More Medical Device Businesses Impacted by COVID-19
Endologix is the latest medical device company to withdraw financial guidance for 2020 due to the uncertainty surrounding the magnitude, trajectory, and duration of COVID-19’s business impact.
The uncertainty surrounding COVID-19 is making it difficult for public companies to accurately forecast 2020 earnings. Irvine, CA-based Endologix recently joined a growing list of medical device companies that have withdrawn previously-reported financial guidance for the year.
The company makes endovascular stent grafts for the treatment of abdominal aortic aneurysms (AAA). AAA is a weakening of the wall of the aorta, the largest artery in the body, resulting in a balloon-like enlargement. Once an AAA develops, it continues to enlarge and, if left untreated, becomes increasingly susceptible to rupture.
Endologix said AAA procedures began to get deferred in March as healthcare systems shifted focus to treating coronavirus patients. The company said that so far these deferrals have impacted smaller-diameter, less-severe aneurysms more acutely than larger-diameter or ruptured aneurysms that require more immediate intervention. Endologix also said it expects that the majority of the deferred cases will be re-scheduled once the healthcare systems regain capacity.
“Management is closely monitoring the company’s balance sheet and evaluating options to improve liquidity to mitigate the impact of deferred AAA procedures,” the company said in a statement issued Monday.
Boston Scientific also withdrew its 2020 guidance and last week said it is “significantly reducing” the salaries of its CEO, board of directors, and executive committee members as part of its mitigation plan for managing the financial impact COVID-19. The company has also reduced weekly hours of employees where appropriate.
Conformis recently furloughed one-third of its workforce (about 80 employees) and withdrew its 2020 guidance. Previously the Billerica, MA-based company was expecting to see a product revenue growth this year between 3% and 6%.
Second Sight Medical Products is laying off 84 of its 108 employees and said it intends to wind-down operations. The Sylmar, CA-based company develops implantable visual prosthetics that are intended to create an artificial form of useful vision for blind individuals. Additional layoffs are also expected to come at a later date, depending on the extent of its wind-down activities.
Weight-loss company Obalon Therapeutics is exploring financial and strategic alternatives. Such alternatives could include equity or debt financing; a sale of the company; a business combination; or a merger or reverse merger.