Vicarious Surgical (NYSE:RBOT) announced layoffs to reduce cash burn and boost R&D spending at the surgical robotics company.
CFO William Kelly told analysts yesterday evening that the present economic environment has Vicarious Surgical focusing on getting a quality robotic surgery system “out the door fast.”
He said the company has reduced its workforce by 14%. The company’s most recent annual report listed 165 employees. That means the layoff could have involved roughly two dozen employees.
Those who were let go were mostly engaged in sales and general and administrative expenses, according to CEO Adam Sachs.
“Previously it made sense for the company to deploy greater resources and parallel path multiple contingencies in order to absolutely minimize timeline risk wherever possible. In the current market environment, fiscal discipline requires a much more lean approach, focused on growing equity value and minimizing dilution,” Sachs said.
Company officials expect the streamlining to hold full-year 2023 cash burn at $55 million to $65 million. Vicarious Surgical had $116 million on its balance sheet at the end of 2022. That translates into two years of cash runway for Vicarious Surgical.
Adjusted net losses were $19.9 million, or 16¢ per share, for the quarter ended Dec. 31, 2022. The result was a penny ahead of The Street. Analysts’ consensus was a loss of 17¢ per share.
Sachs stressed that the workforce reduction will not affect Vicarious Surgical’s regulatory timeline. The goal remains to file with the FDA for a ventral hernia surgery indication around the end of 2024. However, Sachs acknowledged some additional risk around the company’s ability to respond to anything that comes up in the regulatory process.
Investors reacted by sending RBOT shares up more than 10% to $3.42 apiece by midday trading today. MassDevice‘s MedTech 100 Index, which includes stocks of the world’s largest medical device companies, was also up more than 10%.
BTIG analysts Ryan Zimmerman and Sam Durno stuck with their Buy rating on Vicarious Surgical stock. “Frankly, we think some of the hiring in anticipation of a launch in FY25 may have been premature, so if RBOT can operate in a leaner fashion and still make its timelines, we think investors should be OK with this.”
How Vicarious Surgical seeks to compete in the robotic surgery space
The company’s technology uses proprietary human-like surgical robots combined with 3D visualization to transport surgeons inside the patient to perform minimally invasive surgery.
Last year, Vicarious Surgical finalized its Beta 2 surgical robotic system design and build-out. Sachs said yesterday that the company has moved on to the next robot, v1.0. It expects to finalize the next-gen system in the first half of 2023.
