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
fourth quarter and full year ended December 31, 2018.
Fourth Quarter and Recent Highlights
- Achieved revenue of $2.0 million for the fourth quarter of
2018;
- Reported $1.0 million in Pantheris revenue, a 74% increase
compared to the fourth quarter of 2017 and an 18% increase from the
third quarter of 2018;
- Announced treatment of 500th patient with next-generation
Pantheris in December 2018, as more than 65 sites have adopted the
new platform since FDA clearance;
- Received CE Marking for Pantheris SV (Small Vessel) and treated
first patients globally at initial sites in Europe, including a
live case transmission as part of LINC 2019;
- Received clearance for commercial distribution of Pantheris and
treated first patients in Australia;
- Released preliminary data analysis from the SCAN clinical study
indicating that OCT imaging with Pantheris was statistically
superior or equivalent to IVUS on all parameters evaluated as a
diagnostic imaging tool in the peripheral arteries; and
- Raised gross proceeds of $11.5 million in November from the
sale of securities in an underwritten public offering.
Jeff Soinski, Avinger’s president and CEO, commented, “We are
excited with the continued momentum for our next-generation
Pantheris atherectomy device, including treatment of our 500th
patient in December. Pantheris fourth quarter revenue increased 18%
quarter-over-quarter, with more than 65 of our Lumivascular centers
now using the next-generation device. Feedback from the field
continues to be excellent, with clinical results, product
reliability and case volume all tracking positively for the next
generation device. We continued to build our sales organization in
the fourth quarter and expect to increase sales headcount in 2019
as we scale utilization and drive revenue growth.
“On the new product front, we remain enthusiastic about the
potential for Pantheris SV to expand our available market with the
first-ever image-guided atherectomy system for the treatment of
small vessels. We received CE Marking for Pantheris SV in October
and completed our first clinical cases in the fourth quarter. We
were excited to have Pantheris SV featured in a successful live
case transmission at LINC 2019, one of the top global forums for
thought leadership in the field of vascular medicine. Our 510(k)
application for U.S. pre-marketing clearance of Pantheris SV is
pending and we have now submitted all additional data requested as
part of the review process. By allowing for the treatment of
lesions in smaller diameter vessels, we believe Pantheris SV has
the potential to expand our available market by as much as 50%,
which should allow us to address a significantly larger portion of
the estimated $500 million atherectomy market.
“As we look to 2019, we intend to focus on five strategic goals
as the pillars of our growth strategy. These include driving
utilization at current sites and in current markets, launching new
sites in underserved areas with high rates of PAD, launching new
devices to expand our addressable market and revenue per site
opportunity, continuing to produce compelling clinical data
confirming the unique benefits of Avinger’s Lumivascular platform
and maintaining a lean operating structure as we push to scale the
business. We look forward to reporting our progress on these
initiatives in the quarters ahead.”
Fourth Quarter 2018 Financial ResultsTotal
revenue was $2.0 million for the fourth quarter ended December 31,
2018, an increase of 6% from the fourth quarter of 2017 and roughly
flat with the third quarter of 2018.
Gross margin for the fourth quarter of 2018 was 28%, compared to
9% for the fourth quarter of 2017 and 27% for the third quarter of
2018. Operating expenses for the fourth quarter of 2018 were $6.4
million, a 27% decrease compared to $8.8 million in the fourth
quarter of 2017 and an increase of 13% compared to $5.7 million in
the third quarter of 2018.
Operating loss for the fourth quarter of 2018 was $5.8 million,
a 32% improvement compared to $8.6 million for the fourth quarter
of 2017 and a decrease of 14% compared to $5.1 million in the third
quarter of 2018. Net loss attributable to common stockholders for
the fourth quarter of 2018 was $6.9 million, compared to $10.2
million for the fourth quarter of 2017 and compared to $6.2 million
for the third quarter of 2018.
Adjusted EBITDA, as defined under non-GAAP measures in this
press release, was a loss of $4.2 million for the fourth quarter of
2018, an improvement of approximately $2.6 million compared to a
loss of $6.8 million for the fourth quarter of 2017 and a decline
of $0.1 million compared to a loss of $4.1 million in the third
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.
Full Year 2018 Financial ResultsTotal revenue
was $7.9 million for 2018, compared to $9.9 million in 2017. The
year-over-year decrease in revenue was primarily related to the
reduction in the commercial sales organization implemented in
2017.
Gross profit was $1.4 million for 2018, compared to a loss of
$3.1 million in 2017 and gross margin for 2018 was 17%, up from
-31% in 2017. This improvement was primarily related to lower
excess and obsolete inventory charges in 2018.
Operating expenses for 2018 were $23.5 million, a decrease of
41% compared to $39.5 million in 2017. The decrease was primarily
attributable to the cost reduction activities implemented in 2017
and 2018.
Loss from operations for 2018 was $22.1 million, compared to
$42.6 million for 2017.
Adjusted EBITDA, a non-GAAP measure, was a loss of $17.2 million
for 2018, compared to a $29.3 million loss for 2017. 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
$16.4 million as of December 31, 2018, compared to $10.0 million as
of September 30, 2018.
As of December 31, 2018, there were approximately 34.9 million
shares of common stock, 41,800 shares of Series A preferred stock,
1,701 shares of Series B preferred stock and 2,170 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, after taking into account the effect of the
November fundraising, is convertible into approximately 2,500
shares of the Company’s common stock at a conversion price of
$0.40. Each share of the Series C preferred stock is convertible
into 2,500 shares of the Company’s common stock at a conversion
price of $0.40 per share. 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 44.6 million shares of
common stock outstanding at December 31, 2018, excluding
outstanding warrants.
Conference Call Avinger will hold a conference
call today, March 6, 2019 at 4:30pm ET to discuss its fourth
quarter 2018 and year-end financial results.
Individuals interested in listening to the conference call may
do so by dialing 877-407-9205 for domestic callers or
+1-201-689-8054 for international callers. To listen to a live
webcast, please visit the investor relations section of the Avinger
web site at www.avinger.com.
A replay of the call will be available beginning March 6, 2019
at approximately 7:30pm PT/10:30pm ET through March 13, 2019. To
access the replay, dial 877-481-4010 reference Conference ID:
44910. The webcast will also be available on Avinger's website for
six months following the 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 Statements
This 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
anticipated increase in sales headcount, the impact of Pantheris SV
on our available market, driving utilization rates at current sites
and in current markets, launching new sites, launching new devices,
producing clinical data and maintaining a lean operating structure.
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 Loss from
Operations plus Stock-based Compensation expense plus Depreciation
and Amortization expense plus charges related to our organizational
and facilities restructuring activities and litigation settlement
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 |
|
|
|
For the Years Ended |
|
December
31, |
|
September
30, |
|
December
31, |
|
December
31, |
|
December
31, |
|
2018 |
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
2,028 |
|
$ |
2,020 |
|
$ |
1,913 |
|
$ |
7,915 |
|
$ |
9,934 |
|
Cost of revenue |
|
1,470 |
|
|
|
1,477 |
|
|
|
1,734 |
|
|
|
6,531 |
|
|
|
13,002 |
|
Gross profit (loss) |
|
558 |
|
|
|
543 |
|
|
|
179 |
|
|
|
1,384 |
|
|
|
(3,068 |
) |
|
|
28 |
% |
|
|
27 |
% |
|
|
9 |
% |
|
|
17 |
% |
|
|
-31 |
% |
Operating expense |
|
|
|
|
|
|
|
Research and development |
|
1,669 |
|
|
|
1,404 |
|
|
|
1,977 |
|
|
|
6,009 |
|
|
|
11,319 |
|
Selling, general, and administrative |
|
4,719 |
|
|
|
4,259 |
|
|
|
4,685 |
|
|
|
17,442 |
|
|
|
25,120 |
|
Litigation settlement |
|
- |
|
|
|
- |
|
|
|
1,760 |
|
|
|
- |
|
|
|
1,760 |
|
Restructuring charges |
|
- |
|
|
|
- |
|
|
|
350 |
|
|
|
- |
|
|
|
1,285 |
|
Total operating expense |
|
6,388 |
|
|
|
5,663 |
|
|
|
8,772 |
|
|
|
23,451 |
|
|
|
39,484 |
|
|
|
|
|
|
|
|
|
|
|
Operating income/(loss) |
|
(5,830 |
) |
|
(5,120 |
) |
|
(8,593 |
) |
|
(22,067 |
) |
|
(42,552 |
) |
|
|
|
|
|
|
|
|
|
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
Interest expense, net |
|
(257 |
) |
|
|
(270 |
) |
|
|
(1,559 |
) |
|
|
(5,478 |
) |
|
|
(6,191 |
) |
Other income (expense), net |
|
(3 |
) |
|
|
2 |
|
|
|
2 |
|
|
|
(13 |
) |
|
|
11 |
|
Net loss and comprehensive loss |
|
(6,090 |
) |
|
|
(5,388 |
) |
|
|
(10,150 |
) |
|
|
(27,558 |
) |
|
|
(48,732 |
) |
Accretion of preferred stock dividends |
|
(836 |
) |
|
|
(836 |
) |
|
|
- |
|
|
|
(2,918 |
) |
|
|
- |
|
Deemed dividend arising from beneficial
conversion |
|
|
|
|
|
|
|
|
|
feature of convertible preferred
stock |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(5,216 |
) |
|
|
- |
|
Net loss attributable to common stockholders |
$ |
(6,926 |
) |
|
$ |
(6,224 |
) |
|
$ |
(10,150 |
) |
|
$ |
(35,692 |
) |
|
$ |
(48,732 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss per share attributable to common
stockholders |
|
|
|
|
|
|
|
|
|
basic and
diluted |
$ |
(0.31 |
) |
|
$ |
(0.56 |
) |
|
$ |
(12.58 |
) |
|
$ |
(3.34 |
) |
|
$ |
(74.74 |
) |
|
|
|
|
|
|
|
|
|
|
Weighted average common shares used to
compute |
|
|
|
|
|
|
|
|
|
net loss per share, basic and diluted |
|
22,409 |
|
|
|
11,194 |
|
|
|
807 |
|
|
|
10,687 |
|
|
|
652 |
|
|
|
|
|
|
Condensed Balance
Sheets |
|
|
|
|
(in thousands, except per
share amounts) (unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December
31, |
|
December 31, |
Assets |
|
|
|
2018 |
|
2017 |
Current
assets: |
|
|
|
|
|
|
Cash and cash
equivalents |
|
$ |
16,410 |
|
|
$ |
5,389 |
|
|
|
Accounts receivable,
net of allowance for doubtful accounts of $260 and $146 |
|
|
|
|
|
|
at December 31,
2018 and December 31, 2017, respectively |
|
|
1,154 |
|
|
|
1,127 |
|
|
|
Inventories |
|
|
3,422 |
|
|
|
4,295 |
|
|
|
Prepaid expenses and
other current assets |
|
|
635 |
|
|
|
640 |
|
|
Total
current assets |
|
|
21,621 |
|
|
|
11,451 |
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
2,078 |
|
|
|
2,950 |
|
Other assets |
|
|
- |
|
|
|
687 |
|
|
Total
assets |
|
$ |
23,699 |
|
|
$ |
15,088 |
|
|
|
|
|
|
|
|
Liabilities and stockholders'
equity (deficit) |
|
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
Accounts payable |
|
$ |
1,148 |
|
|
$ |
1,273 |
|
|
|
Accrued
compensation |
|
|
1,197 |
|
|
|
863 |
|
|
|
Accrued expenses and
other current liabilities |
|
|
1,449 |
|
|
|
3,597 |
|
|
|
Borrowings |
|
|
7,486 |
|
|
|
44,744 |
|
|
|
Preferred stock
dividends payable |
|
|
2,918 |
|
|
|
- |
|
|
Total
current liabilities |
|
|
14,198 |
|
|
|
50,477 |
|
Other long-term liabilities |
|
|
41 |
|
|
|
301 |
|
|
Total
liabilities |
|
|
14,239 |
|
|
|
50,778 |
|
|
|
|
|
|
|
|
Stockholders' equity (deficit): |
|
|
|
|
Common stock, par value
$0.001 |
|
|
34 |
|
|
|
1 |
|
Additional paid-in
capital |
|
|
338,311 |
|
|
|
265,636 |
|
Accumulated
deficit |
|
|
(328,885 |
) |
|
|
(301,327 |
) |
|
Total
stockholders' equity (deficit) |
|
|
9,460 |
|
|
|
(35,690 |
) |
|
Total
liabilities and stockholders' equity (deficit) |
|
$ |
23,699 |
|
|
$ |
15,088 |
|
|
|
|
|
|
Reconciliation of Adjusted
EBITDA to Loss from Operations |
|
|
|
|
(in thousands) |
|
|
|
|
(unaudited) |
|
|
|
|
|
|
|
|
Three Months Ended |
|
Years Ended |
|
|
|
|
December
31, |
|
September
30, |
|
December
31, |
|
December
31, |
|
December
31, |
|
|
|
|
|
2018 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
2018 |
|
|
|
2017 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
$ |
(5,830 |
) |
|
$ |
(5,120 |
) |
|
$ |
(8,593 |
) |
|
$ |
(22,067 |
) |
|
$ |
(42,552 |
) |
Add: Stock-based compensation |
|
1,052 |
|
|
|
768 |
|
|
|
769 |
|
|
|
3,080 |
|
|
|
4,966 |
|
Add: Restructuring charges |
|
- |
|
|
|
- |
|
|
|
350 |
|
|
|
- |
|
|
|
1,285 |
|
Add: Specific inventory charges |
|
- |
|
|
|
- |
|
|
|
320 |
|
|
|
528 |
|
|
|
5,500 |
|
Add: Depreciation and
amortization |
|
546 |
|
|
|
217 |
|
|
|
314 |
|
|
|
1,281 |
|
|
|
1,476 |
|
|
Adjusted EBITDA |
$ |
(4,232 |
) |
|
$ |
(4,135 |
) |
|
$ |
(6,840 |
) |
|
$ |
(17,178 |
) |
|
$ |
(29,325 |
) |
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