RE:RE:RE:RE:RE:RE:RE:8.25 ???? The FDA guidance for the review process for de novo to 510(k) submissions is 90-150 days. Helius submitted its request to the FDA on September 4th, implying a date range between December 4th and February 4th. There is NOTHING that could have tipped off management in any way that the approval would come later. Phil even reiterated that timeline on the earnings call.
Helius had $12.4M of cash left at the end of 3Q18 as it had burned through $3.6M in the quarter. With the Health Canada approval, you can assume that commercialization expenses would have gone up in 4Q18 and 1Q19. Assuming an increase to $4.5M and $5M, this would have left the company with only $2.9M at the end of the quarter. This does not account for any unforeseen expenses.
But what if the market crashes early next year, and nobody wants to have anything to do with pre-revenue companies? What is Helius supposed to do? Furthermore, ask anyone working in corporate finance or in a CEO role, betting on a FDA approval to raise cash with very little cash in the bank is the worst business strategy. What if the FDA decides that they have one more questions and it delays the process by another 2 months? Does your company just go bankrupt because you were hoping for an earlier approval, and you thought that the probability of this happening as very low?
To recap, my logic does not assume revised expectations for FDA approval, but only prudent business management. I am relieved they have taken the cash, because now I have no worries about the future except the execution of the commercialization.
Prokofiev