Cardica (CRD) Stock Climbs On FDA Clearance

Cardica, Inc. (NASDAQ: CRDC)

Cardica is having an incredible day in the market today after announcing that the company has received important clearance from the United States Food and Drug Administration. Today, we’ll talk about the details of the clearance, what we’ve seen in the market as a result, and what we can expect to see from CRDC moving forward.

CRDC Receives FDA Clearance

In an early morning announcement today, investors learned that Cardica has received 510(k) clearance from the FDA with regard to using its MicroCutter XCHANGE 30 surgical stapling device. Under the clearance, the device can be used with a white cartridge for the transection and resection in open or minimally invasive urologic, thoracic, and pediatric surgical procedures. This adds to the indications that have already been approved for the MicroCutter XCHANGE 30, which include procedures in the small intestine, large intestine, and appendix. In a statement, Julian Nikolchev, President and CEO at CRDC had the following to offer:

With this important corporate and commercial milestone, the MicroCutter’s U.S. indication covers many of the same indications as approved in the European Union… We look forward to introducing this innovative surgical stapler in a limited launch to key opinion leaders throughout the United States, including those surgeons performing video assisted thoracic surgery (VATS) at the annual meeting of the Society of Thoracic Surgeons (STS) in Phoenix, Arizona later this month and leading pediatric surgeons at the American Pediatric Surgical Association annual meeting in San Diego in May 2016.”

How The Market Reacted To The News

As investors, we’ve learned that any time we see positive news with regard to a publicly traded company, we can expect to see gains in the market. That’s exactly what we’re seeing from CRDC in the market today. Currently (10:40), the stock is trading at $0.27 per share after a gain of 32.47% so far today.

What We Can Expect From CRDC Moving Forward

Moving forward, I have a relatively mixed opinion of what we can expect to see from Cardica, and it all depends on how far forward you plan to look. First off, it’s important to remember that price movements in the market tend to happen through a series of overreactions. While I would expect to see gains in CRDC following this incredibly positive news, 30%+ is indeed a bit much. So, I’m expecting to see a slight short-term correction, bringing the value of the stock down to a more sustainable rate. From there, I’m expecting to see slow and steady growth. The reality is that CRDC has received clearance to use its technology in the region that represents the world’s largest economy. This will open important doors to the company with regard to strong revenue opportunities. Also, Cardica stated that it plans on a limited launch which will happen relatively soon, pushing the technology to thought leaders. This is a great way to tackle getting the word out about the new technology and will likely lead to further revenue opportunities down the road. All in all, CRDC is looking great!

What Do You Think?

Where do you think CRDC is headed moving forward? Let us know your opinion in the comments below!

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