Full Press Release Details
MRI Interventions, Inc. Reports 34% Year-Over-Year
Increase in Functional Neurology Revenues,
50% increase in Capital Sales
ClearPoint Procedures Performed in 2017
Position for Further Growth in 2018
IRVINE, CA, March 15, 2018 - MRI Interventions,
Inc. (OTCQB: MRIC) (the "Company") today announced financial results for the fourth quarter and full year ended December
Full-Year and Fourth Quarter 2017 Highlights
"MRI reported another year of strong growth
and thoughtful transformation in 2017, driven by our fifth year in a row of significant procedure and revenue growth, as well as the evolution
of our strategic plan to go deeper into our own therapeutic products," commented Joe Burnett, President and Chief Executive
Officer. "Our core functional neurology business grew revenue 34%, to $5.3 million, and procedure volume ramped 25% to a
record 629 cases. Our biologics and drug delivery partnerships continued to advance through the regulatory process in examples
such as Voyager Therapeutics. We also signed multiple new partnerships as the premier live-MRI guidance and navigation partner
for drug delivery companies. Capital sales and service grew 50% as a testament to the interest in acquiring access to our technology
and hospitals willing to put skin in the game for that access.
"We now look to 2018 with expectations for
another year of strong revenue growth in all three of our product areas: functional neurology, biologics and drug delivery, and
capital sales and service. Also, we anticipate the introduction of two new product families to clinical usage, including the commercial
release of our ClearPoint 2.0 fusion software and the first human case of our intracerebral hemorrhage therapy product in collaboration
with the Mayo Clinic. We believe that these additions to our platform, in concert with streamlining our marketing and product development
processes and capabilities, will improve workflow efficiency while staying true to our commitment to precision and sub-millimetric
accuracy under live MRI-guidance. We expect that these advancements and our focus on continued growth in procedures will enable
us to lead the movement toward minimally invasive therapy procedures in the brain, as we have seen take place in other
medical device markets including cardiology."
Musick, Irvine, California 92618 949.900.6833
Financial Results - Year Ended December
Functional neurology revenue, which consists of
disposable product sales related to cases utilizing the ClearPoint system, increased 34% to $5.3 million from $4.0 million in 2016.
This increase was due primarily to a 25% increase in the utilization of the ClearPoint system, to a record 629 cases during 2017,
from 504 cases in 2016.
Biologics and drug delivery systems revenue, which
consists primarily of disposable product sales related to customer-sponsored clinical trials utilizing the ClearPoint system, was
$563,000, as compared with $771,000 in 2016. This fluctuation arose due to $222,000 in advance purchases of such products by Voyager
Therapeutics ("Voyager") in late 2016, which have been subsequently used in Voyager's clinical trials.
Capital equipment revenue, consisting of sales,
rentals and service of ClearPoint reusable hardware and software, increased 50%, to $1.5 million, from $980,000 in 2016. This increase
was due primarily to increases in equipment sales, new equipment rental revenue and equipment service contract revenue.
Gross margin for the year ended December 31, 2017
improved to 61% from 54% in 2016. The increase was due primarily to a favorable mix of revenue in 2017, relative to 2016. Also
contributing to the increase were lower costs for scrap, expired product and reserves for inventory obsolescence during 2017, relative
Research and development costs were $2.8 million
for year ended December 31, 2017, compared to $2.6 million in 2016, an increase of $186,000, or 7%. The increase was due primarily
to payments, the majority of which were in shares of the Company's common stock, required under certain license and product
co-development agreements entered into in April 2017, that were partially offset by decreases in software development and intellectual
property-related costs, and in personnel costs.
Sales and marketing expenses were $4.0 million
for the year ended December 31, 2017, compared to $3.8 million in 2016, an increase of $179,000, or 5%. This increase was primarily
due to an increase in personnel-related expenses.
General and administrative expenses were $4.0 million
for the year ended December 31, 2017, compared to $4.2 million for in 2016, a decrease of $144,000, or 3%. The decrease was due
primarily to decreases in professional fees and stock-based compensation, that were partially offset by costs incurred in connection
with recruiting and hiring Mr. Burnett in November 2017.
During the years ended December 31, 2017 and 2016,
the Company recorded gains of $25,000 and $1.1 million, respectively, resulting from changes in the fair value of derivative liabilities.
Such derivative liabilities related to the terms of certain warrants issued in 2012 and 2013, and in connection with amendments
the Company made to certain note payable agreements in 2016, discussed further below.
In April 2016, the Company entered into an agreement
with Brainlab AG ("Brainlab") under which the note payable to Brainlab was restructured and reissued. As a result,
the Company recorded a debt restructuring gain of $941,000.
In June 2016, the Company entered into the amendments
with Brainlab and with certain holders of the Company's 2014 junior secured notes payable (the "2014 Note Holders").
Based on the provisions of these amendments, on June 30, 2016, the Company recorded a debt restructuring loss of $820,000.
In August 2016, the Company entered into additional amendments
with the 2014 Note Holders. Based on the provisions of these amendments, on August 30, 2016, the Company recorded a debt restructuring
During the year ended December 31, 2017, the Company
recorded other income of $17,000, as compared with other income of $216,000 recorded during 2016, representing a decrease of $199,000,
or 92%. This decrease was due primarily to grant income from a U.S. federal agency of $203,000 earned from a project in process
during the 2016, which was discontinued by the agency later in 2016. The Company has not since undertaken any additional such projects.
Net interest expense for the year ended December
31, 2017 was $873,000, compared with $1.1 million for 2016. The decrease was due primarily to the conversion of an aggregate $1.74
million in principal balance of notes held by the 2014 Note Holders in connection with the Company's completion of a private
placement of equity units in September 2016.
Financial Results - Quarter Ended December
Functional neurology revenue increased 23%,
to $1.3 million from $1.0 million in the fourth quarter of 2016. This increase was due primarily to a 26% increase in the number
of cases using the ClearPoint system, to 160 cases in the fourth quarter of 2017 from 128 cases during the same period in 2016.
Drug delivery product revenue for the fourth
quarter of 2017 was $120,000, a decline of 63% as compared with $327,000 during the same period in 2016, reflecting the previously
mentioned $222,000 purchase of drug delivery cannulas and related products by Voyager in 2016.
Capital equipment revenue was $291,000 in the fourth
quarter of 2017, as compared with $272,000 during the same period in 2016.
Gross margin for the fourth quarter ended December
31, 2017 improved to 61% from 59% for the same period in 2016. The increase was due primarily to a favorable mix of revenues during
the fourth quarter ended December 31, 2017, relative to the same period in 2016.
Research and development costs were $582,000 for
the fourth quarter of 2017, compared to $530,000 for the same period in 2016, an increase of $52,000, or 10%. The increase during
the fourth quarter of 2017, in comparison to the same period in 2016, was due primarily to increases in personnel, regulatory and
software development costs, that were partially offset by decreases in intellectual property costs.
Sales and marketing expenses were $1.0 million
for the fourth quarter ended December 31, 2017, compared to $946,000 for the same period in 2016, an increase of $65,000, or 7%.
This increase was primarily due to an increase in exhibit activity during the fourth quarter ended December 31, 2017, relative
to the same period in 2016.
General and administrative expenses were $1.3 million
for each of the fourth quarters of 2017 and 2016, primarily attributable to decreases in professional fees and stock-based compensation
being offset by costs incurred in connection with recruiting and hiring Mr. Burnett in November 2017.
During the fourth quarter of 2017, the Company
recorded a loss of $23,000, and during the same period in 2016, the Company recorded a gain of $318,000, resulting from changes
in the fair value of derivative liabilities. Such derivative liabilities related to the terms of certain warrants issued in 2012
and 2013, and in connection with the amendments the Company made to certain note payable agreements in 2016, discussed further