Amedica is taking a comprehensive business review to heart, hoping it will help improve the company's financial performance, increase operational efficiency and strengthen the value proposition.
The immediate changes include:
• 28 percent staff reduction
• 35 percent corporate overhead and operational expenditure reduction
• Sales, marketing and product development team alignment
• 25 percent manufacturing reduction through their Kyocera partnership
"We are committed to our shareholders to improve the focus and profitability of Amedica, as these initiatives will strengthen our financial position and allow us to execute on the development of our core silicon nitride technology," said Chairman and CEO Dr. Sonny Bal.
Here are five things to know about the change:
1. Amedica estimates there will be a $6 million to $8 million impact from the strategic actions on the annualized operating profit benefit. The change is expected to begin during the first quarter of 2015.
2. The changes are slated to make Amedica operating cash flow breakeven during the second half of 2016 by:
• Reducing total cash burn
• Increasing financial stability
• Strengthening the balance sheet
3. Amedica anticipates 2015 silicon nitride revenue will increase 30 percent to 40 percent in 2015 over the previous year as a result of the restructuring.
4. The total revenue for silicon nitride is expected to reach $23 million to $24 million for 2015 after the restructuring.
5. The company will focus on the clinically-relevant areas of their offering to make the most impact. Amedica recently received positive clinical data from the CASCADE study and going forward will be particularly focused on spinal interbody devices but will also continue to "push toward hip and knee applications."
"We remain in discussion with several potential new partners and a number of those discussions are advancing," said Dr. Bal. "While we cannot give assurance on the outcome of those discussions, based on our experience and assessment, those potential new partners could be positive contributors to our financial performance as early as 2016."