Changes for page Dextera Surgical

Last modified by Wilton Risenhoover on 2019/10/22 05:46

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edited by Wilton Risenhoover
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  Dextera Surgical (DXTR) is commercializing and developing the MicroCutter 5/80TM stapler based on its proprietary ‘‘staple-on-a-strip’’ technology intended for use by thoracic, pediatric, bariatric, colorectal and general surgeons. Its proprietary ‘‘staple-on-a-strip’’ technology enables it to develop products with innovative features such as consistent staple forms, significantly reduced tool shaft diameter and increased articulation. Together these advances in stapler design enable surgeons to perform procedures on a broader array of patients and to develop procedural methods previously unattainable with existing products in the market. The MicroCutter 5/80, which is currently commercially available, is a cartridge-based stapler device with a 5 millimeter shaft diameter, 80 degrees of articulation, and a 30 millimeter staple line cleared for specified indications for use in the United States, and in the European Union, or EU, for a broader range of specified indications of use. Dextera estimate that the commercially available MicroCutter 5/80, along with its additional potential products, if developed, would be suited for use in approximately 1.4 million procedures annually in the United States, involving, the company estimate, over four million staple cartridge deployments, three million of which the company believe would be deployed in laparoscopic procedures.{{footnote}}https://fintel.io/doc/sec-dxtr-dextera-surgical-10k-annual-report-2017-october-13-18023{{/footnote}}
  In January 2016, Dextera received 510(k) clearance from the U.S. Food and Drug Administration, or FDA, to use the MicroCutter 5/80 with a white reload, to deploy staples for use in thin tissue, and in July 2016, The company received FDA 510(k) clearance to use the MicroCutter 5/80 with a blue reload, to deploy staples for use in medium thickness tissue, both for the transection and resection in open or minimally invasive urologic, thoracic, and pediatric surgical procedures. These clearances complement the existing indications for use of the MicroCutter 5/80 in surgical procedures in the small and large intestine and in the appendix. Following the 510(k) clearances, the companyconducted its evaluation of the MicroCutter 5/80, which deploys both blue and white cartridges, with selected centers of key opinion leaders in the U.S. and Europe through initial market preference testing to evaluate surgeons’ preferences and to validate the MicroCutter’s clinical benefits prior to broadening its commercial launch. the company completed its market testing of the MicroCutter 5/80 with approximately 55 procedures and 200 staple cartridge deployments. In this market preference testing, the MicroCutter 5/80 demonstrated reliable and consistent hemostasis (stopping of the blood flow). Following its successful evaluation of the MicroCutter 5/80, the company expanded its commercial launch to a select group of customers in the U.S. and Europe. The company are conducting the MicroCutter-Assisted Thoracic Surgery Hemostasis, or MATCH, registry, a post-market surveillance registry, to evaluate the hemostasis and ease-of-use for the MicroCutter 5/80. This is an open-label, multi-center registry and the company plan to enroll up to 120 patients requiring surgical stapling during a lobectomy of the lung (surgical removal of a lobe of an organ) or segmentectomy of the lung (surgical removal of a segment of a lung lobe) at leading centers in the U.S. and Europe. As of September 30, 2017, the company had enrolled 107 patients in the MATCH registry.
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  Dextera may seek to sell additional equity or debt securities, obtain a credit facility, enter into product development, license or distribution agreements with third parties or divest one or more of its commercialized products or products in development. The sale of additional equity or convertible debt securities could result in significant dilution to its stockholders, particularly in light of the prices at which its common stock has been recently trading. In addition, if the company raise additional funds through the sale of equity securities, new investors could have rights superior to its existing stockholders. If additional funds are raised through the issuance of debt securities, these securities could have rights senior to those associated with its common stock and could contain covenants that would restrict its operations. Any product development, licensing, distribution or sale agreements that the company enter into may require it to relinquish valuable rights, including with respect to commercialized products or products in development that the company would otherwise seek to commercialize or develop itselves. The company may not be able to obtain sufficient additional financing or enter into a strategic transaction in a timely manner, in which case the company would need to cease operations. Its need to raise capital may require it to accept terms that may harm its business or be disadvantageous to its current stockholders.
--== Agreements with Century ==
++= Agreements with Century =
  On September 2, 2011, the company signed a distribution agreement, or the Distribution Agreement, with Century, with respect to distribution of its planned MicroCutter products in Japan. Under the terms of a secured note purchase agreement entered into at the time of the Distribution Agreement, Century agreed to loan it an aggregate of up to $4.0 million, with principal due on September 30, 2016, subject to certain conditions, which principal due date was extended to September 30, 2018, effective July 1, 2014. Under this facility, the company received $2.0 million on September 30, 2011, and the remaining $2.0 million on December 27, 2011. The note bears 5% annual interest which is payable quarterly in arrears.
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  In addition, its distribution agreement with Century pertaining to the PAS-Port system, originally dated June 16, 2003, as amended, was last amended effective July 1, 2014. The last amendment, among other things, renewed the contract for another five years, extending the expiration date to July 31, 2019. The note amendment was accounted for as the modification of the 2011 note agreement, as the value of the consideration provided by it in the form of additional distribution rights was estimated to be approximately equal to the reduction in the fair value of the note. Accordingly, the company reduced the carrying value of the note of $3.1 million to its post-modification fair value of $2.6 million, and recorded the resulting incremental discount of $0.5 million as deferred revenue. The company determined the fair value of the amended note using the discount rate of 18%, which the company estimated as the market rate of borrowing as of the modification date that could be obtained by companies with credit risk similar to it. The incremental discount of $0.5 million will be amortized over the remaining term of the note using the effective interest rate method. The deferred revenue will be recognized over the term of the distribution agreement beginning upon the first sale by Century of the MicroCutter products in Japan.
--== Agreements with Intuitive Surgical ==
++= Agreements with Intuitive Surgical =
  On August 16, 2010, Dextera entered into a license agreement, or License Agreement, with Intuitive Surgical Operations, Inc., or Intuitive Surgical, pursuant to which Dextera granted to Intuitive Surgical a worldwide, sublicenseable, exclusive license to use its intellectual property in the robotics field in diagnostic or therapeutic medical procedures, but excluding vascular anastomosis applications, for an upfront license fee of $9.0 million, which was fully recognized in fiscal years ended June 30, 2011 through 2014. Dextera also eligible to receive a contingent payment if sales of any products incorporating its patent rights achieve a specified level of net sales within a specified period after the date of the License Agreement, as well as single-digit royalties on sales by Intuitive Surgical, its affiliates or its sublicensees of specified stapler and clip applier products covered by its patent rights as well as on sales of certain other products covered by its patent rights that may be developed in the future, if any. Each party has the right to terminate the License Agreement in the event of the other party’s uncured material breach or bankruptcy. Following any termination of the License Agreement, the licenses granted to Intuitive Surgical will continue, and, except in the case of termination for its uncured material breach or insolvency, Intuitive Surgical’s payment obligations will continue as well. Under the License Agreement, Intuitive Surgical has rights to improvements in its technology and intellectual property over a specified period of time.
  On December 31, 2015, Dextera and Intuitive Surgical amended the license agreement to include, among other things, an agreement providing for a feasibility evaluation and potential development of a surgical stapling cartridge for use with Intuitive Surgical’s da Vinci Surgical Systems. The six-month feasibility evaluation of its MicroCutterTM technology was completed successfully and Intuitive Surgical exercised its option to initiate a joint development program for an 8-millimeters-in-diameter surgical stapling cartridge for use with the da Vinci Surgical System, and the company and Intuitive Surgical entered into a joint development program in which Intuitive Surgical will be responsible for the development work on the stapler and the company will be responsible for the development work on the stapler cartridge. Pursuant to the agreement, the company will receive further funding for development of the cartridge and tooling as well as a unit-based royalty on commercial sales, if any.
--== Reverse Stock Split ==
++= Reverse Stock Split =
  On February 16, 2016, the company filed an amendment to its certificate of incorporation, which amendment was effective at 12:01 a.m. eastern time on February 17, 2016, to effect a one-for-ten reverse split of its outstanding common stock (the “Reverse Split”), which had the effect of reducing the number of outstanding shares of common stock from 89,344,777 to 8,934,452. Any fractional shares of common stock resulting from the Reverse Split were settled in cash equal to the fraction of a share to which the holder was entitled. As a result of the Reverse Split, the company reclassified its consolidated balance sheets total par value of approximately $80,000 from common stock to additional paid-in capital for the reporting periods.