Less than a week after announcing that it’s actively exploring a possible sale, merger or other “significant transaction” to help stay afloat, Titan Medical has taken some cost-cutting measures to tide itself over.
For one, the surgical robotics maker said Tuesday that approximately 40 employees at its Chapel Hill, North Carolina, facility had been furloughed, effective immediately. That’ll help narrow Titan’s focus primarily to the strategic review process and to the investigational device exemption (IDE) application it plans to submit to the FDA so it can begin clinical trials of its Enos single-access robotic surgery system.
“These employees have made valuable contributions to the development of robotic-assisted technologies, and as we have communicated to the impacted employees, we look forward to bringing our employees back to work if and as soon as we are able,” CEO Cary Vance said of the “extremely difficult” but “necessary” decision to furlough some workers.
Despite taking measures specifically aimed at keeping the IDE filing process chugging along, Titan noted in the announcement that because the cost-cutting actions “will impact the timing and costs of the company’s milestones,” it has withdrawn all previous forecasts of the cost and timing of the development of the Enos system. Most recently, in June, Titan had suggested that submitting its IDE application in mid-2023 could put the robotic surgery system on track for FDA clearance and a subsequent market launch in early 2025.
On Wednesday, a day after the furlough announcement, Titan took another step to cut costs, suspending a special shareholder meeting that was planned for Jan. 12. The meeting had been set last month to allow shareholders to vote on a potential consolidation of common stock.
At the time, Titan described the proposed move as likely “the last option available” for the company to regain compliance with the Nasdaq’s listing rules. Its stock has been out of compliance for almost a full year: The company was hit with a warning at the end of last year after its share price had failed to trade above $1 for 30 consecutive business days.
To regain compliance, Titan’s stock must climb back above that point for 10 days in a row, but even with a six-month extension from the Nasdaq, that has proved much easier said than done. Throughout 2022, its shares have traded largely between $0.40 and $0.60; if they can’t reach $1 by Dec. 26, they’ll be subject to delisting from the stock exchange.
Though Titan’s stock has experienced an impressive upward sprint this week—reaching $0.86 on Monday afternoon, its highest point of the year by far and its first time in the 80-cent range since November 2021—it has already dropped back below $0.70 as of Wednesday morning.
In its Wednesday announcement suspending the shareholder vote, Titan acknowledged the possibility of delisting, noting that its stock could continue to trade after that point while it appeals the Nasdaq’s decision—though “there can be no assurance that the appeal process would result in any satisfactory outcome for Titan,” the company added.
Still, Vance said in the release that the vote’s cancellation was necessary to both save money and allow Titan to continue focusing only on the strategic review and IDE submission. The vote will be rescheduled to a future date “if appropriate and necessary,” according to the company, and could potentially shift to include a vote on any proposed transaction that comes out of the strategic review process.