Avinger Inc. Q1 2023 Earnings Call
Speaker 1: No.
Speaker 2: Greetings and welcome to the first quarter results call.
Speaker 2: At this time, all participants are in a listen-only mode and a question and answer session will follow the formal presentation.
Speaker 2: If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.
Speaker 2: Please note this conference is being recorded and I will now turn the conference over to your host, Matt Kreps.
Speaker 2: Sir, you may begin. Thank you, Ellie, and thank you all for participating in today's call. I'd like to welcome you to Avangers first quarter 2023 conference call. Joining us today are Avangers CEO Jeff Zwinske and Principal Financial Officer Nabil Spane.
Speaker 2: Earlier today, Avangar released financial results for the quarter ended March 31, 2023. The copy of the release is posted on the Avangar website under investor relations.
Speaker 2: Before we begin, I would like to remind you that management will make statements during this call that will include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical fact are
Speaker 2: should be deemed to be for looking statements. All four were looking statements, including without limitation our future financial expectations, are based on our current estimates and various assumptions.
Speaker 2: The statements involve material risks and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these four lifting statements.
Speaker 2: Accordingly, you should not place a new reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please see our form 10K filing with the Securities and Exchange Commission.
Speaker 2: Adverture Disclaves any intention or obligation except is required by law to update or revise any financial projections for looking statements whether because of new information, future events or otherwise.
Speaker 2: Today's presentation will also include reference to non-GAAP financial measures, such as the justice of EBITDA. For reconciliation of these non-GAAP financial measures, the most comparable GAAP financial measures is also available within the earnings release, which can be found in the Appendures website. And with that, I'd like to now turn the call over to Jeff.
Speaker 3: Thank you, Matt. Good afternoon and thank you all for joining us.
Speaker 3: During the first quarter and the early part of the second quarter, we've made important progress in advancing our business and our mission of radically changing the way Bascular disease is treated.
Speaker 3: In April , we received 510K clearance for our new Tiger IST image-guided CTO crossing catheter and have already initiated limited launch activities.
Speaker 3: In January , we filed a 510K submission for Pantheris LV, our next generation large vessel image guided at the rectumine system.
Speaker 3: And since that time, we've advanced the regulatory review process with the FDA and continue to anticipate pre-market clearance in the mid-year timeframe, providing the opportunity for two new peripheral product launches in the second half of this year.
Speaker 3: Along with the introduction of our new Lightbox 3 Imaging Console in 2022, we believe the launch of these two new catheter systems in 2023 will fully build out our image-guided PAD product portfolio, allowing us to focus most of our R&D efforts on the development of our first coronary product application.
Speaker 3: Over the past several months, we've made significant progress on this initiative. Advancing, design, candidates through the development process.
Speaker 3: gaining valuable feedback from coronary CTO specialists, and preparing for our first animal studies later this quarter.
Speaker 3: Based on our progress to date, we believe we remain on track to file an investigational device exemption, or IDE application with the FDA, in the next 9 to 12 months to allow for initiation of a clinical study in 2024.
Speaker 3: While we made significant progress in our new product development activities, we also reported continued improvement in our operating metrics.
Speaker 3: During the first quarter, we increased gross margin by 6 percentage points and sustained our efficient operating cost model.
Speaker 3: driving significant improvement in adjusted EVA.com compared to the year ago period.
Speaker 3: While revenue remained flat compared to the prior year, sales productivity or revenue for sales had improved by more than 25% as we delivered the same amount of revenue with lower sales headcount.
Speaker 3: We continue our recruiting efforts to build our clinical sales force and have recently added two new clinical specialists with two more expected to join our team this quarter.
Speaker 3: In addition to expanding our sales team throughout the year, we are confident that the anticipated full commercial launch of our two new peripheral products in the second half of the year will provide new growth opportunities for our business, expanding the addressable market for our products and increasing use of occasions and existing accounts.
Speaker 3: Our new Tiger IST CTO crossing catheter incorporates design upgrades to the tip configuration and catheter shaft to increase crossing power and procedural success in challenging morphology.
Speaker 3: It also incorporates design enhancements for ease of image interpretation during the procedure. Tiger IST continues to provide the distinctive high definition real-time imaging, user-controlled flexible tip and faster rotational speeds introduced to the platform in 2021.
Speaker 3: All of which perform exceptionally well with our advanced Lightbox 3 imaging platform.
Speaker 3: We've already initiated limited launch and expect to announce the completion of first cases with Tiger IST this month. The limited launch period provides important benefits to fully appreciate the clinical capabilities of this exciting new device and to prepare our clinical sales team for full commercial launch.
Speaker 3: If all goes according to plan, we expect to expand to full commercial availability in the third quarter of this year.
Speaker 3: As mentioned earlier, we filed a 510K submission for our new Pantheris LV image-guided at the rectum catheter in January and anticipate FDA clearance in the mid-year timeframe.
Speaker 3: Pantherus LV is our new large vessel device that incorporates key design principles from our highly successful Pantherus SV device.
Speaker 3: Penteris LV is designed to treat vessels 3 to 7 millimeters in diameter and is ideally suited to treat lesions in the SFA and popliteal arteries above and behind the knee where the majority of PAD procedures are performed.
Speaker 3: And Therese LV incorporates a proprietary design for plaque opposition without the need for a balloon and operates at significantly higher rotational speeds than our current large vessel offering. It also introduces enhanced guide wire and plaque management systems to the platform.
Speaker 3: Combined with our Lightbox 3 Imaging Council, we believe these design innovations will streamline the Atherrectomy procedure, open additional case opportunities for our platform, and expand the mainstream appeal of our image-guided approach.
Speaker 3: Our 510K filing for Pantheras LV continues to advance through the regulatory review process.
Speaker 3: We've answered all open questions and provided documentation and additional testing requested by FDA and have no open requests on our 510K submission at this time. While subject to change, based on the progress we've made today, we anticipate FDA clearance mid-year, which would allow us to initiate limited launch in the third quarter and provide the opportunity for expansion.
Speaker 3: As discussed on past calls, Pantheris SV is primarily used to treat patients with below-the-knee lesions, many of whom suffer from critical limb ischemia, or CLI, the most severe form of PAD. In this video, I will show you how to treat patients with below-the-knee lesions.
Speaker 3: PENTHERIS SB provides tremendous benefits to physicians, treating lesions within these very small 2-4 millimeter diameter vessels.
Speaker 3: The real-time imaging and precise control provided by Panthers SB allows physicians to precisely target the disease while avoiding damage to the arterial vascular structures, which can lead to adverse events and a re-narrowing of the vessel or re-stinosis with conventional approaches.
Speaker 3: We are documenting the excellent clinical results physicians are achieving with this unique and highly differentiated device in our image BTK post-market clinical study, designed to evaluate pantheris SV for the treatment of below the knee lesions in a real world clinical setting.
Speaker 3: We continue to build the clinical data set at the 12 months post-procedure study endpoint and expect a complete patient enrollment by the third quarter of this year.
Speaker 3: We are excited to share expanded outcomes data with the broader clinical community in the coming months, with principal investigators for the study in the US and Europe scheduled to present updated interim results at major clinical conferences in the second and third quarter.
Speaker 3: In addition to these efforts, in April , we announced the presentation of clinical data from our groundbreaking insight trial at the prestigious chairing cross international symposium in London by Dr. Arne Schwent, a vascular surgeon and one of the leading enrollers in the study.
Speaker 3: treatment of instant re stenosis or ISR when a previously implanted stent becomes occluded.
Speaker 3: The highly positive results from the study form the basis for a 510K application to the FDA to add a specific ISR indication for pantheris. Based on the strength of the data, the FDA provided clearance to add this indication in November 2021.
Speaker 3: with pantheris becoming the only directional pathorectomy device approved for use in the treatment of ISR, the significant and challenging problem for thousands of patients every year.
Speaker 3: Key outcomes data presented from the Insight Study include 82% luminal gain or increase in the channel for blood flow following the procedure.
Speaker 3: 93% freedom from Parkant Legion Restanosis at 6 months close procedure.
Speaker 3: 89% freedom from target lesion restonosis at 12 months post procedure.
Speaker 3: Viro amputations for the 6th and 12-month patient cohorts.
Speaker 3: A 0.96 mean ankle-breakable index or ABI at six months from a baseline of 0.69 pre-procedure and a 71% improvement in the Rutherford Class Corps a measure of disease severity at six months.
Speaker 3: These are remarkable results which speak volumes to the safety and efficacy of our catheters in a high risk difficult to treat patient population.
Speaker 3: Dr. Schwent noted, the results from the Insight trial support pantheris as a front-line treatment option for ISR with the best combination of efficacy and safety in this patient cohort as compared to any other statistically significant data set produced by alternative technologies.
Speaker 3: Again, demonstrating the ability for real-time imaging combined with precisely controlled therapeutic catheters to make a clinically significant difference in the lives of PAD patients.
Speaker 3: As we look to the future, we're excited about the progress we are making in the development of our first coronary product application, targeting a superior image-guided solution to the complex, expensive, and uncertain procedures currently used across chronic total occlusions in the coronary arteries. By leveraging our proprietary technology platform, we believe we can read a
Speaker 3: CT guidance with precise control and durability to facilitate an anna-grade approach and allow a larger number of physicians to safely and efficiently cross coronary CTOs.
Similar to our peripheral catheters, our coronary devices will incorporate a precise measurement capability to help physicians properly size balloons or stents prior to placement, critical for optimal outcomes.
Perhaps most exciting from a business perspective, an image-guided coronary CTO crossing device with diagnostic capabilities would access existing reimbursement codes both for the therapeutic procedure and for coronary OCT diagnostic imaging immediately upon FDA clearance.
We believe that an OCD guided catheter designed for crossing efficiency with the need for fewer support devices and less contrast media usage combined with an attractive reimbursement scenario provides the opportunity for differentiating and highly compelling economic value proposition.
As we focus our R&D efforts on this initiative, we've made significant progress in our development program. In recent months, we've had multiple interactions with members of our clinical advisory board made up of highly experienced, interventional cardiologists in the fields of coronary CTO crossing and intradascular imaging.
And through those interactions, change valuable feedback for the evolution of our design prototypes.
We are making final preparations to evaluate our leading design candidates in a first round of animal studies this quarter, as we work towards our goal of filing an IDE application with the FDA within the next 9-12 months to allow for initiation of a clinical study for this revolutionary new device in 2024.
I'll close my opening remarks today by reiterating the three strategic areas introduced on our March call to drive growth of our peripheral business.
First, increasing case coverage capability in capital utilization in our core geographic areas through the expansion and training of our clinical sales team.
Second, leveraging our new Lightbox 3 Imaging Console to drive new account activity and expand our user base.
And third, completing the regulatory approval process for our two new peripheral devices in preparation for commercial launch in the second half of 2023.
which we believe will broaden the appeal of our product portfolio and create new usage drivers for our platform. We are also making important investments for our future with the expansion of our proprietary technology platform to the larger coronary artery disease or CAD market.
with a defined goal of filing an IDE application with the FDA for our first coronary device in the next 9-12 months to allow for the initiation of a clinical study in 2024.
Despite a challenging economic environment, we've made tangible progress against each of these goals in the first part of this year while driving continued improvement in operating results.
We look forward to reporting our continued progress against these initiatives throughout the year. At this point, I'd like to turn the call over to Nabil Spanetti, our principal financial officer and accounting officer to take us through the financial results, and then I'll return for Q&A. Nabil?
first quarter of 2022 and 2 million in the fourth quarter. As Jeff mentioned, sales productivity increased as revenue remained stable with lower sales ciao tutor number.
You're currently hiring additional field sales people to increase selling activities and expand case coverage capability in key markets.
First margin for the first quarter was 34%. Notably improved from 28% in the year of the fourth quarter and stable with the fourth quarter.
Operating expenses for the first quarter were 4.9 million compared with 5.2 million in the year quarter and 4.5 million in the fourth quarter.
Net loss and comprehensive loss for the first quarter was 4.6 million compared with 5.1 million in the first quarter of 2022 and 4.2 million in the fourth quarter. Adjusted EBITDA as defined under our non-GAF financial measures in this press release.
was a loss of 3.9 million compared to a loss of 4.6 million in the first quarter of 2022 and a loss of 3.8 million in the fourth quarter.
A copy of the reconciliation from NetLost to a vested EBITDA can be found in today's Parts Release, which is also posted on our website at www.abendru.com under the Investor Section.
Cash and Cash Equal loans tell 10.4 million as of the end of the quarter.
At this point, I'd like to turn the call back to Jeff for Q&A. Thanks, Nabil. We're excited about the recent Tiger IST clearance and initiation of limited launch, as well as the progress we're making towards regulatory approval of Panthers LB, providing the opportunity for two major new peripheral product launches in 2023.
Our clinical studies continue to provide irrefutable evidence of the clinical advantages of our image-guided approach with KOL physicians spreading the news through podium presentations at major clinical conferences.
and we're making detangible progress on the development of our first coronary product application, which we believe provides the opportunity to redefine a large and underserved market with a highly differentiated solution that can advance the standard of care for millions of patients. And by doing so, fulfill our mission of radically changing the way vascular diseases treated.
At this point, we'd be happy to take your questions. Thank you. At this time, we will be conducting a question and answer session.
If you would like to ask a question, please press star one on your telephone keypad.
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Thank you. Our first question is coming from Swayama Kula Ramakamp from H.C. Wainrise. You may proceed.
Thank you. This is okay from Hitchhue and Wright. Good afternoon, Jeff and the BIO. Hope you guys are doing good.
So, just to start off, thinking about the ISR data that you've been using, you've probably recently uploaded an update on the ISR data. How is that being utilized?
in detailing the product and have you seen any increase in adoption once the data is out?
Yes, thanks, okay. As we, not only is the data powerful, but the addition of the actual indication certainly makes a difference, enabling our sales force to directly market and support our device for use in ISR. As you may know, the only other directional...
a very large amount of luminal gain.
to restore blood flow without, of course, damaging the stent or damaging the tissue. Our lumenal gain even prior to utilization of a balloon or any adjunctive therapy is 60 percent, over 80 percent when you use any adjunctive therapy, compared to a laser which is a predominant adherectomy modality.
and show the data.
talk about the indications and get trial in a new account because treating these ISR patients is very challenging.
The stent struts light up wonderfully under OCT and physicians can clearly and easily see the value in their very first cases of the real-time imaging.
So that primarily is how it's used. It's a way for our reps to engage with new users. It's a usage occasion as a way in. And especially something that can happen quickly with our Lightbox 3 imaging console and of course, our available pantheras catheters to just accelerate the adoption cycle and the engagement level with new accounts.
It's also a way to add use educations with existing accounts or bring on new users with existing accounts.
So, talking about adoption, if you can provide us some commentary on the TigerI ST because obviously this was recently approved and I believe you will have.
an ongoing limited launch at this point? And also, when should we expect the launch to become a full launch?
Yes, so as you know we very recently received our FDA clearance just within I guess last week we announced the FDA clearance it seems like longer than that but we've been ready to go and preparing our launch activities or for our launch activities as we waited for the approval.
So the same week that we got the approval, we kicked off the limited launch with our sales team, we've initiated training programs with the reps and clinicals who will be supporting our limited launch accounts. And we are now in the field, trying to get catheters into the limited launch accounts, but also supporting our first cases with the Tiger IST.
So we expect to announce very soon, you know, within the next couple of weeks, the initial results from our first cases with Tiger IST. We will add accounts throughout the quarter, you know, with the objective to be in about 10 limited launch sites.
And once we've done a certain number of cases and provided the opportunity for us to get a better understanding of the clinical capabilities of the device, and very importantly, prepare and train our sales team as well as provide clinical experience to our sales and clinical support team during this period.
then make the decision and the announcement to proceed to full commercial availability, which again we're early in the limited launch process, but we anticipate that the expansion to full commercial availability should happen early in the second half of the year in third quarter. Okay.
And then on the L.D. product on the pantries L.D. product, do you have a regular dialogue with the FDA in terms of expectations for that product? How?
Now that some of your Salesforce has gained experience, is that launch going to be more smooth than the previous ones? Any expectations or comments on that?
Yeah, so we are going through really a very standard review process with FDA. As you know, we filed the 510K submission early in the year, early in January . We've had the typical, you know, informal as well as formal requests for, you know, questions and requests for information.
that area limited to where they've asked before, but we feel we've provided very comprehensive responses supported by data and are hopeful that we will receive the clearance within the time frames that we've always anticipated in that mid-year time frame.
And so based on that expectation, we are doing the same thing we did with Tiger IST and starting to prepare to initiate a limited launch very soon after clearance. So our expectation, of course, you know, a lot of this is out of our control, is that we will be in a position to initiate limited launch in the third quarter of this year.
And because there are, you know, the atherectomy market is a larger market with more usage occasions, we think that we can move pretty quickly through that process. You know, of course we do limited launch to ensure that the device is operating in the real world clinical setting as we expect it to.
to gain experience, really understand the device and prepare our team. And so if everything goes according to plan, we would expect that our PENTHERES-LV would be ready for expansion to full commercial availability, hopefully early in the fourth quarter.
What's exciting about Panthers LV is that it builds on the great success that our clinicians have had with our Panthers SV or small vessel divider. It eliminates the need for a balloon to provide apposition even in these larger three to seven millimeter vessels which does streamline the app-directomy procedure. It spins at much higher speeds.
to moderate calcium. It also is a device that brings a lot of other efficiency to the platform. It has a new guide wire management system, it has a new plaque management system. So there's a lot of improvements in this device that are all designed not only to provide a great clinical outcome as all of our devices do.
but the streamline the procedure and kind of broaden the mainstream appeal of our platform.
our peripheral clinical advisors in the development of that product and think we're well positioned for Pentheras LV to make a strong difference in the growth of our business. Very, very excited. I'm very excited personally to get this product out in the market.
clinical advisors in the development of that product and think we're well positioned for Penther, SLV to make a strong difference in the growth of our business. Very, very excited. I'm very excited personally to get this product out in the market.
Thank you. Thanks for taking all my questions, sir. Thank you again. Thank you so much.
We have reached the end of our question and answer session, so now I will hand the call back over to Mr. Soinsky for closing remarks.
Well, thank you very much for joining our call this afternoon. We appreciate your interest in our company and look forward to reporting our further progress as the year advances. Have a good afternoon.
Thank you and this does conclude today's conference. You may disconnect your lines at this time and we thank you for your participation.