Asensus Surgical Inc (ASXC)

[investora2z]

The correction has run a bit deep, and the stock is now down 19% over the last one month. It is down 24% from the 52 week high made in August. However, despite the correction it has delivered great returns and has appreciated by 385% on a ytd basis. The merger with TransEnterix has changed the sentiments for the company. Synergies are expected between the two companies, and the combined entity is financially in a better position. The funding obtained by SafeStitch will help provide the resources required for development and commercialization of its products, especially SurgiBot surgical robotic system. The company got $30.2 million funding through private placement of equity, with TransEnterix contributing 65%, and Dr. Frost and other investors contributing 35%. The huge investment by Dr. Frost and his joining the board of TransEnterix is also a major reason for investor interest in the stock. The investment indicates the faith in the future prospects of the combined entity. Frost's investments in the pharma / biotechnology sector are well known, and his recent investment in Biozone (BZNE) is also promising. Biozone owns the high potential proprietary drug delivery technology QuSomes. The merger is expected to help TransEnterix enhance its ability to commercialize flexible minimally invasive surgical technologies. Joseph Slattery, who joined the company recently, is expected to help in development and commercialization of SurgiBot as he has relevant experience in medical technology companies. However, it is important to remember that the potential of the merger will be realized only over time. The positive results will take time to get reflected in the top or the bottom-line. Since the stock has already appreciated significantly over the past 7-8 months, it is good to remain a bit cautious. However, the power Frost's support should not be ignored, and it is possible that the stock starts another leg of uptrend.