Outset Medical
(Nasdaq: OM)
announced today that the FDA granted 510(k) clearance for its TabloCart with Prefiltration.
Shares of OM rose more than 24% to $3.90 apiece in midday trading today after the announcement. MassDevice‘s MedTech 100 Index was down slightly.
With clearance for the new optional accessory for the Tablo hemodialysis system, Outset resumed distribution of TabloCart with Prefiltration. The company says it already has product available to ship to U.S. customers.
“With the FDA’s clearance of TabloCart with prefiltration, we have delivered features to the Tablo Hemodialysis System that increase the flexibility for nurses and health systems to serve patients from the ICU to the bedside,” said Leslie Trigg, chair and CEO of Outset Medical. “Today’s announcement underscores Outset Medical’s commitment to innovation and our ongoing dedication to transforming the landscape of dialysis treatment.”
Outset designed its TabloCart to enhance the user experience within healthcare facilities. It features two versions — one with added storage and another with water prefiltration capabilities.
The system has three customizable prefiltration options to adapt to varying water conditions. Its booster pump also increases incoming water pressure. Outset also incorporated 360-degree rotating wheels and directional locking rear wheels for maneuverability. This facilitates seamless movement through various clinical environments.
News of the FDA nod comes at a welcome time for Outset, which last month recalled certain Tablo hemodialysis systems after non-dioxin-like polychlorinated biphenyl acids (NDL-PCBAs) leaching was identified at levels above allowable safety limits. That recall came just weeks after analysts initiated coverage for the company with a very optimistic outlook.
More about the Outset Tablo system
Tablo is a fully integrated system for use across the care continuum and clinical spectrum, from the ICU to home hemodialysis treatments. It treats patients with acute and/or chronic renal failure, with or without ultrafiltration, in an acute or chronic care facility.
All the system requires is access to tap water and a standard electrical outlet.
The past few years have been up and down for the company, which initiated a shipment hold for Tablo systems last August as it dealt with an FDA warning letter for the system. That included an observation asserting that TabloCart with Prefiltration required prior 510(k) clearance for marketing authorization. TabloCart originally launched in the third quarter of 2022.
Outset also suffered from the wider medtech panic related to GLP-1s and increased scrutiny of not-yet profitable companies.
Just before the recent recall received the FDA’s Class I designation, the company also expanded its reach with a partnership with U.S. Renal Care, accelerating home hemodialysis in the U.S.
Analysts react to the latest news
BTIG analysts Marie Thibault and Sam Eiber say the clearance came in ahead of their original expectations. They noted that Outset guided to a potential clearance mid-year.
Management last year revised revenue guidance because of a delay in customer adoption as many waited to purchase TabloCart with Prefiltration, the analysts said.
With the positive update, the analysts maintain the “Buy” rating they initiated last month.
“We see the FDA clearance and resumed shipment of TabloCart with Prefiltration as a big win for OM,” they wrote. “We expect the company to now be able to work through a customer backlog. This clearing event helps underscore the turnaround at OM, and we remain bullish.”
