Titan Medical isn’t quite ready to give up on its robotic surgery technologies, even amid a possible delisting from the Nasdaq and widespread layoffs. It also tried—but failed—to sell off the company after a two-month search for a buyer.
In a corporate update shared this week, Titan reported that it hadn’t found any takers in its hunt for an acquirer, which was announced at the end of November 2022 and included outreach to more than 40 potential buyers and “numerous extensions” to its previously set deadlines for the buyout.
In the update, Titan said the pool of possible buyers was limited by “the specialized nature of the company’s technology and the time to bring a product to market.” In their refusals to bite at the offer, the buyers, in turn, cited “the stage and focus of the company’s technology development” as well as financial limitations and a desire to focus on their own operations, according to Titan.
Without that bailout, Titan is now making several more cost-cutting moves. Chief among these is the decision to lay off 48 of its 66 employees, comprising around 72% of the workforce. The layoffs have already taken effect and include all 40 of the workers who were previously furloughed at the beginning of December 2022.
Titan added in the release that more layoffs could still occur “as needed” as the strategic review process continues.
But it’s not yet the end for the tech maker, which has devoted several years to developing the Enos single-access robotic surgery system. Titan said its remaining 18 employees will now focus nearly all of their attention on selling off either all or a portion of the company’s assets.
“We remain open to all strategic options,” CEO Cary Vance said in the update. “While we truly appreciate the impact of these changes on our stakeholders including our employees, our strategic review process has led us to believe that interest remains in the company’s assets and some of its technology. We are implementing cost reductions in an effort to preserve cash while maintaining the value of the company’s technology and other key assets in considering any further strategic alternatives.”
When it originally furloughed the 40 workers last December, Titan said it would narrow its focus only to the strategic review and the investigational device exemption (IDE) application it was in the process of submitting to the FDA. Now, however, though the remaining workers will continue to fulfill Titan’s contractually obligated development and supply work and other administrative needs, the company is stopping all further development of the Enos system—including work on the IDE application—to cut back on spending.
As recently as early November 2022, when it published a third-quarter earnings report, the company was still aiming to secure FDA approval to begin clinical trials in 2023 of the surgery system. Previous forecasts had suggested that the company could begin its U.S. rollout by early 2025 post FDA clearance.
Alongside that optimistic outlook, however, Titan’s financial situation was becoming increasingly dire: The earnings report showed that the company had only $11.6 million in cash and cash equivalents as of Sept. 30, well below the $32.3 million it had reported just nine months prior.
Plus, the decision last November to begin exploring a potential sale or acquisition came as the company neared a deadline to regain compliance with the Nasdaq’s listing rules or face removal from the exchange.
An initial warning arrived at the end of 2021, after Titan’s share price failed to rise above $1 for 30 consecutive business days. Despite securing two six-month extensions from Nasdaq to regain compliance, Titan’s shares remained firmly in penny stock territory throughout the year, and, at the end of 2022, the stock exchange ruled that it would be delisted from the Nasdaq—though the company has so far delayed that action by requesting a hearing on the decision.
Despite briefly clawing its way back to the $1 mark in mid-January, Titan’s stock has now plummeted to a new low after releasing the corporate update this week. It dropped to $0.30 on Wednesday—a 65% nosedive from the day before—and continued the downward slide throughout the following day, closing Thursday at just 25 cents per share.