Close on the heels of a “not approvable“ notice from the FDA, cryoablation specialist CryoCor (San Diego) yesterday reported that it is restructuring some of its operations and reducing staffing levels to decrease its overall cash burn rate.
The company said it “anticipates“ a staff reduction of about one-third and the postponement and possible elimination of some of its internal research initiatives.
Earlier this month CryoCor received word from the FDA that it had rejected the company's premarket approval application (PMA) for use of its cryoablation system to treat atrial flutter (Medical Device Daily, Feb. 6, 2006).
The “not approvable“ decision appeared as a shock to the company, which said it had expected an “approvable“ decision, based on earlier communication with the agency that it had considered simply as “routine“ enquiries.
The company is holding a conference call today to provide financial guidance and further information concerning its restructuring plans.
After receiving the “not approvable“ notice, CryoCor CEO Greg Ayers said that the turndown was likely the result of different ways of interpreting data related to the determination of “chronic“ efficacy and that the FDA had made a different interpretation than the company.
He also said at the time that the company was in the process of evaluating its response to the FDA's decision and that it would release details at a future time concerning how it would move forward with the application for atrial flutter. Those details are expected in today's conference call.
CryoCor did say, however, that its restructuring activities will not affect planned timelines for completing enrollment of its atrial fibrillation (AF) pivotal trial. In February, Ayers said that enrollment was proceeding at the rate of about 10 patients per week.
CFO Greg Tibbetts also had noted that the company's burn rate was about $1.3 million a month and that at the end of 2005 it had $29.4 million as cash on hand.
In mid-2005, CryoCor raised $35.5 million in an initial public offering (MDD, July 15, 2005).
The company said that it expects to incur restructuring charges of $500,000 to $600,000 over the next five months associated with the staff reductions and the cancellation of certain contracts.
CryoCor manufactures a disposable catheter system based on its cryoablation technology for the minimally invasive treatment of cardiac arrhythmias. Its Cardiac Cryoablation System is designed to treat cardiac arrhythmias through the use of cryoenergy to destroy targeted cardiac tissue. The system has been approved in Europe for the treatment of AF and atrial flutter, the two most common and difficult to treat arrhythmias, since 2002.
In the U.S., the company is conducting a pivotal trial to evaluate the safety and efficacy of the system for the treatment of AF, and has conducted a pivotal trial for the treatment of atrial flutter.