Outset Medical stock price dives as company halts shipping of Tablo cart
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Key takeaways:
- Outset Medical halts sales of medical cart to obtain FDA 510(k) approval.
- The company released its second-quarter earnings results.
Outset Medical stock value took a significant downturn after the company announced in its second-quarter earnings report that it was pausing shipment of its TabloCart with Prefiltration to obtain FDA 510(k) approval.
Company stock went from a high of $20.66 on Aug. 1, to $16.63 on Aug. 3, when the company said it was holding sales of the medical cart, an accessory to its Tablo dialysis machine.
Outset Medical received a warning letter from the FDA in July that the cart required prior 510(k) clearance for marketing authorization.
“ ... [W]e have agreed to submit a 510(k) application for TabloCart with Prefiltration,” the company said in a statement to Healio. “Although we evaluated the TabloCart with Prefiltration prior to marketing and distributing the product and concluded that no marketing authorization was necessary, we have paused distribution of the TabloCart with Prefiltration pending the FDA’s review and clearance of the 510(k) application we plan to submit later this month. We have not identified any safety issues with the TabloCart with Prefiltration.”
For the second quarter of 2023, the company recorded net revenue of $36 million, a 44% increase compared with $25.1 million in the second quarter of 2022, and an 8% increase compared with $33.5 million in the first quarter of 2023, according to a company press release.
“Our momentum entering 2023 carried through the second quarter, led by the strong demand from hospitals due to the value realized from insourcing dialysis with Tablo,” Leslie Trigg, chair and CEO of Outset, said in the release.
Product revenue in the second quarter was $29.3 million, representing an increase of 49.5% compared with $19.6 million in the second quarter of 2022, according to the release. Service and other revenue was $6.7 million, representing an increase of 23.4% compared with $5.4 million in the second quarter of 2022.
Outset reiterated its 2023 revenue guidance range of $144 million to $150 million, and now expects to be at the low end of this range because of the shipment pause for the TabloCart. The company reaffirmed its gross margin guidance for the year to be in the low-20% range, exiting the fourth quarter in the mid-20% range, according to the release. – by Mark E. Neumann
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