With less than two years to go on a self-set timeline for its first FDA submission, Vicarious Surgical is directing all its energy toward preparing its flagship robotic surgery system for the agency’s inspection.
Alongside the narrowed focus, Vicarious has made a plan to reduce spending not directly related to that work—resulting in a round of layoffs and cuts to external spending, CEO Adam Sachs announced in an investor call on Monday.
“While previously, it made sense for the company to deploy greater resources and parallel-path multiple contingencies in order to absolutely minimize timeline risk wherever possible, in the current market environment, fiscal discipline requires a much more lean approach, focused on growing equity value and minimizing dilution,” Sachs said, according to a transcript of the call. “With that in mind, we have taken thoughtful steps to optimize our burn and extend our cash runway.”
The layoffs will affect 14% of Vicarious’ workforce, Chief Financial Officer William Kelly said on the call. With 165 employees as of March 1, 2022, according to its most recent annual report (PDF), that means around 23 roles could be eliminated.
The cuts are focused mainly on reducing costs in Vicarious’ general and administrative (G&A) and sales and marketing departments, Kelly said—areas that could see their numbers slashed in half since the annual report listed only 45 employees in “marketing, sales and administrative activities.” Meanwhile, however, the company’s research and development work will actually see an increase in spending.
“The thesis behind the whole thing was to really focus spending on those things that get the quality product out the door fast and divert resources in this economic environment to ensure that we deliver on those things,” Kelly said.
The layoffs come with one-time severance costs of less than $1 million. Ultimately, they’re expected to keep Vicarious’ total 2023 cash burn between $55 million and $65 million, which would give the company “roughly two years of cash runway,” since it ended 2022 with $116 million in its pocket, Sachs noted on the call.
Though reducing spending “does naturally introduce additional timeline risk,” according to the CEO, Vicarious remains on track to submit its technology for FDA clearance by the end of next year.
The company's robotic surgery system is designed to be as minimally invasive as possible: A camera and two robotic instruments are inserted into the body through an incision about a centimeter wide, and then surgeons can remotely control the tools using virtual reality technology.
The robot’s first indication is in ventral hernia surgery. Though Vicarious originally planned to submit the system for FDA 510(k) clearance in late 2023, it revised those plans last year to focus instead on filing for a de novo clearance in the second half of 2024.
The company is now nearing the completion of its latest presubmission to the agency. “Our conversations with the FDA have remained enthusiastic, and we are pleased with the level of collaboration in support of bringing our differentiated technology to market,” according to Sachs.