OTC Markets (OTCM): Tell us about your company.
David McNally: Titan Medical Inc. is a Canadian public medical device company, headquartered in Toronto, Ontario, and listed on the Toronto Stock Exchange (TSX: TMD) and the OTCQX in the United States (OTCQX: TITXF).
Today’s robotic surgery presents fundamental challenges such as limited clinical applications, reduced operational efficiency and low financial return on investment (ROI) for hospitals.
Titan Medical is developing the SPORT™ Surgical System to address the current clinical, operational and financial limitations of robotic platforms in the high growth market of robotic surgery. Current robotic technology is cost prohibitive for secondary and tertiary hospitals, as well as for ambulatory surgery centers, and is confined to a limited number of surgical procedures. Titan’s well-differentiated SPORT system will expand robotic surgery into areas that are currently underserved in general abdominal procedures, in an operationally-efficient and cost-effective manner.
The SPORT system is a versatile single incision advanced robotic platform that features multi-articulated instruments, 3D high definition visualization, an open ergonomic workstation and a single-arm mobile patient cart while enabling broad applications in single and multi-quadrant surgeries. Unique design elements of the SPORT system allow for unique clinical capabilities and will allow for unparalleled OR efficiency at operating costs comparable to laparoscopic surgery.
Titan is planning to first commercialize the SPORT Surgical System in the United States and Europe, the world’s two largest markets for robotic surgery. However, Titan’s comprehensive commercial strategy will also capitalize on global demand for robotic surgery in high growth yet underserved emerging markets in Asia, South America, Australia and the Middle East.
On January 1, 2017, I was appointed Chief Executive Officer and a Director, and on January 9, 2016 as President of Titan. As a seasoned executive who has successfully created and developed two medical device companies while generating significant shareholder value, I have a track record of successful medical device commercialization, plus significant capital markets experience. I look forward to applying to Titan my experience in all facets of building innovative and complex medical device companies serving multi-specialty surgical applications in a highly competitive environment including clinically-focused product design and development, capital formation, regulatory clearance, and commercialization. I have joined Titan after serving as the founder, President, CEO and Chairman of the Board of Domain Surgical, Inc., a developer, manufacturer and marketer of a new advanced energy surgery platform for precise cutting and coagulation of soft tissue, and reliable vessel sealing in open and laparoscopic procedures. In August of 2016, we successfully merged Domain Surgical with flexible laser company OmniGuide, Inc. to become the world’s premier supplier of surgical systems for tissue preservation. Prior to Domain, I was co-founder, President, CEO and a Director of ZEVEX International, Inc. (NASDAQ: ZVXI), a publicly-traded medical device technology leader that manufactured and marketed a broad array of products including minimally invasive surgical devices, sensors, and medical device award-winning fluid delivery systems. Under my leadership, ZEVEX was acquired by Moog, Inc. (NYSE: MOGA, MOGB) in 2007. In addition to earning a MBA from the University of Utah, I hold a Bachelor of Science degree in Mechanical Engineering from Lafayette College, Easton, PA and am the co-inventor of more than 30 U.S. and international patents associated with ferromagnetic surgical devices and systems, electromagnetic and ultrasonic sensors, and medical fluid delivery systems.
OTCM: What were your accomplishments in 2016?
Mr. McNally: 2016 was the year when Titan reached its inflection point. These kinds of events are crucial in transitioning start-up companies in taking the challenging yet necessary steps in making their way towards their ultimate goal of commercialization of the product. Titan Medical, with strong leadership and clear focus, is now on its way to deliver on the critical milestones in commercializing the SPORT surgical system.
In 2016, Titan Medical also unveiled, the SPORT system prototype at highly selective tradeshows. In March, Titan Medical successfully unveiled the SPORT system to the surgeon community at the Society of American Gastrointestinal and Endoscopic Surgeons (SAGES) meeting in Boston. Over the course of three exhibit days, more than 800 surgeons viewed the technology and attended live demonstrations of Titan’s SPORT technology. In early August, Titan Medical exhibited its SPORT system at the World Robotics Gynecology Congress (WRGC). The conference was sponsored by the American Association of Gynecologic Laparoscopists (AAGL) and was held in New York City. Being at these premier global meetings allowed Titan to share our vision for an advanced robotic platform with the eager and influential audiences. This was the first time we demonstrated the SPORT surgical system to the general surgery and gynecological community respectively and based on the feedback it was extremely positive and validating experience.
During 2016, the Board of Directors explored a variety of fund raising opportunities and succeeded in securing necessary funding to keep the development of the SPORT system progressing. Titan not only explored traditional ways to raise capital, such as through equity offerings, but also actively pursued partnerships, strategic investments and other non-dilutive methods. Since November 2015, Titan has raised nearly C$60 million (US$45 million).
Our development partner Ximedica, LLC has recently built functional prototype units that will be used in a series of pre-clinical studies to simulate procedural applicability — from gall bladder surgery to general abdominal, gynecological, urological and colorectal procedures. These systems will be operated by key opinion leaders (KOLs) and early technology adopters to generate early product feedback and the requisite data in support of the regulatory submissions. In October, the OTC Markets Group announced that Titan would be included in a newly launched OTCQX Canada Index, which is comprised of a diversity of quality Canadian companies that meet high financial, disclosure and corporate standards.
OTCM: What differentiates Titan Medical from your competitors and what is your growth strategy for 2017?
Mr. McNally: Titan is highly responsive to patients and stakeholders’ medical, clinical, operational and financial needs, and aims to bring enhanced user-friendly technology to the market place. The design of the SPORT system is inspired in direct response to “voice of customer” feedback from current robotic users — surgeons, as well as administrators and Titan’s Surgeon Advisory Board comprised of world-renowned multi-specialty surgeons affiliated with leading institutions.
The SPORT surgical system is designed to offer the following competitive advantages:
- Highly Versatile: Natural handle interface and dexterity with single port surgical access for multi-quadrant surgeries.
- Operationally Efficient: Simple to setup and dismantle with mobile single arm patient cart design.
- Competitively-Priced: Unique design elements such as disposable single-use tips and extended-life instruments facilitate optimal pricing.
- Reduced footprint: Highly mobile and functional surgical device for small surgical spaces.
In addition to practical differentiation from other systems by its unique single-port design, Titan continues to push innovation in the robotic surgical space and, as of December 31, 2016, Titan has ownership or exclusive rights to 14 patents and 32 patent applications. Titan’s focus continues to be to commercialize an innovative single incision robotic surgical system that has been designed from the ground up based on clinical user requirements, with a unique technical footprint and with the intent of respecting the innovation of others while obtaining the appropriate patents to protect our competitive position.
OTCM: Titan Medical celebrates its 5th year on OTCQX this year. How have you leveraged OTCQX as part of your U.S. IR program?
Mr. McNally: One of our primary objectives for listing on OTCQX was to attract and retain a complementary U.S. investor base. We have met this objective many times over.
Titan Medical has employed the OTCQX to effectively communicate to our existing and potential American investors and to obtain blue sky approval in many states in the U.S. Titan has also benefitted from attending and participating in a number of annual OCTQX forums in Toronto.
OTCM: What else do you want investors to know about Titan Medical?
Mr. McNally: We believe that 2017 will be a significant and successful year of progress for Titan.
With my appointment as CEO at the start of the year, I am thrilled for the opportunity to apply my leadership skills and medical device commercialization experience to the challenges and opportunities facing Titan Medical. We begin the year with strong business partners, significant product development accomplishments, and a core team with which we can execute. We expect to recruit and add complementary expertise to the team early in the year.
Early in January, we will be attending the J.P. Morgan Healthcare Conference in San Francisco. Our meeting schedule is completely full with prospective analysts that want to hear our story, potential investors, and business partners. In addition, we have been invited to present at three well-respected healthcare conferences. Once details are confirmed, we will post this information on our website.
Based on ever-evolving medical device technology and the regulatory environment, we have been conducting a very detailed and thorough review of our development timelines and milestone schedules. This year, we would like to improve on the transparency with which we communicate with our shareholders, while protecting the strategic advantage of confidential information. As we achieve meaningful operational and development milestones, we will promptly inform our shareholders.
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