Acutus Medical Announces Major Staff Reductions and Strategic Shift to Focus on Medtronic Partnership
5 December 2024
Acutus Medical, has announced a significant reduction in its operations and workforce following a strategic review. This decision comes as the company adjusts its resources to focus solely on the manufacturing and distribution of left-heart access products under its agreement with Medtronic.
As part of the restructuring, Acutus will downsize its operations to the level required to meet its obligations to Medtronic, which involve transitioning the production of these products to Medtronic as per their Asset Purchase Agreement from April 2022 and the Distribution Agreement from June 2022. This will lead to a reduction in the company’s workforce by around 70%, with the downsizing expected to be completed by the first quarter of 2025. These changes are expected to significantly reduce the company's cash burn and ongoing operating costs.
Acutus will continue to manufacture left-heart access products for Medtronic until it has fully met its contractual obligations. The company estimates that the downsizing and exit-related costs will range from $1.4 million to $1.8 million, with the majority of these costs expected to occur in the first quarter of 2025. This includes payments for retention bonuses and other employee-related costs as part of the downsizing process.
Acutus’ sole source of revenue will now come from the sale of left-heart access products to Medtronic, along with any fee-bearing transition services. The company plans to manage its operating expenses carefully to focus on manufacturing, quality, supply chain activities, and general administration. It also expects to benefit from potential earnout payments from Medtronic based on the sales of left-heart access products under the terms of the Asset Purchase Agreement. These earnouts are expected to continue until January 2027.
As of September 30, 2024, the company had $12.6 million in cash, cash equivalents, marketable securities, and restricted cash. Acutus anticipates that this amount, combined with ongoing distribution revenue and future earnout payments, will be sufficient to manage its outstanding debt and support its remaining operations.
In accordance with the WARN Act, Acutus has provided the required sixty-day notice to affected employees and government authorities regarding the layoffs.
Source: globenewswire.com
