The stock is up 485% on a ytd basis. Announcement of the merger with TransEnterix has led to a huge spike in the stock over the last one month, and it has risen by 100%. CEO of TransEnterix will serve as CEO of the combined entity which will be called TransEnterix. Importantly, billionaire investor Dr. Phillip Frost, who has a significant stake in SafeStitch, has joined the board of the combined entity. It is expected that the merger will help TransEnterix to build upon its ability to bring flexible minimally invasive surgical technologies to market. The funds raised by SafeStitch recently will help TransEnterix develop its robotic system SurgiBot(TM). As mentioned in an article on SA, the merger will give Safestitch the necessary resources to continue developing devices and to begin marketing them. So the merger is expected to help both entities. SafeStitch raised $30.2 million in a private placement of its equity, with TransEnterix investors contributing $19.7 million (65%) and Dr. Frost along with other investors, putting in $10.5 million (35%). Dr. Frost, who is known as an astute investor in the pharma / medical devices sector, has been active with several of his companies recently. He has been continuously exploring synergies between the companies where he has a stake. In the pharma sector, his company OPKO Health (OPK) is working with Biozone (BZNE), another of his companies, to use Biozone's proprietary drug delivery technology to help reduce cost of manufacture of formulations. The technology (QuSomes) is stated to have tremendous potential for Biozone. SafeStitch has already delivered great returns recently, but further movement of the stock will depend on how things progress as far as revenue generation / profitability is concerned. Visible benefits of the merger may take time to reflect in the numbers. So after such a huge rise, it is good to be a bit cautious.
