© Reuters. Silk Road Medical (SILK) plunges on CMS proposed decision, prompting two downgrades
Silk Road Medical Inc (NASDAQ:) shares are under heavy pressure early Wednesday after the CMS released a proposed decision memo which makes percutaneous transluminal angioplasty (PTA) of the carotid arteries concurrent with stenting (CAS) on par with TCAR from a reimbursement perspective. The stock last traded down 20% and the news prompted two Wall Street downgrades.
“The Centers for Medicare & Medicaid Services (CMS) proposes that coverage of percutaneous transluminal angioplasty (PTA) of the carotid artery concurrent with stenting is reasonable and necessary with the placement of a Food and Drug Administration (FDA) approved carotid stent with an FDA-approved or cleared embolic protection device, for Medicare beneficiaries under the following conditions: Patients with symptomatic carotid artery stenosis ≥50%; and Patients with asymptomatic carotid artery stenosis ≥70%,” the CMS said in its proposed decision memo Tuesday evening.
Following the news, analysts at JPMorgan and BofA Securities downgraded the stock.
“While this event has been on most investors’ radars for some time, and many were expecting exactly this outcome, it nevertheless places a difficult overhang on the stock, one that will take time to either confirm or disprove,” JPMorgan analysts said in today’s downgrade report. “Better CAS reimbursement, plus concerns over volumes following a 1Q miss puts incremental focus on the achievability of 2024+ forecasts, and will remain a difficult overhang until either confirmed or proven otherwise. With this news further putting into question the susceptibility of TCAR’s adoption curve, we are downgrading Silk Road to Neutral.” They also lowered the price target to $28 from $50.
Meanwhile, BofA Securities analysts downgraded Silk Road Medical from Buy to Underperform with a price target of $28.00 (from $51.00).
