Stereotaxis Inc (OTCMKTS:STXS) is the latest NASDAQ stock to get de-listed and relegated to the OTC Markets, or the land of penny stocks. The stock was de-listed by NASDAQ due to the company's inability to maintain a $35 million market cap. Shares initially got hit hard on the news as the big institutions dumped their positions as many cannot own OTC stocks. The good news for OTC investors is that this is the perfect bounce opportunity for traders.Stereotaxis describes itself as a healthcare technology and innovation leader in the development of robotic cardiology instrument navigation systems designed to enhance the treatment of arrhythmias and coronary disease, as well as information management solutions for the interventional lab. Over 100 issued patents support the Stereotaxis platform, which helps physicians around the world provide unsurpassed patient care with robotic precision and safety, improved lab efficiency and productivity, and enhanced integration of procedural information. Stereotaxis' core Epoch® Solution includes the Niobe® magnetic navigation system, the Odyssey® portfolio of lab optimization, networking and patient information management solutions, and the Vdrive® robotic navigation system and consumables.
The core components of Stereotaxis’ systems have received regulatory clearance in the United States, European Union, Canada, China, Japan, and elsewhere. The V-Sono™ ICE catheter manipulator, V-Loop™ variable loop catheter manipulator, and V-CAS™ catheter advancement system have received clearance in the United States, Canada, and the European Union. The V-CAS Deflect™ catheter advancement system is available for use in the European Union.
The company is due to report second quarter earnings on Tuesday, August 9, 2016 after markets close. The company will then host a conference call and webcast at 4:30 p.m. Eastern Time to discuss the results and corporate developments. We are looking for how many systems the company sold, the utilization rate, and any improvements over the first quarter. In Q1, ventricular tachycardia procedures increased 27% year over year, representing the third consecutive quarter of 20%+ volume growth. STXS also reported that it shipped its fourth Niobe system to Japan and reached a milestone of more than 120 patients treated with the Niobe system at Takatsuki General Hospital.
The highlight of the second quarter was the Texas Children’s Hospital in Houston installing the Company’s Niobe®ES system, making it the only pediatric hospital in the country to offer the latest generation remote magnetic navigation platform for ablation procedures. Texas Children’s is recognized as one of the top children’s hospitals in the nation, ranked #2 nationally in cardiology and heart surgery by U.S. News & World Report. The Arrhythmia and Pacing Service at Texas Children’s, which is one of the highest volume pediatric centers in the country for invasive electrophysiology studies, first installed Stereotaxis technology in March 2009. According to Dr. Jeffrey Kim, director of the Arrhythmia and Pacing Service at Texas Children’s:
“We are privileged to provide this cutting-edge treatment for our patients with arrhythmias in whom cardiac ablations are deemed necessary. With the Niobe system, we can more quickly and aggressively target and ablate abnormal electrical impulses in young children and patients with structurally complex anatomy. This is an important tool in our armamentarium for this highly specialized procedure and undoubtedly advances our approach to pediatric cardiac rhythm management.”
Currently trading with a market cap of $15 million, STXS is an interesting new story on the OTC Markets. One of the main things we like about Stereotaxis is its high gross margin. In Q1, STXS reported a gross margin of 74.8%. These high margins make STXS an ideal takeover target from a deep pocked suitor. With the share price drop, we believe that STXS will begin attracting interest from prospective buyers. For continuing coverage on STXS, sign up below. We will be updating Insider Financial with our interpretation of Q2 results as soon as they hit the tape.
Disclosure: We have no position in STXS and have not been compensated for this article.
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