Shares of the medical device maker dropped 24% in premarket trading as investors reacted to a proposed decision memorandum from the Centers for Medicare & Medicaid Services that could have implications for Silk Road's business.
Silk Road is the company behind the transcarotid artery revascularization (TCAR) procedure, which is a minimally invasive surgical procedure to protect against stroke by treating carotid artery disease. With alternative treatments having demonstrated certain shortcomings, Silk Road believes that TCAR has become the best-in-class option for patients.
However, analysts at J.P. Morgan (NYSE: JPM) downgraded Silk Road stock from overweight to neutral, slashing its price target from $50 to $28 per share. The move came after the federal agency overseeing Medicare proposed conditions under which patients suffering from carotid artery stenosis would be able to get coverage for percutaneous transluminal angioplasty procedures along with carotid stents.
Investors are always concerned when major funding sources make decisions that could adversely impact businesses, and Silk Road faces such a threat right now. The Medicare proposal isn't final yet, but shareholders are preparing for what could be a worst-case scenario for the TCAR procedure and Silk Road's future prospects.
https://www.fool.com/investing/2023/07/12/dominos-is-heating-up-but-this-healthcare-stock-is/
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