Avinger, Inc. (Nasdaq: AVGR), a commercial-stage medical device
company marketing the first and only intravascular image-guided,
catheter-based system for diagnosis and treatment of patients with
Peripheral Artery Disease (PAD), today reported results for the
first quarter ended March 31, 2019.
First Quarter and Recent Highlights
- Achieved revenue of $1.8 million for the first quarter of 2019,
reflecting typical seasonality within the user base;
- Reported $0.9 million in Pantheris® revenue, a 46%
increase from the first quarter of 2018;
- Added 4 new Lumivascular accounts, for a total of 75 accounts
ordering the Company’s Lumivascular products in the first quarter
of 2019;
- Announced FDA 510(k) clearance for Pantheris SV (Small Vessel)
and commenced preparations for initial launch at select
Lumivascular sites, to be followed by full commercial rollout,
anticipated in the third quarter of 2019;
- Reported publication of excellent clinical outcomes data from a
study evaluating Pantheris image-guided atherectomy combined with
antirestenotic therapy for the treatment of PAD;
- Announced issuance of one new U.S. patent and the allowance of
five additional U.S. patent applications, bringing Avinger’s
intellectual property portfolio to 149 patents and applications;
and
- Further strengthened the balance sheet with $8.0 million in
proceeds received since January 1, 2019 from warrant exercises
related to prior underwritten public offerings.
Jeff Soinski, Avinger’s president and CEO, commented, “We are
excited about the continued momentum for our Lumivascular platform,
including the expansion of our customer base, the strong
performance of our next-generation Pantheris and the recent FDA
clearance of Pantheris SV. In the first quarter, we grew our
Pantheris business significantly compared to the year-ago period.
We have also made progress on our growth initiatives, including
driving utilization at current sites, opening new Lumivascular
sites, developing new devices, advancing our clinical data and
expanding our sales force to fuel further growth.
“On the new product front, we believe Pantheris SV has the
potential to expand our addressable market by as much as 50%, or an
additional $180 million. We are initially focused on the limited
launch of this highly-differentiated platform to select key opinion
leader sites within our network. We anticipate transitioning to
full commercial launch during the third quarter with the roll-out
of Pantheris SV to our more than 75 Lumivascular sites. Our user
base is eager to commence cases with this technology, which offers
a compelling new therapeutic option for patients suffering from PAD
in smaller vessels, including those below-the-knee.”
First Quarter 2019 Financial ResultsTotal
revenue was $1.8 million for the first quarter ended March 31,
2019, an increase of 2% from the first quarter of 2018 and a
decrease of 9% from the fourth quarter of 2018, with first quarter
revenue reflecting typical seasonality, given the elective nature
of many PAD procedures.
Gross margin for the first quarter of 2019 was 20%, compared to
22% for the first quarter of 2018 and 28% for the fourth quarter of
2018. Operating expenses for the first quarter of 2019 were $5.4
million, a 14% decrease from $6.3 million in the first quarter of
2018 and a decrease of 19% from $6.6 million in the fourth quarter
of 2018.
Operating loss for the first quarter of 2019 was $5.0 million,
an improvement of $0.9 million, or 15%, from $5.9 million in the
first quarter of 2018 and an improvement of $1.0 million, or 17%,
from an operating loss of $6.1 million in the fourth quarter of
2018. Net loss and comprehensive loss for the first quarter of 2019
was $5.1 million, an improvement of 51% from $10.3 million in the
first quarter of 2018 and an improvement of 17% from $6.1 million
in the fourth quarter of 2018.
Adjusted EBITDA, as defined under non-GAAP measures in this
press release, was a loss of $4.3 million, an improvement of 14%
compared to a loss of $5.1 million for the first quarter of 2018
and an improvement of 3% compared to a loss of $4.5 million for the
fourth quarter of 2018.
For more information regarding non-GAAP financial measures
discussed in this press release, please see “Non-GAAP Financial
Measures” below, as well as the reconciliation of GAAP to non-GAAP
measures provided in the tables below.
Balance SheetCash and cash equivalents totaled
$16.7 million as of March 31, 2019, an increase from $16.4 million
as of December 31, 2018. Subsequent to the end of the first
quarter, Avinger received an additional $1.7 million in proceeds
from warrant exercises, bringing the year-to-date total proceeds
from warrant exercises to $8.0 million.
As of March 31, 2019, Avinger had approximately 60.1 million
shares of common stock, 44,745 shares of Series A preferred stock,
178 shares of Series B preferred stock and no shares of Series C
preferred stock outstanding. Each share of the Series A preferred
stock is convertible into 500 shares of the Company’s common stock
at a conversion price of $2.00 per share. Each share of Series B
preferred stock is convertible into approximately 2,500 shares of
the Company’s common stock at a conversion price of $0.40. Assuming
conversion of all outstanding shares of preferred stock (other than
conversions of Series A preferred stock, which have been suspended
until such time as our stockholders have approved an amended and
restated certificate of incorporation authorizing at least 125
million shares of common stock), the Company would have
approximately 92.2 million shares of common stock outstanding at
March 31, 2019, excluding outstanding warrants.
Conference Call Avinger will hold a conference
call today, May 8, 2019 at 4:30pm ET to discuss its first quarter
2019 financial results.
Individuals interested in listening to the conference call may
do so by dialing 844-602-0380 for domestic callers or
+1-862-298-0970 for international callers. To listen to a live
webcast, please visit http://www.avinger.com and select Investor
Relations.
A replay of the call will be available beginning May 8, 2019 at
approximately 7:30pm PT/ 10:30pm ET through May 15, 2019. To access
the replay, dial 919-882-2331 and reference Conference ID: 48585.
The webcast will also be available on Avinger's website following
completion of the call at www.avinger.com.
About Avinger, Inc.Avinger is a
commercial-stage medical device company that designs and develops
the first and only image-guided, catheter-based system for the
diagnosis and treatment of patients with Peripheral Artery Disease
(PAD). PAD is estimated to affect over 12 million people in the
U.S. and over 200 million worldwide. 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, California. 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 our future performance, the impact of Pantheris SV on our
addressable market, and our anticipated commercial launch and
roll-out of Pantheris SV. 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; experiences of high-volume users of our products may lead
to better patient outcomes than those of physicians that are less
proficient; 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 Annual Report on Form 10-K filed with the
Securities and Exchange Commission on March 6, 2019. 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 net loss and
comprehensive loss plus interest expense, net, plus other income,
net, plus stock-based compensation expense plus certain inventory
charges plus certain depreciation and amortization expense.
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.
Public Relations Contact:Phil PreussVP of
Marketing & Business OperationsAvinger, Inc.(650)
241-7942pr@avinger.com
Investor Contact:Mark WeinswigChief Financial
OfficerAvinger, Inc.(650) 241-7916ir@avinger.com
Matt KrepsDarrow Associates Investor Relations(214)
597-8200mkreps@darrowir.com
Condensed Statements of Operations and Comprehensive
Loss |
|
|
|
|
(in thousands) (unaudited) |
|
|
|
|
|
|
|
|
For the Three Months Ended |
|
March 31, |
|
December 31, |
|
March 31, |
|
|
2018 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
|
|
|
|
Revenue |
$ |
1,809 |
|
|
$ |
2,028 |
|
$ |
1,840 |
|
Cost of revenue |
|
1,415 |
|
|
|
1,470 |
|
|
|
1,467 |
|
Gross profit (loss) |
|
394 |
|
|
|
558 |
|
|
|
373 |
|
|
|
22 |
% |
|
|
28 |
% |
|
|
20 |
% |
Operating expense |
|
|
|
|
|
Research and development |
|
1,777 |
|
|
|
1,669 |
|
|
|
1,414 |
|
Selling, general, and administrative |
|
4,500 |
|
|
|
4,961 |
|
|
|
3,986 |
|
Total operating expense |
|
6,277 |
|
|
|
6,630 |
|
|
|
5,400 |
|
|
|
|
|
|
|
Operating income/(loss) |
|
(5,883 |
) |
|
|
(6,072 |
) |
|
(5,027 |
) |
|
|
|
|
|
|
Other income (expense), net: |
|
|
|
|
|
Interest expense, net |
|
(4,639 |
) |
|
|
(257 |
) |
|
|
(268 |
) |
Other income, net |
|
241 |
|
|
|
239 |
|
|
|
240 |
|
Net loss and comprehensive loss |
|
(10,281 |
) |
|
|
(6,090 |
) |
|
|
(5,055 |
) |
Accretion of preferred stock dividends |
|
(410 |
) |
|
|
(836 |
) |
|
|
(895 |
) |
Deemed dividend arising from beneficial conversion |
|
|
|
|
|
feature of convertible preferred stock |
|
(5,216 |
) |
|
|
- |
|
|
|
- |
|
Net loss attributable to common stockholders |
$ |
(15,907 |
) |
|
$ |
(6,926 |
) |
|
$ |
(5,950 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share attributable to common stockholders |
|
|
|
|
|
basic and diluted |
$ |
(7.99 |
) |
|
$ |
(0.31 |
) |
|
$ |
(0.14 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares used to compute |
|
|
net loss per share, basic and diluted |
|
1,992 |
|
|
|
22,409 |
|
|
|
42,481 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Condensed Balance Sheets |
|
|
|
|
(in thousands, except per share amounts)
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, |
|
December 31, |
Assets |
|
|
|
|
2019 |
|
|
|
2018 |
|
Current
assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
16,707 |
|
|
$ |
16,410 |
|
|
|
Accounts receivable, net of
allowance for doubtful accounts of $232 and $260 |
|
|
|
|
|
|
at March 31, 2019 and
December 31, 2018, respectively |
|
|
1,112 |
|
|
|
1,154 |
|
|
|
Right of use asset |
|
|
1,313 |
|
|
|
- |
|
|
|
Inventories |
|
|
3,955 |
|
|
|
3,422 |
|
|
|
Prepaid expenses and other
current assets |
|
|
1,026 |
|
|
|
635 |
|
|
Total current
assets |
|
|
24,113 |
|
|
|
21,621 |
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
2,140 |
|
|
|
2,078 |
|
|
Total assets |
|
$ |
26,253 |
|
|
$ |
23,699 |
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity
(deficit) |
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
969 |
|
|
$ |
1,148 |
|
|
|
Accrued compensation |
|
|
1,016 |
|
|
|
1,197 |
|
|
|
Accrued expenses and other
current liabilities |
|
|
906 |
|
|
|
1,449 |
|
|
|
Leasehold liability |
|
|
1,313 |
|
|
|
- |
|
|
|
Borrowings |
|
|
7,837 |
|
|
|
7,486 |
|
|
|
Preferred stock dividends
payable |
|
|
895 |
|
|
|
2,918 |
|
|
Total current
liabilities |
|
|
12,936 |
|
|
|
14,198 |
|
Other long-term liabilities |
|
|
38 |
|
|
|
41 |
|
|
Total
liabilities |
|
|
12,974 |
|
|
|
14,239 |
|
|
|
|
|
|
|
|
Stockholders' equity: |
|
|
|
|
|
|
Convertible preferred stock,
par value $0.001 |
|
|
- |
|
|
|
- |
|
|
Common stock, par value
$0.001 |
|
|
59 |
|
|
|
34 |
|
|
|
Additional paid-in
capital |
|
|
347,160 |
|
|
|
338,311 |
|
|
|
Accumulated deficit |
|
|
(333,940 |
) |
|
|
(328,885 |
) |
|
Total
stockholders' equity |
|
|
13,279 |
|
|
|
9,460 |
|
|
Total liabilities
and stockholders' equity |
|
$ |
26,253 |
|
|
$ |
23,699 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EBITDA to Net loss and
comprehensive loss |
(in
thousands) |
(unaudited) |
|
|
|
|
For the Three Months Ended |
|
|
|
|
March 31, |
|
December 31, |
|
March 31, |
|
|
|
|
|
2018 |
|
|
|
2018 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
Net loss and
comprehensive loss |
$ |
(10,281 |
) |
|
$ |
(6,090 |
) |
|
$ |
(5,055 |
) |
Add: Interest
expense, net |
|
4,639 |
|
|
|
257 |
|
|
|
268 |
|
Add: Other income,
net |
|
(241 |
) |
|
|
(239 |
) |
|
|
(240 |
) |
Add: Stock-based
compensation |
|
619 |
|
|
|
1,052 |
|
|
|
493 |
|
Add: Certain
inventory charges |
|
(79 |
) |
|
|
- |
|
|
|
- |
|
Add: Certain
depreciation and amortization charges |
|
277 |
|
|
|
546 |
|
|
|
200 |
|
|
Adjusted
EBITDA |
$ |
(5,066 |
) |
|
$ |
(4,474 |
) |
|
$ |
(4,334 |
) |
|
|
|
|
|
|
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