00:53:36 EDT Thu 01 Jun 2023
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or Name

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Titan Medical Inc (2)
Symbol TMD
Shares Issued 111,202,690
Close 2022-03-23 C$ 0.78
Recent Sedar Documents

Titan Medical spends $37.9M on R&D in fiscal 2021

2022-03-24 12:18 ET - News Release

Mr. Kristen Galfetti reports


Titan Medical Inc. has released financial results for the three and 12 months ended Dec. 31, 2021.

Key accomplishments and recent activities:

  • Received payment and retired senior secured loan from Medtronic after completion of final milestone under development agreement:
    • Net payment of $8.3-million received;
    • Retired senior secured loan of $2.3-million;
  • Selected Benchmark to manufacture Enos system surgeon workstation and patient cart:
    • Manufactured units will be integrated with proprietary cameras and multiarticulating instruments to be manufactured at Titan's Chapel Hill facility;
  • Expanded patent portfolio to more than 200 patents and applications:
    • Continue to evaluate options for geographical expansion and revenue generating opportunities with third parties;
    • Comprehensive RAS patent portfolio includes coverage in the United States, Europe, Canada, China, Japan, Korea and Australia;
  • Completed buildout of Chapel Hill facilities:
    • Increased footprint to serve as a controlled manufacturing space. Procurement of parts for assembly of cameras and instruments under way, as well as processes for life cycle testing;
  • Announced chief executive officer transition:
    • Paul Cataford named as interim president and CEO; the company has commenced a process to identify a permanent CEO using a top-tier recruiting firm;
  • Attended Society of American Gastrointestinal and Endoscopic Surgeons (SAGES) annual meeting, March 16 to March 18, 2022:
    • Deepak Basra, vice-president of strategy and business development, and Chris Seibert, vice-president of upstream marketing, attended SAGES, met with surgeons to discuss innovations in the development of the Enos system and assessed the potential for the downstream integration of advanced software, including artificial intelligence and machine learning, to further enhance the patient experience;
  • Mr. Cataford presented and participated in the H.C. Wainwright & Co. BioConnect 2022 Conference on Jan. 10, 2022, and in Oppenheimer's 32nd annual investor conference on March 15, 2022.

The company remains on track with activities to support a De Novo classification request with the U.S. Food and Drug Administration (FDA) in 2024. Utilizing the Q-Submission program, the company has engaged in continuing dialogue with the FDA to clarify requirements in an effort to mitigate against risks to the development plan and timeline. The company plans to file the IDE application with the FDA in the first quarter of 2023 and anticipates receiving a response on the IDE from the FDA in the first half of 2023. Following IDE approval, the company expects to start the IDE human clinical study in the second half of 2023. Upon completion, the company plans to submit a De Novo application in 2024. Commercial launch of the Enos system will begin upon receipt of marketing authorization from the FDA, anticipated in early 2025.

"Our focus and commitment are on executing against our IDE submission milestone. Design transfer to our capital equipment contract manufacturing partner continues and we are currently on track to begin system verification and validation testing later this year. We have completed the buildout of our in-house manufacturing facility in Chapel Hill to assemble our proprietary RAS cameras and instruments, that will be used in clinical trials," stated Mr. Cataford, interim president and CEO of Titan. "Our team's ability to execute is key as we deliver on our mission to bring the innovative Enos system to market to benefit patients, while addressing feedback from surgeons and improving hospital economics. Our interactions with the FDA continue to be collaborative as we finalize our IDE submission package and work on requirements for our clinical trials. With a regulatory authorization process established and the team properly resourced, we are excited about our progress and the opportunity that we have to bring to market an advanced surgical experience for patients and surgeons," added Mr. Cataford.

Financial highlights

As of Dec. 31, 2021, Titan had cash and cash equivalents of $32.3-million, compared with $25.5-million at Dec. 31, 2020.

For the year ended Dec. 31, 2021, research and development (R&D) expenses were $37.9-million compared with $7.9-million in the comparative period. R&D expenses were related to the development of the Enos system and development activities under the development and licence agreement with Medtronic. Comparatively, in the first half of 2020, the company temporarily suspended R&D activities and then, following execution of the Medtronic agreements in June, initiated the establishment of in-house development capabilities in Chapel Hill, North Carolina.

For the three months ended Dec. 31, 2021, R&D expenses increased to $10.8-million compared with $5.5-million for the for the three months ended Dec. 31, 2020. In the quarter, R&D expenses related to the development of the Enos System and the development work required to achieve the final milestone under the development agreement with Medtronic. In the comparative period, the R&D expenses related to the establishing a new facility in Chapel Hill, N.C., to focus on the development of the Enos System and development work required to complete the milestone under the development agreement with Medtronic.

General and administrative (G&A) expenses were $12.4-million for the year ended Dec. 31, 2021, compared with $7.6-million in the comparative period. The increase in G&A expenses in 2021 compared with 2020 is related to an increase in stock-based compensation of $2.6-million, $700,000 in severance costs, expansion of the senior leadership team to support the development of the Enos system and professional fees related to market research. Adjusting for non-cash stock-based compensation expenses and one-time severance expenses, G&A expenses for 2021 were $8.1-million compared with $6.5-million in 2020, primarily due to expansion of the leadership team to support the development of the Enos system.

G&A expenses increased to $2.0-million for the three months ended Dec. 31, 2021, compared with $1.4-million for the three months ended Dec. 31, 2020. The increase in G&A expenses is related to $0.5-million in severance costs and an increase in stock-based compensation.

With respect to the Nasdaq notification regarding minimum bid price deficiency received on Dec. 30, 2021, the company is evaluating all options to regain compliance with Nasdaq Rule 5550 (a) (2) prior to the June 28, 2022, deadline.

The company's audited annual financial statements and MD&A are available on SEDAR.

Investor audio webcast information

Titan Medical will host an investor audio webcast at 8:30 a.m. ET today (March 24, 2022) to discuss the company's financial results for the three and 12 months ended Dec. 31, 2021, and recent business highlights. The webcast can be accessed via the investor relations section of the company's website.

About Titan Medical Inc.

Titan Medical, a medical device company headquartered in Toronto, Ontario and with operations in Chapel Hill, N.C., is focused on enhancing robotic assisted surgery using innovative technology through a single access point. The Enos robotic single access surgical system is being developed with an ergonomic focus to provide a surgical experience that imitates real-life movements that surgeons demand and includes multiarticulating instruments designed to allow surgeons an increased range of motion in a confined space, with dexterity and the ability to exert the forces necessary to complete common surgical tasks. With the Enos system, Titan intends to initially pursue gynecologic surgical indications.

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