InspireMD, Inc. Price & Performance (NSPR)

Thank you for joining us for the InspireMD fourth quarter twenty twenty four conference call. Joining us today from InspireMD are Marvin Slausman, Chief Executive Officer and Craig Shore, Chief Financial Officer. During the call, management 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 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 ks and Form 10 Q. Or any updates in our current reports on Form eight ks 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 12, 2025. 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 the call over to Marvin Salzman, Chief Executive Officer.

Marvin? Please go ahead. Thank you and good morning. We're pleased to welcome everyone to the call today. I'd like to start by highlighting our strong fourth quarter and full year performance. CGuard revenue reached a new quarterly high of $1,950,000 in the fourth quarter.

Reflecting a 10.6% growth year over year with $7,000,000 in revenue for the full year 2024. Translating our momentum in unit sales of 3,512 CGuard stents sold for the quarter and 12,100 units for the full year. Thus benefiting thousands of patients in our end markets suffering from carotid artery disease. These results contribute to more than 60,000 implants sold to date as a testament to our strong global commercial foundation and real world experience as we build toward anticipated approval and launch of CGuard Prime in The United States. I'm pleased to share that we remain on track for an anticipated U. S. Approval and launch of CGuard Prime. In the first half of twenty twenty five. With the potential approval I'd like to illustrate how our global Q4 sales would translate in U. S. Market revenue to help frame the potential opportunity. With $3,512 sold internationally during the fourth quarter, at this number of stents sold in The U. S. They would have generated over $16,000,000 in revenue assuming a balanced mix between CAS and TCAR sales at current U. S. Market ASP. To put this in perspective, we estimate that more than 7,000 U. S. TCAR procedures were performed in the fourth quarter making our global unit sales close to 50% of The U. S. Only TCAR market before we've even entered the market with both cats and TCAR solutions.

Therefore, with The U. S. Market entry of both cats and TCAR platforms, we are confident in the significant revenue expansion upon regulatory approval.

To recap our regulatory status in The U. S. September 2024, we submitted the final module of our premarket approval our PMA application to FDA We and have since engaged in an interactive review process. Are optimistic for a timely and positive decision which would enable our U. S. Market launch of CGuard Prime triggering the commercialization of our best in class stent platform in The U. S. While our review continues with FDA, we've been diligently building a world class commercial and operational engine to support our highly anticipated U. S. Launch. We are not just prepared but ready to aggressively execute a robust commercial and operational launch plan. We believe CGuard Prime is poised to redefine carotid artery disease treatment and stroke prevention and plan to fully capitalize on the shift toward an endovascular first approach. Our new headquarters in Miami, Florida is strategically positioned to support the anticipated U. S. Launch in commercialization of CGuard Prime upon approval. This state of the art facility represents our commitment to scaling operations in The U. S. And further strengthens our ability to execute on a national level. Contingent upon U. S. Approval, we also believe we are well positioned to meet robust demand for CGuard Prime as our infrastructure and operations will support significant growth and success in The U. S. Market.

In addition to building the support functions of marketing, and commercial operations, we have onboarded more than a dozen world class field sales professionals and will continue to build our field sales presence with intention over the next twenty four months. There is overwhelming interest from highly talented seasoned professionals interested in joining our organization at this pivotal time reflecting the potential of CGuard Prime and the shifting change the landscape of carotid revascularization. Given us confidence in our submission and the pending approval of CGuard Prime, is the overwhelmingly positive one year data from the CGuardians pivotal clinical trial first presented at the Leipzig Interventional Course in 2024. This trial evaluated the safety and efficacy of CGuard and CGuard Prime in treating carotid artery stenosis enrolling three sixteen patients across 24 trial sites in The U. S. And Europe. The Guardantian's results demonstrated an unprecedented primary endpoint with major adverse events rates of just zero point nine five percent through thirty days and one point nine five percent through twelve months post procedure making this the lowest event rate ever reported in a pivotal study of carotid stent or embolic protection device. As a reminder, receipt of premarket approval from the FDA would also trigger the second of four milestone based financing tranches pursuant to the transformational private placement of up to $113,600,000 that we originally announced in May of twenty twenty three.

If fully exercised, the second tranche would raise an additional $17,900,000 in gross proceeds for the company like the first tranche which was triggered this past July upon the presentation of positive one year CGuardian's pivotal data. After pre market approval, the remaining two milestones would each trigger additional tranche financings including receipt of FDA clearance for the SwitchCard [indiscernible] along with our TCAR indicated TCAR Prime stent and the completion of four quarters of commercial sales of CGuard Prime In The United States which we anticipate in the back half of twenty twenty six. Pending the approvals I mentioned earlier, and based on our current plans. Shifting gears to our clinical pipeline. As a reminder, in October, we received FDA approval for an investigational device exemption or IDE application to begin the CGuardians two pivotal study of our CGuard Prime carotid stent system and TCAR procedures. This study is intended to evaluate the safety and effectiveness of our novel CGuard PrimeStent platform a short TCAR indicated version compatible with commercially available no protection systems for TCAR procedures. I'm pleased to share that we are enrolling very well in this study as we progress into 2025. We've also engaged with FDA in the filing of our CGuardian III IDE, for the investigation of our complete CCAR solution including the CGuard Prime 80 stent and SwitchGuard Neuroprotection System, [indiscernible] anticipate approval to initiate the study in the second quarter of this year. [indiscernible] With more than 30,000 TCAR procedures performed in The U. S. Annually, TCAR is a large market opportunity that remains strategically important as we build a comprehensive approach to carotid revascularization.

Our ongoing investments in both CAT and TCAR are aimed at serving the broadest physician base positioning us to lead as product innovation and procedural reimbursement continue to shift toward an endovascular first standard of care. At this point, I'd like to turn the call over to Craig to review the financials. Craig?

Thanks, Marlin. For the fourth quarter of twenty twenty four, total revenue increased 10.6% to $1,900,000 from $1,700,000 during the fourth quarter twenty twenty three. This increase was predominantly driven by growth in existing and new markets. Gross profit for the fourth quarter of twenty twenty four decreased by 36 to $469,000 compared to a gross profit of $505,000 for the fourth quarter of twenty twenty three. This decrease in gross profit resulted from an increase in cost of goods sold The increase was primarily due to an increase in material and labor costs driven mainly to higher sales volume and increased compensation The increase of goods sold was offset by an increase of revenues. Gross margin decreased to 24.1% during the three months ended 12/31/2024 from 28.7% during the three months ended 12/31/2023 for reasons just mentioned.

Total operating expenses for the fourth quarter of twenty twenty four were $9,800,000 an increase of $3,500,000 or 55.8% compared to '23 This increase was primarily due to increase in expenses related to salaries and share based compensation associated with our expected launch into The U. S. Market. Offset by a reduction in clinical trial expenses as we near completion of the CGuardians trial. Total financial income for the fourth quarter of twenty twenty four was $252,000 a decrease of $216,000 or 46.1% compared to $468,000 for the fourth quarter of twenty twenty three. This decrease was primarily due to less interest income from investments and marketable securities and money market funds. Net loss for the fourth quarter of twenty twenty four totaled $9,100,000 or $0.19 per basic and diluted share compared to a net loss of $5,400,000 or $0.16 per basic and diluted share for the same period in 2023. For the full year 2024, total revenue increased 13% to $7,000,000 from $6,200,000 during the full year of 2023. This increase was primarily driven by growth in existing and new markets. Gross profit for the full year 2024 decreased by $301,000 or 16.7% to $1,500,000 compared to a gross profit of $1,800,000 for the full year of 2023, This decrease in gross profit resulted from an increase in cost of goods sold.

This increase was primarily due to an increase in material and labor costs driven mainly to higher sales volume and increased compensation expenses for new and current employees. The increase of cost of goods sold was offset by an increase of the revenues. Gross margin decreased to 21.5% for the full year 2024 from 29.1% during the full year 2023 for reasons just mentioned. Total operating expenses for the full year 2024 were $35,000,000 an increase of $12,000,000 or 52.5% compared to $22,900,000 for the full year 2023. This increase was primarily due to increases in expenses related to the salaries and share based compensation associated with our trial expenses as we near completion of the CGuardians trial. Total financial income for the full year 2024 was $1,600,000 an increase of $265,000 or 20.5%. Compared to $1,300,000 for the full year 2023. This increase was primarily due to an increase in interest income from investments in marketable securities and money market funds. Net loss for the full year 2024 totaled $32,000,000 or $0.76 per basic and diluted share compared to a net loss of $19,900,000 or $0.82 per basic and diluted share for the full year 2023. As of 12/31/2024, cash and cash equivalents and marketable securities were $34,700,000 compared to $39,000,000 as of 12/31/2023.

Regarding our future expectations and roadmap for growth, we're optimistic for an exciting year ahead. However, please note that we're not providing any forward looking revenue guidance today We look forward to doing so as our catalyst pathway advances following a potential U. S. FDA approval in the first half of the year This concludes our prepared remarks. We'll now open the call for questions. The Q and A segment will be joined by Shane Gleeson, InspireMD's Chief Commercial Officer. Operator, Hi, good morning, Marvin, Craig, Shane. Thanks for taking the questions. Congrats on the quarter and the progress in 2024. A couple from the maybe just to start on U. S. Approval timing for CGuard Prime. The stent product. Just wanted to see if there's anything more you can really kind of share around visibility into approval, the dialogue or discussion that you're having with reviewers and anything to mention or call out just given some of the the macro backdrop and the headlines with potential changes at FDA? Should we expect an impact to timing or still feeling pretty good about about first half twenty twenty five? And then I had a couple of follow ups.

Thanks.

Good morning, Adam. Thanks for the question. Yes, we remain optimistic approval as we've previously noted, and of course, we're building our resources appropriately to to build toward an effective launch following the approval I would say that we've been having a very productive interactive approach with FDA, which has been helpful as has been the modular approach that we selected to take from the beginning. Allows us to organize the PMA submission in an efficient manner No direct impact related to sort of the macro view and some of the unprecedented things that FDA is going through. And nothing material other than just continuing to work through what has generally a very complex process as you know for PMAs in general. And so we remain committed to that timetable.

Okay. Perfect. That's great to hear. And for the second question, [indiscernible] you had some comments in the prepared remarks around SeaGuardians two and three, but wanted to go a little bit deeper there. So in terms of SeaGuardians two enrollment, sounds like that's going well. In terms of timing for integration into the competitor neuroprotection system, is that still tracking to early twenty twenty six? And then for the second part of the question, SeaGuardians three sounds like you're going to initiate this study in Q2 of this year. Is first half twenty six still a good assumption for switch [indiscernible] Approval and launch in The U. S? And then one more. Thanks.

Yes. So to answer the first question, Adam, enrollment is going well and we're holding the timeline related to that supplement being approved in early twenty twenty six. For commercial launch. We're still very enthusiastic about the feedback that we've received from the physicians using the product and look forward to entering the TCAR space with that strategy. So everything remains on track. Related to that piece. And for the second part, timeline also remains consistent on SwitchGuard. In the second half of twenty twenty six. Again, we're anticipating an approval and initiating enrollment Many of the same sites and physicians are going to be both enrolling in both of those. And so we're we're enthusiastic and optimistic for both of those entries as we get closer to the T space.

Okay, fantastic.

And Marvin, sorry, just one clarification for SwitchGuard. First half twenty six approval and launch or second half twenty six?

Second half, sorry, I was referring to initiating the trial part of this in the first half of twenty twenty five, I guess. Had my years mixed up. Okay.

And just one last one on the guidance front.

Well, sorry, I know you don't have guidance, but just wanted to ask how you're thinking about the business at a high level The international business has done well, probably not doesn't get enough attention. Obviously, a lot of the focus is on The U. S. And are getting closer and closer there. But just how do we think about the businesses at a high level for 2025 U. S. Versus OUS? Just any color you could offer up there would be appreciated. Thanks again.

Yes. Let me I'll take a pass at that. Of course, you've got Shane in the room here. So, he can certainly offer color to that as well. The OUS business continues to be strong and growing. And we continue to focus our resources around that established market It provides us a tremendous amount of value at many different levels. The shift toward The U. S. Focus will obviously continue, but the second half post approval of 2025 is really a foundational building time for us We're getting new reps into territories, having to go through administrative VAT committees and otherwise. So I would sort of think about this as a foundational building time as we get through the second half of twenty twenty five.

And so we can get level set into 2026. We're also building our commercial team with a pretty predictable cadence of training classes and onboarding reps So we hope to take full advantage of the enthusiasm of CGuard Prime and what the market has indicated, but at the same time have to remain realistic about how quickly we can actually get into hospitals and into cases. And we of course want follow a very predictable approach to how those cases perform.

Okay. Thanks.

Thank you. We'll take our next question from Frank Tacknow with Lake Street Capital Market. Please go ahead.

Great. Thanks for taking the questions. Congrats on all the progress.

Maybe to start on kind of the commercial launch process of things. Is there anything you can be doing with the value analysis committees today to start preparing for launch? And then kind of a separate but related question to to kind of expectations around adoption at a specific site? Do you feel like they tested for a quarter or two or did they kind of jump in two feet first given the clinical data that's out there and kind of shift over their whole business in one swoop?

Good morning, Frank. I'm going to let Shane handle that one. Yes. Thanks, Marvin. Good morning, Frank. And Adam. So I think this is one of those places where I use a phrase I might overuse, which is all politics is local. And different hospitals act differently. What we can't do is go out and promote a product at this point. But as Marvin mentioned, we had our first cohort of salespeople go through training last week. And they are armed with some really good claims data in terms of knowing about fixing where the fish are, they know where the procedures are happening. And we're hiring people that have [indiscernible] relationships, knowledge of these accounts who can start to form their position in line for back reviews. So most hospitals will not consider a product until it's approved. But we know when their next meetings are over the course of the next months and quarters. So in many cases, we're able to kind of hold the place in line so that upon approval, we will then be queuing up at the back of the line for consideration. That's probably the best thing we could be doing at this point is holding our place so that we're closer to consideration of time of approval.

On the question about whether people will dabble or jump right in, Again, it will be a little bit of both, but we're seeing a lot of enthusiasm. We've been going [indiscernible] a couple of years here with this product. The data is becoming more and more understood. And there's more excitement about a next generation dual layer mesh covered stent entering the market. So there are a lot of people at Sight on Scene have told us that they're excited to start using it and using it all the time. And of course, it's our job to go out there and solidify that and make that happen.

Okay. That's helpful. Appreciated the comments around the commercial infrastructure. I think you mentioned four fourteen personnel onboarded so far and then you referenced kind of steady cadence of new additions. Can you just maybe bring us a little bit into the split of that 14 territory managers versus regional managers and then that cadence of new rep and territory manager additions going forward?

Yes. So we've got 13 people that were in here last week. And that includes the first four sales directors West Central, Northeast, Southeast and it's their job to build the team. Going forward. So the rest of those are individual contributors and that's where we'll continue our staffing for the balance of the year both in territory manager and clinical specialist. Positions.

Okay. That's helpful. And then just final one for me.

I was hoping I know you're not providing any guidance on the top line, but was hoping you can maybe speak anecdotally to the OpEx structure as we we go forward. Obviously, there's a lot of commercial hiring, but how should we think about OpEx growth throughout 2025?

Yes. Hi, this is Craig Shore, the CFO. As Shane just mentioned, there'll be significant growth in the sales organization, of course, through the hiring of the territory managers and the sales reps. But we also will have growth in the R and D area as well. We're doing SeaGuardian two, CGuardians three. We still have completion of CGuardians one and the PMA submission costs. Associated as well. So you will continue to see growth in the operating expenses Okay. That's helpful.

Thank you. And next, we'll go to Richard Nesbitt with InspireMD. Please go ahead.

I have one simple question whoever wants to answer it.

On a scale of one to 10, what are your expectations of meeting your goals for this year?

Our expectations are are always 10 They remain 10 consistently. We're We're always shooting for the top to meet the expectations we've set for the group.

That's all I wanted to know.

You feel very positive about all what that you're projecting. Am I correct?

Indeed.

Okay. Thank you.

And now that our Q and A session has ended, I will now turn the call back over to Marvin Salzman for closing remarks.

I'd like to thank everyone for joining the call and for ongoing support of our mission to lead the Crotter revascularization market. We're very pleased with our execution in 2024 and look forward to the many milestones ahead in 2025, including the potential U. S. Approval and launch of CGuard Prime We believe InspireMD is uniquely positioned to transform stroke prevention by addressing vast unmet need strong clinical foundation with a clear path to market expansion and a commitment to improving patient outcomes we believe the company is well equipped to drive meaningful impact for patients and and we're excited for the opportunities ahead and remain committed to advancing care in this space Thank you.