The uncertain times brought on by the COVID-19 pandemic have affected businesses worldwide, and several sectors of medtech industry are projecting hits to their bottom lines.
A number of companies have announced decisions to withdraw financial guidance, cut hours and/or staff, among other major business decisions. Initial impacts of the global pandemic on Wall Street showed struggles for a lot of these companies, and many can’t forecast improvements yet.
In recent days, even more companies have been forced to make wide-ranging decisions, both positive and negative, in direct response to the effect that coronavirus has had on the medical space and global economics as a whole. You can track the top 100 medtech companies’ performance in the Medical Design & Outsourcing Medtech 100 Index.
Hologic developed the Panther Fusion SARS-CoV-2 assay that was among the earlier COVID-19 diagnostic tests to gain emergency use authorization from the FDA last month after winning government funding to develop it. However, the company announced today that it is withdrawing its 2020 guidance due to the uncertainty brought on by COVID-19.
The Marlborough, Mass.-based company said the coronavirus hit its business hard in late March. Sales of breast health products were weaker because of restricted access to facilities, while sales of GYN surgical and diagnostic products dipped as a result of the deferral of elective procedures and office visits.
In reporting its first-quarter financial results on Jan. 29, Hologic said it expected to log adjusted EPS of $2.63–$2.67 this year with sales expected to be between $3.238–$3.268 billion. However, with COVID-19 expected to continue to negatively impact future revenue, the company is withdrawing those numbers and can’t quantify the net effect of the virus.
Hologic also withdrew its second-quarter guidance ahead of reporting its full results for the three months on April 29. The company now expects to report total revenues of $756.1 million, a decrease of -7.6% compared to the prior-year period.
“Our second quarter revenue results reflect the strong underlying momentum that has been building at Hologic over the last few years, and give us confidence that we will emerge from the current COVID-19 pandemic as a stronger company,” Hologic chairman, president & CEO Steve MacMillan said in a news release. “Disruptions caused by COVID-19 had a significant negative impact on sales in late March, as elective procedures and appointments were deferred, and our customers focused on responding to the pandemic. It has become clear that a lynchpin of that response is increasing diagnostic testing for the virus, and we are proud to be playing a leading role in this effort.”
Myomo announced that it is expecting revenue delays because of COVID-19 and, as a result, it is suspending its guidance for 2020.
The Cambridge, Mass.-based company offers custom-fabricated devices with required in-person contact and delivery that are both being impacted by coronavirus restrictions. In addition, the company anticipates a delay in the launch of its MyoPal product later this year because of the concern over in-person interactions.
“With COVID-19 affecting our U.S. and European markets, our primary concern is for the health of our employees and the patients seeking a MyoPro,” CEO Paul Gudonis said in a news release. “As a result, revenues for the second quarter and possibly the third quarter of 2020 are expected to be negatively impacted.”
Myomo said it ended the first quarter with approximately $13.7 million in cash and equivalents with preliminary cash burn at approximately $2.4 million.
“We believe that Myomo is well-positioned to continue building the patient pipeline and authorization backlog through direct-to-patient online advertising, while conducting patient evaluations via telehealth video conferencing,” Gudonis said. “Importantly, we have sufficient inventory in our supply chain and expect to have the requisite fabrication capacity available to manufacture and deliver devices to patients quickly when public heath restrictions are eased.”
Aortic disorder treatment developer Endologix announced yesterday that it is withdrawing its financial guidance for 2020 in the wake of COVID-19.
The Irvine, Calif.-based company anticipates that the virus will continue to have a negative impact on its business. Last month, it saw deferrals of abdominal aortic aneurysm procedures as hospitals’ focus shifted toward treating COVID-19 patients.
Endologix believes the majority patients whose procedures have been deferred will require treatment once hospitals regain their capacity, but in the meantime, the company said it has to closely monitor its balance sheet with an eye on improving liquidity.
Livongo Health (NSDQ:LVGO)
Diabetes treatment developer Livongo announced an increase in its projected first-quarter revenue guidance as it continues to monitor the situation regarding COVID-19.
The Mountain View, Calif.-based company’s new expected revenue is in the range of $62 million to $64 million, compared to prior guidance of $60 million to $62 million.
CEO Zane Burke said in a news release that Livongo is in the unique position of assisting vulnerable populations amid the coronavirus crisis, given that people with pre-existing chronic conditions such as diabetes are considered more vulnerable to the virus.
“We began 2020 well-positioned to pursue our mission of empowering people with chronic conditions to live better and healthier lives, and now more than ever, our efforts are necessary to support our members and clients through the COVID-19 pandemic,” Burke said. “Livongo’s remote monitoring and 24/7 telehealth capabilities provide a world-class health and care experience that empowers people to stay healthy, at home, and out of harm’s way.”
Medical aesthetic device maker Cutera announced last week that it is withdrawing its full-year 2020 guidance, among other concessions it has had to make as a result of COVID-19.
Cutera noted the impact of coronavirus on its business includes temporary facility closures, the suspension of elective procedures and disruption in supply chain and contract manufacturing, along with the decision to withdraw its fiscal guidance.
Brisbane, Calif.-based Cutera said in a news release that due to COVID-19, it is cutting the salaries of its president, CEO and COO by 25% and reducing board directors’ fees by the same percentage. Other managers have agreed to salary reductions until conditions improve. Cutera is also discontinuing non-essential services and instituting controls on travel and entertainment, among other cost-cutting measures.
The company said it will offer more information during its first-quarter earnings call once more information is available by that time.
Check-Cap has instituted a number of cost-cutting measures, including salary reductions for all employees and management as it manages its finances during the coronavirus crisis.
The diagnostic company developing the C-Scan testing system for detecting polyps before they transform into colorectal cancer said in a news release that all employees and management had their salaries reduced by 15%, the same percentage by which the board of directors had their fees decreased.
Check-Cap also announced that it placed a number of operational employees on unpaid leave. Between the salary decreases and unpaid leave, among other lowered expenditures, the company said it believes it has sufficient capital to fund its ongoing operations and plans through the third quarter of 2020.
“I’m proud that our entire team remains fully dedicated to achieving our corporate objectives despite this global crisis,” Check-Cap CEO Alex Ovadia said in the release. “We are moving forward toward IDE submission with the FDA and our team continues to advance C-Scan to be ready for our pivotal study, and we are continuing to explore collaborations with potential strategic industry leaders. Our suppliers have, for the most part, been able to provide the necessary support for our business plans, and we are grateful for their efforts.”
Contrary to most other companies forced to withdraw or lower their guidance, Zynex is raising its first-quarter and full-year 2020 guidance.
The Englewood, Colo.-based developer of non-invasive medical devices for pain management, stroke rehabilitation, cardiac monitoring and neurological diagnostics said in a news release that it received 125% more orders in the first quarter of 2020 than in the first quarter of 2019 and 3% more than in the fourth quarter last year. The company’s Q4 2019 orders grew 129% year-over-year compared with Q4 2018.
As a result, Zynex bumped up its first-quarter guidance from $14 million to $14.5 million to between $14.9 million and $15.4 million. Its full-year 2020 revenue is expected to reach $78 million and $83 million, up from its previous range of $75 million to $80 million. Last year’s full-year revenue was $45.5 million.
“Similar to many companies, we have seen the impact of the COVID-19 pandemic, not only on the availability of physicians to prescribe our products but also on navigating employee and supply chain issues,” Zynex CEO Thomas Sandgaard said in the release. “March orders were down 15% compared to the average number of orders in January and February 2020, which is a smaller decline than we had expected considering the nationwide impact of COVID-19. The numbers have since stabilized and remain constant through the last 3 weeks of March and the early days of April. This speaks volumes to the relationships our sales force has with many prescribers and the need for them to prescribe non-opioid, non-addictive prescription-strength solutions for their patients in pain.”
Natus Medical (NSDQ:NTUS)
Natus Medical announced yesterday that it is withdrawing its full-year 2020 guidance in response to the COVID-19 pandemic.
The Pleasanton, Calif.-based maker of monitoring and diagnostics for newborns had projected an adjusted EPS between $1.45 and $1.55 and sales between $480 million and $490 million when it released its fourth-quarter 2019 results in February.
“We believe we are well-positioned to weather the course of this pandemic,” Natus president & CEO Jonathan Kennedy said in a news release. “Our restructuring efforts over the past year have streamlined our operations, increased our cash flow and strengthened our balance sheet. We provide critical devices, supplies and services to health care providers and patients around the world. Our dedicated team members are committed to continuing to manufacture and deliver our healthcare solutions even during times of crisis.”
In response to COVID-19, neurovascular device maker Penumbra also withdrew its previously announced revenue guidance.
The Alameda, Calif.-based company said in a news release that it is unable to predict the duration of the impact of COVID-19 on its financial and operating results but expects the effect to be more significant in the short term.
Penumbra said it is in a strong cash position with no debt, but is actively reviewing and implementing cost-saving measures. More than 20 senior executives have taken voluntary temporary salary reductions.
The company added it expects first quarter 2020 sales to range between $137 million and $137.3 million. Penumbra plans to offer its final results with additional information related to COVID-19 on its first-quarter earnings call in early May.
Shockwave Medical (NSDQ:SWAV)
Intravascular lithotripsy technology developer Shockwave Medical announced yesterday that it is withdrawing its full-year 2020 guidance because of COVID-19.
Due to the advice of multiple governments around the world to defer elective medical procedures, Shockwave Medical said it can’t accurately estimate the impact on its procedure volumes and, by extension, its financial results.
In a news release, the company said it believes its long-term fundamentals remain intact and it is in a strong cash position. Shockwave said it intends to provide additional info during its next earnings call next month.
Cancer therapy developer NovoCure announced last week that the COVID-19 pandemic has brought uncertainty to its industry and caused delays in some of its clinical efforts.
The company is treating clinical trial patients and enrolling new patients in six ongoing trials, but COVID-19 is causing delays in enrollment and clinical trial site expansion as resources are devoted to the coronavirus.
NovoCure executive chairman William Doyle said in a news release that the company has a strong balance sheet to allow it to maintain its investments and advance commercial and development priorities. NovoCure intends to offer further updates on its first-quarter earnings call later this month.
“COVID-19 does not lessen the need for better patient outcomes in the aggressive cancers we treat,” Doyle said. “Although our industry is operating in an unprecedented time with substantial uncertainty, NovoCure remains as focused as ever on delivering our therapy to the patients who rely on us and we believe the fundamental prospects for our business remain unchanged.”
Silk Road Medical (NSDQ:SILK)
Transcarotid artery revascularization (TCAR) technology developer Silk Road is another company that is withdrawing its 2020 guidance because of COVID-19.
The Sunnyvale, Calif.-based company, which is developing a treatment for stroke, said in a news release that it is unable to estimate the impact of coronavirus on its operations and financial results. It plans to provide more information during its first-quarter earnings release and conference call once more information is available.
MRI-compatible medical device developer Iradimed announced today that it is withdrawing its full-year 2020 guidance as well.
President & CEO Leslie McDonnell said in a news release that the unprecedented times have caused a high degree of uncertainty, leading to the company’s decision to withdraw its guidance. As of March 31, Iradimed expects to report $45.2 million in cash and cash equivalents, which is about 1.2 times the full-year revenue from 2019.
Iradimed also expects first-quarter revenue between $8.6 million and $8.7 million. The company currently has no third-party debt or other restrictive covenants.
“We continue to maintain a strong balance sheet and stand ready to support healthcare providers in the fight against COVID-19,” McDonnell said. “As the focus of our customers has turned toward caring for those infected with the virus, we saw an accelerating decline in equipment orders throughout March. We fully expect demand for our equipment to return, however, the magnitude of the COVID-19 impact is highly dependent upon the length of time the pandemic continues.”