It’s taken two years, but Surmodics has finally secured the long-awaited premarket approval from the FDA for its SurVeil drug-coated balloon.
Surmodics announced the good news in a Tuesday press release, in which CEO Gary Maharaj described the agency’s approval as “one of the most important achievements in Surmodics’ history.”
The SurVeil balloon is meant to be used in percutaneous transluminal angioplasty procedures to treat people with peripheral artery disease. The device is inserted into a blocked femoral or popliteal artery so that once the balloon is inflated, it can help hold open the blood vessel and allow blood to resume flowing normally. The balloon is coated in the chemotherapy drug paclitaxel to help prevent recurring blockages in the artery.
The FDA approval was a long time coming for Surmodics. The company originally submitted the SurVeil device for regulatory review in mid-2021, but the agency responded with a request for more clinical data. Surmodics sent in the additional data in late 2022, but once again, at the start of this year, the FDA requested further information about the device before making a final decision.
In a January update, Surmodics said that this time around, the FDA wasn’t looking for any new clinical data but rather some additional details about the SurVeil system’s biocompatibility and adjustments to its labeling.
During a call with investors a month later, Maharaj said that the company was preparing to share details with the FDA about its proposed approach to fill in those gaps and was hoping to receive the agency’s green light on that plan by May. From there, between carrying out the plan and waiting for the FDA to rule on the subsequent re-submission—which could take up to six months alone—the CEO suggested that it was somewhat optimistic to hope that approval would arrive before the end of the year.
In the meantime, Surmodics began taking steps to make up for the lost SurVeil revenues it had planned on earning this year: The company said at the time that it would lay off about 13% of its approximately 450 workers while also reducing other costs and narrowing its focus only to the investments and R&D work with the fastest growth potential, all with an aim of trimming about $10 million in costs for its fiscal year 2023.
The midyear approval, then, is a major boon to the company. Indeed, its stock price surged steadily upward with the news on Tuesday, climbing about 15% over Friday’s closing price by midday—briefly hitting the $29 mark, a level not reached since the days just before the savings plan was announced in February.
With the SurVeil balloon’s approval, Surmodics also qualified for a milestone payment of $27 million from Abbott, which has exclusive global licensing rights to the device. The approval came just in time: Though Surmodics had already missed the Dec. 31 deadline for a $30 million payout from Abbott, the FDA’s nod kept it from passing the next threshold on June 30, after which the milestone payment would’ve dropped to $24 million.
Now that the device can be sold throughout the U.S., Surmodics will manufacture the SurVeil systems for Abbott and will collect not only revenues from its sales to Abbott but also a share of Abbott’s profits from distributing the device.