Pathway Medical Technologies, the Kirkland, WA-based medical device maker, has cut about one-fifth of its staff because its latest round of venture financing fell short of expectations, Xconomy has learned.
Today, Pathway eliminated 39 jobs, or about 19 percent of its workforce, leaving it with a staff of about 170, according to CEO Paul Buckman. The company made the cutbacks because it had to settle for $42.3 million in its latest round of venture capital—not the $55 million it was shooting for. That meant it was on pace to run out of cash by the end of 2010, before it expects to turn profitable in the first half of 2011.
But that’s not the whole story. Pathway, which is currently marketing a new device in the U.S. for clearing out blockages in leg arteries, is also falling short of the aggressive sales projections it forecasted earlier this year, Buckman says.
“It’s taking a little longer than we thought,” Buckman says. “We’re still seeing demand, we’re ramping up every month, it’s just not as aggressive as we anticipated.”
The company has been one of the bright spots in Seattle’s life sciences scene of the past year, since it won FDA approval last July to begin marketing its first product, called Jetstream. This is a tiny stainless-steel drill mounted on a catheter that slides inside clogged leg arteries, where it cuts through and vacuums out blockages. It’s approved for patients with peripheral artery disease, a condition related to cardiovascular disease that has caused 2 million Americans to seek treatment, complaining of pain when they walk. Most people go undiagnosed, partly because there aren’t many good options for treatment.
Pathway is using its latest round of investment cash to beef up its marketing effort to make doctors aware of this new tool. But Buckman says the company is running into unexpected obstacles, like tightening
