InspireMD, Inc. (NYSE American: NSPR), developer of the CGuard™
Embolic Prevention System (EPS) for the prevention of stroke caused
by the treatment of Carotid Artery Disease (CAD), today announced
financial and operating results for the second quarter ended June
30, 2020.
Second Quarter 2020 and recent highlights:
- Received approval from the Brazilian registration authority
(ANVISA), to market the CGuard™ MicroNet®- covered stent,
effectively clearing it for sale and distribution in Brazil.
SUPRI Artigos Médicos Hospitalares Ltda. will serve as distribution
partner.
- Completed an $11.5 million follow-on underwritten public
offering, which included $1.5 million from the exercise by the
underwriter of its full over-allotment option for the
offering.
- On June 25, 2020, the U.S. Food and Drug Administration (FDA)
granted InspireMD conditional approval of its Investigational
Device Exemption (IDE) application to initiate a pivotal study of
CGuard™ EPS. We are in the process of addressing the Agency’s
remaining requests, specifically related to the stent-embolic
protection device (EPD) compatibility performance testing that was
previously conducted.
- Published 12-month PARDIGM trial results in the journal,
EuroIntervention, a prestigious peer-reviewed publication covering
the latest advancements in vascular intervention. The paper, titled
“Routine MicroNET” details the results of 101 unselected
consecutive real-life patients treated with the CGuard™ MicroNET
covered stent for carotid stenosis and the 12-month prevention of
post-procedural neurologic events. The results indicate that 12
months following carotid intervention the CGuard EPS
MicroNET-covered stent delivers sustained protection against
postprocedural neurologic events.
- Announced early results from the investigator-initiated SIBERIA
randomized clinical trial of CGuard™ compared to Acculink™,
evaluating 30-day silent brain infarcts in 100 patients who
qualified for carotid revascularization with high risk for surgery.
The results indicated that significantly fewer silent brain
infarcts were associated with CGuard™ EPS versus Acculink™ at 30
days post-procedure.
“COVID-19 placed significant pressure on the operations of
healthcare facilities worldwide, resulting in interruptions in
elective procedure volumes, including critical carotid artery
treatments. However, we are encouraged by the gradual
resumption of these crucial procedures in a growing number of our
key markets in Europe and other territories, and we look forward to
this expansion taking hold in South America as well. We are also
buoyed by the scientific validation we continue to receive in both
peer-reviewed publications and opportunities to present at medical
conferences where our CGuard MicroNet technology is being
recognized as a valued advancement in the carotid stent category,”
said Marvin Slosman, InspireMD’s Chief Executive Officer. “Our
expansion strategy continues to progress, with our recent Brazilian
approval for CGuard™ MicroNet® introducing us to the largest
market for medical devices in Latin America and one of the top
overall global markets for carotid artery disease. We believe this
approval will set the stage for continued expansion into other
countries in South America.
“We are in the process of addressing the agencies remaining
requests, specifically related to the stent-embolic protection
device (EPD) compatibility performance testing to gain full FDA
approval of our Investigational Device Exemption (IDE) application
to initiate a pivotal study of CGuard™ EPS. We have already
completed the testing of additional stents according to the FDA’s
specifications, and have employed alternative visualization
modalities that, we believe, will ultimately allow us to gain full
approval. Having an approved IDE is an extremely significant step
towards enabling us to initiate a pivotal trial in the United
States, clearly one of the world’s most important markets for
carotid artery disease and other vascular treatments. We previously
indicated that the FDA has concurred with our clinical study design
and data requirements to support the market approval of the device.
Accordingly, we believe that we are well positioned from a
regulatory perspective in terms of our ability to initiate a
trial.
“In addition, we believe the completion of our $11.5M financing
will help ensure we are capable of advancing our commercial
expansion and research and development activities as a pillar of
our growth objectives. Although the pandemic has put a spotlight on
the supply chain infrastructure challenges many in our field are
facing, we stand at the ready to fulfill the needs of physicians
and their patients for these serious and lifesaving procedures,”
Mr. Slosman concluded.
Financial Results for the Second Quarter and Six Months
ended June 30, 2020
For the three months ended June 30, 2020,
revenue decreased by $1,041,000, or 76.9%, to $313,000, from
$1,354,000 during the three months ended June 30, 2019. This
decrease was predominantly driven by a 75.7% decrease in sales
volume of CGuard EPS from $1,116,000 during the three months ended
June 30, 2019, to $271,000 during the three months ended June 30,
2020. This decrease was mainly due to the fact that procedures with
CGuard EPS, which are generally scheduled or non-emergency
procedures, were mostly postponed as hospitals shifted resources to
patients affected by COVID-19. The decrease was also due to the
large shipments of CGuard EPS that we made during the three months
ended June 30, 2019 of backlog that accumulated in the three months
ended March 31, 2019 that we were unable to ship previously due to
our former third-party sterilizer equipment failures. Those large
shipments did not recur during the three months ended June 30,
2020. In addition, there was an 82.4% decrease in sales volume of
MGuard Prime EPS, from $238,000 during the three months ended June
30, 2019, to $42,000 during the three months ended June 30, 2020,
mainly due to similar reasons as mentioned above.
The company recorded a gross loss for the
quarter ended June 30, 2020 of $120,000, compared to a gross profit
of $442,000 for the same period in 2019. This decrease in gross
profit resulted primarily from a $448,000 decrease in revenues (as
described above), less the related material and labor costs, and a
decrease following a receipt of $135,000 compensation received in
the quarter ended June 30, 2019 from our former third-party
sterilizer for the delays related to the product sterilization
interruption during the three months ended March 31, 2019, which
did not reoccur in the three months ended June 30, 2020, offset by
a $21,000 decrease in miscellaneous expenses. Gross margin (gross
profits as a percentage of revenue) decreased to (38.3)% during the
three months ended June 30, 2020 from 32.6% during the three months
ended June 30, 2019, driven by the reasons mentioned above.
Total operating expenses for the quarter ended
June 30, 2020 were $2,326,000, a decrease of 11.4% compared to
$2,625,000 for the same period in 2019. This decrease was primarily
due to a reduction of $382,000 in clinical expenses associated with
CGuard EPS, mainly related to the IDE approval process, $235,000 in
compensation related to temporary salary reductions due to the
immediate impact of COVID-19 on cash flow, and $82,000 of
miscellaneous expense reductions offset by an increase of
$400,000 due to a settlement agreement with the underwriter of our
prior offerings.
Financial expenses for the quarter ended June
30, 2020 were $34,000 compared to $23,000 for the same period in
2019. Net loss for the second quarter of 2020 totaled $2,480,000,
or $0.20 per basic and diluted share, compared to a net loss of
$2,206,000, or $1.59 per basic and diluted share, for the same
period in 2019.
For the six months ended June 30, 2020, revenue
decreased by $422,000, or 23.9%, to $1,347,000, from $1,769,000
during the six months ended June 30, 2019. This decrease was
predominantly driven by a 16.8% decrease in sales volume of CGuard
EPS from $1,492,000 during the six months ended June 30, 2019, to
$1,242,000 during the six months ended June 30, 2020, mainly due to
the postponement of procedures with CGuard EPS, which are generally
scheduled or non-emergency procedures, as hospitals shifted
resources to patients affected by COVID-19. In addition, there was
a 62.1% decrease in sales volume of MGuard Prime EPS from $277,000
during the six months ended June 30, 2019, to $105,000 during the
six months ended June 30, 2020, mainly due to the impact of
COVID-19, as mentioned above.
For the six months ended June 30, 2020, gross
profit decreased by $194,000, or 52.6%, to $175,000 from $369,000
for the same period in 2019. This decrease in gross profit resulted
primarily from a $225,000 decrease in revenues (as mentioned
above), less the related material and labor costs and a $61,000
increase in write-offs driven by a non-recurring component supply
issue. This decrease was partially offset by a decrease of
$69,000 of expenses related to upgrades made to our production
facilities during the six months ended June 30, 2019, which did not
reoccur during the six months ended in June 30, 2020 and a decrease
of $23,000 in miscellaneous expenses during the six months ended
June 30, 2020. Gross margin (gross profits as a percentage of
revenue) decreased to 13.0% during the six months ended June 30,
2020 from 20.9% during the six months ended June 30, 2019, driven
by the reasons mentioned above.
Total operating expenses for the six months
ended June 30, 2020 were $4,642,000, a decrease of 18.3% compared
to $5,682,000 for the same period in 2019. This decrease was
primarily due to a reduction of $710,000 in clinical expenses
associated with CGuard EPS, mainly related to the IDE approval
process, $354,000 due to settlement expenses that were paid to a
former service provider pursuant to a settlement agreement during
the six months ended June 30, 2019, $235,000 in compensation
expenses, primarily related to temporary salary reductions due to
the immediate impact of COVID-19 on cash flow, and $141,000 of
miscellaneous expense reductions offset by an increase of $400,000
due to a settlement agreement with the underwriter of our prior
offerings.
Financial income for the six months ended June
30, 2020 was $9,000 compared to $100,000 of financial expenses for
the same period in 2019. Net loss for the six months ended June 30,
2020 totaled $4,458,000, or $0.52 per basic and diluted share,
compared to a net loss of $5,413,000, or $4.86 per basic and
diluted share, for the same period in 2019.
As of June 30, 2020, cash and cash equivalents were $13,861,000
compared to $5,514,000 as of December 31, 2019.
Conference Call and Webcast Details
Management will host a conference call at 8:30AM ET, to review
financial results and provide an update on corporate
developments. Following management’s formal remarks, there
will be a question and answer session. Participants are asked to
pre-register for the call through the following link:
http://dpregister.com/10146840. Please note that registered
participants will receive their dial in number upon registration
and will dial directly into the call without delay. Those without
internet access or unable to pre-register may dial in by calling:
1-866-777-2509 (domestic) or 1-412-317-5413 (international). All
callers should dial in approximately 10 minutes prior to the
scheduled start time and ask for the InspireMD call. The conference
call will also be available through a live webcast, which can be
accessed through the following link:
https://services.choruscall.com/links/nspr200805.html. The
link is also available through the company’s website at
https://www.inspiremd.com/en/investors/investor-relations/.
A webcast replay of the call will be available approximately one
hour after the end of the call through November 4, 2020 at the
above links. A telephonic replay of the call will be available
through August 19, 2020 and may be accessed by calling
1-877-344-7529 (domestic) or 1-412-317-0088 (international) and
using access code 10146840.
About InspireMD, Inc.InspireMD seeks to utilize
its proprietary MicroNet® technology to make its products the
industry standard for carotid stenting by providing outstanding
acute results and durable stroke free long-term outcomes.
InspireMD’s common stock is quoted on the NYSE American under
the ticker symbol NSPR and certain warrants are quoted on the NYSE
American under the ticker symbol NSPR.WS and NSPR.WSB.
Forward-looking Statements
This press release contains “forward-looking statements.” Such
statements may be preceded by the words “intends,” “may,” “will,”
“plans,” “expects,” “anticipates,” “projects,” “predicts,”
“estimates,” “aims,” “believes,” “hopes,” “potential” or similar
words. Forward-looking statements are not guarantees of future
performance, are based on certain assumptions and are subject to
various known and unknown risks and uncertainties, many of which
are beyond the Company’s control, and cannot be predicted or
quantified and consequently, actual results may differ materially
from those expressed or implied by such forward-looking statements.
Such risks and uncertainties include, without limitation, risks and
uncertainties associated with (i) market acceptance of our existing
and new products, (ii) negative clinical trial results or lengthy
product delays in key markets, (iii) an inability to secure
regulatory approvals for the sale of our products, (iv) the impact
of the COVID-19 pandemic on our manufacturing, sales, business plan
and the global economy; (v) intense competition in the medical
device industry from much larger, multinational companies, (vi)
product liability claims, (vii) product malfunctions, (viii) our
limited manufacturing capabilities and reliance on subcontractors
for assistance, (ix) insufficient or inadequate reimbursement by
governmental and other third party payers for our products, (x) our
efforts to successfully obtain and maintain intellectual property
protection covering our products, which may not be successful, (xi)
legislative or regulatory reform of the healthcare system in both
the U.S. and foreign jurisdictions, (xii) our reliance on single
suppliers for certain product components, (xiii) the fact that we
will need to raise additional capital to meet our business
requirements in the future and that such capital raising may be
costly, dilutive or difficult to obtain and (xiv) the fact that we
conduct business in multiple foreign jurisdictions, exposing us to
foreign currency exchange rate fluctuations, logistical and
communications challenges, burdens and costs of compliance with
foreign laws and political and economic instability in each
jurisdiction. More detailed information about the Company and the
risk factors that may affect the realization of forward looking
statements is set forth in the Company’s filings with the
Securities and Exchange Commission (SEC), including the Company’s
Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q.
Investors and security holders are urged to read these documents
free of charge on the SEC’s web site at http://www.sec.gov. The
Company assumes no obligation to publicly update or revise its
forward-looking statements as a result of new information, future
events or otherwise.
Investor Contacts:Craig ShoreChief Financial
OfficerInspireMD, Inc.888-776-6804craigs@inspiremd.com
CORE IR investor-relations@inspiremd.com
CONSOLIDATED
STATEMENTS OF OPERATIONS (1) |
(U.S. dollars in
thousands, except per share data) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended |
|
Six months ended |
|
June 30, |
|
June 30, |
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues |
$313 |
|
|
$1,354 |
|
|
$1,347 |
|
|
$1,769 |
|
Cost of revenues |
|
433 |
|
|
|
912 |
|
|
|
1,172 |
|
|
|
1,400 |
|
|
|
|
|
|
|
|
|
Gross Profit |
|
(120) |
|
|
|
442 |
|
|
|
175 |
|
|
|
369 |
|
|
|
|
|
|
|
|
|
Operating Expenses: |
|
|
|
|
|
|
|
Research and development |
|
444 |
|
|
|
865 |
|
|
|
967 |
|
|
|
1,990 |
|
Selling and marketing |
|
377 |
|
|
|
620 |
|
|
|
1,001 |
|
|
|
1,254 |
|
General and administrative |
|
1,505 |
|
|
|
1,140 |
|
|
|
2,674 |
|
|
|
2,438 |
|
|
|
|
|
|
|
|
|
Total operating expenses |
|
2,326 |
|
|
|
2,625 |
|
|
|
4,642 |
|
|
|
5,682 |
|
|
|
|
|
|
|
|
|
Loss from operations |
|
(2,446) |
|
|
|
(2,183) |
|
|
|
(4,467) |
|
|
|
(5,313) |
|
|
|
|
|
|
|
|
|
Financial income (expenses) |
|
(34) |
|
|
|
(23) |
|
|
|
9 |
|
|
|
(100) |
|
|
|
|
|
|
|
|
|
Net Loss |
$(2,480) |
|
|
$(2,206) |
|
|
$(4,458) |
|
|
$(5,413) |
|
|
|
|
|
|
|
|
|
Net loss per share – basic and diluted |
$(0.20) |
|
|
$(1.59) |
|
|
$(0.52) |
|
|
$(4.86) |
|
|
|
|
|
|
|
|
|
Weighted average number of shares of common stock used in
computing net loss per share – basic and diluted |
|
12,681,757 |
|
|
|
1,383,238 |
|
|
|
8,652,396 |
|
|
|
1,112,888 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED
BALANCE SHEETS (2) |
(U.S. dollars in
thousands) |
ASSETS |
June 30, |
|
December 31, |
|
2020 |
|
2019 |
|
|
|
|
Current Assets: |
|
|
|
Cash and cash equivalents |
$13,861 |
|
|
$5,514 |
|
Accounts receivable: |
|
|
|
Trade, net |
|
416 |
|
|
|
823 |
|
Other |
|
152 |
|
|
|
150 |
|
Prepaid expenses |
|
40 |
|
|
|
87 |
|
Inventory |
|
1,402 |
|
|
|
1,236 |
|
|
|
|
|
Total current assets |
|
15,871 |
|
|
|
7,810 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current assets: |
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
459 |
|
|
|
547 |
|
Operating lease right of use
assets |
|
790 |
|
|
|
937 |
|
Funds in respect of employee rights upon retirement |
|
620 |
|
|
|
586 |
|
|
|
|
|
Total non-current assets |
|
1,869 |
|
|
|
2,070 |
|
|
|
|
|
Total assets |
$17,740 |
|
|
$9,880 |
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
June
30, |
|
December
31, |
|
2020 |
|
2019 |
|
|
|
|
Current liabilities: |
|
|
|
Accounts payable and accruals: |
|
|
|
Trade |
$458 |
|
|
$646 |
|
Other |
|
2,774 |
|
|
|
2,449 |
|
Contract liability |
|
17 |
|
|
|
20 |
|
|
|
|
|
Total current liabilities |
|
3,249 |
|
|
|
3,115 |
|
|
|
|
|
Long-term liabilities: |
|
|
|
Operating lease liabilities |
|
476 |
|
|
|
653 |
|
Liability for employees rights upon retirement |
|
801 |
|
|
|
729 |
|
Total long-term liabilities |
|
1,277 |
|
|
|
1,382 |
|
|
|
|
|
Total liabilities |
|
4,526 |
|
|
|
4,497 |
|
|
|
|
|
Equity: |
|
|
|
Common stock, par value $0.0001 per share; 150,000,000 shares
authorized at June 30, 2020 and December 31, 2019; 33,358,994 and
3,916,134 shares issued and outstanding at June 30, 2020 and
December 31, 2019, respectively |
|
3 |
|
|
|
- |
|
Preferred B shares, par value
$0.0001 per share; 500,000 shares authorized at June 30, 2020 and
December 31, 2019; 17,303 shares issued and outstanding at June 30,
2020 and December 31, 2019. |
|
- |
|
|
|
- |
|
Preferred C shares, par value
$0.0001 per share; 1,172,000 shares authorized at June 30, 2020 and
December 31, 2019; 2,343 and 34,370 shares issued and outstanding
at June 30, 2020 and December 31, 2019, respectively |
|
- |
|
|
|
- |
|
Additional paid-in capital |
|
175,301 |
|
|
|
163,015 |
|
Accumulated deficit |
|
(162,090) |
|
|
|
(157,632) |
|
|
|
|
|
Total equity |
|
13,214 |
|
|
|
5,383 |
|
|
|
|
|
Total liabilities and equity |
$17,740 |
|
|
$9,880 |
|
|
|
|
|
(1) All 2020 financial information is derived from the Company’s
2020 unaudited financial statements, as disclosed in the Company’s
Quarterly Report on Form 10-Q, filed with the Securities and
Exchange Commission; all 2019 financial information is derived from
the Company’s 2019 unaudited financial statements, as disclosed in
the Company’s Quarterly Report on Form 10-Q, filed with the
Securities and Exchange Commission.
(2) All June 30, 2020 financial information is derived from the
Company’s 2020 unaudited financial statements, as disclosed in the
Company’s Quarterly Report on Form 10-Q, filed with the Securities
and Exchange Commission. All December 31, 2019 financial
information is derived from the Company’s 2019 audited financial
statements as disclosed in the Company’s Annual Report on Form
10-K, for the twelve months ended December 31, 2019 filed with the
Securities and Exchange Commission.
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