Across the nation, Robotically assisted surgeries are on the rise. Their popularity is due to reduced recovery times and less strain on hospital resources. Titan Medical Inc.
Equities: For our readers, can you describe Titan Medical? And especially what is the SPORT Surgical System?
President &CEO David McNally: We are a public company, dual listed on the Toronto Stock Exchange under the symbol TMD and on Nasdaq under the symbol TMDI. We are focused on the development and commercialization of a single-port robotically assisted system for abdominal surgery. We believe that single incision surgery is the next frontier in reducing surgical trauma and speeding patient recovery, just as the move from open surgery to laparoscopic surgery represented a leap forward over two decades ago. Through a 25mm incision, our system is designed to deliver a 3D high definition camera with a light source and two multi-articulating arms that enable the surgeon to perform procedures with unprecedented dexterity and visualization, yet with comfort afforded by the ergonomic design. At a high level, we aim to deliver a versatile, mobile, cost-effective robotic surgical system that can be used to improve patient outcomes, while meeting the needs of surgeons, hospital staff and hospital administrators.
Titan Medical Next-Generation Single Port Surgical System Enhancement from Titan Medical Inc. on Vimeo.
Equities: What are some milestones that potential investors should be looking for this year as you build out the SPORT Surgical System?
McNally: We began this year by reporting that we had completed the confidence build of our next-generation single port robotic system on schedule in December. Based on discussions with the FDA, we have clarity on the regulatory pathway to commercialization in the United States. Looking forward, 2019 will be an incredibly busy year. During the first quarter, we expect to document the results of testing the confidence build of our next-generation robotic system. We then expect to proceed to design freeze and the verification of system operation with rigorous human factors evaluation under simulated robotic manipulation exercises. We then plan to proceed to preclinical animal and human cadaver studies in support of our 510(k) submission. Based on preparations that are already underway, we’re planning for the first human surgeries to be performed with our single-port surgical system during the fourth quarter of 2019 under an Investigational Device Exemption from the FDA. Upon successful completion of those studies, we expect to file our 510(k) application with the FDA by year-end.
Equities: So, I know you just released a peer-reviewed, multi-faculty paper that was published in Surgical Endoscopy, can you tell us a little about that?
McNally: Yes, this is a significant milestone. To date, 45 procedures have been performed in a preclinical environment, and the surgeries were performed on live animals and human cadavers. This paper represents a collaboration among a number of the surgeons who have used the system successfully in those preclinical studies. It’s notable that this was published in a reputable peer reviewed journal, Surgical Endoscopy. The article concluded that the basic tasks of surgery and a variety of physically complex procedures can be performed with our SPORT Surgical System, and that it shows great promise for single incision surgery in humans.
Equities: One of the most interesting aspects of the study was that each procedure was completed successfully on the SPORT System?
McNally: Yes, 100% of the time when our system was used in these 45 studies, the surgeons were not only successful in performing the studies that were planned, but they went even further to perform more complex surgeries than we had anticipated. As we look forward to future use of our system on humans, surgeons have already demonstrated the basic functions of tissue grasping, approximation, sharp dissection, blunt dissection, coagulation and suturing, all of which can be performed with our platform. Overall, this publication also provides evidence that the outcomes with our system can be achieved by surgeons representing multiple sub-specialties.
Equities: Could you describe the technological specifications of the SPORT System?
McNally: This system is designed to have a very small footprint in the operating room and to be mobile. For example, it can be transported easily down the hall to other operating rooms within a facility. Our system has the smallest footprint of any of the robotic systems that exist today for abdominal surgery. It is more compact and lighter weight, as well. It consists of just two components. There is an ergonomic workstation that can be adjusted to the surgeon’s needs, where the surgeon sits upright and views a flat panel monitor which displays a 3D HD image of the target anatomy within the body. Also, we have integrated training software into our workstation.We have provided tools for hospital surgeon accreditation, and these tools will allow the surgeon to not only perform simulated training exercises, but also to be able to be graded on those exercises so that there is a record of training.
Equities:Obviously, you have a lot of complex technology that’s working together. How is this software and hardware built?
McNally: A robotic surgical system is as complex a medical device as one could imagine. It requires an incredible amount of engineering of the vision system, which has to be very crisp and clear with high resolution, but also needs to be communicated from the patient’s body to the workstation with extremely low latency. Of course, there are number of processors and electromechanical systems that interface with the processors. Based on this complexity and our desire to move very swiftly, we use an outsourcing model. We work with experts around the world who we believe are the very best at what they do, and through that outsourcing strategy we can ramp up engineering efforts in key areas as needed and then ramp them back down so that we’re not shouldering the burden of having an enormous full-time engineering staff. We presently have over a hundred engineers working on the system as we accelerate toward expected commercialization.
Mimic Simulation Core Surgical Skills Exercises on SPORT Surgical System | September 2018 from Titan Medical Inc. on Vimeo.
Equities: Are there any competitors in the field?
McNally: We have the benefit of following a remarkably successful company that has put robotically assisted abdominal surgery on the map, and that is Intuitive Surgical
Equities: In that vein, what do you see as the potential of single incision surgery and how it could impact healthcare and the medical field?
McNally: Single incision surgery, we believe, can reduce trauma to the body with fewer incisions. Similarly, as certain procedures have moved from open to minimally invasive approaches in the past, we have seen better patient outcomes and fewer complications during and after surgery, which in turn allows patients to leave the hospital sooner and ultimately reduces some of the greatest cost burdens hospitals face. The potential benefits of single incision surgery go far beyond less scarring, as they may also include the benefits of improved healing and a reduced economic burden on hospitals and the healthcare system in total.
Equities: What do you believe is the revenue potential for this system?
McNally:No doubt, this is a multi-billion dollar revenue opportunity. Our business model resembles the proven medical industry razor/ razor blade model. We are initially focused on benign gynecologic procedures and in the U.S. alone, independent market research indicates that over 600,000 of those procedures are performed annually. With an anticipated price per procedure for the use of our system projected to be $1,500, this equates to a recurring revenue stream market potential of up to $900 million annually. When we add to this a projected system sales price of up to $1.25 million and annual service revenue of $125,000 per system, in gynecologic surgery alone this is clearly an extraordinary multi-billion dollar market opportunity.
Equities: Can you walk us through Titan’s timeline for the rest of the year?
McNally: This year our focus will be on preparation for our regulatory submittals. Those will include both a U.S. submission to the FDA for clearance and a submittal for the CE mark in Europe by year end. Based on the approval processes with both the FDA and a European Notified Body, we would expect clearance to sell by mid-year 2020. However, what that requires is a great deal of preclinical and clinical evidence to support those submittals. So, the pathway this year, is once we have gone through the testing of the next-generation robotic system that we revealed at year-end 2018, we’ll proceed to preclinical animal and human cadaver studies under rigorous guidelines to support our regulatory submittals. Then,in the fourth quarter, we expect several sites to perform surgeries in humans to provide confirmatory human data that is required for our FDA submission.
(This interview has been edited for clarity)