Avinger, Inc. (NASDAQ:AVGR) (the “Company”), a leading developer of
innovative treatments for peripheral artery disease (“PAD”), today
reported results for the first quarter ended March 31, 2017.
First Quarter and Recent
Highlights
- Announced an organizational restructuring, which is expected to
reduce net cash use to approximately $7 million per quarter by the
third quarter of 2017, a reduction of 48% from the average
quarterly cash use for 2016
- Revenue of $3.5 million, a 23% decrease compared to the first
quarter of 2016
- Added five Lumivascular™ accounts, expanding the installed base
of the Company's Lumivascular platform to 161 accounts
- Presented positive interim two-year clinical data from the
pivotal VISION study for the Company’s Lumivascular technology,
with the complete data set scheduled for presentation at the New
Cardiovascular Horizons (NCVH) annual conference on May 31,
2017
- Received FDA approval to proceed with an in-stent restenosis
(ISR) pivotal study for Pantheris under an investigational device
exemption (IDE) designation
“We are pleased with how our organization has
responded following our recent restructuring, and are making good
progress on our core strategic initiatives,” said Jeff Soinski,
Avinger’s president and CEO. “Our sales force is focused on driving
utilization in our installed base to improve productivity in the
near term and maintain a strong commercial presence in advance of
our new product offerings. Our R&D and operations teams
continue to implement improvements to our current Pantheris
products and are rapidly advancing our two new Pantheris offerings,
Pantheris 3.0, our next generation atherectomy catheter, and a
lower-profile Pantheris device, toward 510(k) filings later this
year. These two new product offerings are expected to meaningfully
improve product reliability and usability and significantly expand
our addressable market, as we re-position the Company for growth in
2018.
“In addition, we have recently received FDA
approval of our IDE application for an in-stent restenosis trial
for Pantheris. In-stent restenosis is especially challenging for
physicians to treat, and we believe that Pantheris will prove to be
an important new therapy in a segment estimated to represent
approximately 20% of PAD procedures in the U.S. We expect to begin
patient enrollment in the third quarter of this year.”
First Quarter 2017 Financial
ResultsTotal revenue was $3.5 million for the first
quarter ended March 31, 2017, a 23% decrease from the first quarter
of 2016 and a 25% decrease from the fourth quarter of 2016. Revenue
from disposable devices was $2.9 million for the first quarter of
2017, a 12% decrease compared to the first quarter of 2016 and a
22% decrease from the fourth quarter of 2016. Revenue related to
Lightbox imaging consoles was $0.6 million, a 50% decrease compared
to the first quarter of 2016 and a 40% decrease from the fourth
quarter of 2016.
Gross margin for the first quarter of 2017 was a
loss of 17%, down from 26% in the comparable quarter of 2016 and
down from 21% in the fourth quarter of 2016. The decreased gross
margin was primarily attributable to $2.1 million in charges for
excess, obsolete and scrapped inventories. Excluding these
non-recurring expenses would have resulted in a gross margin of
approximately 44%.
Operating expenses for the first quarter of 2017
were $13.2 million, compared to $16.2 million in the first quarter
of 2016. This decrease was primarily attributable to higher sales
and marketing expenses in 2016 as the Company expanded its
commercial organization in conjunction with the commercial launch
of Pantheris. Because the Company’s restructuring activities
occurred after the end of the first quarter, expenses related
thereto will be recognized during the second quarter of 2017.
Loss from operations for the first quarter of 2017
was $13.8 million, compared to $15.0 million for the first quarter
of 2016, and net loss for the first quarter of 2017 was $15.3
million, compared to $16.2 million for the first quarter of 2016.
Loss per share for the first quarter of 2017 was $0.64, compared to
$1.28 for the first quarter of 2016. The decreased loss per share
includes 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 1.1 million shares issued throughout 2016 under the
Company’s at-the-market (“ATM”) program.
Adjusted EBITDA, a non-GAAP measure, was a loss of
$11.9 million for the first quarter of 2017, compared to a loss of
$12.7 million for the first quarter of 2016.
Cash and cash equivalents totaled $23.0 million as
of March 31, 2017, compared to $36.1 million as of December 31,
2016. Based on the Company’s recent organizational restructuring
and other expense reduction measures, the Company expects cash
utilization to decrease to approximately $7 million per quarter by
the third quarter of 2017, compared to an average of $13.5 million
per quarter in 2016 and $13.1 million in the first quarter of
2017.
Conference Call Avinger will hold
a conference call today, May 4, 2017 at 1:30pm PT/4:30pm ET to
discuss its first 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: 14503879. 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
May 4, 2017 at 4:30pm PT/7:30pm ET through 4:30pm PT/7:30pm ET on
May 5, 2017. To access the replay, dial (855) 859-2056 or (404)
537-3406 and reference Conference ID: 14503879. The webcast will
also be available on Avinger's website for one year following the
completion of the call.
About Avinger, Inc. Avinger, Inc.
is a commercial-stage medical device company that designs,
manufactures and sells image-guided, catheter-based systems for the
treatment of patients with peripheral artery disease (PAD). PAD is
characterized by a build-up of plaque in the arteries that supply
blood to the legs and feet. The Company’s mission is to
dramatically improve the treatment of vascular disease through the
introduction of products based on its Lumivascular platform, the
only intravascular image-guided system of therapeutic catheters
available in this market. Avinger’s current Lumivascular products
include the Lightbox imaging console, the Ocelot family of
catheters, which are designed to penetrate total arterial
blockages, known as chronic total occlusions, or CTOs, and
Pantheris, the first-ever image-guided atherectomy device, designed
to precisely remove arterial plaque in PAD patients. 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, 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 and
intellectual property 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 annual Form 10-K filing made with the Securities
and Exchange Commission on March 15, 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.
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 non-recurring expenses and other expenses that do not
reflect the Company’s core business operating results.
Avinger, Inc. |
Statements of Operations Data |
(in thousands, except per share
data) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
March 31, |
|
|
|
|
2017 |
|
2016 |
Revenues |
|
$ |
3,491 |
|
|
$ |
4,539 |
|
Cost of
revenues |
|
|
4,075 |
|
|
|
3,360 |
|
|
Gross
profit |
|
|
(584 |
) |
|
|
1,179 |
|
|
|
|
|
|
-17 |
% |
|
|
26 |
% |
Operating
expenses: |
|
|
|
|
|
|
|
|
|
Research and development |
|
|
3,923 |
|
|
|
4,047 |
|
|
Selling, general and administrative |
|
|
9,318 |
|
|
|
12,161 |
|
|
|
Total
operating expenses |
|
|
13,241 |
|
|
|
16,208 |
|
Loss from
operations |
|
|
(13,825 |
) |
|
|
(15,029 |
) |
|
|
|
|
|
|
|
|
|
|
|
Interest
income |
|
|
32 |
|
|
|
33 |
|
Interest
expense |
|
|
(1,550 |
) |
|
|
(1,172 |
) |
Other
income (expense), net |
|
|
3 |
|
|
|
1 |
|
Net loss
and comprehensive loss |
|
$ |
(15,340 |
) |
|
$ |
(16,167 |
) |
|
|
|
|
|
|
|
|
|
|
|
Net loss
per share, basic and diluted |
|
$ |
(0.64 |
) |
|
$ |
(1.28 |
) |
|
|
|
|
|
|
|
|
|
|
|
Weighted
average common shares used to |
|
|
|
|
|
|
|
|
|
compute net
loss per share, basic and diluted |
|
|
23,820 |
|
|
|
12,669 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Avinger, Inc. |
|
Balance Sheets Data |
|
(in thousands) |
|
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
March
31, |
|
December
31, |
|
|
|
|
|
|
2017 |
|
|
|
2016 |
|
|
Assets |
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
23,034 |
|
|
$ |
36,096 |
|
|
|
|
Accounts
receivable, net |
|
|
2,089 |
|
|
|
3,570 |
|
|
|
|
Inventories |
|
|
8,352 |
|
|
|
8,462 |
|
|
|
|
Prepaid
expenses and other current assets |
|
|
1,359 |
|
|
|
662 |
|
|
|
|
Total
current assets |
|
|
34,834 |
|
|
|
48,790 |
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
4,175 |
|
|
|
4,555 |
|
|
Other assets |
|
|
211 |
|
|
|
212 |
|
|
|
|
Total
assets |
|
$ |
39,220 |
|
|
$ |
53,557 |
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders’ equity
(deficit) |
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
1,161 |
|
|
$ |
1,607 |
|
|
|
|
Accrued
compensation |
|
|
2,188 |
|
|
|
2,807 |
|
|
|
|
Accrued
expenses and other current liabilities |
|
|
3,053 |
|
|
|
3,067 |
|
|
|
|
Borrowings, current portion |
|
|
41,882 |
|
|
|
41,289 |
|
|
|
|
Total
current liabilities |
|
|
48,284 |
|
|
|
48,770 |
|
|
|
|
|
|
|
|
|
|
Other long-term liabilities |
|
|
257 |
|
|
|
546 |
|
|
|
|
Total
liabilities |
|
|
48,541 |
|
|
|
49,316 |
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity (deficit): |
|
|
|
|
|
|
Preferred
stock |
|
|
- |
|
|
|
- |
|
|
|
Common
stock |
|
|
24 |
|
|
|
24 |
|
|
|
Additional
paid-in capital |
|
|
258,590 |
|
|
|
256,606 |
|
|
|
Accumulated
deficit |
|
|
(267,935 |
) |
|
|
(252,389 |
) |
|
|
|
Total stockholders’
equity (deficit) |
|
|
(9,321 |
) |
|
|
4,241 |
|
|
|
|
Total liabilities and
stockholders’ equity (deficit) |
|
$ |
39,220 |
|
|
$ |
53,557 |
|
|
|
|
|
|
|
|
|
|
Avinger, Inc. |
Adjusted EBITDA |
(in thousands) |
(unaudited) |
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
|
|
|
March 31, |
|
|
|
|
|
2017 |
|
|
|
2016 |
|
Loss from
operations |
$ |
(13,825 |
) |
|
$ |
(15,029 |
) |
Add:
Stock-based compensation |
|
1,542 |
|
|
|
1,978 |
|
Add:
Depreciation and amortization |
|
428 |
|
|
|
336 |
|
|
Adjusted
EBITDA |
$ |
(11,855 |
) |
|
$ |
(12,715 |
) |
|
|
|
INVESTOR CONTACT
Matt Ferguson
Avinger, Inc.
(650) 241-7917
ir@avinger.com
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