10-K
1
form10-k.htm
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
10-K
(Mark One)
For the fiscal year ended December 31, 2020
For
the transition period from ____ to _____
Commission
file number: 000-19871
MICROBOT
MEDICAL INC.
(Exact
name of registrant as specified in its charter)
25
Recreation Park Drive, Unit 108
Hingham,
MA 02043
(Address
including zip code of registrant’s Principal Executive Offices)
(781)
875-3605
(Registrant’s
Telephone Number, Including Area Code)
Securities
registered under Section 12(b) of the Act:
Title of each class Trading Symbol(s) Name of each exchange on which registered
Common Stock, Par value $0.01 MBOT NASDAQ Capital Market
Securities
registered under Section 12(g) of the Act: None
Indicate
by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes [ ]
No [X]
Indicate
by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes [ ]
No [X]
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data file required to be submitted pursuant
to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that
the registrant was required to submit such files). Yes [X] No [ ]
Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting
company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,”
“smaller reporting company”, and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [X] Smaller reporting company [X]
Emerging Growth Company [ ]
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Indicate
by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness
of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered
public accounting firm that prepared or issued its audit report. [ ]
Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]
State
the aggregate market value of the voting and non-voting common equity held by non-affiliates computed by reference to the price
at which the common equity was last sold, or the average bid and asked price of such common equity, as of the last business day
of the registrant’s most recently completed second fiscal quarter: approximately $46,050,375.
Common
stock outstanding as of March 29, 2021: 7,108,133 shares
INFORMATION
CONCERNING FORWARD-LOOKING STATEMENTS
This
report contains forward-looking statements. Forward-looking statements are projections in respect of future events or our future
financial performance. In some cases, you can identify forward-looking statements by terminology such as “may”, “should”,
“intends”, “expects”, “will”, “plans”, “anticipates”, “believes”,
“estimates”, “predicts”, “potential”, or “continue” or the negative of these terms
or other comparable terminology. These statements are only predictions and involve known and unknown risks, uncertainties and
other factors, including the risks listed under the section entitled “Risk Factors” commencing on page 22 of
this report, which may cause our or our industry’s actual results, levels of activity or performance to be materially different
from any future results, levels of activity or performance expressed or implied by these forward-looking statements.
Table
of Contents
Page
PART I
Item 1. Business 3
Item 1A. Risk Factors 22
Item 1B. Unresolved Staff Comments 45
Item 2. Description of Property 45
Item 3. Legal Proceedings 45
Item 4. Mine Safety Disclosures 46
PART II
Item 6. Selected Financial Data 47
Item 7A. Quantitative and Qualitative Disclosures about Market Risk 53
Item 8. Financial Statements and Supplementary Data 53
Item 9A. Controls and Procedures 54
Item 9B. Other Information 54
PART III
Item 10. Directors, Executive Officers and Corporate Governance 55
Item 11. Executive Compensation 60
Item 14. Principal Accountant Fees and Services 66
PART IV
Item 15. Exhibits and Financial Statement Schedules 67
NOTE
REGARDING REFERENCES TO OUR COMPANY
Throughout
this Form 10-K, the words “we,” “us,” “our,” the “Company” and “Microbot”
refer to Microbot Medical Inc., including our directly and indirectly wholly-owned subsidiaries and, unless the context otherwise
requires, the historical business, financial statements and operations of Microbot are of Microbot Medical Ltd., an Israeli corporation
(“Microbot Israel”) which became a wholly-owned subsidiary of the Company on November 28, 2016.
Risk
Factors Summary
The
following is a summary of the principal risks that could adversely affect our business, operations, and financial results. A more
thorough discussion of these and other risks are listed under the section entitled “Risk Factors” commencing on page
22.
Risks
Relating to Microbot’s Financial Position and Need for Additional Capital
Risks
Relating to the Development and Commercialization of Microbot’s Product Candidates
Risks
Relating to Microbot’s Intellectual Property
Risks
Relating to Operations in Israel
● Israel’s economy may become unstable.
Risks
Relating to Microbot’s Securities, Governance and Other Matters
● We do not expect to pay cash dividends on our common stock.
PART
I
Item
1. Description of Business.
The
Company
Microbot
is a pre-clinical medical device company specializing in the research, design and development of next generation robotic endoluminal
surgery devices targeting the minimally invasive surgery space. Microbot is primarily focused on leveraging its micro-robotic
technologies with the goal of redefining surgical robotics while improving surgical outcomes for patients.
Microbot’s
current technological platforms, ViRobTM, TipCATTM, LIBERTYTM and certain CardioSert assets,
are comprised of proprietary innovative technologies. Using the ViRob platform, Microbot is currently developing the Self Cleaning
Shunt, or SCSTM, for the treatment of hydrocephalus and Normal Pressure Hydrocephalus, or NPH. Utilizing the LIBERTY
and CardioSert platforms, Microbot is developing the first ever fully disposable robot for various endovascular interventional
procedures. In addition, the Company is focused on the development of a Multi Generation Pipeline Portfolio utilizing all of its
proprietary technologies.
Microbot
has a patent portfolio of 42 issued/allowed patents and 23 patent applications pending worldwide.
We
were incorporated on August 2, 1988 in the State of Delaware under the name Cellular Transplants, Inc. The original Certificate
of Incorporation was restated on February 14, 1992 to change our name to CytoTherapeutics, Inc. On May 24, 2000, the Certificate
of Incorporation as restated was further amended to change our name to StemCells, Inc. On November 28, 2016, C&RD Israel Ltd.,
a wholly-owned subsidiary of ours, completed its merger with and into Microbot Medical Ltd., or Microbot Israel, an Israeli corporation
that then owned our assets and operated our current business, with Microbot Israel surviving as a wholly-owned subsidiary of ours.
We refer to this transaction as the Merger. On November 28, 2016, in connection with the Merger, we changed our name from “StemCells,
Inc.” to Microbot Medical Inc., and each outstanding share of Microbot Israel capital stock was converted into the right
to receive shares of our common stock. In addition, all outstanding options to purchase the ordinary shares of Microbot Israel
were assumed by us and converted into options to purchase shares of the common stock of Microbot Medical Inc. On November 29,
2016, our common stock began trading on the Nasdaq Capital Market under the symbol “MBOT”. Prior to the Merger, we
were a biopharmaceutical company that operated in one segment, the research, development, and commercialization of stem cell therapeutics
and related technologies. Substantially all of the material assets relating to the stem cell business were sold on November 29,
2016.
In
May 2016, we effected a 1-for-12 reverse split of our common stock, and in November 2016, we effected a 1-for-9 reverse split
of our common stock in connection with the Merger. In September 2018, we effected a 1-for-15 reverse split of our common stock.
Technological
Platforms
ViRob
The
ViRob is an autonomous crawling micro-robot which can be controlled remotely or within the body. Its miniature dimensions are
expected to allow it to navigate and crawl in different natural spaces within the human body, including blood vessels, the digestive
tract and the respiratory system as well as artificial spaces such as shunts, catheters, ports, etc. Its unique structure is expected
to give it the ability to move in tight spaces and curved passages as well as the ability to remain within the human body for
prolonged time. The SCS product was developed using the ViRob technology.
TipCAT
The
TipCAT is a disposable self-propelled locomotive device that is specially designed to advance in tubular anatomies. The TipCAT
is a mechanism comprising a series of interconnected balloons at the device’s tip that provides the TipCAT with its forward
locomotion capability. The device can self-propel within natural tubular lumens such as the blood vessels, respiratory and the
urinary and GI tracts. A single channel of air/fluid supply sequentially inflates and deflates a series of balloons creating an
inchworm like forward motion. The TipCAT maintains a standard working channel for treatments. Unlike standard access devices such
as guidewires, catheters for vascular access and endoscopes, the TipCAT does not need to be pushed into the patient’s lumen
using external pressure; rather, it will gently advance itself through the organ’s anatomy. As a result, the TipCAT is designed
to be able to reach every part of the lumen under examination regardless of the topography, be less operator dependent, and greatly
reduce the likelihood of damage to lumen structure. The TipCAT thus offers functionality features equivalent to modern tubular
access devices, along with advantages associated with its physiologically adapted self-propelling mechanism, flexibility, and
design.
CardioSert
Technology
On
April 8, 2018, Microbot acquired a patent-protected technology from CardioSert Ltd., a privately-held medical device company
based in Israel that was part of a technological incubator supported by the Israel Innovation Authorities. The CardioSert technology
contemplates a combination of a guidewire and microcatheter, technologies that are broadly used for surgery within a tubular organ
or structure such as a blood vessel or duct. The CardioSert technology features a unique guidewire delivery system with steering
and stiffness control capabilities which when developed is expected to give the physician the ability to control the tip curvature,
to adjust tip load to varying degrees of stiffness in a gradually continuous manner. The CardioSert technology was originally
developed to support interventional cardiologists in crossing chronic total occlusions (CTO) during percutaneous coronary intervention
(PCI) procedures and has the potential to be used in other spaces and applications, such as peripheral intervention, and neurosurgery.
LIBERTY
On
January 13, 2020, Microbot unveiled what it believes is the world’s first fully disposable robotic system for use in Endovascular
Interventional procedures, such as cardiovascular, peripheral and neurovascular. The LIBERTY robotic system features a unique
compact design with the capability to be operated remotely, reduce radiation exposure and physical strain to the physician, reduce
the risk of cross contamination, as well as the potential to eliminate the use of multiple consumables when used with its
“One & Done” capabilities, which would be based in part on the CardioSert platform or possibly other
guidewire/microcatheter technologies.
LIBERTY
is designed to maneuver guidewires and over-the-wire devices (such as microcatheters) within the body’s vasculature. It
eliminates the need for extensive capital equipment requiring dedicated Cath-lab rooms as well as dedicated staff. In addition,
when combined with CardioSert technology or possibly other guidewire/microcatheter technologies, it is being designed to
streamline Cath-lab procedures with our proprietary “One & Done” tool that combines guidewire and microcatheter
into a single device. With control over tip curvature and stiffness for maneuverability and access – and without the need
for constant tool exchanges – the “One & Done” feature, when integrated into the LIBERTY device,
may drastically reduce procedure time and costs while enhancing the operator experience.
On
August 17, 2020, Microbot announced the successful conclusion of its feasibility animal study using the LIBERTY robotic system.
The study met all of its end points with no intraoperative adverse events, which supports Microbot’s objectives to allow
physicians to conduct a catheter-based procedure from outside the catheterization laboratory (cath-lab), avoiding radiation exposure,
physical strain and the risk of cross contamination. The study was performed by two leading physicians in the neuro vascular and
peripheral vascular intervention spaces, and the results demonstrated robust navigation capabilities, intuitive usability and
accurate deployment of embolic agents, most of which was conducted remotely from the cath-lab’s control room.
We
are continuously exploring and evaluating additional innovative guidewire/microcatheter technologies to be integrated and combined
with the LIBERTY robotic platform.
Recent
Developments
On
January 14, 2021, Microbot announced the successful completion of an additional feasibility animal study using the LIBERTY robotic
system. The study end points included navigating to a clot, crossing the clot, deploying a stent retriever, and manually retrieving
an arterial clot in a live pig. All the end points were met with no intraoperative adverse events. This and earlier animal feasibility
studies support Microbot’s assertion that LIBERTY will potentially allow physicians to safely and easily conduct catheter-based
peripheral and neurovascular procedures remotely, avoiding radiation exposure, physical strain and the risk of cross contamination.
On
January 21, 2021, Microbot announced the continued enhancement of its thought leadership capabilities with the addition of several
new Scientific Advisory Board members:
On
January 27, 2021, Microbot announced the completion of successful discussions with the U.S. Food and Drug Administration, or FDA,
for the SCSTM. After review of Microbot’s existing pre-clinical data, the FDA’s feedback will allow Microbot
to apply for a limited clinical investigation known as an Early Feasibility Study, or EFS. Microbot expects to continue to work
with the FDA towards finalizing the SCSTM design, and to incorporate their feedback prior to submitting the Investigational
Device Exemption, or IDE, to seek authorization to begin the EFS clinical trial. While there can be no assurance that the FDA
will approve the EFS study, the agency’s recent feedback indicates that the agency will be receptive to allowing a first-in-human
study to proceed based on existing data. After completing the EFS, Microbot would then seek FDA input on the device design as
finalized through the EFS process in a subsequent IDE filing for approval of a clinical study proposal. Consequently, the timeline
for the First-in-Human clinical trial under the EFS is expected to commence following IDE approval, estimated in the third quarter
of 2022.
On
February 4, 2021, Microbot announced that it has received official notification from the Japan Patent Office (JPO) that it intends
to grant Microbot a patent for its ‘One & Done’ guidewire technology for use with endoluminal interventions. Japan
is the second jurisdiction to grant a patent for the ‘One & Done’ guidewire technology and further protects the
novel technology Microbot is currently developing.
Industry
Overview
CSF
Management
Hydrocephalus
is a medical condition in which there is an abnormal accumulation of cerebrospinal fluid, or CSF, in the brain that can cause
increased intracranial pressure. It is estimated that one in every 500 babies are born with hydrocephalus, and over 1,000,000
people in the United States currently live with hydrocephalus.
Symptoms
of hydrocephalus vary with age, disease progression and individual tolerance to the condition, but they can include convulsion,
tunnel vision, mental disability or dementia-like symptoms and even death. NPH is a type of hydrocephalus that usually occurs
in older adults. NPH is generally treated as distinct from other types of hydrocephalus because it develops slowly over time.
In NPH, the drainage of CSF is blocked gradually and the excess fluid builds up slowly. This slow accumulation means that the
fluid pressure may not be as high as in other types of hydrocephalus. It is estimated that more than 700,000 Americans have NPH,
but less than 20% receive an appropriate diagnosis.
Hydrocephalus
is most often treated by the surgical insertion of a shunt system. The shunt system diverts the flow of CSF from the brain’s
ventricles (or the lumbar subarachnoid space) to another part of the body where the fluid can be more readily absorbed. Hydrocephalus
shunt designs have changed little since their introduction in the 1950s. A shunt system typically consists of three parts: the
distal tubing or shunt (a flexible and sturdy plastic tube), the ventricular catheter (the proximal catheter), and a valve. The
end of the shunt system with the proximal catheter is placed in the ventricles (within the CSF) and the distal catheter is placed
in the site of the body where the CSF can be drained. A valve is located along the shunt to maintain and regulate the rate of
CSF flow. Current systems can be created from separate components or bought as complete units.
The
treatment of hydrocephalus with existing shunt systems often includes complications. For example, approximately 50% of shunts
used in the pediatric population fail within two years of placement and repeated neurosurgical operations are often required.
Ventricular catheter blockage, or occlusion, is by far the most frequent event that results in shunt failure. Shunt occlusion
occurs when there is a partial or complete blockage of the shunt that causes it to function intermittently or not at all. Such
a shunt blockage can be caused by the accumulation of blood cells, tissue, or bacteria in any part of the shunt system. In the
event of shunt occlusion, CSF begins to accumulate in the brain or lumbar region again and the symptoms of untreated hydrocephalus
can reappear until a shunt replacement surgery is performed.
Although
several companies are active in the field of hydrocephalus treatment and the manufacturing of shunt systems and shunt components,
Microbot believes that the majority of those companies are focusing on the development of valves. The development of a “smart
shunt” – a shunt that could provide data to the physician on patient conditions and shunt function with sensor-based
controls, or correct the high failure rate of existing shunt systems – is for the most part at an academic and conceptual
level only. Reports of smart shunt technologies are typically focused on a subset of components with remaining factors left unspecified,
such as hardware, control algorithms or power management. Microbot does not believe that a smart shunt that can prevent functional
failures has been developed to date. Because of the limited innovation in this area, Microbot believes an opportunity exists to
provide patients suffering from hydrocephalus or NPH with a more effective instrument for treating their condition.
An
alternative, short-term solution to hydrocephalus is the implantation of an External Ventricular Drainage, or EVD, an implanted
device used in neurosurgery for the short-term treatment and monitoring of elevated intracranial pressure when the normal flow
of CSF inside the brain is obstructed. If after using an EVD, the underlying hydrocephalus does not eventually resolve, the EVD
may then be replaced with a cerebral shunt, a fully internalized, long-term treatment for hydrocephalus.
EVDs
are also used in other instances when the normal flow of CSF inside the brain is obstructed, such as a result of head trauma,
intracerebral hemorrhage, brain tumors and infection. The EVD serves to divert excess fluids from the brain and allows for the
monitoring of intracranial pressure. An EVD must be placed in a center with full neurosurgical capabilities because immediate
neurosurgical intervention may be needed if a complication of EVD placement, such as bleeding, is encountered. EVD is one of the
most commonly used and most important life-saving procedures in the neurologic ICU, with more than 200,000 neuro-intensive patients
requiring EVD insertions annually.
Similar
to shunts, EVDs are also prone to occlusion, mostly due to cellular debris, such as blood clots and/or tissue fragments. Studies
have shown that approximately 1-7% of EVDs require replacement secondary to occlusion. Current solutions for EVD occlusion include
irrigation and replacement, which we believe may be ineffective (in the case of irrigation) or costly (in the case of replacement)
and in either case, put the patient at risk of unintended side effects. Microbot believes that with its portfolio of technologies,
and its initial pre-clinical results, it is well-positioned to explore and expand its offerings as an alternative solution for
EVD occlusion.
Minimally
Invasive Robot-Assisted Endovascular Interventions
Minimally
Invasive Surgery, or MIS, refers to surgical procedures performed through tiny incisions instead of a single large opening. Because
the incisions are small, patients tend to have quicker recovery times and experience less trauma than with conventional surgery.
The global MIS surgery is expected to grow from $24 billion in 2020 to $42 billion in 2026, representing a CAGR of 9.85%.
MIS involves three major categories of devices: surgical, monitoring and visualization, and endoscopy. The market for surgical
devices, including ablation, electrosurgery and medical robotic systems, accounts for the largest share of revenue and is also
expected to show the highest rate of growth. According to the Society of Robotic Surgery, the US market growth in endoluminal
robotic surgery is projected to be 15-25% by 2025.
Vascular
disease is the most common precursor to ischemic heart disease and stroke, which are two of the leading causes of death worldwide.
Advances in endovascular intervention in recent years have transformed patient survival rates and post-surgical quality of life.
It is estimated that more than three million percutaneous coronary interventions (PCI) and over two million of peripheral vascular
interventions are performed annually worldwide. The incidence of stroke in the US alone is estimated at 900,000 cases annually.
Compared to open surgery, it has the advantages of faster recovery, reduced need for general anesthesia, reduced blood loss and
significantly lower mortality. However, the current practice of endovascular procedures, which virtually has remained unchanged
since the introduction of Intervention four decades ago, is limited by a number of factors, including physical strain and exposure
to X-Ray radiation of the operator, and involves complex maneuvering of intervention tools, such as guidewires and catheters,
to reach target areas in the vasculature. Despite recent advancements in technology and devices, manual procedures are still highly
dependent on the technical skills and training of the operator, what makes the access to expert medical centers and advanced emergent
treatments, such as endovascular thrombectomy for acute ischemic stroke, geographically limited. In addition, we believe that
demand for physicians continues to grow faster than supply.
Endovascular
robotic systems are aimed to increase the stability and precision of guidewires and catheters, protecting the physicians from
ionizing radiation and physical strain by removing them from the radiation source, helping in closing shortages of skilled physicians
and skill gaps and enable tele-interventions (e.g. the Hub & Spoke hospital model).
Today,
there are only few commercially available robotic systems for endovascular interventions. We believe these systems have major
drawbacks, such as limited maneuverability, the requirement to exchange and use multiple expensive surgical tools, being cumbersome
to set-up and operate, and requiring significant capital expenditures.
Navigating
and placing access devices through tortuous and highly delicate brain arteries is a complex procedure that requires high-level
surgical skills with specialist training. In many procedures, surgeons exchange numerous access devices before reaching the target
and applying the therapeutic agent or device, increasing the risk of adverse events and the exposure of both patient and physician
to radiation. Adverse events, such as perforation of brain arteries or the release of embolies from a thrombus or atherosclerotic
lesion can have devastating or even fatal results.
Microbot
believes that with its portfolio of CardioSert and LIBERTY technologies, it is well-positioned to explore and develop such
technologies as neurovascular access devices, with a focus on improving the ease and access and enhancing the safety of endovascular
interventions.
Our
Product Pipeline
Self-Cleaning
Shunt
The
SCS device is designed to act as the ventricular catheter portion of a CSF shunt system that is used to treat hydrocephalus and
NPH. It is designed to work as an alternative to any ventricular catheter options currently on the market and to connect to all
existing shunt system valves currently on the market; therefore, the successful commercialization of the SCS is not dependent
on any single shunt system. Initially, Microbot expects the SCS device to be an aftermarket purchase that would be deployed to
modify existing products by the end user. Microbot believes that the use of its SCS device will be able to reduce, and potentially
eliminate, shunt occlusions, and by doing so, Microbot believes its SCS has the potential to become the gold standard ventricular
shunt in the treatment of hydrocephalus and NPH.
The
SCS device embeds an internal robotic cleaning mechanism in the lumen, or inside space, of the ventricular catheter which prevents
cell accumulation and tissue ingrowth into the catheter. The SCS device consists of a silicone tube with a perforated titanium
tip, which connects to a standard shunt valve at its distal end. The internal cleaning mechanism is embedded in the lumen of the
titanium tip. Once activated, the cleaning mechanism keeps tissue from entering the catheter perforations while maintaining the
CSF flow in the ventricular catheter.
The
internal cleaning mechanism of the SCS device is activated by means of an induced magnetic field, which is currently designed
to be externally generated by the patient through a user-friendly headset that transmits the magnetic field at a pre-determined
frequency and operating sequence protocol. The magnetic field that is created by the headset is then captured by a flexible coil
and circuit board that is placed just under the patient’s scalp in the location where the valve is located. The circuit
board assembly converts the magnetic field into the power necessary to activate the cleaning mechanism within the proximal part
of the ventricular catheter.
Microbot
has completed the development of an SCS prototype and is currently continuing the safety testing, general proof of concept testing
and performance testing for the device, which Microbot began in mid-2013. In May 2018, Microbot announced the results of two pre-clinical
studies assessing the SCS, an in-vitro study and a small animal study. The in-vitro study, which was performed at Wayne State
University by Dr. Carolyn Harris, supports the SCS’s potential as a viable technology for preventing occlusion in shunts
used to treat hydrocephalus. The first stage animal study designed to assess the safety profile of the SCS, which was performed
by James Patterson McAllister, PhD, a Professor of Neurosurgery at Washington University School of Medicine in St. Louis, met
the primary goal to determine the safety of the SCS device that aims to prevent obstruction in CSF catheters. Following the completion
of the first stage initial studies, Microbot commenced a follow-up study to further evaluate the safety of the SCS. The follow-up
study was also conducted by leading hydrocephalus experts at Washington University. The study, included a larger sample size compared
to the initial studies and the primary and secondary endpoints were to validate the safety of the activated SCS in-vivo (animal)
models. In that in-vivo study the major finding was that the SCS system is as safe to use as currently marketed devices. The study
also mentions, that in the animal model, contact of the shunt with the choroid plexus is impossible to avoid and that it may lead
to shunt obstruction due to hemorrhage of this highly vascular structure
In
parallel with the in-vivo study, Microbot also contracted with Envigo CRS Israel, a leading provider of non-clinical contract
research services, to conduct an in-vitro study designed to evaluate the operational performance of the SCS. Human brain glioblastoma
cells were used in order to assess performance of the SCSTM in a test system with accelerated cell growth, accumulation
and obstruction rates. In 2018, Microbot and Envigo conducted an in-vitro trial that its final conclusion was:
While
significant cell growth and accumulation were seen in the non-operating SCSTM group after 30 days, the shunt openings remained
clear in the constantly operating SCSTM group, with little to no cell attachment on the robotic cleaning mechanism (the ViRobTM
system) and on the shunt openings.
The
SCSTM was further validated in a broader follow-up in-vitro study which commenced in July 2019 and concluded on August 14,
2019 and clearly demonstrated that the SCSTM prevented shunt occlusions under the parameters of that study. This follow-up
study was also conducted by Envigo CRS Israel using Human brain glioblastoma cells Specifically, the study demonstrated:
To
further investigate the efficacy of the SCSTM, Microbot conducted a follow-up in-vitro study at Wayne State University.
The study included a larger sample size compared to the initial study and the primary and secondary end points aimed to validate
the efficacy of the SCS in comparison to commercially available devices. After careful analysis of the results the final conclusion
was that the data from this study did not reveal statistically significant differences between the study’s groups.
Microbot
used the findings of the second stage of the animal study combined with additional experimental data that was acquired in the
past year for initial regulatory FDA pre-submissions.
On
January 27, 2021, we announced the completion of successful discussions with the FDA, for the SCSTM. After review
of Microbot existing pre-clinical data, the FDA’s feedback will allow us to apply for the EFS (Early Feasibility Study)
without further animal studies.
We
expect to continue to work with the FDA towards finalizing the SCSTM design, and to incorporate their feedback
prior to submitting the IDE to seek authorization to begin the EFS clinical trial. While there can be no assurance that the FDA
will approve the EFS study, the agency’s recent feedback indicates that the agency will be receptive to allowing a first-in-human
study to proceed based on existing data. After completing the EFS, we would then seek FDA input on the device design as finalized
through the EFS process in a subsequent IDE filing for approval of a clinical study proposal. Consequently, the timeline for the
First-in-Human clinical trial under the EFS is expected to commence in the third quarter of 2022.
In
spite of the above, there is still a possibility that Microbot may conduct clinical trials if they are requested by the FDA or
if Microbot decides that the data from such trials would improve the marketability of the product candidate.
The
proposed indication for use of the SCSTM device would be for the treatment of hydrocephalus and/or NPH as a component of
commercially available shunt systems. It continues to be possible that the FDA could require us to conduct a human clinical study
to support the safety and efficacy of the SCS and that such clinical data would need to be part of the future regulatory submission
to authorize marketing of the medical device in the U.S.
TipCAT
A
TipCAT prototype was shown to self-propel and self-navigate in curved plastic pipes and curved ex-vivo colon. In addition, in
its first feasibility study, the prototype device was tested in a live animal experiment and successfully self-propelled through
segments of the animal’s colon, with no post-procedural damage. All tests were conducted at AMIT (Alfred Mann Institute
of Technology at the Technion), prior to the licensing of TipCAT by Microbot.
Currently,
Microbot is not pursuing the development of the TipCAT as a colonoscopy tool due to its focus on the neurosurgical and endovascular
intervention spaces, and as such it is currently exploring the use of the TipCAT for minimally invasive neurosurgical and endovascular
applications to complement its other technologies.
LIBERTY
The
LIBERTY robotic system features a unique compact design with the capability to be operated remotely, reduce radiation exposure
and physical strain to the physician, reduce the risk of cross contamination, as well as the potential to eliminate the
use of multiple consumables when used with its “One & Done” capabilities, which would be based in
part on the CardioSert platform or possibly other guidewire/microcatheter technologies. LIBERTY is being designed to have
the following attributes:
We
are continuing our feasibility animal trials with respect to the LIBERTY device, with a planned pre-submission to the FDA
as early as the fourth quarter of 2021, with submission to the FDA planned in the fourth quarter of 2022.
Strategy
Microbot’s
goal is to generate sales of its products, once they have received regulatory approval, by establishing SCS, LIBERTY and
additional devices from its technological platforms, as the standard-of-care in the eyes of doctors, surgeons, patients and medical
facilities, as well as getting the support of payors and insurance companies. Microbot believes that it can achieve this objective
by working with hospitals to demonstrate the key benefits of its products. Microbot’s strategy includes the following key
elements:
SCS
Opportunities
The
SCS is designed to prevent shunt occlusions in hydrocephalus and NPH patients who have undergone or are undergoing the surgical
insertion of a shunt system. For purposes of its marketing strategy, Microbot has split the market for shunt systems into two
sub-markets:
● Primary shunt placement; and
● Shunt replacement.
Microbot’s
SCS device is universal (meaning that it is designed to be attachable to any valve on the market); therefore, Microbot’s
initial go-to-market strategy is the development of strategic partnerships with leading global medical device companies with ready
sales and distribution channels. Outside of a strategic partnership, it is most likely that Microbot’s SCS product will
be initially used in shunt replacement surgeries to replace occluded ventricular catheters. Accordingly, Microbot intends to establish
key hospital and clinic relationships that will allow it to diffuse the technology among experts and other stakeholders. Microbot
is also planning to apply for the SCS device to be covered under the current reimbursement codes in the United States for use
in hydrocephalus and NPH shunt procedures.
TipCAT
Opportunities
Microbot
is currently exploring the use of the TipCAT for minimally invasive neurological and endovascular applications.
CardioSert
Technology Opportunities
Microbot
is currently exploring the integration of the CardioSert technology into the LIBERTY endovascular robotic system for a
range of potential applications in the cardiovascular, peripheral vascular and neurovascular spaces.
LIBERTY
Opportunities
The
LIBERTY endovascular robotic system is being designed to remotely maneuvering guidewires, microcatheters and over-the-wire
devices within the body’s vasculature. The device is being designed to be the size of a personal device and to be fully
disposable and affordable. We are aiming LIBERTY to be capable of supporting whole-endovascular procedures by providing
“One & Done” solutions which would be based in part on CardioSert’s proprietary technology or possibly
other guidewire/microcatheter technologies. With control over tip curvature and stiffness for maneuverability and access –
and without the need for constant tool exchanges – the “One & Done” feature, when integrated into the
system, is expected to drastically reduce the procedure time and costs, while enhancing the operator experience. We believe
LIBERTY’s addressable markets are the Interventional Cardiology, Interventional Radiology and Interventional Neuroradiology
markets.
The
unique characteristics of LIBERTY – compact, mobile, disposable and remotely controlled - open the opportunity of
expanding telerobotic interventions to patients with limited access to life-saving procedures, such as mechanical thrombectomy
in ischemic stroke.
Competition
SCS
Competitive Landscape
Several
academic research groups, such as at the New Jersey Institute of Technology, are currently researching sensing and obstruction-resistant
catheter designs, and the Smart Sensors and Integrated Microsystems (SSIM) Program at Wayne State University has publicized that
it is engaging in smart shunt development activity. However, based in part on its knowledge of the patented technologies, Microbot
believes that these technologies are still early in the research and development cycle. Although we believe the SCS may face direct
competition from Anuncia Inc., a spin-off of Alycone Lifesciences Inc., which received a CE Mark and FDA 510k clearance for the
Alivio ReFlowTM Ventricular System for the treatment of hydrocephalus, the commercialization status of the device is not
clear. The SCS also faces non-direct competition from Aqueduct Neurosciences, Inc., which we believe is developing a non-shunt,
electro-mechanical technology platform to control the draining of cerebrospinal fluid, and from Cerevasc Inc., which is developing
the eShuntTM System that aims to eliminate the need for passing a rigid catheter through cerebral cortex and subcortical
white matter.
Microbot
does not expect its SCS device to directly compete against shunt systems currently available in the market. The SCS device is
designed to replace a component of existing shunt systems and is expected to be an aftermarket purchase that would be used to
modify existing products by the end user. However, there can be no assurance that Microbot’s product candidate will be accepted
by the shunt market as an alternative component.
TipCAT
Competitive Landscape
Microbot
has not at this time completed its evaluation of the current competitive landscape in the endovascular space for potential uses
of the TipCAT.
CardioSert
Technology Competitive Landscape
Competition
includes moveable-core guidewires from companies such as Boston Scientific and Rapid Medical, and steerable and deflectable sheaths
and catheters from companies such as Bendit Technologies and Merit Medical. To our knowledge, the CardioSert device is the only
device that combines an inner moveable guidewire and an outer microcatheter, with the ability to control the shape and stiffness
of the distal tip in a continuous, gradual manner, and intends to compete on that basis.
LIBERTY
Competitive Landscape
We
believe the main competitor to the LIBERTY system is the CorPath GRX vascular robotics system by Corindus Vascular Robotics,
a Siemens Helathineers company. The CorPath GRX system has FDA approvals for percutaneous coronary interventions (PCI) and peripheral
vascular interventions (PVI) and is pending an approval for neurovascular interventions. Other competitors include Robocath (CE
Marked for PCI only) and Hansen Medical (a J&J Company with FDA approval for PVI). We believe these systems have drawbacks,
such as limited maneuverability, the requirement to exchange and use multiple expensive surgical tools, being cumbersome to set-up
and operate, and requiring significant capital expenditures. We further believe that these systems have captured a marginal
market share to date.
Microbot’s
existing and planned products could also be rendered obsolete or uneconomical by technological advances developed in the future
by existing or new competitors. Some of Microbot’s competitors currently have significantly greater resources than Microbot
does; have established relationships with healthcare professionals, customers and third-party payors; and have long-term contracts
with group purchasing organizations in the United States. In addition, many of Microbot’s competitors have established distributor
networks, greater resources for product development, sales and marketing, additional lines of products and the ability to offer
financial incentives such as rebates, bundled products or discounts on other product lines that Microbot cannot provide.
Intellectual
Property
General
The
SCS and TipCAT are based on technological platforms licensed from The Technion Research and Development Foundation Ltd., or TRDF,
as further discussed below. The LIBERTY platform core technology is co-owned by Microbot and TRDF. The CardioSert device
is based on technologies acquired by Microbot. Microbot plans to develop other micro-robotic solutions through internal research
and development, to strengthen its intellectual property position, and to continue exploring strategic collaborations and accretive
acquisition opportunities. Microbot currently holds an intellectual property portfolio of 42 patents issued/allowed and
23 patent applications pending worldwide. It also has registered trademarks in Israel and Europe relating to its LIBERTY
platform, and also has trademark applications pending in Israel, US, Europe and China relating to its proprietary Microbot
Medical tradename and logo.
Microbot
relies or intends to rely on intellectual property licensed or developed, including patents, trade secrets, trademarks, technical
innovations, laws of unfair competition and various licensing agreements, to provide its future growth, to build its competitive
position and to protect its technology. As Microbot continues to expand its intellectual property portfolio, it is critical for
Microbot to continue to invest in filing patent applications to protect its technology, inventions, and improvements.
Microbot
requires its employees and consultants to execute confidentiality agreements in connection with their employment or consulting
relationships with Microbot. Microbot also requires its employees and consultants who work on its product candidates to agree
to disclose and assign to Microbot all inventions conceived during the term of their service, while using Microbot property, or
which relate to Microbot’s business.
Patent
applications in the United States and in foreign countries are maintained in secrecy for a period of time after filing, which
results in a delay between the filing date of the patent applications and the time when they are published. Patents issued and
patent applications filed relating to medical devices are numerous, and there can be no assurance that current and potential competitors
and other third parties have not filed or in the future will not file applications for, or have not received or in the future
will not receive, patents or obtain additional proprietary rights relating to product candidates, products, devices or processes
used or proposed to be used by Microbot. Microbot believes that the technologies it employs in its products and systems do not
infringe the valid claims of any third-party patents. There can be no assurance, however, that third parties will not seek to
assert that Microbot devices and systems infringe their patents or seek to expand their patent claims to cover aspects of Microbot’s
products and systems.
The
medical device industry in general has been characterized by substantial litigation regarding patents and other intellectual property
rights. Any such claims, regardless of their merit, could be time-consuming and expensive to respond to and could divert Microbot’s
technical and management personnel. Microbot may be involved in litigation to defend against claims of infringement by other patent
holders, to enforce patents issued to Microbot, or to protect Microbot’s trade secrets. If any relevant claims of third-party
patents are upheld as valid and enforceable in any litigation or administrative proceeding, Microbot could be prevented from practicing
the subject matter claimed in such patents, or would be required to obtain licenses from the patent owners of each such patent,
or to redesign Microbot’s products, devices or processes to avoid infringement. There can be no assurance that such licenses
would be available or, if available, would be available on terms acceptable to Microbot or that Microbot would be successful in
any attempt to redesign products or processes to avoid infringement. Accordingly, an adverse determination in a judicial or administrative
proceeding or failure to obtain necessary licenses, could potentially prevent Microbot from manufacturing and selling its products.
Microbot’s
issued U.S. patents, which cover Microbot’s product candidates, will expire between 2026 and 2033, not including any patent
term adjustments that may be available. Issued patents outside of the United States directed to Microbot’s product candidates
will expire between 2026 and 2036.
License
Agreement with the Technion
In
June 2012, Microbot entered into a license agreement with TRDF, the technology transfer subsidiary of The Technion Institute of
Technology, pursuant to which it obtained an exclusive, worldwide, royalty-bearing, sub-licensable license to certain patents