Outset Medical (OM) Stock: Why The Price Increased Today

By Amit Chowdhry ● Nov 29, 2021
  • The stock price of Outset Medical Inc (NASDAQ: OM) increased by over 5% after hours today. This is why it happened.

The stock price of Outset Medical Inc (NASDAQ: OM) – a medical technology company reducing the cost and complexity of dialysis – increased by over 5% after hours today. Investors are responding positively to Outset Medical announcing today that the U.S. Food and Drug Administration (FDA) has granted 510(k) clearance for a new sterilization method of the cartridge utilized in its Tablo Hemodialysis System, enabling full production in North America.

The Tablo cartridge is a single-use disposable that works in concert with the console to deliver dialysis treatment. And its “one-touch” design speeds and simplifies treatment set-up and take-down.

The new FDA clearance enables Outset to start cartridge production through a manufacturing partner in Mexico, facilitating the localization of the cartridge in addition to the Tablo console in North America. And in addition, the new location reduces the need for expensive and capacity-constrained air freight delivery of the cartridges, thus simplifying distribution and logistics for the company, its customers and patients.

Another benefit to the FDA clearance is the ability to start using an eco-friendly cartridge sterilization method. And e-beam is a non-ionizing technology that can be produced on-demand and does not involve toxic or potentially explosive chemicals.

KEY QUOTE:

“This clearance is an important milestone on our roadmap to continued gross margin expansion. In addition to cost reduction, we also are now better able to optimize our manufacturing process and mitigate current supply chain challenges around lead time, capacity and logistics.”

— Leslie Trigg, President and Chief Executive Officer of Outset

Disclaimer: This content is intended for informational purposes. Before making any investment, you should do your own analysis.