Silk Road Medical stock tanks after CMS decision on carotid artery stenting prompts analyst downgrade

Shares of Silk Road Medical Inc. (SILK) tanked 21.9% toward a more-than three-year low in premarket Tuesday, after an unfavorable government decision regarding Medicare coverage of carotid artery stenting. The Centers for Medicare & Medicaid Services (CMS) proposed that coverage of percutaneous transluminal angioplasty (PTA) of carotid arteries concurrent with stenting (CAS) is "reasonable and necessary" with devices approved or cleared with the Food and Drug Administration. J.P. Morgan analyst Robert Marcus followed by downgrading Silk Road to neutral, after being at overweight for at least three years, as the CMS decision means CAS is now on par with Silk Road's treatment of carotid artery disease, called TransCarotid Artery Revascularization (TCAR). "While this event has been on most investors' radars for some time, and many were expecting exactly this outcome, it is nevertheless places a difficult overhang on the stock, one that will take time to either confirm or disprove," Marcus wrote in a note to clients. The stock has plunged 51.8% year to date, while the S&P 500 has advanced 16.6%.

-Tomi Kilgore

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07-12-23 0940ET

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