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Surgical Robotics Firm Titan Medical Gets Desperate
The company has struck out so far in its pursuit of strategic alternatives and is down to a skeleton crew.
February 15, 2023
3 Min Read
Image credit: grinvalds / iStock via Getty Images
Desperate times call for desperate measures, and surgical robotics player Titan Medical certainly appears to be getting desperate.
The company, which already was down to a skeleton crew as it struggles to find a potential buyer, laid off four members of its leadership team this week.
The Toronto, Ontario-based surgical robotics company first showed signs of trouble in 2019 when it delayed development of its single-port robotic system twice due to a lack of financing.
But the writing on the wall really became clear in December as Titan Medical began reviewing strategic alternatives, including a potential merger or sale of assets. The company also furloughed 40 employees. Those employees, along with eight additional employees, were laid off last week, leaving Titan with a workforce of just 18 employees. That's when Heather Knight resigned from Titan's board and from its audit committee.
This week, the company laid off Tammy Carrea, VP of quality and regulatory affairs; Kristen Galfetti, VP of investor relations and corporate communications; Eric Heinz, VP of market and corporate development; and Chris Seibert, VP of upstream marketing. Each of these executives plan to remain available to assist the company with its strategic review process as independent consultants.
Titan also said it has been notified by Nasdaq that the company is no longer in compliance because the audit committee must consist of at least three independent members and Knight's resignation left just two independent directors on the audit committee.
The surgical robotics company has now halted all expenditures related to the development of its Enos single-access robotic-assisted surgical system, including work on an investigational device exemption filing with FDA.
No takers for Titan
Titan's leadership team has reached out to more than 40 potential buyers, engaged in management presentations, and cooperated in confidential due diligence reviews, but none of these potential buyers expressed an interest in acquiring the business. The company said in last week's update that it offered deadline extensions to a number of these parties, but none submitted a proposal.
Titan attributed the lack of interest to the specialized nature of the company's technology and the time it would take to bring a product to market. The company also cited current economic environment and market conditions that are providing challenges to potential buyers, strategic partners, and investors.
The company's board has decided to prioritize the sale of all or some of its assets, including its intellectual property portfolio of more than 235 patents and patent applications.
Tough times for surgical robotics
Titan may be hurting more than its peers, but it is far from the only surgical robotics company that is making tough decisions in 2023. Earlier this week, Vicarious Surgical said it is taking a "calculated risk" by trimming 14% of its workforce in addition to other spending cuts.
"We are operating in a very different economy than two years ago when we took our company public," said Vicarious CEO Adam Sachs. "The cost of capital has dramatically increased, particularly for pre-revenue and emerging growth companies and thus, the meaning of efficient use of capital has dramatically changed as well."
Vicarious is developing a surgical robotics system that combines human-like mechanical arms with virtual reality technology designed to virtually “transport surgeons inside the patient when performing minimally invasive surgery.” FDA granted the system a breakthrough device designation in December 2019.
Vicarious went public in 2021 through a $1.1 billion special purpose acquisition corporation (SPAC) merger with D8 Holdings. But the global shortage of semiconductor chips has been tough on Vicarious since the SPAC deal closed.
Still, Sachs said the company remains on track to finalize version 1.0 of its surgical robotics system in the first half of 2023. Vicarious unveiled a finalized Beta 2 version of its surgical robotics system in December.
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