TransEnterix's SurgiBot rejected by FDA
"TransEnterix entered 2016 on the inside track as the likely challenger to surgical-robot giant Intuitive Surgical, marching forward with a pipeline that boasted two different robotic systems. But the FDA rejected TransEnterix’s first surgical robot, and the company is now conserving cash and trimming staff to keep its second robot in the race with other surgical robot developers in the multibillion-dollar industry.
Research Triangle Park, NC-based TransEnterix (NYSE MKT: TRXC)
is cutting workers who were expected to support the launch for
SurgiBot, the surgical robotic system that was denied marketing approval
last month. CEO Todd Pope said Tuesday that staffers who had been doing
regulatory work and R&D for SurgiBot will now shift to ALF-X, the surgical robot system that TransEnterix acquired last year from an Italian healthcare company in a $100 million deal.
Pope, speaking on a conference call with analysts, did not specify
the reasons the FDA gave for denying marketing clearance for SurgiBot,
but he made clear that he doesn’t expect the same result for ALF-X. The
device has passed regulatory muster in Europe, where it is already in
use, meaning that there’s clinical data on the system’s performance.
“We think we’re going into the ALF-X environment from a different position than we were with SurgiBot,” Pope told analysts.
Pope said that TransEnterix is still analyzing the FDA’s SurgiBot
response and that the agency has agreed to meet with the company. That
meeting has not yet been scheduled. But Pope said that the FDA considers
the SurgiBot application closed. If TransEnterix wants to bring
SurgiBot to market, the company must try all over again with a new
submission. Rather than work on two different applications, Pope said,
the company decided to curtail its SurgiBot efforts and focus instead on
ALF-X.
TransEnterix, which started 2016 with 130 full-time workers, now has
105 employees. Joseph Slattery, the company’s chief financial officer,
said the layoffs will save about $4 million annually. But he added that
the company’s workforce could still grow, particularly in Europe, where
18 hospitals currently use ALF-X.
TransEnterix has focused on developing products for minimally
invasive surgery. The company’s first device, the SPIDER Surgical
System, enabled surgeons to perform laparoscopic surgery through a
single, small incision in the patient’s belly button. Whereas SPIDER was
manually controlled by the surgeon, SurgiBot brought motorized control
to this surgical approach. TransEnterix said that its technology
retained more of the hands-on sense of touch in surgery compared with
the larger da Vinci Surgical Systems sold by Sunnyvale, CA-based
Intuitive Surgical (NASDAQ: ISRG), the leader in robotic surgery with $2.3 billion in 2015 revenue.
When TransEnterix acquired ALF-X from Italian company Sofar last
year, Pope said the device would complement SurgiBot, offering an
alternative surgical approach via multiple incisions, or ports. The
ALF-X also includes a camera system whose eye-tracking software moves a
camera to wherever the surgeon looks.
TransEnterix plans to file for FDA clearance on ALF-X in the fourth
quarter, and if cleared, bring the surgical robot to market in the U.S.
in 2017. Slattery said TransEnterix had $75 million in the bank at the
end of April; enough to carry the company through the third quarter of
2017.
That timeline could put TransEnterix neck-and-neck with Toronto-based competitor Titan Medical (TSX: TMD), which has developed its own surgical robot for minimally invasive surgery. Titan expects to file for regulatory clearance
in both Europe and the United States this year. And, though not as far
along as TransEnterix or Titan, United Kingdom-based Cambridge Medical
Robotics is starting to reveal details about its robotic surgery arm, which it says mimics the dexterity of a surgeon’s hands.
Pope dropped a few hints suggesting why the FDA declined approval on
SurgiBot. He said on the call that the landscape for surgical robots has
changed in the three years since TransEnterix started discussions with
the agency about its robotic system. There’s more scrutiny now on robots
in surgery. (Intuitive Surgical’s annual report
notes the company is a defendant in 92 product liability lawsuits
alleging injury, and in some cases death, due to surgeries performed
using the da Vinci.) Last year, the FDA has since issued guidance documents
indicating its thinking about the evaluation and regulation of
“robotically assisted surgical devices,” Pope said. When a decision
deadline on the SurgiBot approached and the FDA asked for more
information about the system earlier this year, TransEnterix provided
11,000 pages of additional material. TransEnterix’s responses,
apparently, weren’t enough.
TransEnterix isn’t taking any chances with its ALF-X regulatory
application. To smooth FDA discussions next time around, Pope said that
TransEnterix will hire a surgeon to join the company’s leadership."
Source: Xconomy
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