Q1 2021 InspireMD Inc Earnings Call
Ladies and gentlemen, thank you for standing by.
Morning, and welcome to the inspire and the first quarter 2021 financial results.
Corporate update conference call.
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I would now like to turn the call over to Scott Gordon President of core IR of the company's Investor Relations for <unk>. Please go ahead Sir.
Thank you Chad and good morning, everyone. Thank you for joining us for the inspire M. D first quarter 2021 financial results and corporate update conference call.
Joining us today from inspire M. D. R. Marvin's Schlossman, Chief Executive officer of inspire and Craig Shore Chief Financial Officer.
During the call management will be making forward looking statements, including statements that address the inspire empties expectations for future performance or operational results, particularly in light of the COVID-19 pandemic.
Forward looking statements involve risks and other factors that may cause actual results to differ materially from those statements.
For more information about these risks please refer to the risk factors described in the inspire M. DS. Most recently filed periodic reports on form 10-K form 10-Q, the form 8-K filed with the SEC today and inspire empties press release that accompanies this call, particularly the cautionary statements in it.
The content of this call contains time sensitive information and is accurate only as of today may 11, 2021, except as required by law inspire them day disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur. After this call.
It's now my pleasure to turn the call over to Martin Saltzman, Chief Executive Officer Marvin. Please go ahead.
Thank you Scott and thank you all for joining the call and webcast today.
The first quarter of 2021 was the very productive period for inspire empty with persistence and tireless focus on executing on milestones ranging from expanding our already unmatched clinical body of evidence global expansion commercial growth and development of new pipeline offerings on.
Our execution strategy remains sound and our mission remains the same to demonstrate the CRT P. S with its unique and proprietary design is the most advanced treatment of carotid artery disease of C. A D and stroke prevention above all other stent systems in the market and to establish the guard is the carotid device of choice.
Amongst physicians across multiple clinical specialties that treat carotid artery disease.
Revenue performance for the first quarter showed improvement, although with some ritual residual effects of the pandemic as many of our served geographies continue to struggle with full access to elective procedures, but we expect revenue to normalize as we move through the year.
Of the many milestones we achieved during the first quarter. We believe one of the key events was the shareholder approval for a for a reverse split of our stock. We worked hard to accomplish of one for 15 reverse stock split reducing the number of outstanding shares for 118 million to $7 9 million shares which took effect at the close of trading.
On April 26 2021.
The reverse stock split was important and allowed us to pursue the newly announced the listing on the NASDAQ capital market. Our stock will begin trading on NASDAQ under the same ticker symbol and S. P. R. Starting made the twenty-first we.
We believe that the up listing to NASDAQ will make our share it's more attractive to a broader range of investors, particularly institutional and fundamental investors.
One of our top priorities for 2021 is to initiate steps in the past toward commercial registration of <unk> guard in the U S with the startup of our pivotal trial now on known as C Guardian, we announced at leading interventional cardiologist, Chris Metsker system Chair.
Of clinical research at Ballard Health system in the Eastern Tennessee has accepted the role of principal investigator in the U S. Along with Theater me see Alec who will serve as co principal investigator focusing on the European enrollment for the trial.
Our clinical consultants of leading contract research organization will spearhead the effort managing the trial execution the.
The U S is one of the largest markets in the world for our device and establishing the base of awareness and credibility through the trial execution will position us for successful and accelerated post approval commercial launch I'm pleased to share of it all of the initial sites both in the U S and Europe have accepted our invitation to participate and I believe we.
Have the most robust group of leading centers in the investigators on board for this important effort anticipated to begin enrollment in July.
In terms of global expansion, we continue to progress in China. Following the announcement of our agreement and are working diligently with our partners on next steps for regulatory approval and distribution for CRT P. S in mainland China.
Broke is the leading cause of death in China and the country is believed to be the second fastest growing market in peripheral stent procedures, we view our entry into the Chinese market is a pillar of our Asian growth plan as we work toward expansion in new markets, such as Japan, Taiwan and Korea in.
In Europe, we filed for registration and reimbursement in France and plan to establish a direct sales strategy along with our current direct sales market in the U K. We currently share of portion of our revenue in the form of transfer pricing with our distributors and therefore under a direct sales model our topline revenue will increase by capturing the full E. S. P.
[noise] from customers.
Additionally, we value the direct model and our ability to control the sales process to drive accelerated growth and adoption of new tools and devices. This is an important point of reference as we move forward and direct sales in certain markets.
Finally during the first quarter, we completed in the upsides underwritten public offering which along with other supported financial transactions raised the total of $35 $1 million net and accordingly.
<unk> balance sheet and cash reserves to fund our operations through mid 2023, assuming normal course of business. We are now well positioned and believe that we have been necessary resources to fund. The C. Guardian trial, all continued global commercial expansion and to advance the development of pipeline of new products, including new tools access.
For each stent delivery solutions and portfolio additions to facilitate broader and greater utilization of C. Guard. We are working diligently on our commercial goals to increase awareness of our seed guard proprietary stent system focusing on the conversion of vascular surgeons, who perform the majority of carotid revascularization.
And our current served markets as well as growth target markets. We continue to expand our online training and prospering efforts, along with reinstating our centers of excellence or Coa programs for our existing markets and the educational support of the new users for the <unk> platform.
We remain firmly committed to change how C. A D is managed and stroke has prevented with our clinically proven segar. The E. P. S system in the past physicians, who had to make inherent compromises in choosing of carotid artery stent with either open or closed cell design CRT P. S eliminates those compromises as it offers the best of both.
Worlds by simultaneously, providing opening closed cell features and performance with what we believe to be the most advanced protection from the embolic events as the leading cause of stroke.
The guards unique micro net technology mitigates, the prolexic prolapse of plaque into the lumen of the artery and thus prevent associated embolization.
Continues to demonstrate superior clinical outcomes for patients compared to alternative carotid stent types conventional of next generation double layer of stents as well as invasive surgical procedures such as endarterectomy.
CCAR of his demonstrated clinical superiority and protected treatment of C. E. D look at potential to firmly establish a new standard of care for carotid artery disease and with that I'll turn the call over to Craig to review, our first quarter financials Craig.
Thank you Marvin.
For everyone for joining today here of some key financial highlights for the first quarter of 2021.
Total revenue for the three months ended March 31, 2021 was $1 $6000 a decrease of two seven per cent compared to $1.034 million. During the three months ended March 31st 2020.
The revenue remained essentially unchanged of $970000. During the three months ended March 31, 2021 as compared to 971000 during the same period last year.
In spite of the continued postponement of many electric of many electric procedures as the result of the residual COVID-19 really directed resources.
However, <unk> prime EPS revenue decreased by 41, 3% from $63000. During the three months ended March 31st 2000, the 20 to $37000. During the three months ended March 31, 2021, largely driven by the predominant industry preferences favoring drug eluting stents rather than the.
They're not withstand such as Amazon Prime EPS for the.
The three months ended March 31, 2021, we had a gross profit of $106000 compared to a gross profit of $295000. During the same period last year the.
This decrease in gross profit resulted from an increase in write off of the $156000, which were driven mainly by component supply issue and an increase of $33000 of miscellaneous expenses.
Gross margin decreased to 10, 5% during the three months ended March 31, 2021 compared to 28 in the 5% during the three months ended March 31, 2020, driven by the factors just mentioned.
Total operating expenses for the quarter ended March 31, 2000 of 21 were $3 $4 million, an increase of 47, 7% compared to $2 $3 million for the same period of 2020. This increase was primarily due to an increase of $430000 of salary expenses and related.
Cool expenses, mainly driven by additional resources in our product development and sales infrastructure.
$248000 on share based compensation related expenses due to the expense recognition of grants made in the second half of 2020 $136000 of development expenses associated with CRT P F.
The related to the new advanced delivery system and accessories, a hunter on 18000 of directors and officers liability insurance expense due to increased premiums caused by recent trends in the overall insurance industry, an increase of $108000 and shareholder related expenses due to the special shareholder meeting and six.
The $4000 of miscellaneous expense.
For the three months ended March 31, 2021 financial income increased by 65, 1% of $71000 from $43000. During the same period last year. The increase of financial income primarily resulted from exchange of changes in exchange rates.
Net loss for the first quarter of 2021 totaled $3 $2 million for 53 per basic and diluted share compared to a net loss of $2 million or $6 for two cents per basic and diluted share for the same period in 2020, the average amount of shares outstanding used for the earnings.
Per share calculation were $6 1 million in Q1 2000 of 'twenty, one and 300000 in Q1 2020 with both numbers, having being adjusted for the reverse split.
How's the March 31, 2021, cash and cash equivalents for $44 million compared to $12 6 million of as of December 31, 2000 of 20 during the first quarter of 22000 of 'twenty one as Marvin mentioned the company raised 35 point of $1 million net through various equity trends actions.
With that I'd like to turn the call over for questions. Operator. Please go ahead.
Thank you.
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And the first question is from Ben Hayner with Alliance Global Partners. Please go ahead.
Good morning, gentlemen, thanks for taking the questions.
For.
First for me can you talk a little bit of a more about the our input that you expect from the scientific Advisory Board on.
I noticed you've got a doctor of Rosenfield as chair you know.
Can you talk about a what type of input are that you see them, providing you know kind of how that'll help the advanced she guard and then.
Any anything on the other.
Our other product development that they may be able to help out with I know they haven't all been named yet, but just looking for more color on that.
Sure Ben Thanks for the question Yeah, I think the of the FCB has been long overdue in terms of getting a formal group together and we have across the discipline of great cost discipline group, both the interventional as well as surgeons state, where we're building a nice team that will help advise the company both in the pipeline.
<unk> that we're building within the organization to make sure that the relevant and valid and provide the clinical utility that we believe.
I think it's just a great barometer to make sure that we're right on track on both proactively as well as in all the development cycles too to make sure that when our products are announced and do come to market that the relevant and meaningful and can have an immediate commercial impact. So we're we're really pleased to have for this group of supporters on board with Us and it's a very practical.
For them to to use for us.
And you guys of sure punched above your weighted so to speak and are attracting a lot of these folks that are kind of.
Named brands of the right term, but a highly respected certainly to the to the company and the further your.
Your development so that's great.
On the pipeline of new products in the you know, making sure that there you know relevant valid providing clinical utility like you mentioned you know when might we start to hear more specifics on on you know what what do you guys are working on.
Yeah, Ben I think hopefully we're going to be able to talk more specifics over the next quarter or so.
We certainly want to make sure that we have everything lined up accordingly.
On the development process has been going remarkably well, we're getting some validated feedback now we're obviously working our regulatory path. In addition to our our engineering effort. So I'm encouraged by the progress and hopefully within the next quarter. So we'll be able to talk more specifically about about what we have in the pipeline of.
What we plan to launch.
Okay, Great and then just thinking about the kind of the expense line items and you know on the R&D activities related to the the CRD in trial and it hasn't really shown up but yet our in the reported numbers, but you know kind of what should we be looking for in terms of magnitude of the step up in.
And when that might occur.
Craig you want to take this one.
Can you just repeat it a little and that's one of the following yeah no problem. So.
As far as R&D goes the not a lot of the CRD and trial is shown up you know on the reported numbers.
What should we be looking for and you know kind of in terms of magnitude and you know when that step up will occur both the magnitude and the timing of the step up that will occur as you get into the trial.
Okay. So as Marvin said, we're expecting you know our first patient to be recruited sometime in the summer.
So most of our expenses will be overseeing all of them.
Most of our expenses have to do with the recruitment of patients. So we should see a pickup in expenses you know in Q2 filing you know Q3, then you know next year.
Throughout the full year, and then we should start to see them from coming back to normal sometimes in 2023.
If we finish enrollment in the one year follow up.
Okay.
Sense and then finally for me the you know there's another player on the credit stent in the market. That's out there you know they've recently spoken of kind of refocusing their efforts on physicians that have already been trained on there are procedures. It looks like Oh about three quarters of more of the procedures.
The <unk> are being done on.
All of her being done by docs trained over a year ago, you know, which.
Did but you know it kind of seems like some of the the docs that we talked to the gets a fairly complex procedure do you think that's a difficult to you know kind of brought the.
Uh huh.
Get adoption of and you know how do you guys see kind of the sea guard procedure stacking up in comparison to the T car procedure that's out there.
Sure Ben Good question.
We are fundamentally a stent driven and focused company and we believe that ultimately the stent is the difference maker in terms of clinical performance and patient outcomes and we will continue to remain focused on that.
Regardless of delivery system, ultimately, we don't want to discriminate with with one sector of our physician group, we want to appeal to all of them and make sure that we have delivery systems that are consistent with what they they choose to use but ultimately our goal is to make sure that she guard is the focus and that are that the stent of the residual stent is really.
What matters so we.
We will continue to build systems and mechanisms that allow us the guard to be placed and we will continue to focus on the outcomes and evidence of that show superior clinical results for patients. So I think ultimately that's the goal is to is to continue to make segar ubiquitous across.
Every discipline in every specialty.
Jesus to do carotid artery stenting, and I think that's fundamentally the difference that we have.
Okay. So in other words is the your view of the World is the it's the stent that is what matters rather than how it gets delivered.
I think I think that's that's clear and consistent and we certainly want to create mechanisms for for delivering the stent.
And give people options and we will continue to work on optimizing those but ultimately our business is based on C Guard and based on the Stat correct.
Okay got it well thanks for taking the questions and congrats on the on the the progress gentlemen, and looking forward for the upcoming uplifting.
Great. Thanks, Ben Thanks for the questions.
Ladies and gentlemen. This concludes the question and answer session of the call I will now return the call Tomorrow in Boston for closing remarks.
Great. Thank you I'd like to thank everyone for taking the time to join the call today and the ongoing support for inspire M. D. We are fundamentally a stronger company today than ever before and I'm very proud of the extraordinary efforts that our team has gone through an expanding and creating an exciting future for the company and thank you for joining.
And thank you Sir conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines.
For you.
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