Shockwave Medical has been introduced to this board before as long ago as June 2021 and again in September. For whatever reasons, I did not pay much attention to those posts. Be that as it may, an SA article I read this morning got me interested enough to take close look. I’ve not got a track record of introducing companies to the board, so I welcome others to comment.
Briefly, this is a cardiovascular medical device company. They make catheters in a variety of diameters, suited to different locations in the body. Their products are primarily focused on treatment of calcified cardiovascular disease treated with Intravascular Lithotripsy (IVL).
What’s their moat? I assume they have a gaggle of patents, but beyond that, maybe not much. I think being first to market is probably it. What makes them unique is that they employ proven sonic technology for treating kidney stones to arterial calcium. In any case, the name of the company is derived from this technology. If you want to know more, I suggest you visit their website. https://shockwavemedical.com/
I’ve reviewed several quarterly reports, while I did not dig into every detail, I did take down some important numbers which I will share with you here. There’s supposed to be a way of sharing a table, but I don’t know how to do it, so I’ll wing it:
Revenue 1Q 2Q 3Q 4Q
2021 $31.9 $55.9 $65.2 $84.2
2022 $93.7 $120.7 $131.3 $144
2021 $24.0 $46.0 $ 54.2 $71/5
2022 $80.7 $104.0 $113.5 $126.5
2021 75.0% 82.0% 83.0% 85.0%
2022 86.2% 86.0% 86.0% 88.0%
Net Income (Millions) Note, the large 4Q22 was due to a tax situation
2021 -$23.60 -$0.40 $1.90 $12.9
2022 $14.5 $25.6 $35.0 $140.9
2022 $0.39 $0.68 $0.97 $3.71
If you are interested, their quarterly reports break down the revenue by product and geography. They have a presence in 68 countries and don’t see much opportunity for further geographic expansion. However, they do see more opportunity in Germany, Japan and China.
Most of their revenue growth in the first quarter of 2023 came from existing customers. They are expanding their efforts related to training and cultivation of specialists. They don’t provide quarterly guidance, but they raised their annual guide from $660M - $680M to $700M - $720M. they beat their 2022 guide by $14M.
During last quarter’s Q&A there was a lot of questions and discussion about reimbursements, I did not fully comprehend a lot of it, as it was product and procedure specific, but the general notion was that insurance (be it private or national) has covered most, if not all of their offerings.
Finally, there are rumors of Shockwave being in takeover discussions with Boston Scientific. When asked about it, the CEO said no comment, but then proceeded to say words to the effect that Shockwave has a very competent board and they will do right for the company and owners. Kinda, sorta seemed to me that he was confirming the rumors.