Titan Medical Inc. (“Titan” or the “Company”) (TSX: TMD)
(Nasdaq: TMDI), a medical device company focused on the design
and development of single-port robotic surgical technologies, today
issued an update letter to its shareholders. The letter, authored
by David McNally, President & CEO, Chairman, may be found on
the Company’s website and a full text of the letter follows.
July 14, 2020
Dear Titan Medical Shareholders,
As we commence the second half of 2020, I provide you with a
brief review of the first half and outline our focus for the
remainder of the year.
I am honored to be surrounded by a diligent team at Titan
Medical and proud of its work over recent months to address the
Company’s acute shortage of capital. We are pleased with our recent
accomplishments, including the secured loan and development and
license agreements with Medtronic, successful equity capital
raises, payment plan for outstanding debt with a product
development service provider, and settlement of ongoing litigation
with another product development service provider.
Our innovations in robotic-assisted surgery have yielded
technology and an intellectual property portfolio that we have been
able to strategically leverage. In this letter, I highlight the
significance of the development and license agreements and describe
the strategy for development of our single-port robotic surgical
system.
Medtronic Agreements
On June 3, 2020, we entered into several agreements with an
affiliate of Medtronic plc, including a development and license
agreement to further the development of robotic assisted surgical
technologies, as well as a separate license agreement in respect of
certain intellectual property of Titan.
The development and license agreement provides for the
development of robotic assisted surgical technologies for use by
both Titan and Medtronic in their respective robotic assisted
surgery businesses. As technology milestones are completed and
verified, we will be entitled to receive a series of license
payments totaling up to $31 million for Medtronic’s rights to such
technologies. Our engineering team and product development partners
are working toward the achievement of the first milestone in
October 2020. If successful, Titan will receive a payment of $10
million before proceeding to the second of the three development
milestones, to be completed in 2021.
Under the terms of the separate license agreement, Medtronic has
licensed certain robotic assisted surgical technologies from Titan
for an upfront license payment of $10 million, which we received in
June 2020. Titan retains the rights to continue to develop and
commercialize those technologies for its own business. These
agreements with Medtronic allow Titan to continue to develop its
single-port robotic surgical technologies while sharing our
expertise and technologies with Medtronic.
Development Status and Milestones
Through the $10 million license payment and $1.5 million loan
from Medtronic, and the over $20 million raised in public equity,
we have been able to resume product development of our single-port
robotic surgical system. Robotic systems designed for surgery are
highly technical and complex pieces of equipment, involving
medical-grade software and numerous electro-mechanical systems,
precise surgical instruments and sterile interface components, all
designed for instinctive use and successful surgical outcomes. To
facilitate the unique design and development of our system, Titan
has engaged individuals and third parties with specialized
competencies for assistance with certain aspects of our system such
as our innovative dual-view camera system, multi-articulating
instruments and simulation training software. We have also
established a U.S. subsidiary to initially focus on product
development activities, which is based at our new dedicated,
purpose-built space in North Carolina’s Research Triangle, a
leading high-tech and medical technology hub, which is also in
close proximity to our development partners. The recruitment of
highly skilled and experienced technical personnel to manage,
execute and provide in-house expertise in product development is
well underway.
Positioning of our Single-port Robotic Surgical
System
The opportunity for single-port robotic surgery appears
promising, with initial and on-going clinical success being
reported by surgeons using Intuitive Surgical’s da Vinci SP®, the
only commercially available single-port offering, but currently
with surgical indications outside our initial target area. We
believe that our robotic assisted surgical system, having been
designed with a focus on single-port surgery, may provide
competitive advantages for physicians and their clinical teams,
hospitals and patients. Should we be able to complete product
development and achieve regulatory clearance in a timely manner,
upon commercialization we expect our single-port system to expand
the market for robotic assisted surgery with attractive pricing, a
reduced operating room footprint and greater portability within the
hospital. With these target product attributes, we intend to focus
early commercialization efforts on U.S. ambulatory surgery centers
wishing to perform benign procedures in a lower-cost setting
compared to hospitals.
Financing
We are grateful to the retail and institutional shareholders
that have financed Titan Medical over its 12-year history. Earlier
this year, we raised $21.2 million through three financings led by
H.C. Wainwright & Co., plus $2 million from an equity line of
credit provided by Aspire Capital Fund, LLC. We estimate that in
addition to our current cash on hand , plus $31 million in payments
that we are entitled to receive upon achievement of the milestones
defined under the Medtronic development and license agreement, we
will have sufficient capital to operate and work towards
achievement of certain product development milestones over the next
12 months. We will continue to evaluate and consider financing
options as they become available, including equity and debt, to
best position Titan Medical to complete product development and
preparation of regulatory filings related to our single-port
robotic surgical system.
In Summary
Looking ahead, we believe that the estimated magnitude of the
robotic assisted surgery market opportunity justifies the
investment of substantial human and financial capital to improve
patient outcomes through single-port robotic surgery. We remain
committed to our vision of delivering both patient and physician
satisfaction through a product that, upon completion, we expect
will be able to reduce trauma and deliver virtually scar-free
surgery.
I have often said that I am proud of our team, which includes
our employees, our expert consultants, development and
manufacturing partners, and the surgeons who advise us. It is
through their ongoing commitment, energy, guidance and teamwork
that we have achieved so much, and most recently in spite of the
COVID-19 pandemic. We remain grateful to you, our shareholders, who
have provided the capital for our growing team to execute on our
collective vision for single-port robotic surgery.
I look forward to reporting on our progress.
Sincerely,
David McNally President & CEO, Chairman
About Titan
Titan Medical Inc. is focused on robotic-assisted technologies
for application in minimally invasive surgery (“MIS”). Titan is
developing a single-port robotic surgical system comprised of a
surgeon-controlled patient cart that includes a dual-view camera
system with 3D and 2D high-definition vision systems and
multi-articulating instruments for performing MIS procedures, and a
surgeon workstation that provides an ergonomic interface to the
patient cart and a 3D high-definition endoscopic view of the MIS
procedure. Titan intends to initially pursue gynecologic surgical
indications for use of its single-port robotic surgical system.
For more information, visit www.titanmedicalinc.com.
Forward-looking Statements
This news release contains “forward-looking statements” within
the meaning of applicable Canadian and U.S. securities laws. Such
statements reflect the current expectations of management of the
Company’s future growth, results of operations, performance and
business prospects and opportunities and include statements
regarding the Company’s focus for the remainder of the year, the
Company’s payment plan for outstanding debt, the Company’s strategy
for development of its single-port robotic surgical system, the
Company’s plan to further the development of robotic assisted
surgical technologies, the completion and verification of
milestones and related license payments, the timeline for the
expected completion of the first and second milestones and
anticipated payment for same, the effect of the Medtronic
agreements on the Company’s development of its single-port robotic
surgical technology while sharing its expertise with Medtronic, the
initial focus of the Company’s US subsidiary, the competitive
advantage the Company believes that its robotic assisted surgical
system will provide, the effect on the market that the Company
expects its single-port system to have if commercialized, the
Company’s belief regarding its product attributes and their appeal
to U.S. ambulatory surgery centers, the Company’s estimation that
it will have sufficient capital over the next 12 months, the
Company’s belief that the robotic surgery market justifies the
investment of human and financial capital and the Company’s
expectation that it will be able to reduce trauma and deliver
virtually scar-free surgery. Wherever possible, words such as
“may”, “would”, “could”, “will”, “anticipate”, “believe”, “plan”,
“expect”, “intend”, “estimate”, “potential for” and similar
expressions have been used to identify these forward-looking
statements. These statements reflect management’s current beliefs
with respect to future events and are based on information
currently available to management. Forward-looking statements
involve significant risks, uncertainties and assumptions. Many
factors could cause the Company’s actual results, performance or
achievements to be materially different from any future results,
performance or achievements that may be expressed or implied by
such forward-looking statements, including, without limitation,
those listed in the “Risk Factors” section of the Company’s Annual
Report on Form 20F dated March 30, 2020 (which may be viewed at
www.sedar.com and at www.sec.gov). Should one or more of these
risks or uncertainties materialize, or should assumptions
underlying the forward-looking statements prove incorrect, actual
results, performance, or achievements may vary materially from
those expressed or implied by the forward-looking statements
contained in this news release. These factors should be considered
carefully, and prospective investors should not place undue
reliance on the forward-looking statements. Although the
forward-looking statements contained in the news release are based
upon what management currently believes to be reasonable
assumptions, the Company cannot assure prospective investors that
actual results, performance or achievements will be consistent with
these forward-looking statements. Except as required by law, the
Company expressly disclaims any intention or obligation to update
or revise any forward-looking statements whether as a result of new
information, future events or otherwise.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200714005157/en/
Stephen Randall Chief Financial Officer +1-416-548-7522
stephen@titanmedicalinc.com
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