Dive Brief:
- Rockley Photonics has filed for bankruptcy 10 months after partnering with Medtronic on the development of wearable devices.
- While Rockley works with two of the top five medtech companies, plus six leading smart watch manufacturers including Apple, it has run into financial problems.
- The company wants to “continue to conduct its business without interruption” throughout the bankruptcy proceedings and emerge from the process with $35 million for ongoing operations.
Dive Insight:
Rockley landed the deal with Medtronic on the strength of Bioptx, its wrist-bassed technology for sensing biomarkers such as body temperature, blood pressure, body hydration, alcohol, lactate and glucose. The technology is central to the company’s plans to expand beyond consumer electronics and into healthcare. Rockley plans to ship its first Bioptx health monitoring product this year.
“The Company expects customers will initially use the Bioptx platform to monitor the general wellness of individuals under care or in studies,” Rockley wrote in a bankruptcy filing. “After products in the Bioptx line receive approval from the FDA or other regulatory bodies, the Company anticipates that customers will expand product use into preventive and diagnostic care, such as remote patient monitoring and diagnosis.”
Money is an impediment to Rockley’s plans. The company ended September 2022 with $4.9 million in cash and equivalents, down from $36.8 million at the start of the year. Rockley’s short-term investments went from $27 million to zero over the same period.
The collapse in the value of Rockley’s current assets occurred alongside a doubling of its total liabilities, which went from $59 million to $120.7 million in nine months. Rockley warned investors that there was “substantial doubt” about its ability to continue as a going concern.
Filing for chapter 11 bankruptcy could put Rockley on a better financial footing. The plan is to restructure the business, eliminate existing debt, and emerge with $35 million in cash to fund the next steps, all without interrupting the company’s ongoing operations.
