Avinger, Inc. (NASDAQ:AVGR) (“Avinger” or the “Company”), a leading
developer of innovative treatments for peripheral artery disease
(PAD), today reported results for the third quarter ended September
30, 2017.
Third Quarter and Recent Highlights
- Revenue of $2.1 million, a 16% sequential decrease from the
second quarter of 2017
- September 30, 2017 cash balance of $10.2 million, including net
proceeds of $3.2M raised through the company’s at-the-market (ATM)
program in the third quarter of 2017
- Reduced cash utilization to $7.0 million, excluding the impact
of capital raised through the ATM program, compared to $9.1 million
utilized in the second quarter of 2017
- Continued strategic reorganization to further reduce cash
usage, with total headcount of 73, including 20 sales
professionals, as of October 15, 2017
- Entered into an equity purchase agreement with Lincoln Park
Capital on November 3, 2017 for sales of up to $15 million in
shares of common stock and filed an S-1 registration statement on
November 6, 2017 for the resale of up to 9.95 million of such
shares of common stock
- Received CE Marking for in-stent restenosis (ISR) treatment
indication for Pantheris image-guided atherectomy system
- Enrolled first patient in INSIGHT, a prospective, multi-center
investigational device exemption (IDE) study to evaluate the safety
and effectiveness of Pantheris in treating ISR, to support a US FDA
501(k) submission
- Received 510(k) clearance for a series of design improvements
incorporated into the current version of Pantheris
“With our streamlined commercial organization focused on driving
utilization and clinical success, incremental current product
improvement, and enrollment in our INSIGHT trial now underway, we
continue to look forward to the introduction of new products and
expansion of indications in 2018,” said Jeff Soinski, Avinger’s
president and CEO. “We believe our equity purchase agreement with
Lincoln Park Capital, combined with our continued progress in
expense management, will put us in a stronger position to achieve
our goals as we enter 2018.”
Third Quarter 2017 Financial ResultsTotal
revenue was $2.1 million for the third quarter ended September 30,
2017, a 61% decrease from the third quarter of 2016 and a 16%
decrease from the second quarter of 2017. Revenue from disposable
devices was $1.7 million for the third quarter of 2017, a 56%
decrease compared to the third quarter of 2016 and a 15% decrease
from the second quarter of 2017. Revenue related to Lightbox
imaging consoles was $0.4 million, a 71% decrease compared to the
third quarter of 2016 and a 20% decrease from the second quarter of
2017, reflecting the Company’s current focus on disposable device
utilization in existing accounts.
Gross margin for the third quarter of 2017 was -58%, compared to
30% in the third quarter of 2016 and -59% in the second quarter of
2017. Gross margin for the quarter was negatively impacted
primarily by lower production volumes as well as $1.6 million in
charges for excess and obsolete inventories, predominantly related
to reduced expectations for the opening of new Lumivascular
accounts through 2018 and the write-down of Pantheris catheters
produced prior to the implementation of certain manufacturing
process improvements. Without these charges, gross margin for the
quarter would have been 19%.
Operating expenses for the third quarter of 2017 were $7.7
million, compared to $13.0 million in the third quarter of 2016.
This decrease was primarily attributable to higher sales and
marketing expenses in 2016. Operating expenses for the third
quarter of 2017 included a $0.4 million charge related to the
Company’s organizational restructuring activities during the
quarter.
Loss from operations for the third quarter of 2017 was $8.9
million, compared to $11.4 million for the third quarter of 2016,
and net loss for the third quarter of 2017 was $10.4 million,
compared to $13.0 million for the third quarter of 2016. Loss per
share for the third quarter of 2017 was $0.43, compared to $0.73
for the third quarter of 2016. The decreased loss per share
reflects the impact of the issuance of 9.9 million shares in the
Company’s follow-on public offering, which closed on August 16,
2016, and 8.6 million shares issued from the third quarter of 2016
through the third quarter of 2017 under the Company’s ATM
program.
Adjusted EBITDA, a non-GAAP measure, was a loss of $6.8 million
for the third quarter of 2017, compared to a loss of $9.3 million
for the third quarter of 2016.
Cash and cash equivalents totaled $10.2 million as of September
30, 2017, compared to $14.0 million as of June 30, 2017. The cash
balance at the end of the third quarter included $3.2 million
raised through the Company’s ATM program. Cash utilization in the
third quarter of 2017, excluding the proceeds from financing, was
$7.0 million, compared to an average of $13.4 million per quarter
in 2016 and $9.1 million in the second quarter of 2017. The Company
expects cash utilization in the fourth quarter of 2017 to remain
consistent with the third quarter.
Conference Call Avinger will hold a conference
call today, November 9, 2017 at 1:30pm PT/4:30pm ET to discuss its
third quarter 2017 financial results. Individuals may listen to the
call by dialing (844) 776-7820 for domestic callers or (661)
378-9536 for international callers and referencing Conference ID:
7797916. To listen to a live webcast, please visit the investor
relations section of Avinger's website at: www.avinger.com.
A replay of the call will be available beginning November 9,
2017 at 4:30pm PT/7:30pm ET through 4:30pm PT/7:30pm ET on November
10, 2017. To access the replay, dial (855) 859-2056 or (404)
537-3406 and reference Conference ID: 7797916. The webcast will
also be available on Avinger's website for one year following the
completion of the call.
About Avinger, Inc. Avinger is a
commercial-stage medical device company that designs and develops
the first-ever image-guided, catheter-based system that diagnoses
and treats patients with peripheral artery disease (PAD). Avinger
is dedicated to radically changing the way vascular disease is
treated through its Lumivascular platform, which currently consists
of the Lightbox imaging console, the Ocelot family of chronic total
occlusion (CTO) catheters, and the Pantheris® family of atherectomy
devices. Avinger is based in Redwood City, CA. For more
information, please visit www.avinger.com.
Forward-Looking StatementsThis news release
contains forward-looking statements within the meaning of Section
27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934 and the Private Securities Litigation Reform
Act of 1995. These forward-looking statements include statements
regarding the expected impact of the Company’s recent
organizational restructuring and other expense reduction measures,
expectations regarding future 510(k) filings for new product
offerings and expanded claims for our products, the commercial
introduction of new versions of Pantheris, the effect of these
products on reliability and usability and the size of our
addressable market, the future availability and presentation of
clinical data, the timing of enrollment in future clinical studies
and financial and operating guidance for 2017. Such statements are
based on current assumptions that involve risks and uncertainties
that could cause actual outcomes and results to differ materially.
These risks and uncertainties, many of which are beyond our
control, include our dependency on a limited number of products;
our ability to demonstrate the benefits of our Lumivascular
platform; the resource requirements related to Pantheris; the
outcome of clinical trial results; potential exposure to
third-party product liability, intellectual property and other
litigation; lack of long-term data demonstrating the safety and
efficacy of our Lumivascular platform products; reliance on
third-party vendors; dependency on physician adoption; reliance on
key personnel; and requirements to obtain regulatory approval to
commercialize our products; as well as the other risks described in
the section entitled “Risk Factors” and elsewhere in our quarterly
Form 10-Q filing made with the Securities and Exchange Commission
on August 9, 2017. These forward-looking statements speak only as
of the date hereof and should not be unduly relied upon. Avinger
disclaims any obligation to update these forward-looking
statements.
Non-GAAP Financial Measures Avinger has
provided in this press release financial information that has not
been prepared in accordance with generally accepted accounting
principles in the United States (GAAP). The Company uses these
non-GAAP financial measures internally in analyzing its financial
results and believes that the use of these non-GAAP financial
measures is useful to investors as an additional tool to evaluate
ongoing operating results and trends and in comparing the Company’s
financial results with other companies in its industry, many of
which present similar non-GAAP financial measures.
The presentation of these non-GAAP financial measures are not
meant to be considered in isolation or as a substitute for
comparable GAAP financial measures, and should be read only in
conjunction with the Company’s financial statements prepared in
accordance with GAAP. A reconciliation of the Company’s non-GAAP
financial measures to their most directly comparable GAAP measures
has been provided in the financial statement tables included in
this press release, and investors are encouraged to review these
reconciliations.
Adjusted EBITDA. Avinger defines Adjusted EBITDA as Loss from
Operations plus Stock-based Compensation expense plus Depreciation
and Amortization expense plus charges related to our organizational
restructuring activities. Investors are cautioned that there are a
number of limitations associated with the use of non-GAAP financial
measures as analytical tools. Furthermore, these non-GAAP financial
measures are not based on any standardized methodology prescribed
by GAAP, and the components that Avinger excludes in its
calculation of non-GAAP financial measures may differ from the
components that its peer companies exclude when they report their
non-GAAP results of operations. Avinger compensates for these
limitations by providing specific information regarding the GAAP
amounts excluded from these non-GAAP financial measures. In the
future, the Company may also exclude other non-recurring expenses
and other expenses that do not reflect the Company’s core business
operating results.
INVESTOR CONTACT
Matt FergusonAvinger, Inc.(650) 241-7917ir@avinger.com
|
Avinger, Inc. |
Statements of Operations Data |
(in thousands, except per share
data) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
September 30, |
|
September 30, |
|
|
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Revenues |
$ |
2,071 |
|
|
$ |
5,316 |
|
|
$ |
8,021 |
|
|
$ |
14,535 |
|
Cost of
revenues |
|
3,274 |
|
|
|
3,742 |
|
|
|
11,268 |
|
|
|
10,747 |
|
Gross profit |
|
(1,203 |
) |
|
|
1,574 |
|
|
|
(3,247 |
) |
|
|
3,788 |
|
|
|
|
|
-58 |
% |
|
|
30 |
% |
|
|
-40 |
% |
|
|
26 |
% |
Operating
expenses: |
|
|
|
|
|
|
|
Research and development |
|
2,322 |
|
|
|
3,591 |
|
|
|
9,342 |
|
|
|
11,505 |
|
Selling, general and administrative |
|
4,928 |
|
|
|
9,414 |
|
|
|
20,435 |
|
|
|
31,036 |
|
Restructuring charges |
|
416 |
|
|
|
- |
|
|
|
935 |
|
|
|
- |
|
Total operating expenses |
|
7,666 |
|
|
|
13,005 |
|
|
|
30,712 |
|
|
|
42,541 |
|
Loss from
operations |
|
(8,869 |
) |
|
|
(11,431 |
) |
|
|
(33,959 |
) |
|
|
(38,753 |
) |
|
|
|
|
|
|
|
|
|
|
Interest
income |
|
25 |
|
|
|
27 |
|
|
|
88 |
|
|
|
88 |
|
Interest
expense |
|
(1,599 |
) |
|
|
(1,553 |
) |
|
|
(4,720 |
) |
|
|
(3,959 |
) |
Other
income (expense), net |
|
- |
|
|
|
(12 |
) |
|
|
9 |
|
|
|
(7 |
) |
Net loss
and comprehensive loss |
$ |
(10,443 |
) |
|
$ |
(12,969 |
) |
|
$ |
(38,582 |
) |
|
$ |
(42,631 |
) |
|
|
|
|
|
|
|
|
|
|
Net loss
per share, basic and diluted |
$ |
(0.43 |
) |
|
$ |
(0.73 |
) |
|
$ |
(1.61 |
) |
|
$ |
(2.97 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares used to |
|
|
|
|
|
|
|
compute net loss per share, basic and diluted |
|
24,276 |
|
|
|
17,694 |
|
|
|
24,005 |
|
|
|
14,378 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Avinger, Inc. |
|
Balance Sheets Data |
|
(in thousands) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
September
30, |
|
December
31, |
|
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
Cash and cash equivalents |
|
$ |
10,170 |
|
|
$ |
36,096 |
|
|
Accounts receivable, net |
|
|
1,197 |
|
|
|
3,570 |
|
|
Inventories |
|
|
5,046 |
|
|
|
8,462 |
|
|
Prepaid expenses and other current assets |
|
|
880 |
|
|
|
662 |
|
|
Total current assets |
|
|
17,293 |
|
|
|
48,790 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
3,458 |
|
|
|
4,555 |
|
|
Other assets |
|
|
220 |
|
|
|
212 |
|
|
Total assets |
|
$ |
20,971 |
|
|
$ |
53,557 |
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders’ equity
(deficit) |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
Accounts payable |
|
$ |
841 |
|
|
$ |
1,607 |
|
|
Accrued compensation |
|
|
1,401 |
|
|
|
2,807 |
|
|
Accrued expenses and other current liabilities |
|
|
2,151 |
|
|
|
3,067 |
|
|
Borrowings, current portion |
|
|
43,112 |
|
|
|
41,289 |
|
|
Total current liabilities |
|
|
47,505 |
|
|
|
48,770 |
|
|
|
|
|
|
|
|
|
|
Other long-term liablities |
|
|
177 |
|
|
|
546 |
|
|
Total liabilities |
|
|
47,682 |
|
|
|
49,316 |
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity (deficit): |
|
|
|
|
|
Preferred stock |
|
|
- |
|
|
|
- |
|
|
Common stock |
|
|
32 |
|
|
|
24 |
|
|
Additional paid-in capital |
|
|
264,434 |
|
|
|
256,606 |
|
|
Accumulated deficit |
|
|
(291,177 |
) |
|
|
(252,389 |
) |
|
Total stockholders’ equity (deficit) |
|
|
(26,711 |
) |
|
|
4,241 |
|
|
Total liabilities and stockholders’ equity (deficit) |
|
$ |
20,971 |
|
|
$ |
53,557 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Avinger, Inc. |
Adjusted EBITDA |
(in thousands) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Nine Months Ended |
|
|
|
|
September 30, |
|
September 30, |
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
|
2017 |
|
|
|
2016 |
|
Loss from
operations |
$ |
(8,869 |
) |
|
$ |
(11,431 |
) |
|
$ |
(33,959 |
) |
|
$ |
(38,753 |
) |
Add:
Stock-based compensation |
|
1,320 |
|
|
|
1,712 |
|
|
|
4,197 |
|
|
|
5,301 |
|
Add:
Depreciation and amortization |
|
308 |
|
|
|
404 |
|
|
|
1,162 |
|
|
|
1,095 |
|
Add:
Restructuring charges |
|
416 |
|
|
|
- |
|
|
|
935 |
|
|
|
- |
|
Adjusted EBITDA |
$ |
(6,825 |
) |
|
$ |
(9,315 |
) |
|
$ |
(27,665 |
) |
|
$ |
(32,357 |
) |
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