Cardica (NSDQ:CRDC) said it suspended the launch of its MicroCutter Xchange 30 surgical stapler so it can focus on improving the product, a move that may also result in a realignment of its operations. The news sent CRDC shares down more than 22% yesterday.
The Redwood City, Calif.-based company said about 220 units of the product were distributed as part of a “controlled commercial launch” to solicit feedback on its performance. Cardica said expects surgeons to continue using the approximately 100 units that remain in the field. The company plans to conduct a full commercial launch of the product once certain improvements are made.
Cardica will also reexamine its business “to focus on conserving cash by aligning spending with its focused plan going forward,” the company said.
"After further analysis of Cardica’s operations, including timing and budget, Cardica will provide an update to stockholders," according to a statement.
Shares of the micro-cap stock closed down 22.4% at 66¢ apiece yesterday and were down another 2.3% today to 64.3¢ as of about 10:15 a.m. Eastern.
Meanwhile, 1 of Cardica’s major stakeholders, Broadfin Capital, launched a proxy battle to replace 3 of the company’s long-time directors with its own nominees. In a letter sent to shareholders last week, Broadfin accused the board of poor corporate governance.
“Since Cardica’s IPO in 2006, the company’s stock price has plummeted by an astounding 91%, the company has missed analyst expectations 78% of the time and milestones in 59% of the cases, and universally compares terribly to all relative indices over any measurable period of time. In addition, as a result of continued operational missteps and the ineffective oversight of a board that lacks both independence and surgical markets expertise, Cardica is poorly positioned to capitalize on its unique and valuable ‘staple-on-strip’ technology,” Broadfin alleged.
Cardica’s annual meeting is scheduled for Dec. 11, according to Broadfin.
