There is a bit of relief for Conformis, a maker of custom orthopedic implants, which has been impacted significantly by the novel coronavirus (COVID-19).
The Billerica, MA-based company said in a release it received $4.7 million under the paycheck protection program (PPP) offered by the U.S. Small Business Administration.
In response to the coronavirus (COVID-19) pandemic, the Coronavirus Aid, Relief, and Economic Security Act authorizes the SBA to make available low-interest rate loans to qualified small businesses under the PPP. According to the terms of the PPP, all or a portion of the loan may be fully forgiven if the funds are used for payroll costs (and at least 75% of the forgiven amount must have been used for payroll), interest on certain other outstanding debt, rent, and utilities.
Nearly a month ago, Conformis said it was going to furlough about one-third of its workforce because of sharp declines in procedures from the coronavirus pandemic.
Last month, Kyle Rose an analyst with Canaccord & Genuity wrote in a research note that the vast majority of orthopedic procedures would be deterred until the foreseeable future.
“Questions we’re currently asking: When do we hit a point where we can no longer make up lost procedures in 2020 by doing weekend surgeries,” Rose wrote in research notes. “What are the impacts to capital sales in 2020? How will the dynamic of the shift to the ambulatory surgery centers/outpatient be impacted/ accelerated by hospitalization concerns?”
Conformis isn’t the only company facing hardship because of the negative impacts of COVID-19.
Obalon Therapeutics said it would explore financial and strategic alternatives because of the impact of COVID-19 on elective procedures. The weight loss solutions company said that these alternatives could include equity or debt financing; a sale of the company; a business combination; or a merger or a reverse merger with another party.
And late last month, Second Sight Medical Products announced it was winding down operations and laying off 84 of its 108 employees. The Sylmar, CA-based company had developed a cortical stimulation device intended to provide useful artificial vision to individuals who are blind due to a wide range of causes.
Late last week, Intuitive Surgical noted that it was facing some uncertainty, even though it managed to beat estimates. The Sunnyvale, CA-based company said procedures with its da Vinci robot were trending at the higher end of expectations during the first two and half months of 1Q20 but declined sharply in the bottom half of March.