Shockwave Medical (SWAV)

SHOCKWAVE MEDICAL is a company that makes vascular related hardware for treatment of calcified (stiffened) arteries that can be made more pliable and therefore susceptible to stenting and other endovascular (not-open-surgery) repairs and procedures. Initially it had been approved for peripheral arteries. The concept is that some arteries that have high deposits of calcium become stiff and not amenable to endovascular repair, necessitating open repair instead. The shockwave devices act as a local lithotripser, using high frequency sound waves to interrupt and dissolve some of the calcium, allowing a vascular surgeon to more easily place stents, thereby preventing the need for open procedures, which necessarily are more costly and which increase utilization of medical resources.

Shockwave has more recently become of greater interest because of FDA-approved application for coronary arteries. By utilizing the shockwave device on calcified coronary arteries, they become more susceptible to placement of stents and obviate the need for CABG procedures. Again, this is able to substantially reduce medical resources, and this opens up a substantially increased market for SWAV.

If this sounds like it might be something similar to INARI, which had been featured on this board, it is, but only in a most superficial way. From my experience as a physician with some vascular exposure, the main difference is that the standard of care tends to be narrower for coronary artery applications. Inari in contrast offered devices to help dissolve actual clots in the venous system but there are a greater number of approaches to this management, which did not make it a must-have device for all such circumstances. The shockwave device on the other hand, is of greater necessity if an invasive cardiologist wishes to optimize a particular calcified coronary artery, as there are fewer alternatives beside sending the patient to open surgeries (CABG)

Shockwave’s stock continues to rise, whereas Inari has fallen or drifted. Shockwave continues to lose money and management indicates it will likely do so for the foreseeable future. From the most recent 10Q:

Revenue in millions 6 months ending June 2021/2020 is 69,982 vs 16,240 (300% increase)
Operating expenses in millions 6 months ending June 2021/2020 is 87,649 vs 53,230 (67% increase)
Losses from operation in millions 6 months ending June 2021/2020 is 17,667 vs 36,990 (50% improvement)
Net losses before taxes millions 6 months ending June 2021/2020 is 23,909 vs 36,849 (33% improvement)
Per share net loss, same time span, is 0.69 versus 1.16 and share dilution went from 31,900,259 to 34,914,361.
Cash and equivalent on hand between 12/31/20 and 6/30/21 increased from 50,423 to 84,268 (65% improvement) but total current assets is unchanged
Account receivable improved from 11,686 to 24,955 (120%) between 12/31/20 and 6/30/21
Cash in millions used for operating activities fell from 42,355 to 15,117 (nearly 2/3 drop)
Corporate accumulated deficit is $267 million
R&D increased slightly in millions from $19,991 to $22,092, same 6 month span and S&M increased significantly from $21 million to $49 million (approx 130%). General administrative costs increased slightly

Company comments on risk and uncertainties mostly incorporates COVID 19 pandemic interrupting emergent and elective procedures, and worldwide economies in general

I am unable to discern a TAM as it could grow substantially as emerging nations adopt advanced medical care.

If the real financial whizzes on this board can dive deeper into their balance sheet, I would be most curious about their assessment

Regards to all


Previous thread on this company in June located here.…

Reminder to Fools that there are search tools for Saul’s board to the right of every post that help with redundancy issues.


Brian, thanks for bring this to our attention. The company certainly has shown impressive growth. It estimates TAM at $8.5B according to a presentation on its website at… about one-third down the page. Search for “Targeted Segments Have a TAM of >$8.5” Since you have knowledge in this area, I wonder if think these TAM projections are reasonable. These numbers are from 2019 but SWAV has a $7+ market cap.

Their TAM continues to grow but estimates in my opinion are best guess. First, incidence of coronary artery disease (CAD) continues to increase (in spite of statin drugs), emerging countries are going to increasingly adopt CC (cardiac catheterization) and it is claimed they often have higher rates of CAD. Confounding this is the astonishingly different rates a vendor might get paid for their equipment from health care system to health care system just within the US, nevermind worldwide.

I had an easier time assessing Inari’s application. But I would say that, whatever happens, SWAV will grow, just a matter of how fast (i.e., will it maintain “growth stock” status)

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