The Bedlam in Young Goliath

By DrKSSMDPhD, May 7, 2016

[Ed. Note: Dr. KSS writes about medicine and biotech stocks for the Irregulars. He has agreed to our trading restrictions, choses his own topics, and his words and opinions are his own. All of his previous articles and most recent comments can be found on his Stock Gumshoe page.]

“I have seen you shake
And I know what it cost you
I have heard your words
I am big on your noise
My eyes aren’t big enough
‘Cause I can’t see your hands
I can’t see what you hold

“I am growin’ now
As I watch you fade
Now I know what you know
And I’ll break the chains that you have made
This chain you’ve made for me
Yeah, I will pull you down
I know I’ll fail in style
I long to touch your genius hands

“I am growin’ now
As I watch you fade
Now I know what you know
And I’ll break the chains that you have made
This chain you’ve made for me
Yeah, yeah, yeah, I will pull you down
I know I’ll fail in style
I will, I swear
I’m gonna shake your genius hands.”

—–Everclear, “Your Genius Hands,” World of Noise

Let’s smash the glass on the fire extinguisher case and answer the question, “What just happened?” We are speaking of TransEnterix ($TRXC), the Morrisville, NC, abdominal robotics surgical company whose next generation device, SurgiBot, was recently denied device marketing approval by the FDA. There’s the fact of the denial—ugly for the company—and then the manner of the denial, a lot like full chords being dissonantly struck by both hands on a badly-tuned piano. During the Passover weekend, we kibbutzed with some people whose insights we value, churned that, slept on it, and came with what I regard as a glimpse of what really happened and why.

Trixie (my term for $TRXC) fell and skinned her knee. Or was she pushed?

We had feared the worst when, in late winter, FDA people communicated with $TRXC that their assessment and ruling would be delayed til “mid-April.” Readers needs to understand that in an FDA review cycle, here a gravid nine months, the FDA does not actually review the application and supporting documents that entire interval. A submission package is first gone over ...

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