Minneapolis-based Urologix, which makes the Cooled ThermoTherapy and Prostiva RF devices to treat benign prostatic hyperplasia, said in January that it planned to lay off an unspecified number of workers as it sought to right the ship.
Yesterday the medical device company said it agreed not to draw down on its $2 million credit line before approval from Medtronic. Urologix, which owes it Twin Cities neighbor $650,000 in royalties and $65,000 in license maintenance fees, hadn’t touched the credit line as of Dec. 31, 2013, according to a regulatory filing.
"I am writing to acknowledge the fact that you are continuing to make efforts to turn the Urologix business around. However, notwithstanding the foregoing, I am sending you this letter as a formal reservation of any rights that Medtronic may have in respect of the above-described past due amounts," Medtronic Neuromodulation finance vice president Chad Martinson wrote in the March 21 letter to Urologix CEO Greg Fluet. "Please keep me posted as to your continuing efforts to turn around Urologix’s business and to make good on Urologix’s obligations to Medtronic."
Early this year Urologix said it would look to pare $1.5 million from its annual budget and withdrew its outlook for the balance of its fiscal 2014, which ends June 30.
"This new organizational structure marks an important step towards repositioning Urologix for future growth and sustainability," Fluet said at the time. "In addition to refocusing our resources on our strongest urology partners, we believe these measures will lead to a more cost effective sales and operating infrastructure. Importantly, by leveraging our well-established, multi-tiered, distribution model, we expect to maintain our market-leading service levels throughout our existing account base of urologist practices. We expect this program to make the company stronger and to drive improving profitability and shareholder value going forward."
In February Urologix posted net losses of -$1.1 million, or -5¢ per share, on sales of $3.8 million for the 3 months ended Dec. 31, 2013. That’s an increase in losses of 11.9% on a sales decline of -12.6%, compared with the same period in 2012. Urologix said it paid $59,000 for the medical device tax during the quarter, more than half of the increased losses between Q2 2014 and Q2 2013.