Titan Medical (Nasdaq:TMDI) announced today that it plans to implement cost-cutting measures that include temporary furloughs.
News of cost-cutting follows last week’s announcement that Titan plans to review and evaluate strategic alternatives.
Toronto-based Titan develops single-access robotic-assisted surgery technology. It consulted with financial and legal advisors to determine that the review is in the company’s and stakeholders’ best interest. Titan’s board plans to consider a full range of strategic alternatives. That may include a corporate sale, merger or other business combination. It could also lead to a sale of all or a portion of its assets, strategic investment or other significant transaction.
According to a news release, Titan’s measures allow it to continue working on its FDA investigational device exemption (IDE) filing. As part of the plan, Titan’s U.S. subsidiary intends to temporarily furlough approximately 40 employees. The furlough, which impacts employees at the subsidiary’s Chapel Hill, North Carolina, facility, goes into effect immediately.
Impact of Titan’s cost-cutting
Titan said that, following the announcement, it plans to limit work to tasks. These tasks relate to its strategic review process, IDE filing and other contractual development and supply obligations.
Cost-cutting measures will impact the timing and costs of the company’s milestones, it said. Therefore, it plans to withdraw all forward-looking statements with respect to the cost and timing of its Enos surgical system.
“While the company works through the strategic review process, and in view of the company’s capital position and the challenging market conditions, we have had to make the extremely difficult decision to place some of our employees on furlough,” said Cary Vance, Titan president and CEO. “These employees have made valuable contributions to the development of robotic-assisted technologies, and as we have communicated to the impacted employees, we look forward to bringing our employees back to work if and as soon as we are able.
“While this is not the news we would want to have been sharing, it is a necessary measure that allows us to strategically maintain a workforce that supports the strategic review process while continuing to make progress towards an IDE filing.”