Reshape Lifesciences Inc (NASDAQ: RSLS) is having an overwhelmingly strong start to the trading session this morning, and for good reason. The company announced that it has entered into a new agreement with the VA. Of course, the news excited investors, sending the stock screaming for the top. Today, we’ll talk about:
- The contract with the VA;
- what we’re seeing from RSLS stock; and
- what we’ll be watching for ahead.
RSLS Gains On VA Contract
As mentioned above, ReShape Lifesciences is having a great start to the trading session this morning after announcing news of a VA contract. In a press release issued early this morning, the company said that its ReShape Balloon System is now available at the United States Department of Veterans Affairs (VA) medical facilities.
In the release RSLS said that this availability is the result of a previously-announced partnership with Academy Medical, LLC, a certified Service-Disabled Veteran-Owned Small Business that specializes in distribution of medical products to the VA and DoD.
The company said that the ReShape Balloon was added to the Academy Medical’s five-year sole source agreement with the US VA. This allows any VA surgeon in the United States to purchase the ReShape Baloon System from Academy Medical under a national contract.
In a statement, Dan Gladney, President and CEO at RSLS, had the following to offer:
We are very pleased that surgeons at VA medical facilities now have the ability to treat veterans fighting obesity with the ReShape Balloon… There are over one million eligible veterans who are struggling with obesity and they, as well as all patients, deserve access to every option that may help them fight this disease.We look forward to working closely with the VA and Academy Medical to increase awareness and training so that the ReShape Balloon can be offered as soon as possible.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dig into the market is that the news leads to moves. In the case of ReShape Lifesciences, the news proved to be overwhelmingly positive. After all, the company’s products are now available to a massive population that they were not available to in the past. So, this opens the door to a large stream of potential revenue. So, it comes as no surprise that excited investors are pushing the stock on a run for the top. Of course, our partners at Trade Ideas were the first to alert us to the gains. Currently (8:28), RSLS is trading at $3.74 per share after a gain of $3.72 per share. However, that gain is a bit deceiving. The stock went through a 1 for 140 reverse stock split. So, the gain is more like $0.97 per share, considering that the stock was trading at $0.02 before the reverse split, which would bring the value of the stock to $2.80 per share. Nonetheless, it’s still a big run!
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on RSLS. In particular, we’re interested in following the story surrounding the company’s continued work to commercialize its ReShape Balloon system. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!