Announces leadership transition
Announces delayed second-quarter 2019 earnings
release and Form 10-Q filing
Provides manufacturing update and reports cost
savings initiatives
Announces Audit Committee investigation
Ra Medical Systems, Inc. (NYSE: RMED), a medical device company
focusing on commercializing excimer laser systems to treat vascular
and dermatological diseases, today reported certain preliminary
results for the quarter ended June 30, 2019, as well as a
leadership transition. Ra Medical also announced that it will delay
its earnings release and investor conference call for the second
quarter of 2019 and the filing of its Quarterly Report on Form 10-Q
for the quarter ended June 30, 2019.
Leadership Transition
Ra Medical today announced that Dean Irwin was terminated
without cause from his position as Ra Medical’s Chief Executive
Officer, Co-President, and Chief Technology Officer, and as
Chairman of Ra Medical’s Board of Directors. Andrew Jackson,
currently serving as Chief Financial Officer, has been appointed to
serve as Interim Chief Executive Officer while the Company
continues its search for a permanent Chief Executive Officer.
“On behalf of the entire Ra Medical Board, I want to thank Dean
for his contributions and for his years of service to Ra Medical.
The Board is focused on finding a CEO who can guide us through the
next phase of commercialization and growth,” said newly-appointed
Chairman Martin Colombatto.
Recent Operational Highlights
- Received approval for an Investigational Device Exemption (IDE)
by the U.S. Food and Drug Administration (FDA) to initiate a
clinical trial to evaluate the safety and efficacy of the DABRA
excimer laser system in atherectomy procedures.
- Commenced strategic shift to service existing accounts and
target key new accounts with a smaller sales and marketing team,
with expected cost savings of $1 million per quarter once these
changes are complete.
- Continued efforts to upgrade manufacturing process to improve
product consistency.
Preliminary Results for Second Quarter 2019
Ra Medical anticipates revenue of between $2.02 million and $2.2
million for the second quarter of 2019, including vascular revenue
of between $0.4 million and $0.5 million and an aggregate balance
of approximately $48.4 million in cash and cash equivalents and
short-term investments.
All financial results in this press release were prepared by
management and are preliminary.
Cost Savings Initiatives
In August 2019, Ra Medical commenced significant operational
efficiency and cost-savings initiatives intended to align its
resources with its product strategy, reduce its operating expenses,
and manage its cash flows. These cost efficiency initiatives
included significant workforce reductions of its sales and
marketing teams. In the near term, with the reduced sales
headcount, Ra Medical intends to focus on servicing priority
existing accounts and targeting key new accounts in certain
existing territories while it corrects the production limitations
referenced below and re-evaluates its marketing strategy.
Manufacturing Update
In the fourth quarter of 2018 and first quarter of 2019, Ra
Medical experienced inconsistencies in its DABRA catheter
manufacturing process, due to issues controlling the temperature of
the oven used in that process, which had an adverse impact on
revenue during the fourth quarter of 2018 and the first half of
2019. In response, Ra Medical upgraded its temperature control
regulator and made certain changes in its production flow and
validated the changes that Ra Medical believed corrected the
production limitations. After manufacturing several well-performing
lots with this upgraded process, Ra Medical is again experiencing
inconsistent performance. The percentage of catheters that fail to
calibrate at customer sites prior to a procedure being performed
began to increase after decreasing during April and May 2019. Ra
Medical is fully committed to resolving the inconsistencies in
performance, but until these are fully resolved, our DABRA sales
may continue to be adversely impacted.
Audit Committee Investigation
The Audit Committee of Ra Medical’s Board of Directors has
commenced an independent investigation in connection with an
anonymous complaint. The Audit Committee of the Board of Directors
is responsible for investigating the allegations and has retained
independent counsel to assist it in the process. The investigation
is not yet completed and no conclusions with respect thereto have
been reached. Ra Medical cannot predict the duration or outcome of
the investigation, and the Company will not be in a position to
file the Form 10-Q until the Audit Committee completes its
work.
About Ra Medical Systems
Ra Medical Systems commercializes excimer lasers and catheters
for the treatment of vascular and dermatological diseases. In May
2017, the DABRA laser system and single-use DABRA catheter received
FDA 510(k) clearance in the U.S. as a device for crossing chronic
total occlusions, or CTOs, in patients with symptomatic
infrainguinal lower extremity vascular disease with an intended use
for ablating a channel in occlusive peripheral vascular disease.
Pharos excimer laser system is FDA-cleared and is used as a tool in
the treatment of psoriasis, vitiligo, atopic dermatitis, and
leukoderma. DABRA and Pharos are both based on Ra Medical’s core
excimer laser technology platform and deploy similar mechanisms of
action. Ra Medical manufactures DABRA and Pharos excimer lasers and
catheters in a 32,000-square-foot facility located in Carlsbad,
California. The vertically integrated facility is ISO 13485
certified and is licensed by the state of California to manufacture
sterile, single-use catheters in controlled environments.
Cautionary Note Regarding Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995. Forward-looking statements generally relate to future events
or Ra Medical’s future financial or operating performance. In some
cases, you can identify forward-looking statements because they
contain words such as “may,” “will,” “should,” “expects,” “plans,”
“anticipates,” “could,” “intends,” “target,” “projects,”
“contemplates,” “believes,” “estimates,” “predicts,” “potential” or
“continue” or the negative of these words or other similar terms or
expressions that concern Ra Medical’s future expectations,
strategy, plans or intentions. Forward-looking statements in this
press release include, but are not limited to, Ra Medical’s
expectations as to the timing and outcome of its Audit Committee
investigation, the filing of its periodic reports, and its expected
financial and operational results; Ra Medical’s expectations with
respect to its search for a permanent CEO; Ra Medical’s intentions
to analyze and correct issues with its DABRA catheter manufacturing
and performance; and the potential impact of its cost savings
initiatives. These statements are based on management’s current
expectations, estimates and projections, are not guarantees of
future outcomes or performance, and are subject to certain risks,
uncertainties and other factors, some of which are beyond Ra
Medical’s control and are difficult to predict, including, but not
limited to, discovering additional information relevant to the
Audit Committee investigation; the findings, conclusions and
recommendations of the Audit Committee (and their timing); the
Board and Ra Medical’s response to the Audit Committee’s findings,
conclusions and recommendations; the review by the Ra Medical’s
independent registered public accounting firm of the Audit
Committee’s findings, conclusions and recommendations and Ra
Medical’s financial statements; the risk that completing and filing
reports with the SEC will take longer than expected; the risk that
Ra Medical will not be able to timely characterize and correct its
issues with its DABRA catheter manufacturing and performance; and
the risk that cost savings will not materialize from Ra Medical’s
cost savings initiatives. In addition, Ra Medical's business is
subject to numerous additional risks and uncertainties, including,
among others, challenges inherent in developing , manufacturing,
launching, marketing, and selling products; risks associated with
acceptance of DABRA and Pharos and procedures performed using such
devices by physicians, payors, and other third parties; development
and acceptance of new products or product enhancements; clinical
and statistical verification of the benefits achieved via the use
of Ra Medical’s products; the results from Ra Medical’s clinical
trials, which may not support intended indications or may require
Ra Medical to conduct additional clinical trials or modify ongoing
clinical trials; challenges related to commencement, patient
enrollment, completion, an analysis of clinical trials; Ra
Medical’s ability to manage operating expenses; Ra Medical’s
ability to effectively manage inventory; Ra Medical’s ability to
recruit and retain management and key personnel; Ra Medical’s need
to comply with complex and evolving laws and regulations; intense
and increasing competition and consolidation in Ra Medical’s
industry; the impact of rapid technological change; costs and
adverse results in any ongoing or future legal proceedings
(including with respect to ongoing securities litigation); adverse
outcome of regulatory inspections, reviews, or audits; and the
other risks and uncertainties described in Ra Medical’s news
releases and filings with the Securities and Exchange Commission.
Information on these and additional risks, uncertainties, and other
information affecting Ra Medical’s business and operating results
is contained in Ra Medical’s Quarterly Report on Form 10-Q for the
quarter ended March 31, 2019 and in its other filings with the
Securities and Exchange Commission. The forward-looking statements
in this press release are based on information available to Ra
Medical as of the date hereof, and Ra Medical disclaims any
obligation to update any forward-looking statements, except as
required by law.
Ra Medical investors and others should note that we announce
material information to the public about the company through a
variety of means, including our website (www.ramed.com), our
investor relations website (https://ir.ramed.com/), press releases,
SEC filings, and public conference calls in order to achieve broad,
non-exclusionary distribution of information to the public and to
comply with our disclosure obligations under Regulation FD. We
encourage our investors and others to monitor and review the
information we make public in these locations as such information
could be deemed to be material information. Please note that this
list may be updated from time to time.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190812005567/en/
At the Company: Jeffrey Kraws
President, Ra Medical Systems 760-707-7516 jkraws@ramed.com
Investors: LHA Investor Relations
Jody Cain / Kevin McCabe 310-691-7100 jcain@lhai.com / kmccabe@lhai.com
Media: KCSA Strategic
Communications Caitlin Kasunich / Lisa Lipson 212-896-1241 /
508-843-6428 ckasunich@kcsa.com /
llipson@kcsa.com
Ra Medical Systems (NYSE:RMED)
Historical Stock Chart
From Mar 2024 to Apr 2024
Ra Medical Systems (NYSE:RMED)
Historical Stock Chart
From Apr 2023 to Apr 2024
