Yahoo Finance InspireMD, Inc. (NASDAQ:NSPR) Q4 2023 Earnings Call Transcript
InspireMD, Inc. (NASDAQ:NSPR) Q4 2023 Earnings Call Transcript March 6, 2024
InspireMD, Inc. beats earnings expectations. Reported EPS is $-0.16, expectations were $-0.2. InspireMD, Inc. isn’t one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Greetings. Welcome to InspireMD Fourth Quarter and Full Year 2023 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the conference over to Chuck Padala with LifeSci Advisors. Please proceed.
Charles Padala: Thank you, operator, and good morning, everyone. Thank you for joining us for the InspireMD fourth quarter and full year 2023 financial results and corporate update conference call. Joining us today from InspireMD are CEO, Marvin Slosman; and CFO, Craig Shore. During this call, management will be making forward-looking statements, not historical facts, which are based upon management's current expectations, beliefs and projections, many of which, by their nature, are inherently uncertain. These forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those expressed in such forward-looking statements. For more information about these risks, please refer to the risk factors described in InspireMD's most recently filed periodic reports on Form 10-K and Form 10-Q or any updates in our current reports on Form 8-K filed with the U.S. Securities and Exchange Commission and InspireMD's press release that accompanies this call, particularly the cautionary statements made in it.
This call contains time-sensitive information that is accurate only as of today, March 6, 2024. Except as required by law, InspireMD disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn this call over to Marvin Slosman, Chief Executive Officer. Marvin, please go ahead.
Marvin Slosman: Thank you, Chuck, and thanks to everyone for joining the call this morning. I'm pleased to share a tremendously productive fourth quarter, completing a remarkable end to 2023 for our company. We have carried this energy and enthusiasm into the new year as we continue our mission to lead the carotid revascularization market with our best-in-class CGuard carotid stent platform. Looking forward to reporting 1-year primary endpoint results from the C-GUARDIANS trial in the first half of this year, with a view to potential approval and commercialization in the United States in the first half of 2025, as well as our continued focus on growth in our 30-plus served OUS markets. Our investment in both CAS and TCAR methods and tools, addressing the broadest market potential was purposeful and done anticipating a time when technology innovation and procedural reimbursement moved the tides toward an endovascular standard of care.
2023 marked the beginning of what we believe to be a sea change towards this shift away from surgery with best-in-class outcomes with CGuard catalyzing our leadership potential. We plan to continue to build our growing body of data and real-world evidence from our OUS markets as we create inertia to lead the U.S. market post approval. Craig will cover the financials shortly, but I wanted to share a brief review of our fourth quarter performance. We generated record total CGuard revenue of $1.76 million, representing growth of 71.6% as compared to the fourth quarter of 2022. Recall that our fourth quarter 2022 sales were negatively impacted by the temporary expiration of our CE Mark in November of last year as European regulators transitioned from the Medical Device Directive or MDD to the new Medical Device Regulation or MDR framework.
We indicated at that time that the temporary suspension of our CE Mark impacted our fourth quarter 2022 sales by approximately $250,000. Even considering these circumstances, on an adjusted basis, we generated year-over-year sales growth of 38% reflecting our commercial focus on building a growing awareness of CGuard's superior patient outcomes as we work to make it the gold standard of carotid implants globally. We sold $3,107 stents, up more than 74% year-over-year, advancing our global sales to date to more than 48,000 stents, building on our real-world market penetration and experience. Another significant highlight was the notification from the European regulators of our CE Mark recertification under MDR. The transition from MDD to MDR was challenging and required us like the rest of the medical device industry broadly to be patient, persistent and comprehensive in our approach to addressing these changes and requirements, time lines and priorities during this lengthy process.
With our formal recertification under MDR now granted, we derisked this topic and removed uncertainty in our ability to continue to sell in EU certified countries while enabling our products development pipeline provided under MDR as we continue to invest in our OUS markets in parallel with our increased U.S. focus. Turning to C-GUARDIANS, our U.S. pivotal IDE trial, which is designed to support approval of CGuard Prime in the U.S., Dr. Chris Metzger, our System Vascular Chief at Ohio Health in Columbus, Ohio; and principal investigator of the C-GUARDIANS trial presented 30-day follow-up data from the trial at VIVA23and then at VEITH Symposium, both of which took place in November of last year. As an important reminder of the results, the primary endpoint of the trial is a composite of incidence of major adverse events, including death, all-cause mortality, any stroke or myocardial infarction, the SMI through 30 days post index procedure or ipsilateral stroke from day 31 to day 365 post procedure.
Between July 2021 and June 2023, 316 patients were prospectively enrolled in a single-arm study performed at 24 sites in the U.S. and Europe, including the CGuard carotid stent system, which also included our next-generation CGuard Prime. With the acknowledgment of FDA, 30-day results were presented reporting best-in-class data with the lowest 30-day MACE rate of any carotid pivotal trial to date. Patients with carotid artery stenosis at high risk for carotid endarterectomy treated with CGuard had a DSMI rate of 0.95% from procedure through 30-day follow-up. This data continues to validate the unique neuroprotective qualities of CGuard utilizing our innovative MicroNet mesh and it's consistent in our real-world experience. We remain on track to report 12-month primary endpoint results anticipated in midyear, followed by the submission of our premarket approval application, or PMA in the third quarter of this year.
Based on these time lines, we anticipate possible FDA approval of CGuard in the United States in the first half of 2025. These time lines remain consistent with our prior guidance. Turning now to our major product development and clinical programs. C-GUARDIANS II, the clinical study of our SwitchGuard neuroprotection system along with our Short Shaft CGuard and accessory devices for TCAR procedures continues with intention as we look to advance our TCAR tool set with next-generation enhancements. As a reminder, the SwitchGuard NPS is designed to prevent embolic debris generated during the carotid stenting procedure from traveling to the brain, passing the blood through an integrated filter and returning it to the patient in a closed circuit to minimize blood loss during the procedure.
We were pleased to announce just a few weeks ago that Dr. Patrick Geraghty, Professor of Surgery and Radiology at Washington University School of Medicine in St. Louis, Missouri; and Dr. Pat Muck, Director and Chief of Vascular Surgery at Good Samaritan Hospital in Cincinnati, Ohio, have enthusiastically agreed to act as our lead PIs for C-GUARDIANS II and that Dr. William Gray, Systems Chief of Cardiovascular Division at Main Line Health in Wynnewood, PA and Professor of Medicine at Thomas Jefferson University in Philadelphia will act as an advisor to the company. Together, Drs. Geraghty, Muck and Gray bring a wealth of knowledge and experience in the field of carotid interventions in both TCAR and CAS, and we are very fortunate to be able to benefit from their extensive knowledge, insight and direction as we build our leadership objectives and strategy.
They join an established multispecialty group of thought leaders that are already providing guidance to us in these initiatives. Turning now to reimbursement. In October, the Centers for Medicare and Medicaid Services or CMS expanded coverage for CAS and TCAR to include both asymptomatic patients at either high or standard risk for carotid endarterectomy. The broader availability of these less invasive options will enable physicians to tailor treatment plans to meet the needs of their individual patients. This expansion of coverage by CMS validates our strategy, which is to be agnostic to whether the stent is implanted via CAS or TCAR as we are unique in offering comprehensive solutions. The timing of these changes in reimbursements and our potential approval of CGuard in the U.S. provide us a tremendous opportunity to lead the market with a stent first approach.
Also during the fourth quarter, we announced a strategic agreement with the Jacobs Institute at the State University of New York and Buffalo and Dr. Adnan Siddiqui, Vice Chair and Professor of Neurosurgery to conduct an early feasibility study of CGuard Prime for severe carotid stenosis or occlusion in conjunction with thrombectomy and patients presenting with acute ischemic stroke and tandem lesions. CGuard Prime with its proprietary MicroNet mesh is designed to provide superior embolic prevention during carotid artery stenting. We believe that this study will demonstrate safety and feasibility of using our stent in these acute stroke procedures. Our investment in this study reflects our unwavering commitment to the neuro community and represents a critical component in our long-term growth strategy.
We are pleased to share that FDA has approved our study, and we anticipate first patient enrollment in Q2 of this year. Before turning the call over to Craig to review the financials, I'd like to welcome Pete Ligotti, who joined in January as Executive Vice President and General Manager of North America. Pete brings more than 30 years of general management and commercial leadership experience to InspireMD and is the latest addition to what I believe is a truly world-class team capable of achieving our goals and growth objectives. At this point, I'd like to turn the call over to Craig for the financials. Craig?
Craig Shore: Thanks, Marvin. For the fourth quarter of 2023, total revenue increased 71.6% to $1,761,000, million from $1,026,000 million during the fourth quarter of 2022. This increase was predominantly driven by the CE Mark recertification which occurred subsequent to the end of the fourth quarter 2022 and overall growth in existing and new markets. Gross profit for the fourth quarter of 2023 increased by $307,000, or 155.1%, to $505,000, compared to a gross profit of $198,000 for the fourth quarter of 2022. This increase resulted from higher revenue offset by a decrease in miscellaneous expenses. Gross margin increased to 28.7% during the three months ended December 31, 2023, from 19.3% during the three months ended December 31, 2022.
Total operating expenses for the fourth quarter of 2023 were $6.3 million, an increase of $1.2 million or 23% compared to $5.1 million for the fourth quarter of 2022. This increase was primarily due to increases in expenses related to the salaries and share-based compensation offset by a reduction in clinical expenses as we near completion of the C-GUARDIANS trial. Total financial income for the fourth quarter of 2023 was $468,000, an increase of $349,000 or 293% compared to $119,000 for the fourth [ph] quarter of 2022. This increase was primarily due to a $349,000 increase in interest income from investment in marketable securities, money market funds and short-term bank deposits. Net loss for the fourth quarter of 2023 totaled $5.4 million or $0.16 per basic and diluted share, compared to a net loss of $4.8 million or $0.60 per basic and diluted share for the same period in 2022.
As of December 31, 2023, cash, cash equivalents, short-term bank deposits and marketable securities were $39 million compared to $17.8 million as of December 31, 2022. That concludes our pre prepared remarks as we will now open the call for questions. Operator?
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