SRDX - Surmodics upgraded at Needham citing FDA nod for drug coated balloon

2023-06-13 08:33:04 ET

Surmodics, Inc. ( NASDAQ: SRDX ) added ~4% premarket Tuesday after Needham upgraded the medical device maker to Buy from Hold, citing a faster-than-expected FDA approval for its SurVeil drug-coated balloon (DCB).

In January, the FDA declined to approve the SurVeil DCB leading Surmodics ( SRDX ) to reduce its workforce by ~13%. However, the stock jumped in March in reaction to news about the positive feedback from the agency regarding the company's plans to submit an amended premarket approval (PMA).

"Several positive developments mean that SRDX's SurVeil drug-coated balloon (DCB) is likely to be approved by the FDA sooner than we previously thought," Needham's Mike Matson wrote in a note on Tuesday.

Citing that SRDX was hovering at the upper bound of the $30 range before its January disclosure on FDA rejection, Matson estimates that the stock can hit "at least the low-$30 range and potentially higher" subject to approval.

The analyst who issues a $36 per share target on Surmodics ( SRDX ) pegs a ~$9 per share value for SurVeil's FDA approval. He expects the device "to help bridge the gap" until there is a material contribution from the company's Sublime and Pounce products for growth.

More on Surmodics

• Surmodics sinks as FDA declines to approve drug-coated balloon
• Surmodics downgraded at Needham on uncertainty over drug-coated balloon

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