Dive Brief:

• TransEnterix is "evaluating strategic alternatives" and restructuring to cut its costs in response to weak demand for its Senhance robotic surgery system.

• In an update posted Thursday, TransEnterix said it sold one Senhance system in the third quarter. The company, which told investors to expect meaningful commercial progress in the second half of the year, also sold one Senhance system in each of the prior quarters. 

• TransEnterix has tasked J.P. Morgan Securities with looking into strategic alternatives such as the sale of the business. Shares in the company were down close to 2% Friday morning.

Dive Insight:

TransEnterix exited 2018 with some momentum, selling five Senhance systems to bring its tally for the year up to 15. However, the company has been less successful in 2019, selling just two systems over the first half of the year despite predicting it would shift two to four units in the second quarter alone.

The slump continued into the third quarter. TransEnterix sold one Senhance system over the period to a buyer in Taiwan, its second sale in the country this year. TransEnterix revealed it had received a purchase order from a Taiwanese hospital at the time of the second quarter results.

In preliminary third quarter results, TransEnterix said it expects the single Senhance sale to translate into revenue of around $2 million in the third quarter. TransEnterix ended the quarter with $22.8 million in cash and other liquid assets.

Amid the disappointing results, the company's CFO, Joe Slattery, announced plans to retire at the end of the year.  The company said it would start a search for his replacement. Slattery's announcement follows the loss of another high-profile executive. Paul Ziegler, who had been a vice president of sales, left in January for ViewRay, which makes radiation therapy devices.

TransEnterix's sale of AutoLap image-based laparoscope positioning assets to Great Belief International will add to its financial reserves. TransEnterix disclosed the deal in July but has since amended the terms. 

Under the original deal, TransEnterix was due to receive $47 million. Great Belief was due to pay $5 million by the end of July, make a $30 million investment by the end of September, and pay the final $12 million when the deal closed at the end of November. In August, TransEnterix said Great Belief had failed to pay the initial $5 million on time.

The new deal eliminates the $30 million equity investment and restructures the other $17 million. TransEnterix received the first $3 million earlier this month and is due to receive another $1 million by mid-December. In between, Great Belief will issue a $13 million letter of credit. TransEnterix said it expects the new terms will give it enough money to keep operating through the first quarter of 2020.

Faced with the short financial runway, TransEnterix plans to restructure to cut costs. TransEnterix will share details of the restructuring plan when it publishes its final third quarter results. 

TransEnterix has also engaged J.P. Morgan Securities to secure its longer-term future. The strategic review will consider the sale of the company, financing, strategic partnerships and collaborations but may ultimately fail to identify a way forward for TransEnterix.