**TMDX – thoughts prior to 2Q ER**

Revenue (and YoY growth %) from last 6 ER:

2021 – Q4 - $9,668 (26%) - this was the first Q after Heart OCS received FDA approval

2022 – Q1 - $15,880 (123%)

2022 – Q2 - $20,521 (151%)

2022 – Q3 - $24,300 (352%) - the year ago Q was very low, so this % is deceptive

2022 – Q4 - $31,400 (224%)

2023 – Q1 - $41,600 (162%)

My estimate for the upcoming ER for 2Q23:

2023 – Q2 - $59,455 (189%) - (see below for my assumptions)

Assumptions for 2Q2023 Revenue:

  • From the 9/12/22 Morgan Stanley Conference – the CEO stated that the selling price of the OCS consumable was $65k to $70k per patient, and that the NOP service adds an incremental $15k to $20k over the cost of the OCS disposable. These prices were from 10 months ago, so they are probably higher today. For my 2Q estimates I assume that total price for liver is $70k, and that total price for heart and lung are $90k per patient.
  • From my July 12 post of transplant numbers for this year (based on publicly available transplant volumes) I estimate that:
    • Q2 Liver transplants exceeded Q1 by 172
    • Q2 Heart transplants exceeded Q1 by 137
    • Q2 Lung transplants exceeded Q1 by 126
  • We do not know if all of the increase is attributable to TMDX. If I assume 50% of the additional Q2 transplants were provided by TMDX, and using the price estimates from the first bullet above, the additional Q2 revenue for TMDX should be ~ $17.8M. Based on those estimates, the Q2 total Revenue would be $59.4M, or 189% growth YoY.
  • If I assume they grow revenue by another $7M in Q3, then the YoY growth for Q3 will be ~ 173%. (This obviously assumes that my Q2 estimate is accurate).

I could be wrong in my estimates, so don’t invest just based on my guesses. Do your own work.

Last quarter they had gross margin of 69%, and they were almost breakeven. It’s possible they could be profitable this quarter.

OCS for lung transplants has been a laggard for the last year. After thinking about this more, I bet that TMDX was intentionally not trying to expand in Lung because of their manufacturing capacity constraints. They were sold out just in heart and liver, so that is probably a big part of why lung looked like it was not growing. Now that the capacity constraint is gone, I think it’s possible we see a big jump in lung numbers starting this quarter.

International sales have also been lagging in the last year. It’s possible the reason is the same as I said above for US lung – TMDX was sold out just in the US, so why push for international expansion? They have all the growth they can handle right now just in the US market. So, we could also see some higher international numbers in the next couple of quarters.

Future Growth Potential:

  • I think TMDX stated that they did ~ 10%-15% of the total heart/lung/liver transplants in the US last year. There is a lot of room for expansion just with the existing products and the existing quantity of transplants.
  • In addition, the total number of transplants will continue to increase because of TMDX being able to provide more “usable” organs. The limiting factor for number of transplants in the past has been the number of organs available. TMDX OCS technology significantly expands the number of organs that can be used.
  • There will also be continued growth from the TMDX “National OCS Program” – NOP. This is the service that TMDX provides to collect and deliver organs. They are continuing to expand this to additional launch sites in the US and they earn additional revenue from this service.
    • NOTE - right now, they are only offering NOP on organs where they can utilize the OCS device. Once they reach a critical mass, I think it is possible that they could also offer this service to collect and deliver other organs.
  • They are planning to develop their own delivery network in the US. There will be costs associated with this, and it will probably be lower margin, but it will add to the overall revenue growth – and strengthen their moat.
  • OCS device for kidneys. They have said that they plan to start working on this in the second half of 2023.
  • International growth - right now they have almost no revenue from international sources. This is a very big opportunity for the future.
  • There is currently a governmental organization that oversees allocation of donated organs. There are a lot of issues with that organization. There has been discussion that TMDX could eventually take over all the responsibilities of that governmental organization.
  • The first ever robotic assisted minimally invasive lung transplant was done in the last few months. It’s very possible that in the future we will see more techniques like that used for transplants which might help increase the demand further for organs.
  • People are living longer, so there may be more opportunities for transplants in the future. In the past, candidates for transplant were limited because there were so few organs that could be used. TMDX changes the paradigm and could open entire new patient cohorts to be considered for transplants.

I heard on a recent Rule Breaker podcast that one of the things the RB team looks for is a company that offers a “Win-Win” scenario for itself and its customers. I think TMDX is one of the best win-win examples you will find. I have said this many times in the past, but I’ll repeat it here for any that did not see previously:

  • Win / Win / Win / Win / Win / Win / Win / Win: The TransMedics OCS product is a benefit for all stakeholders in the transplant chain:
    • Donors’ families win because more organs can actually be utilized – and not thrown away.
    • Patients win because they get a healthier organ, and they have a shorter waiting time to receive a transplant.
    • Transplant Doctors win because they have better outcomes in surgery and can save more lives.
    • Transplant Doctors and staff win because they no longer have to go on trips in the middle of the night to collect donated organs.
    • Hospitals win because they can make more money by doing more transplants.
    • Hospital staff win because more surgeries can be done during the day – not as emergency surgeries during the night.
    • Insurance companies win because they actually save money with use of the OCS (compared to the cost of extended hospitalizations for people waiting for transplants).
    • Organ Procurement Organizations win because they can make more money and help more people by utilizing more donated organs – and meet government goals to increase the number of transplants.


  • Relatively little insider selling.
  • 94% of shares are held by institutions (according to Yahoo Finance).
  • Founder led. The founder started the company over 20 years ago and he led them through all the extensive trials and FDA approval process – which was a challenge.
  • Very strong moat – which I have discussed in another recent post.

Chart (presented without comment):


https://investors.transmedics.com/node/9121/pdf TMDX to acquire Summit Aviation. At first when TMDX first broached the subject of buying an aviation company; I cringed at the thought of buying and maintaining an airplane fleet. I even sent them an email urging them to consider partnering with someone like Bajit for transport needs. But on second thought, I see their patient base as the most inelastic market of any company I have seen. Patients really need those organs. From AnalogKid70’s breakdown in costs, it seems that insurer’s are willing to pay whatever. If TMDX could take over NOP, it would almost be game over as it relates to competition. But all will be unveiled in the fullness of time. TMDX has managed the market thus far. I have to give them the benefit of the doubt.



In previous years I broke down how much insurance companies save by getting patients faster transplants. Patients in end-stage organ failure are some of the most expensive for insurance companies to cover. My dad received a lung transplant about 10 years ago - I’ve seen it first hand. He was in hospital emergency rooms and had extensive stays on critical care wards. All of that cost many hundreds of thousands of dollars. Paying the TMDX fee is far cheaper.

In addition, patients have less post-surgery complications with organs shipped on the OCS device. That also saves the insurance company a lot of $. Win/Win/Win…

Side note - if my Q2 estimates are right, and if TMDX actually provided more than 50% of the additional transplants (as I used in my calculations), then the Revenue could be higher than what I guessed.
Reminder - I’m just a regular guy on the internet, so I could be completely wrong also.

Final thought - there was a strong dip down in the stock price on the aviation news release, and it immediately bounced right back up where it had been. Good show of strength in my opinion.


New News Release

This was unexpected. Seems like they are trying to corner the perfusion market and eliminate potential competition. Boss move. :muscle:

TransMedics Acquires Warm Perfusion EVOSS™ and Cold Perfusion LifeCradle® Technologies from Bridge to Life

ANDOVER, Mass., Aug. 2, 2023 /PRNewswire/ – TransMedics Group, Inc. (“TransMedics”) (Nasdaq: TMDX), a medical technology company that is transforming organ transplant therapy for patients with end-stage lung, heart, and liver failure, announced today that is has acquired from Bridge to Life Ltd. (“Bridge to Life”), assets and intellectual property related to the Ex-Vivo Organ Support System (“EVOSS”) and LifeCradle Heart Preservation Transport System (“LifeCradle”) technologies. EVOSS is a warm perfusion technology designed for lung and heart transplantation and LifeCradle is a cold perfusion technology designed for heart transplantation. TransMedics intends to further develop these technologies as the company seeks to expand its product offerings and indications for organ transplantation.


I saw that as well. Looks like a small bolt-on to build out the technology base. I found the comment it might increase their indications interesting. I wonder if that could eventually expand TMDX’s usage in either the US or elsewhere.

The bigger news of course is the charter acquisition. Since the market barely blinked, kudos to management for messaging the plan so clearly. I’m sure we’ll hear more shortly.


“I wonder if that could eventually expand TMDX’s usage in either the US or elsewhere”

That is an interesting thought stocknovice. I have wondered if it might be tough for TMDX to sell the OCS devices outside the US due to the high price. If they had another device, maybe they could offer that at a lower price point outside the US, and still justify the premium price for the OCS in the US because it has the full FDA approval.

Personally, I think this purchase is mostly to take a competitor out of the market. TMDX might not admit it, but unless I hear a real compelling alternate reason, that’s my primary theory.


I did just read that Bridge To Life (the company that TMDX bought the IP from) is still developing and testing a warm perfusion system for abdominal organs - liver for example. So, they are going to continue to be a competitor. The article said they sold the IP to TMDX partially to get funds to support continued qualification work on the abdominal perfusion product.

Commenting on the transaction, BTL CEO Don Webber said, “This transaction enables us to strengthen our financial position and adequately fund the continued expansion of our leading share in the global preservation solutions market as well as continue the development of our VitaSmart abdominal organ perfusion device. In May 2023, we announced the completion of enrollment of our pivotal HOPE trial, and we expect to submit our Premarket Approval application to the Food and Drug Administration later this year.”


Good find @AnalogKid70.

I noticed only heart and lungs were mentioned in the release and not livers. That fills in the gap. Pure speculation here, but I wonder if TMDX circles back on the abdominal perfusion tech if Bridge To Life makes progress with the trial.


“I wonder if TMDX circles back on the abdominal perfusion tech if Bridge To Life makes progress with the trial”

It’s possible, but I think the liver IP is probably less attractive - and there is less incentive to try to take them out as a competitor in liver. There is already another liver perfusion system available that has FDA approval from a different company.