customer based in Milan called Humanitas Hospital. The customer initially gave the product a try before it decided to buy it.
TransEnterix did not reveal how much it sold the ALF-X robot. But analysts are estimating that the product costs in the range of $1.5 to $2 million.
What changes for Transenterix Inc. (NYSEMKT: TRXC)?
Transenterix Inc. (NYSEMKT: TRXC) has plans to ALF-X in the U.S. Following the sales of the first ALF-X product in Europe, Transenterix wants to expand the market opportunity for the product by seeking FDA approval to market it in the U.S. The company seems to believe that the fact that ALF-X already carries European approval will increase its chances of it being cleared by the FDA for commercialization in the country.
The milestone attained with ALF-X could also provide an incentive for Transenterix Inc. (NYSEMKT: TRXC) to return to modifying its SurgiBot so that it can seek the FDA nod afresh for the product’s sale in the U.S.
Remember that Transenterix had intended to sell SurgiBot and ALF-X as complementary products, before the FDA dealt it a blow.