The plan to convert the debt to equity has been in the making for several months and is expected to provide LENSAR additional opportunities to expand in the existing femtosecond laser space, according to Curtis.
Outside of healthcare, Curtis likens the company’s bankruptcy filing to the automobile manufacturing and airline industries, which came back even stronger after they filed for bankruptcy. However, there is a significant difference, according to Curtis. “In many cases, they did it to avoid their current liabilities,” he said, explaining that LENSAR will continue to pay all of its vendors throughout the bankruptcy.
Related: Year in review: Cataract surgery
The company will continue doing business as usual, Curtis said, adding that the bankruptcy filing will not cause any disruption to employees, suppliers, customers, or customers’ patients.
There will be no downsizing or loss of employee jobs, he added.
“PDL is a very solid partner,” he said. “They believe in our technology.”
PDL, which has been partners with LENSAR since October 2013, has experience in the pharmaceutical industry and understands that pathways to FDA approvals are long and require significant investment, Curtis said. In 2013, LENSAR closed $27 million in private equity financing and up to $60 million in debt financing with PDL, according to a LENSAR press release.
LENSAR, which was a venture capital company, will benefit from the bankruptcy filing in that PDL is a strong, public, commercial company, Curtis said. In addition, over the past year, LENSAR has reduced its operating expenses and increased its sales, according to Curtis.
The LENSAR laser system is a femtosecond laser specifically designed for refractive cataract surgery. An upgraded software to the LENSAR Laser System (Streamline) allows wireless transmission of preoperative topography data and infrared images of the undialated eye directly to the laser. The laser received FDA approval in 2013.
PDL is a bio-technology company which invests in patents and royalty-based biotechnology in order to optimize investment returns for shareholders. More than $1 billion has been made in its overall investments to date, according to the company. The company was known as Protein Design Labs prior to 2006 and is now headquartered in Incline Village, NV.