The layoffs, affecting 131 workers, are slated to be complete this week, the Redwood City, Calif.-based company said, including cutting its field sales force by nearly half, from 60 to 32.
“The plan is designed to focus the company’s commercial efforts on driving catheter utilization in its strongest markets, around its most productive sales professionals,” Avinger said. “This workforce reduction is designed to reduce operating expenses while continuing to support major product development and clinical initiatives. The strategic reduction in the field sales force is designed to maintain robust engagement with higher-volume users of the company’s Lumivascular technology by its highest performing sales representatives and position the company to return to growth in 2018 behind the launch of its next-generation products.”
Strategic alternatives include raising funds from outside backers, 3rd-party distribution outside the U.S. and a sale or merger, the company said.
“Avinger has achieved a great deal in the last year by bringing Pantheris OCT-guided atherectomy to market, increasing our installed base of Lumivascular accounts and presenting compelling 2-year data from our Vision study. However, we have also encountered challenges with product reliability and the broad commercialization of our Lumivascular technology. Consequently, we have decided to make adjustments in our business as we prepare for the launch of our next-generation Pantheris and below-the-knee products in late 2017 and early 2018,” president & CEO Jeff Soinski said in prepared remarks. “Our organizational realignment, cost reduction measures and the exploration of strategic initiatives are all intended to maximize shareholder value.”
Avinger said it expects the moves to cut its cash burn to about $7 million per quarter by the 2nd half of the year, down from about $13 million. The company said the $23.0 million it had in cash on hand as of March 31 is enough to get through the year.
The company also put out its preliminary 1st-quarter sales numbers, which came in well below the consensus $4.95 million forecast on Wall Street, at $3.5 million.
AVGR shares closed up 6.7% yesterday at $1.60 apiece.