Struggling NMT Medical Inc. (NSDQ:NMTI) is once again changing captains as it looks to right a ship in very rough seas.
The Boston-based cardiac implant maker announced several management changes, naming COO Richard Davis as its new chairman, president and CEO, replacing long-time board member and retiring CEO Frank Martin, who took the top job in April of 2009.
NMT chairman James Mahoney also resigned his position, as the company reduced the size of its board from seven members to five, according to a prepared release.
The moves come as the company reels from a series of setbacks that started in June, when it announced that the Closure I clinical trial of its flagship StarFlex device failed to meet its primary endpoint.
NMT had pinned a lot of its future hopes and some $31 million on a successful outcome of the trial, which examined the use of its cardiac implant in treating stroke and transient ischemic attack.
In addition to the money spent, NMT also loaded up in advance of a commercial launch of the Starflex, increasing the size of its board, creating a high-profile scientific advisory board and bringing back a former executive to help shepherd the project.
But the study failed to prove demonstrable superiority to “current best medical therapy for preventing recurrent strokes and TIAs,” the company wrote in June.
That move precipitated a sharp downward spiral for the company’s share price, which was $2.68 on the day of the announcement. Since then shares have dropped off a cliff, closing at 43 cents Aug. 25.
Adding insult to injury, NMT received a de-listing notice from the NASDAQ exchange Aug. 4. Without additional funding over the next six months the company might go under, according to a recent regulatory filing.
Raising those funds could be difficult, given the circumstances. The company’s largest shareholder, Glenn Krevlin, managing partner of New York hedge fund Glenhill Capital Advisors, sold off about half of his 2.6 million shares June 18, the day after the Closure 1 announcement. And a potential, $30 million private placement offering in February only yielded about $6 million, due in part to a massive snowstorm that shut down Washington, D.C., for several days.
Krevlin previously backed Davis over Martin as his pick for the top job more than a year ago.
Davis acknowledged the problems the company was facing in a prepared statement.
“While this is a challenging time for NMT, we continue to be supported by a strong team of seasoned professionals. Our entire organization remains energized and focused on advancing NMT’s clinical and regulatory programs to their successful completion,” he said.