Acutus Medical (Nasdaq:AFIB) announced today that it will lay off 65% of its workforce as part of a major restructuring.
The Carlsbad, California–based company’s most recent annual report lists 225 workers at the end of 2022, which means the layoff could involve roughly 146 workers.
Restructuring will involve winding down Acutus Medical’s EP mapping and ablation business, including the AcQMap mapping system, the AcQMap 3D mapping catheter, the AcQBlate force-sensing ablation catheter, the AcGuide Max 2.0 steerable sheath, and associated accessories. (The company said it will support AcQMap procedures with a small group of therapy managers through Nov. 30.)
Acutus Medical’s main remaining focus will be the manufacturing of left-heart access products for Medtronic. It sold its left-heart access portfolio to Medtronic for $50 million last year, and has brought in tens of millions of dollars worth of milestone payments from the deal since then. Under the deal, it’s due 100% of total net end-user sales in year one, 75% of total net end-user sales in year two, and 50% in years three and four.
“In light of the current financing environment and the capital investments required to achieve leadership in the electrophysiology (EP) market, we have concluded that the optimal use of the Company’s resources is to reallocate capital from our mapping and ablation business to the manufacturing of left-heart access products for Medtronic, which we believe will maximize the potential for future earnouts and cash flow,” Acutus Medical board chair Scott Huennekens said in a news release.
The company’s CEO David Roman added: “The realignment of resources and corporate restructuring unfortunately impacts our team. It is undoubtedly difficult to part with our valued and highly talented colleagues who have made substantial contributions to our company.”
Acutus Medical officials expect to complete the restructuring in the first quarter of 2024. Following the restructuring, the company will be a contract manufacturing business. Company officials say the business has the potential to generate positive cash flow over the next several years.
The layoffs are but the latest example of medtech companies trimming their workforces as they seek to adjust to the post-pandemic economic environment and state of healthcare. MassDevice has reported on more than 18,000 layoffs in the industry since mid-2022.