Vicarious Remains in a Precarious Situation

Vicarious Surgical has managed to keep cash burn and development timelines on track, but the company continues to be in a precarious position.

The Waltham, MA-based surgical robotics company currently has enough cash to get through 2026, but it doesn’t expect to be commercial until 2027. So, the question remains: will Vicarious run out of money before its robot is ready for market?

Last year, Vicarious announced delays to its development timeline due to cost cutting measures and technological integration challenges. The company, at that time, predicted a delay to the overall program of between 12 months and 18 months.

On Monday, Vicarious reported zero revenue (as expected) and operating expenses of $17.7 million in the second quarter. The company is on track to burn through $50 million total in 2024 and exited the second quarter with $73.2 million in cash.

As for the development of its Version 1.0 robotic surgical system, Vicarious expects to begin system integration this fall, ahead of beginning a pivotal trial around this time next year. Trial sites are still being finalized.

Recent and upcoming developmental milestones

Adam Sachs, co-founder, CEO, and director at Vicarious, said the company completed a spring cadaver lab at the end of March and began the process of aggregating and deciphering the insights gained in the initial use of the system.

Related:'Vicarious Walks a Tight Rope with Limited Resources'

“From there, the necessary design optimizations were outlined at both the system and subsystem levels and the team promptly began the implementation of these system refinements,” Sachs said, according to SeekingAlpha transcripts of the call. “As it stands today, both pieces of capital equipment, the surgeon console and the patient cart, are in the latter stages of planned refinements.”

He also said the team conducted its first Version 1.0 four-minute assessment, evaluating the surgeon and care team bedside user experiences.

“Assessing human factors such as maneuverability, docking, draping, and instrument insertion throughout the development cycle ensures our design puts the end user at heart and will deliver a top-tier customer experience,” Sachs said. “Overall, we are pleased with the results of our recent formative assessment and plan to continue with our surgeon console formative mix.”

Following the integration milestone this fall, the company plans to complete informal verification and validation activities across the individual subsystems and full system, incorporating both cadaveric procedures and animal labs. The team will then transition into the formal verification and validation process, where Vicarious will undergo a range of comprehensive benchmark testing, including system-specific evaluations that assess procedural capability and safety, known as essential performance and safety testing, Sachs said. Such testing will include biocompatibility and electromagnetic compatibility testing to assess interference risks, environmental testing to gauge performance under various conditions, and durability testing to assess long-term reliability.

“All of this testing is done to ensure our device meets regulatory standards and is safe and effective for clinical use,” Sachs said. “Once our system satisfies the essential performance and safety standards, we can confidently proceed with our first clinical patients and subsequent clinical trials while simultaneously addressing the remaining verification and validation requirements related to human factors and manufacturing processes.”

Will the clinical and regulatory path of least resistance work for Vicarious Surgical?

Sachs said the company anticipates its first clinical patient around this time next year, and the clinical and regulatory teams are working to evaluate potential clinical sites outside the United States.

“We've watched a handful of other surgical robotics companies get successful de novo [clearance] actually even without any U.S. clinical data in the past year or two. And that has given us a lot of confidence,” Sachs said.

In other words, Vicarious is currently planning to file for FDA de novo clearance without any U.S. clinical data. Sachs said that doesn’t mean the company won’t eventually kick off a U.S. clinical trial, but not the current plan for generating initial clinical data. The company is currently thinking about South America and Australia for potential clinical trials, and possibly a few other countries where other surgical robotics companies have done clinical trials that resulted in successful de novo clearance.

“We think if [Vicarious] can show continued progress towards its milestones and subsequently hit them, investor interest may begin to increase,” Ryan Zimmerman, a medtech analyst at BTIG, wrote in a report Monday. “That said, shares will likely remain range bound given the company’s capital position.”