Breast cancer AI company iCAD lays off workers, names new CEO

Dive Brief:

Mammography AI maker iCAD is laying off 23 employees, or 28% of its workforce, in a restructuring aimed at reducing operating expenses, the company said in a March 20 regulatory filing.
The job cuts come one week after iCAD announced that President and CEO Stacey Stevens would step down for personal reasons and named board chairman Dana Brown to succeed her in those roles, effective immediately. Stevens will remain with the company through April 30.
On Tuesday, iCAD reported a fourth-quarter net loss of $3.1 million, or 12 cents per share, compared to a net loss of $4.1 million, or 17 cents per share, in the same period a year ago. Fourth-quarter revenue fell 17% to $6.5 million.

Dive Insight:

On its earnings call Tuesday, Brown said iCAD plans to “reset and recalibrate” this year to support its cancer detection business. “We believe our core competencies and focus need to be solely on detection and our strategy around AI,” said Brown, who most recently served as senior vice president and chief strategy officer for the Susan G. Komen breast cancer organization.

The company earlier this month said it is exploring strategic alternatives for its Xoft radiation therapy subsidiary.

In the regulatory filing, iCAD said the layoffs mostly affect the cancer detection business unit, while another 12 employees in its Xoft business will be furloughed. The Nashua, N.H.-based company sells a suite of deep-learning breast cancer detection, density assessment and risk evaluation tools.

The filing said “industry and macroeconomic environments” prompted the restructuring, which is intended to align iCAD’s cost structure with its long-term strategic goals.

BTIG analyst Marie Thibault expressed concern about the impact of the layoffs on future revenue growth.

“While we think the pledge to reduce spend and reach profitability is encouraging, we are skeptical that revenue can grow meaningfully near-term given the deep cuts to the workforce, exploration of strategic options for the Xoft Therapy business, and continued shift toward a subscription sales model,” Thibault wrote.

iCAD expects to take a one-time charge of about $300,000 in the first half of 2023, primarily for severance and benefits payments and employee-related transition costs.