Full Press Release Details
Reports Fourth Quarter and Fiscal Year 2013 Results
BOSTON, MA - September 17,
2013 - InspireMD Inc. (NYSE MKT: NSPR) ("InspireMD" or the "Company"), a leader in embolic
protection stents, today announced financial results for its fourth quarter and fiscal year ended June 30, 2013.
Upcoming Near-term Milestones
Commenting on the Company's recent
activity, Alan Milinazzo, President and Chief Executive Officer of InspireMD, stated, "Since joining the Company earlier
this year, I've looked to realign our efforts across multiple areas of the business in order to create a solid foundation
for future growth. We've identified four key areas of focus moving forward: clinical studies, development of new products
in our pipeline, strategic partnerships and our commercial strategy. I believe these concentrated efforts will allow us to build
broader awareness for our new generation of stent technologies with sales in countries where we already have market clearance,
while working towards FDA approval."
"The 12-month follow up results for
the MASTER trial are to be announced on October 30th. This is the next major data point that most clinicians are looking
for to validate use of the MGuard stent. As such, we believe these results will facilitate our sales and strategic partnership
activities in key international markets. In terms of the U.S. market, we already began enrollment for our FDA-intended MASTER II
trial. And as we expand our current clinical activities for the Coronary market, we continue to bolster our product pipeline with
advances for the Carotid and Peripheral Vasculature target indications," concluded Mr. Milinazzo.
Operational Overview
In fiscal year 2013, the Company announced
superior results from the MASTER trial for its MGuard Embolic Protection Stent (EPS). The findings show 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 30-day and 6-month data.
The MASTER trial is an important study
for InspireMD, as it is the first large, randomized clinical trial for the MGuard to date. As such, the results have gained much
more credence among those in the medical community. The 12-month follow up results for the MASTER trial, scheduled to be released
on October 30th, are expected to be an important data point for physicians evaluating the MGuard, as the first year
is an important period for evaluating a patient that has received a stent during a heart attack.
The results disclosed thus far from the
MASTER trial have allowed the Company to begin the transition to a new commercial strategy in countries where the MGuard has received
regulatory clearance. This includes setting up the support structure for a direct sales team in certain European countries and
advancing discussions with new strategic partners. The Company recently entered into an agreement with Healthlink Europe, a medical
device support services and distribution company, to provide logistical and customer support for InspireMD's commercial operations
and clinical activities. Healthlink will provide InspireMD with customer service center capabilities for inquiries from hospitals
and distributors. Healthlink will also handle all inventory controls, warehousing, shipping, and invoicing and receivables management
for customers worldwide on behalf of InspireMD.
The Company began enrollment with 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.
ongoing progress and changes throughout the Company are being driven by new leadership brought in over the past year at the executive
management and board levels. To lead the Company forward, Mr. Milinazzo was appointed President and CEO in January 2013, bringing
fifteen years of experience in interventional cardiology to InspireMD. The Company also appointed Ms. Gwen Bame to a newly created
position of Vice President of Corporate Development and charged her with identifying and executing strategic programs and partnerships
designed to meet InspireMD's global growth objectives. As of yesterday, the Company appointed Mr. David Blossom as its Vice
President of Global Marketing and Strategy and will be charged with creating
and overseeing the implementation of a global strategic marketing plan. At the Board level, industry veterans, Mr. Michael Berman
and Dr. Campbell Rogers recently joined to provide invaluable strategic guidance and support.
Fourth Quarter Financial Results
Revenue for the quarter ended June 30,
2013 was $1.5 million, an increase of 60.7% compared to $0.9 million for the same period in 2012. The increase was the result of
recent expanded sales activities in key European and South American countries.
Gross profit for the quarter ended June
30, 2013 totaled $0.7 million, an increase of 414% compared to $0.1 million for same period in 2012. The increase in gross profit
is primarily attributable to a non-recurring write-off of $0.4 million of slow moving inventory in the twelve months ended June
30, 2012, which did not occur in the same period in 2013, and an increase of $0.4 million primarily due to the increase in sales
of $0.6 million, as discussed above. This was partially offset by $0.2 million of expenses related to the integration of our R&D
center into a streamlined manufacturing facility intended to increase efficiency and support anticipated commercial demand. Gross
margins for the quarter increased to 44.5% compared to 13.9% for the same period in 2012.
Total operating expenses for the quarter
ended June 30, 2013 were $4.9 million, an increase of 17.3% compared to $4.2 million for the same period in 2012. The increase
was primarily due to an increase in General & Administrative and Sales & Marketing expenses, as the Company builds the
appropriate sales infrastructure and management team for future growth.
The loss from operations for the quarter
ended June 30, 2013 was $4.2 million, a slight increase of 4.5% compared to $4.0 million for the same period in 2012.
The net loss for the quarter ended June
30, 2013 totaled $14.9 million, or $0.48 per basic and diluted share, an increase of 279% compared to a net loss of $3.9 million,
or $0.23 per basic and diluted share in the same period in 2012. The net loss was driven by $10.6 million of non-recurring, non-cash
costs associated with the conversion and retirement of the Company's convertible debt in conjunction with the April 2013
Non-GAAP net loss for the quarter ended
June 30, 2013 was $3.2 million, or $0.10 per basic and diluted share, a decrease of 8.6% compared to a non-GAAP net loss of $3.5
million or $0.21 for the same period in 2012. The non-GAAP net loss for the quarter ended June 30, 2013 primarily excludes the
$10.6 million non-recurring, non-cash costs associated with the conversion and retirement of the Company's convertible debt
in conjunction with the April 2013 capital raise.
Fiscal Year End Financial Results
Revenue for the fiscal year ended June
30, 2013 totaled $4.9 million, a decrease of 8.9% compared to $5.3 million for the same period in 2012. The $0.4 million decrease
in sales volume was due primarily to the process of restructuring the Company's commercial strategy in key countries by developing
direct sales channels and eliminating certain non-performing third party distributors.
Gross profit for the fiscal year ended
June 30, 2013 totaled $2.6 million, an increase of 3.6% compared to $2.5 million for the same period in 2012. The increase in gross
profit is attributable to a decrease in cost of revenues, primarily from a non-recurring write-off of $0.4 million of slow moving
inventory in the twelve months ended June 30, 2012, which did not occur in the same period in 2013. These decreases were partially
offset by expenses related to the integration of our R&D center into a streamlined manufacturing facility intended to increase
efficiency and support anticipated commercial demand. Gross margins increased to 53.2% for the fiscal year ended June 30, 2013
compared to 46.7% for the same period in 2012.
Total operating expenses for the fiscal
year ended June 30, 2013 were $17.7 million, a decrease of 11.9% compared to $20.0 million for the same period in 2012. The decrease
was primarily due to a decrease in share-based compensation of $6.7 million, which was partially offset by an increase in Sales
and Marketing, as the Company builds the appropriate sales infrastructure for future growth.
The loss from operations for the fiscal
year ended June 30, 2013 was $15.1 million, a decrease of 14.1% compared to $17.5 million for the same period in 2012.
The net loss for the fiscal year ended
June 30, 2013 totaled $29.3 million, or $1.39 per basic and diluted share, an increase of 66.3% compared to a net loss of $17.6
million, or $1.04 per basic and diluted share in the period in 2012. The increase in net loss resulted primarily from an increase
of $14.1 million in financial expenses, of which, $13.4 million were non-recurring, non-cash costs associated with the Company's
Non-GAAP net loss for the fiscal year ended
June 30, 2013 was $11.0 million, or $0.53 per share, compared to $7.4 million, or $0.44 per share, for the same period in 2012.