Archus Orthopedics to Dissolve
BY LAUREN UZDIENSKI, SEPTEMBER 3, 2009
XConomy reported that Archus Orthopedics is shutting its doors after running out of funds to bring their facet replacement system to market.
As of this morning, Archus' website is down, and the company has formally filed with the state of Delaware to dissolve the business. Archus was founded in 2001 and has received over $63 million in funding from MPM Capital, InterWest Partners, Polaris Venture Partners and Johnson & Johnson Development Corporation, as well as a loan from GE Capital, though they were not able to fund the company through commercialization. The company had been conducting a 450-patient IDE study of its Total Facet Arthroplasty System, which is listed as "ongoing" but not recruiting on ClinicalTrials.gov.
Archus was known to be in trouble since last May, when XConomy reported that the company had laid off most of its 45 employees to conserve cash. At that time, CEO Jim Fitzsimmons said, "Although Archus Orthopedics has been performing very well, we have the unfortunate luck to be a relatively mature, but still pre-revenue company, in need [of] sustaining capital in an extremely challenging financing market." Since then, the company has been looking for a partner to help complete the trials, but those efforts were apparently unsuccessful. Archus' fate reflects an investment community with increasingly high expectations: as we noted last week, while there continues to be VC interest in new technologies, there appears to be decreased patience for time-to-market and the uncertainties of the PMA process.
