Surgical robotics is one of the most promising applications in healthcare, but the time needed for development and regulatory approval can discourage investors. In its third-quarter report on its financial results last week, Titan Medical Inc. said that fundraising challenges have forced it to “suspend work” on its Sport surgical robot. The single-port robot-assisted system still offers potential value for gynecological and urological procedures, added the Toronto-based company.
Back in March 2019, Titan Medical successfully closed a $25 million initial public offering, and it partnered with Teleflex Inc. to integrate Teleflex’s polymer ligation technology into the Sport surgical system.
In August, Titan Medical delayed its plans to file for an investigational device exemption (IDE) from the U.S. Food and Drug Administration (FDA) to the fourth quarter of this year. It had pushed back its full 510(k) filing to the first half of 2020, which caused its shares to lose nearly half their value.
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Sport surgical system advances as market awaits
Sport includes multi-articulating instruments and 2D and 3D high-definition cameras to provide high-definition vision for assisting minimally invasive surgeries. The system also includes a workstation that provides an ergonomic interface to the patient cart and a 3D endoscopic view inside the patient’s body, according to Titan Medical.
In the past quarter, Titan Medical said it expanded its global intellectual property portfolio to 47 patents, with 82 pending, including its first patent in China. It has also completed the Good Laboratory Practices (GPL) test surgeries needed for the IDE submission to the FDA, as well as human factors evaluation studies involving clinical experts and simulated robotic manipulation.
In addition, European regulators had completed audits of Titan’s quality procedures and related documentation for ISO certification. The market for the Sport surgical system is waiting and growing, stated David McNally, president and CEO of Titan Medical, in the earnings report.
“We see the market for single-port robotic surgery already developing, with experienced multi-port robotic surgeons recently reporting encouraging results from single-port urologic procedures performed with the leading robotic surgery manufacturer’s single-port offering,” he said. “We believe that this success confirms the potential for surgeon adoption of single-port robotic surgery.”
The global market for surgical robots will experience a compound annual growth rate of 10.4%, growing from $3.9 billion (U.S.) in 2018 to $6.5 billion by 2023, predicts Markets and Markets. Can robotics startups satisfy this demand?
“With respect to gynecology, our initial area of focus, surgeons we have interviewed perceive clinical benefits relative to the potential for reduced patient trauma with single-port surgery versus traditional open, laparoscopic, and multi-port robotic surgery,” said McNally.
Challenges and next steps
Developing surgical robots is a costly and sometimes slow process. Titan Medical reported research and development expenses of $16.5 million for the quarter ended Sept. 30, 2019, and $49.3 million for the year to date. Its net loss for the third quarter was $1.5 million, with a deficit of $18.6 million for the year.
The company blamed its losses on “increased R&D expenses” and the valuation hit it took for its filing delay and said it “withdrew a planned public offering of units due to market conditions.”
“The third quarter and recent weeks have been challenging for all of us at Titan, as inhospitable conditions in the equity capital markets have caused us to seek alternative sources of financing while suspending work for our single-port robotic surgery system,” said McNally. “We are keenly focused on securing the funds necessary to complete the development of our system and subsequent regulatory filings.”
McNally’s statements were cautiously optimistic about resuming product development and regulatory submissions such as the IDE once more funding is secured.
“We are actively exploring alternative financing options, including strategic investments, while drawing on our $35 million common stock purchase facility with Aspire Capital, in accordance with its terms,” he said.