NEW YORK – PAVmed and its subsidiaries Lucid Diagnostics and Veris Health announced on Tuesday that they have laid off 20 percent of their employees in an effort to lower quarterly cash burn by at least 25 percent.
The companies will prioritize commercialization efforts and have also streamlined their product portfolios, the firms said in a statement. Lucid, which offers its EsoGuard Esophageal DNA Test for detecting precancer, intends to continue to increase EsoGuard testing volume with a focus on larger strategic accounts and new market development initiatives and maintain its team of 40 salespeople after completing targeted layoffs.
The company also plans to maintain its Lucid Test Centers (LTC) and its satellite LTC program that allows Lucid employees to perform cell sampling procedures at prescribing clinicians' offices, it said. It is continuing to invest in LucidDx Labs to keep up EsoGuard testing capacity and will complete ongoing clinical utility studies to support in-network insurance coverage.
Lucid Diagnostics will, however, delay the completion of its EsoGuard BE-2 study to the second half of 2023 and is pausing further development of its EsoCure Esophageal Ablation device.
In a note to investors, Canaccord Genuity analyst Kyle Mikson said that the actions "should reduce expenses and cash burn going forward" and "help the company execute on near-term objectives." He added that the move is prudent and an appropriate course of action to ensure long-term success. Mikson noted that the company's cash burn in Q4 2022 was approximately $10 million.
In the most recent quarter, Lucid's revenues fell to $76,000 from $200,000 in the prior-year quarter and missed the Wall Street estimate of $420,000. The firm had a net loss of $14.3 million, or $.39 per share, in Q3 2022 compared to a net loss of $7.0 million, or $.49 per share, in Q3 2021.
In early morning trading on Wednesday on the Nasdaq, Lucid's shares were down 8 percent to $1.43.