- Titan Medical announced Thursday it is suspending development of its single-port robotic surgery system while it searches for new ways to fund its business.
- CEO David McNally blamed the move on "inhospitable conditions in the equity capital markets," pledging the company will continue to attempt to secure financing to continue work on its robotic system. During the third quarter, Titan withdrew a planned public offering of units, citing market conditions.
- The news is the latest shot across the bow for Titan, which warned investors in July its plan to submit a 510(k) application to FDA by the end of 2019 was in danger of falling behind schedule. In August, the company flagged cash burn concerns and pushed back the 510(k) application filing date to the first half of 2020.
The financial health of Titan is endangering its ability to continue to develop its Sport Surgical System, designed to allow for image-guided, minimally invasive procedures.
At the end of the third quarter, Titan reported it had $5.7 million in total assets remaining, down from $21.9 million the year before. Its liability picture also deteriorated, with $22.6 million in total liabilities on the books as of Sept. 30, up from $17.7 million the year prior.
On Aug. 29, Titan entered into a share purchase agreement with Aspire Capital, where the Chicago investment fund agreed to purchase $35 million worth of shares at the company's request until Feb. 28, 2022, according to a financial disclosure. During the third quarter Titan recieved proceeds of $3 million from the financial facility in exchange for 5.3%, or 1,777,325, of its common shares.
"We are actively exploring alternative financing options, including strategic investments, while drawing on our $35 million common stock purchase facility with Aspire Capital, in accordance with its terms," McNally said.
Before stopping work on the robotic system, Titan completed good laboratory practice study surgeries in preparation for its Investigational Device Exemption application, which the company previously said it intended to file during the fourth quarter. Titan spent $16.6 million during the third quarter on research and development expenses, up significantly from $9.1 million the year before.
McNally said the company now will delay its IDE submission until "our financial position is secured and product development is completed."
"The third quarter and recent weeks have been challenging for all of us at Titan," McNally said in a statement. "We are keenly focused on securing the funds necessary to complete the development of our system and subsequent regulatory filings."