Full Press Release Details
InspireMD Reports Financial Results for
Quarter Ended September 30, 2013
BOSTON, MA - November 11,
2013 - InspireMD Inc. (NYSE MKT: NSPR) ("InspireMD" or the "Company"), a leader in embolic protection
stents, today announced financial results for the quarter ended September 30, 2013.
Key Highlights of Recent Events
Upcoming Near-term Milestones
"The positive mortality data from
the MASTER trial 12-month follow-up is being well received by physicians since the results were announced at the TCT conference
just two weeks ago. We believe this data will be an important factor in our efforts to increase adoption rates for the MGuard and
for recruitment in the MASTER II trial," stated Alan Milinazzo, President and Chief Executive Officer of InspireMD. "The
acute benefits reported with the MGuard in ST segment resolution, improved TIMI flow and reduced infarct size, gives us the confidence
that these improved clinical results are achieved due to the embolic protection benefits of our MicroNet technology."
"Encouraged by the MASTER trial 12-month
data, we believe there is significant potential for our platform technology, MicroNet, to support a broader pipeline of devices
in the coronary and vascular setting. We recently put into place a financing strategy that offers us greater flexibility to accelerate
these programs," concluded Mr. Milinazzo.
Operational Overview
On October 29, 2013, the Company announced
the 12-month follow up results from the MASTER trial for its MGuard Embolic Protection Stent (EPS). The findings showed that the
novel MGuard EPS provides a significant acute advantage in reducing ST segment elevation versus traditional bare metal and drug
eluting stents. As a result, MGuard may hold the potential to prolong the survival of heart attack victims, as evidenced by the
12-month data. The 12-month follow up results are an important data point for physicians evaluating the MGuard, as the first year
is an important period for evaluating a patient who has received a stent during a heart attack. As the Company now has this data
in hand, it intends to ramp commercial activity for the remainder of 2013 and 2014.
The Company continues enrollment in its
MASTER II clinical trial to evaluate the safety and effectiveness of the MGuard Prime EPS in patients suffering from ST
Elevation Myocardial Infarction (STEMI). In total, the multi-center, randomized trial is expected to include up to 70 sites in
the U.S. and Europe and as many as 1,114 patients. The results are intended to support the Company's Investigational Device
Exemption (IDE) application with the U.S. Food and Drug Administration (FDA) to market the MGuard Prime MicroNet
covered coronary stent system in the U.S.
While the MASTER II trial is fully funded,
the Company took additional steps to secure strategic financing and protect shareholder value. On October 24th, the
Company announced it had secured $10 million in venture debt to support expanding its emerging clinical research and product development
efforts. The Company also put into place a one year stockholder rights plan which the Board believed was prudent in order to protect
shareholders' interests.
Quarter Ended September 30, 2013 Financial
Revenue for the quarter ended September
30, 2013 was $1.6 million, an increase of 205% compared to $0.5 million for the same period in 2012. The increase year over year
reflects the positive impact of recent steps taken to stabilize the global distribution strategy and the early success of targeted
selling activities in Brazil as well as select European countries.
Gross profit for the quarter ended September
30, 2013 totaled $0.8 million, an increase of 187% compared to $0.3 million for same period in 2012. The increase in gross profit
is attributable to an increase in revenue of approximately $1.1 million, as described above, partially offset by an increase in
cost of revenues of approximately $0.5 million. Gross margin for the three months ended September 30, 2013 was 51.7%, a decrease
from 54.8% in the three months ended September 30, 2012. If the non-recurring effects of the consolidation of our manufacturing
facilities in the three months ended September 30, 2013 are removed, gross margin for the three months ended September 30, 2013
would have been 63.1%.
Total operating expenses for the quarter
ended September 30, 2013 were $4.7 million, an increase of 31.7% compared to $3.6 million for the same period in 2012. The increase
was primarily due to an increase in startup costs associated with initiating the MASTER II trial, as well as increased sales and
marketing expenses, as the Company begins to build the appropriate sales infrastructure for future growth.
The loss from operations for the quarter
ended September 30, 2013 was $3.9 million, an increase of 18.4% compared to a loss of $3.3 million for the same period in 2012.
Total financial expenses for the quarter
ended September 30, 2013 were $0.1 million, a decrease of 98.6% compared to $4.2 million in the same period in 2012. The decrease
in financial expenses resulted primarily from the absence of any non-cash revaluations of our warrants or amortization expenses
during the three months ended September 30, 2013. In contrast, during the three months ended September 30, 2012, we recognized
approximately $4.0 million in non-recurring, non-cash cost associated with the Company's previously retired convertible debt
and associated warrants. If the non-cash effects in the three months ended September 30, 2012, as well as the non-cash effects
in the three months ended September 30, 2013 are removed, financial expenses for the three months ended September 30, 2012 would
have totaled approximately $0.2 million, as compared to approximately $20,000 of financial income for the three months ended September
The net loss for the quarter ended September
30, 2013 totaled $3.9 million, or $0.12 per basic and diluted share, a decrease of 47.4% compared to a net loss of $7.5 million,
or $0.44 per basic and diluted share in the same period in 2012.
Non-GAAP net loss for the quarter ended
September 20, 2013 was $3.0 million, or $0.09 per basic and diluted share, an increase of 15.7% compared to a non-GAAP net loss
of $2.6 million or $0.15 for the same period in 2012. The non-GAAP net loss for the quarter ended September 30, 2013 primarily
excludes $0.9 million of share-based compensation. The non-GAAP net loss for quarter ended September 30, 2012 primarily excludes
$4.0 million in non-recurring, non-cash cost associated with the Company's previously retired convertible debt and associated
warrants and $1.0 million in share-based compensation.
Cash and Cash Equivalents
At September 30, 2013, cash and cash equivalents
were $11.4 million, a decrease of 22.8% compared to $14.8 million at June 30, 2013. The Company's cash decreased in line
with its anticipated burn rate.
On October 24, 2013, the Company secured
$10 million in venture debt financing to support product development and clinical expansion.
Change to Fiscal Year
As announced on September 17th,
the Company will be changing its fiscal reporting year end from June 30th to December 31st. The three month
period ending September 30th was the first half of the transitional six-month fiscal year from July 1st to
December 31st, 2013. Management believes that this change will allow the Company to better align its financial periods
and annual budget planning with its business cycle, as well as assist the investment community in following the Company's
progress moving forward.
Investor Conference Call
The Company will host a conference call
today at 4:30 p.m. ET to review the Company's financial results and business outlook. Participants should call (877) 407-4018
(United States) or (201) 689-8471 (International) and request the InspireMD call or provide confirmation code 13572723. A live
webcast of the call will also be available on the Investor Relations section of the Company's website at www.inspire-md.com/site_en/for-investors/.
Please allow 10 minutes prior to the call to visit this site to download and install any necessary audio software.
An archive of the webcast will be available
approximately one hour after completion of the live event and will be accessible on the Investor Relations section of the Company's
website at www.inspire-md.com/site_en/for-investors/. A dial-in replay of the call will also be available to those interested.
To access the replay, dial (877) 870-5176 (United States) or (858) 384-5517 (International) and enter code 13572723.
About Stenting and MGuard EPS
Standard stents were not engineered for
heart attack patients. They were designed for treating stable angina patients whose occlusion is different from that of an occlusion
in a heart attack patient.
In acute heart attack patients, the plaque
or thrombus is unstable and often breaks up as the stent is implanted causing downstream blockages (some of which can be fatal)