Titan Medical Inc (TMDIF)

[buccaneer1961]

will they need r/s afterall?

The results achieved by surgeons in operating prototypes in animal and cadaver studies during 2017 validated the potential for single incision surgeries to be performed with the SPORT Surgical System. However, the studies also confirmed that improvements to the system would be necessary before proceeding toward regulatory clearance and commercialization. The planning for engineering activities has commenced, but the execution of those activities will increase the cost of product development and extend the timeline to commercialization. The Company anticipates that 2018 will be a year of intense product development in preparation for manufacturing, including hardware and software at all levels, involving the workstation, patient cart, camera and light source, instruments, and disposable components that facilitate successful surgery. This work must be completed before design freeze and proceeding with summative evaluation usability tests with the final product and validation studies required for regulatory filings. Based on the scope of product development ahead, the Company expects these tests and studies to take place in 2019, with the system in its final configuration and with training programs in place for new surgeon users.

complete estimate of the timing and costs for development milestones beyond 2018 is speculative. The Company does however estimate that a minimum of an additional US $50 million will be required beyond 2018 in order to submit its 510(k) application to the Food and Drug Administration of the United States Department of Health and Human Services (the “FDA”), apply for CE Marking which indicates that a product for sale within the European Economic Area (EEA) has been assessed to conform with health safety and environmental protection requirements, and if successful with those efforts, proceed with early commercialization activities. Given the uncertainty of, among other things, product development timelines, regulatory processes and requirements (such as live animal and human cadaver studies and confirmatory human studies), as well as the availability of required capital to fund development and operating costs, the actual costs and development times may exceed management’s current expectations and an accurate estimate of the future costs of the regulatory phases and development milestones beyond 2018 is not possible at this time.
The Company’s current plan is to raise sufficient financing and continue the development and commercialization of the SPORT Surgical System at estimated incremental costs, and according to the timeline, as set forth in the table below.
Current Development Plan
The Company anticipates development costs through to the first quarter of 2019 to be as set out in the table below (the “Current Development Plan”).
The Current Development Plan set forth below differs from the development plan set forth in the Company’s short form prospectus dated November 30, 2017 (the “November Prospectus”). After the date of the November Prospectus, the Company modified its development plan in response to the results of preclinical testing and guidance received from the FDA.

Milestone 4
Complete SPORT capital equipment engineering confidence build based on improved design
10.6 (5)
Q4 2018
Milestone 5
Document results of confidence build unit testing, implement design improvements and schedule preliminary audit of quality system by European Notified Body
12.7)
Q1 2019
Milestone 6
Submit draft protocols to FDA in Q-submission(s) for comment
TBD(1)
Q2 2019
Initiate SPORT Surgical System Design Freeze
TBD(1)
H2 2019
Verify production system operation with clinical experts under rigorous formal (summative) human factors evaluation under simulated robotic manipulation exercises and through exercises of the completed surgeon simulation software and training program
Complete and document preclinical live animal (swine), cadaver surgery and human confirmatory studies according to final protocols for FDA submittal
Obtain 13485 Certification
Submit technical file to European Notified Body for review for CE Mark
Submit 510(k) application to FDA
TOTAL
TBD(1)
Notes: