Full Press Release Details
InspireMD Reports Results For Period
Quarter Highlighted by Positive
Results at 24th Annual
TEL AVIV, Israel, FEB. 4, 2013 -
InspireMD, Inc. ("InspireMD" or the "Company") (OTC: NSPRD) announced financial results for the period ended
Dec. 31, 2012, the second quarter of its 2013 fiscal year.
Revenue for the period was up 165% over
the Sept. 30, 2012 quarter, reflecting early results of marketing initiatives that were launched following the announcement of
positive results of the MASTER trial of the Company's MGuard Embolic Protection Stent (EPS ) at the 24th
Annual Transcathter Cardiovascular Therapeutics (TCT) scientific meeting in Miami on October 24, 2012.
Alan Milinazzo, newly appointed President
and CEO of InspireMD said, "The interventional cardiology community was clearly enthusiastic about the MASTER trial's
results. The study's positive results set the stage for enhanced sales and marketing activities which began during the first
week of December at the important ICI meeting in Tel Aviv."
The MASTER trial's positive results,
presented at the TCT by Study Chairman Gregg W. Stone, MD, reported that the novel MGuard EPS provided a statistically and clinically
significant advantage in acute treatment of heart attack patients, indicating lower incidences of post stenting adverse events
compared to the control group, and the potential to prolong survival.
MGuard EPS is CE Mark approved. It is not
approved for sale in the U.S. by the Food and Drug Administration (FDA) at this time. The Company has filed an Investigational
Device Exemption with the U.S. FDA to initiate a Premarket Approval trial.
Key Financial Highlights 2Q Ended Dec.
-Revenue for the quarter ended Dec.
31, 2012 totaled $1.4 million, which was slightly above the $1.3 million recorded in the same period in 2011, but 165% higher than
the $500,000 in revenue recorded in the quarter ended Sept. 30, 2012. As previously noted, the prior quarter was negatively affected
by stocking and selling disruptions caused by a realignment of the Company's distributors in advance of the presentation
of the MASTER trial at the TCT.
-Gross profit for the Dec. 31, 2012
period was $803,000, compared to $621,000 for the Dec. 31, 2011 period, up nearly 30% owing to higher revenue and lower production
-Total operating expenses for the
Dec. 31, 2012 period were $5.2 million, compared to $8.9 million in the Dec. 31, 2011 period, a decrease of $3.7 million. The decrease
was attributable to a $5.6 million decrease in G&A expenses (mainly due to timing of the recording of share-based compensation
related to board members) in the Dec. 31, 2012 period. This decrease was offset by a $0.9 million one-time royalties buyout expense,
an increase in sales and marketing activities of $0.6 million (primarily related to the TCT meeting and subsequent launch of MGuard
EPS), and an increase of $0.4 million in R&D expenses (mainly to support clinical trials).
-The loss from operations for the
Dec. 31, 2012 period was ($4.4 million), compared to ($8.2 million) for the Dec. 31, 2011 period.
-Net income of $3.6 million related
to the revaluation of contingently redeemable warrants, less financial and tax expenses of $1.1 million, brought final net income
for the Dec. 31, 2012 period to ($1.9 million), or ($0.11) per basic and diluted share, compared to a final net income of ($8.2
million), or ($0.49) per basic and diluted share for the Dec. 31, 2011 period. The weighted average number of shares of common
stock used in computing net loss per share (basic and diluted) was 17.7 million for the quarter just ended, and 16.7 million for
the prior year's quarter.
-At Dec. 31, 2012, cash and cash
equivalents stood at approximately $5.4 million, compared to $10.3 million at June 30, 2012.
Key Activities 2Q FY 2013 Included:
-Results of the MASTER trial of MGuard
EPS were presented on Oct. 24, 2012 at TCT. The 432-patient randomized trial met its primary endpoint (proportion of patients with
ST segment resolution of 70%, measured at 60 to 90 minutes post procedure), showing the MGuard EPS was significantly superior
to the control arm of bare metal and drug eluting stents in the treatment of heart attack patients.
-The MASTER trial's results
were published in the November 6, 2012 print edition of the peer-reviewed Journal of American College of Cardiology (JACC),
Vol. 60, No. 19. The authors concluded that "among patients with acute STEMI (ST Segment Elevation Myocardial
Infarction) undergoing emergent PCI enrolled in the present multicenter, randomized, controlled trial, the MGuard Embolic
Protection Stent (EPS) compared to standard metallic stents resulted in superior rates of epicardial coronary flow and complete
STR, with trends present toward reduced microvascular obstruction, infarct size and mortality."
-The Company implemented initial
changes to its sales and marketing activities to leverage both the MASTER trial outcomes as well as the availability of the MGuard
Prime cobalt chromium stent platform. Five sales and marketing executives were hired to accelerate market penetration.
-On Dec. 20, 2012, the Company announced
a one-for-four reverse stock split of its common stock as part of the process to qualify its shares for quoting on a national U.S.
stock exchange. The reverse split decreased the number of issued and outstanding shares of common stock from approximately 72.1
million to approximately 18.0 million. The Company's authorized common stock was not affected by the reverse stock split.
-On Jan. 3, 2013, Alan Milinazzo
was named President, CEO, and a member of the board. He replaced Ofir Paz, who previously announced his intention to step down
as CEO in Sept. 2012 once a successor was named. Mr. Paz continues to serve as a director.
Mr. Milinazzo, who previously served in
executive positions at Medtronic and Boston Scientific Corporation, brings more than 15 years of important commercial, operations,
and international experience in interventional cardiology to bear on InspireMD's commercial strategy and operations as it
launches the MGuard EPS platform.
He was instrumental in the launch of ENDEAVOR,
Medtronic's first drug eluting stent platform, which has since generated more than $1 billion in revenue. He previously spent
12 years in executive positions at Boston Scientific, another major stent producer, serving as Vice President of Marketing at its
$200 million SCIMED European unit, responsible for product launches, clinical programs and regulatory strategies.
Mr. Milinazzo most recently served as President
and CEO of Nasdaq-quoted Orthofix International N.V., positions he was promoted to in 2006 after being hired a year earlier as
Chief Operating Officer. During his tenure at Orthofix, Mr. Milinazzo transformed it into a category leader in novel spine and
orthopedic stem cell therapy, while growing revenue from $300 million to $580 million and nearly doubling profits.
In commenting on Mr. Milinazzo's
appointments, Sol J. Barer, PhD, Chairman of InspireMD said: "Alan brings an exceptional set of experiences to us as a proven
executive in the medical device field, particularly as relates to interventional cardiology and stents specifically. He brings
a long list of strategically and commercially important accomplishments as a public company executive, he has the right blend of
domestic and international experience for a company with our opportunities and intentions, and a well-documented entrepreneurial
drive that's critical to success in managing the evolving needs and challenges of an emerging company such as ours."
CONSOLIDATED STATEMENTS OF OPERATIONS
(U.S. dollars in thousands, except per share
| Three months ended December 31, | Six months ended December 31, | |||||||||||||||
| 2012 | 2011 | 2012 | 2011 | |||||||||||||
| Revenues | $ | 1,350 | $ | 1,292 | $ | 1,859 | $ | 3,278 | ||||||||
| Cost of Revenues | 547 | 671 | 777 | 1,472 | ||||||||||||
| Gross Profit | 803 | 621 | 1,082 | 1,806 | ||||||||||||
| Operating Expenses: | ||||||||||||||||
| Royalties buyout expenses | 918 | 918 | ||||||||||||||
| Other research and development expenses | 1,256 | 834 | 2,202 | 1,381 | ||||||||||||
| Selling and marketing | 1,206 | 626 | 1,608 | 928 | ||||||||||||
| General and administrative | 1,789 | 7,398 | 4,001 | 9,884 | ||||||||||||
| Total operating expenses | 5,169 | 8,858 | 8,729 | 12,193 | ||||||||||||
| Loss from Operations | (4,366 | ) | (8,237 | ) | (7,647 | ) | (10,387 | ) | ||||||||
| Expenses (income) related to revaluation of contingently redeemable warrants, net | (3,569 | ) | (296 | ) | ||||||||||||
| Expenses related to interest on convertible loan and other financial expenses | 1,081 | 39 | 2,026 | 147 | ||||||||||||
| Loss before tax expenses | (1,878 | ) | (8,276 | ) | (9,377 | ) | (10,534 | ) | ||||||||
| Tax Expenses | 42 | (43 | ) | 49 | (18 | ) | ||||||||||
| Net Loss | $ | (1,920 | ) | $ | (8,233 | ) | $ | (9,426 | ) | $ | (10,516 | ) | ||||
| Net loss per share - basic and diluted | $ | (0.11 | ) | $ | (0.49 | ) | $ | (0.54 | ) | $ | (0.64 | ) | ||||
| Weighted average number of shares of common stock used in computing net loss per share - basic and diluted | 17,727,815 | 16,674,356 | 17,401,025 | 16,374,636 |
CONSOLIDATED BALANCE SHEETS (2)
(U.S. dollars in thousands)
| December 31, 2012 | June 30, 2012 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and cash equivalents | $ | 5,433 | $ | 10,284 | ||||
| Restricted cash | 93 | 37 | ||||||
| Accounts receivable: | ||||||||
| Trade | 1,273 | 1,824 | ||||||
| Other | 212 | 264 | ||||||
| Prepaid expenses | 94 | 93 | ||||||
| Inventory: | ||||||||
| On hand | 1,977 | 1,744 | ||||||
| On consignment | 20 | 63 | ||||||
| Total current assets | 9,102 | 14,309 | ||||||
| Property, plant and equipment, net of accumulated depreciation and amortization | 479 | 462 | ||||||
| Other non-current assets: | ||||||||
| Funds in respect of employees rights upon retirement | 776 | 961 | ||||||
| Deferred debt issuance costs | 335 | 282 | ||||||
| Royalties buyout | 905 | |||||||
| Total other non-current assets | 2,016 | 1,243 | ||||||
| Total assets | $ | 11,597 | $ | 16,014 |
| December 31, 2012 | June 30, 2012 | |||||||
| LIABILITIES AND EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable and accruals: | ||||||||
| Trade | $ | 501 | $ | 441 | ||||
| Other | 2,426 | 2,925 | ||||||
| Advanced payment from customers | 184 | 174 | ||||||
| Deferred revenues | 10 | 10 | ||||||
| Convertible loan | 6,461 | |||||||
| Total current liabilities | 9,582 | 3,550 | ||||||
| Long-term liabilities: | ||||||||
| Liability for employees rights upon retirement | 451 | 354 | ||||||
| Convertible loan | 5,018 | |||||||
| Contingently redeemable warrants | 1,410 | 1,706 | ||||||
| Total long-term liabilities | 1,861 | 7,078 | ||||||
| Total liabilities | 11,443 | 10,628 | ||||||
| Equity: | ||||||||
| Common stock, par value $0.0001 per share; 125,000,000 shares authorized; 18,026,680 and 17,040,040 shares issued and outstanding at December 31, 2012 and June 30, 2012. | 2 | 2 | ||||||
| Additional paid-in capital | 53,349 | 49,101 | ||||||
| Accumulated deficit | (53,147 | ) | (43,722 | ) | ||||
| Total equity | 204 | 5,386 | ||||||
| Total liabilities and equity | $ | 11,597 | $ | 16,014 |
(1) All 2012 financial information is derived
from the Company's 2012 unaudited financial statements and all 2011 financial information is derived from the Company's
2011 unaudited financial statements, as disclosed in the Company's Quarterly Report on Form 10-Q, filed with the Securities
and Exchange Commission.
(2) All December 31, 2012 financial information
is derived from the Company's 2012 unaudited financial statements and all June 30, 2012 financial information is derived
from the Company's 2012 audited financial statements, as disclosed in the Company's Transition Report on Form 10-KT,
filed with the Securities and Exchange Commission.
About Stenting and MGuard EPS