Titan Medical Announces Development and License Agreements With Medtronic and Senior Secured Loan
June 04 2020 - 7:30AM
Business Wire
Titan Medical Inc. (“Titan” or “Titan Medical”) (TSX: TMD)
(Nasdaq: TMDI), a medical device company focused on the design and
development of single-port robotic surgical technologies, announces
that it has entered into a development and license agreement with
Medtronic plc (“Medtronic”) (NYSE: MDT) to further the development
of robotic assisted surgical technologies, as well as a separate
license agreement with Medtronic 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 businesses. Titan will
receive a series of payments totaling up to U.S. $31 million for
Medtronic’s license to such technologies, as technology milestones
are completed and verified. A steering committee comprised of
representatives from Titan and Medtronic will be established to
provide oversight regarding the work toward achievement of the
milestones. One of the milestones of the agreement is for Titan to
raise an additional U.S. $18 million of capital within four months
of the development start date, which is expected to occur in June
2020.
To support development, Titan has received a senior secured loan
of U.S. $1.5 million from Medtronic which was announced on April
29, 2020. The loan, which will be increased by an amount equal to
certain legal, transaction and intellectual property related
expenses pursuant to the definitive agreements, will be evidenced
by an amended and restated promissory note, and will bear interest
at the rate of 8% per annum. The loan is repayable on June 4, 2023,
or upon the earlier completion of the last milestone under the
development and license agreement or a Change of Control of Titan
(as defined in the note). Until repayment of the loan, Medtronic
may have one non-voting observer attend meetings of Titan’s Board
of Directors. The loan will be secured by way of a security
agreement entered into by Titan and pursuant to which Titan has
granted a security interest in favor of Medtronic in all of Titan’s
present and future property including all personal property,
inventory, equipment and intellectual property.
Under the terms of the separate license agreement, Medtronic has
licensed certain robotic assisted surgical technologies from Titan
for an upfront payment of U.S. $10 million. Titan retains the
rights to continue to develop and commercialize those technologies
for its own business.
“These agreements with Medtronic will allow Titan to continue to
develop its single-port robotic surgical technologies while sharing
our expertise and technologies with Medtronic,” said David McNally,
President and CEO of Titan Medical. “We are very excited about the
opportunity to continue Titan’s pioneering work to bring new
single-port surgical options to the market.”
Following unanimous approval by Titan’s Board of Directors of
the agreements with Medtronic, Charles Federico, who has served as
Titan’s Chairman since May 2019, and John Schellhorn, who has
served as a Director since June 2017, have decided to retire from
Titan’s board in order to dedicate more time for their respective
personal and professional endeavors. David McNally, Titan’s
President and CEO, has been appointed Chairman of the Board of
Directors. Mr. McNally said “I would like to thank Charlie and John
for their many contributions to our Board, and for their guidance
in securing this important strategic relationship. We wish them
continued success.” The Board will consist of three members,
including, in addition to David McNally, John Barker, an
independent director, and Stephen Randall, Titan’s Chief Financial
Officer, while a search for additional independent directors is
conducted.
For clarity, these agreements are between Medtronic and Titan
Medical Inc. Titan Medical is not affiliated with Titan Spine,
which Medtronic acquired in 2019.
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 with 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. 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 which include references to: Titan to receive payments
totaling up to U.S. $31 million from Medtronic, the completion and
verification of technology milestones, technology development work
to be done under the definitive agreements, the condition that
Titan must raise an additional $18 million of capital within four
months of the development start date and the expectation that the
development start date will occur in June 2020, and that the
definitive agreements with Medtronic will allow Titan to continue
to develop its single-port robotic surgical technologies while
sharing our expertise and technologies with Medtronic. 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.
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version on businesswire.com: https://www.businesswire.com/news/home/20200604005323/en/
Stephen Randall Chief Financial Officer +1-416-548-7522
stephen@titanmedicalinc.com
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