Full Press Release Details
MRI Interventions Reports
Record ClearPoint Cases and
Disposable Functional Neurosurgery Revenue in Third Quarter
IRVINE, CA, November 12, 2018
- MRI Interventions, Inc. (OTCQB: MRIC) (the "Company") today announced financial results for its third fiscal
quarter ended September 30, 2018.
Third Quarter 2018 and
Joe Burnett, President and
Chief Executive Officer of MRI Interventions, Inc., said, "The third quarter marked a terrific period with record ClearPoint
cases and exciting execution against our four-pillar growth strategy. We made significant progress in each of these four pillars
as we transform MRIC into a company that provides comprehensive solutions to help surgeons decide, guide, treat and confirm in
clinical procedures where accuracy is paramount to outcomes and patient quality of life.
"In pillar one, functional
neurosurgery, we reported record case volumes and record revenue in the quarter. Our marketing efforts increased the number of
sites using our multiple procedures per day protocol from three to six and added an additional system placement. Furthermore, FDA
clearance in October of Monteris' new laser ablation probe should have an immediate positive impact on fourth quarter case
volume, and we believe our headframe collaboration will further benefit patient mobility and procedure times when that joint product
becomes commercially available in the coming years. Additionally, in November we received FDA clearance of our ClearPoint 2.0 next-generation
software platform. We plan to immediately commence shipment and installation of ClearPoint 2.0 under a limited market release and
expect it will be made available for purchase by all new and existing ClearPoint customers in the first half of 2019.
"In pillar two, biologics and drug delivery,
we shipped $103,000 of SmartFlow cannulae to Europe under our new CE Mark, which we received in the second quarter, with an additional
$49,000 in purchase orders to be shipped. Axovant's Parkinson's program progressed to a clinical dosing stage and the
first treatment in that trial used our cannulae for gene delivery. Our partnership with Voyager Therapeutics continues to progress
as five of our clinical specialists have been trained on the infusion and clinical procedure and will soon be able to cover clinical
cases on behalf of Voyager once their Phase 2-3 study for Parkinson's enrolls its first patient.
"In pillar three, therapy, we announced
an agreement with Clinical Laserthermia Systems, AB ("CLS") to acquire a worldwide license to their FDA-cleared Tranberg
laser ablation system for use in neurosurgery and spine. This will allow us to co-develop hardware, disposables and software to
make the ClearPoint platform work together with the Tranberg system in a single, coordinated and efficient workflow with the goals
of increasing accuracy and reducing procedure time. We are now redeploying existing resources to these products. Adding laser therapy
to our portfolio has the potential to turn our lowest revenue and margin procedure into our highest.
"And in pillar four, gaining global scale,
our non-neuro distribution agreement with CLS for the U.S. and Canada enables additional operating cost leverage within our commercial
infrastructure. Our clinical specialists will be able to cover local cases on non-neuro days, increasing their average cases per
week and further reducing travel.
"Importantly, we accomplished all of
these strategic growth initiatives while still reducing cash used in operations, which came in at just under $1.0 million, despite
putting these programs in place. We are maintaining our previously communicated expectation of cash used in operations in the fourth
quarter of this year, which we believe will be approximately $800,000.
"We believe these initiatives will transform
our company, as we move away from being a single-play, U.S. neuro-navigation company, and emerge as a full-line neuro and spine
therapy company, with products and partnerships for navigation, laser ablation, deep-brain stimulation, aspiration, gene therapy
and more, treating some of the most complex and debilitating neuro disorders. This is an exciting time for employees at the company
because of the opportunities ahead, and the positive impact we believe we are having on patients every day."
Three Months Ended September 30, 2018
Functional neurology revenue,
which consists of disposable product commercial sales related to cases utilizing the ClearPoint system, increased 13% to $1.4 million
for the three months ended September 30, 2018, from $1.3 million for the same period in 2017. The increase was primarily due to
a 9% increase in ClearPoint case volume and a favorable number of DBS cases, which use two disposable kits per case.
Biologics and drug delivery
revenues, which include sales of disposable products and services related to customer-sponsored clinical trials and services, increased
40% to $191,000 for the three months ended September 30, 2018, from $137,000 for the same period in 2017, due primarily to increased
Capital equipment and related
service revenue, consisting of sales of ClearPoint reusable hardware and software and related services, decreased 45% to $162,000
for the three months ended September 30, 2018, from $296,000 for the same period in 2017. Revenues from this product line historically
have varied from quarter to quarter and, we believe, have been adversely impacted by FDA warning letters to two laser system providers,
causing the deferral of multiple capital equipment sales until resolution of the matters raised in the FDA letters.
Gross margin for the three
months ended September 30, 2018 improved to 69% from 60% in the same period in 2017, due primarily to reductions in indirect manufacturing
costs as a percentage of sales and more favorable revenue mix.
Research and development costs
were $617,000 for three months ended September 30, 2018, compared to $590,000 for the same period in 2017, an increase of 5%.
Sales and marketing expenses
were $765,000 for the three months ended September 30, 2018, compared to $899,000 for the same period in 2017, a decrease of 15%.
General and administrative
expenses were $1.1 million for the three months ended September 30, 2018, compared to $867,000 for the same period in 2017, an
increase of 20%. The increase was due primarily to increases in stock-based compensation, legal fees and directors' compensation,
and to a decrease in activity-based cost allocation to other departments.
Net interest expense for the
three months ended September 30, 2018 was $247,000, compared with $211,000 for the same period in 2017. The increase was due to
increased amortization of the discount and deferred issuance costs associated with notes payable.
Teleconference Information
Investors and analysts are
invited to listen to a live broadcast review of the Company's 2018 third quarter financial results today at 4:30 p.m. Eastern time
(1:30 p.m. Pacific time) that may be accessed by visiting the Company's website at www.mriinterventions.com and selecting "Investors"
/ "News" / "IR Calendar." Investors and analysts who would like to participate in the conference call may
do so via telephone at (877) 407-9034, or at (201) 493-6737 if calling from outside the U.S. or Canada.
For those who cannot access
the live broadcast, a replay will be available shortly after the completion of the call until November 19, 2018 by calling (877)
660-6853, or (201) 612-7415 if calling from outside the U.S. or Canada, and then entering conference I.D. number 413671. An online
archive of the broadcast will be available on the Company's website at www.mriinterventions.com, on the "Investor Relations"
About MRI Interventions,
Building on the imaging power
of magnetic resonance imaging ("MRI"), MRI Interventions is creating innovative platforms for performing the next generation
of minimally invasive surgical procedures in the brain. The ClearPoint Neuro Navigation System, which has received 510(k) clearance
and is CE marked, utilizes a hospital's existing diagnostic or intraoperative MRI suite to enable a range of minimally invasive
procedures in the brain. For more information, please visit www.mriinterventions.com.
Forward-Looking Statements
Statements herein concerning
MRI Interventions, Inc.'s plans, growth and strategies may include forward-looking statements within the context of the federal
securities laws. Statements regarding the company's future events, developments and future performance, as well as management's
expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning
of these laws. Uncertainties and risks may cause the company's actual results to differ materially from those expressed in or implied
by forward-looking statements. Particular uncertainties and risks include those relating to: the Company's
ability to obtain additional financing; estimates regarding the sufficiency of the Company's cash resources; future
revenues from sales of the company's ClearPoint Neuro Navigation System products; and the company's ability to market,
commercialize and achieve broader market acceptance for the company's ClearPoint Neuro Navigation System products. More detailed
information on these and additional factors that could affect the company's actual results are described in the "Risk
Factors" section of the company's Annual Report on Form 10-K for the year ended December 31, 2017 which has been filed