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Acutus to Reduce Workforce in Restructuring Plan

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The company is taking the measure because of COVID-related challenges including hospital access constraints and staffing shortages.

Acutus Medical said it will undergo a corporate restructuring that could result in a reduction of its workforce. The arrhythmia management company said it was undertaking the measure because of COVID-related challenges including hospital access constraints, restrictions on new technology evaluations, and staffing shortages that may impact the near term.

In a release, Acutus said its planned reduction in force (RIF) and additional cost reduction measures are expected to result in annualized operating expense savings of $23 million to $25 million compared to 2021.

Acutus said it expects that operating expense savings, cost reductions in manufacturing operations, and working capital improvements will result in a 30% to 40% reduction in quarterly cash burn exiting 2022 compared to 2021. The company said it would provide further details on its fourth quarter earnings call currently scheduled for March 10, 2022.

“We have undertaken a detailed review of our strategic priorities, the external environment, and cost structure and are restructuring the company to sharpen our focus and strengthen our financial position,” Vince Burgess, President & CEO said in a release. “While challenging, this restructuring is a critical step in positioning Acutus for the future, and we are committed to treating impacted employees with respect and support through this period of change.”

Acutus announced preliminary Q4 revenue of $4.2 million to $4.4 million (63% y/y at the midpoint), within the implied Q4 guidance range of $4.1 million to $4.6 million. Marie Thibault, an analyst with BTIG, and former managing editor of MD+DI, wrote “revenue was in line with our $4.2 million estimates and slightly above consensus of $4 million.”

 “We note Acutus ended Q3 with $135M in cash and equivalents,” Thibault wrote in research notes. “While these efforts may help alleviate cash burn pressure in the near-term, reductions to SG&A and R&D may limit the company's ability to meaningfully grow the top-line and scale operations, and may still result in the need for future raises.”

 

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