AVGR - Earnings call transcript Q2 2018

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Operator

Greetings. And welcome to the Avinger’s Second Quarter 2018 Earnings Results Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. pleasure Avinger. your my Investor Chris now for Relations is to host, introduce Camarra, It you. Thank

may You begin.

Chris Camarra

you quarter Thank in like of today’s Thank call. Avinger’s you. you I’d to everyone welcome conference call. XXXX for participating to second all

Soinski; XX, are Weinswig. Officer, XXXX. Avinger financial Jeff today, second the Chief results Financial Joining us for CEO, quarter and today released Avinger’s Mark Earlier ended June

statements statements. the like make cause results include deemed Accordingly, Safe historical current on begin, based forward-looking should Private or involve material you uncertainties I’d pursuant to of to expectations, these within those statements forward-looking forward-looking in from of without Act of this place reliance statements. risks assumptions. statements we that made should implied will Litigation Any statements, remind Securities on securities Before management to our financial future Harbor anticipated fact federal statements this that by limitation, undue during call statements. These statements are not the laws. contained be actual forward-looking meaning these and All the that or you call could Reform be XXXX. provisions events are materially These are of differ estimates the not to various and including, that are

now turn except our call obligation, projections Jeff otherwise. that with of Securities information, Mr. or new or revise and the For to Soinski, With a any because Avinger the financial I’d said, required future update list business, any and forward-looking or to CEO. whether description statements, to of intention or over being events like risks filings our please Exchange and uncertainties by associated see with disclaims law, Commission. as

Jeff Soinski

with all Thanks, second update during Chris. progress to Good multiple and on and made fronts significant share quarter I the this you you. excited for joining am Avinger thank us. afternoon

peripheral lien we clinical and of team. sequential same important atherectomy our CFO, second sheet months the the clearance products the leader, recent Weinswig, is call, practicing development revenue financial He a with FDA background. opinion pursue to outreach senior programs, obtained our key me Chief device position who Avinger expand quarter provide artery made interventional and next-generation an on our who During quarter user making operational leadership and significant Officer. Dr. us of pipeline this our foundation added improvements Jaafer And a highly disease. time in growth, are while image-guided build we capital a July progress maintaining cardiologist, in at programs. our delivered in Lumivascular our strong joins strong for is our extensive joined contributions Golzar, Both cost operational new treatment as of new experienced Medical longtime In balance important leader made to our our clinical two and to Mark new to structure. already the additions also on and as growth, we a organization and

the XX% solution peripheral of Pantheris meeting Pantheris lead affect atherectomy our the for next-generation treatment the that nearly States. Drug that in condition our image-guided Administration age of milestone of received an artery the needs a in U.S. a forward over growing to we This experience is clearance United customers. company a of image-guided is or XXX(k) Moving and the next-generation atherectomy initial the XX and device, is number wide in significant our estimated for on Pantheris based device. from May or believe PAD, disease first-ever in Food variety population our announced to improved and FDA this we for we’d our that of represents the physician important cases

real-time combines with is which based highly proprietary device available Our treatment the differentiated upon Avinger's technology, that catheters Lumivascular for highly imaging, and only intravascular PAD. of effective the is unique technology

issued pending the protected XXX products includes which technology over patent are by in Our broad U.S. patents a and portfolio, and and international markets.

resulted are and reinforced Pantheris feature enhanced for knee. advancements outcomes which positive flow a acute device, early storage of pushability, including, an extremely a cutter single several the both and option occlusions above design other simplified device, balloon with and improvements, excited have system with lesion reliability to in thus chronic results design. atherectomy calcified and capacity more and cutter including, a These shaft types, increased performance blood across incorporates of augment We our about the next-generation stiffer for the below the improvements total variety arteries far are intended in apposition and management, and tissue primary heavily nosecone a for disease, the very

that both in we XX% base FDA AXXXX an year, in with in extended all clearance physicians Based a to are beginning nosecone single and in impressive decision case installed now to more Europe, standard patients of earlier up U.S. Lumivascular in of ability our U.S. U.S. our the selling in our the began launch the plaque the Germany experience AXXX, May, which device and with new has the in in the with time made initial initial Following upon a U.S. sales to sites nosecone two this capture next-generation and version we've outcomes the positive insertion. device to and and a treating sites. in June. the Pantheris the clinical Since versions, next-generation previous discontinued more broadly the XX Pantheris in in

device achieved strong We the continue to Pantheris, response with next-generation with product. to clinical very the reliability physician outcomes significantly be of pleased the improved the the and next-generation the

have incorporate clinical -- for trial the the the enrollment, restenosis Pantheris clinical the study. with is sites added XX new of We of end our next-generation arteries. extremity The XX INSIGHT more in for appropriate our sites treating expected in and now appropriate the a open INSIGHT quarter. in-stent several for in enrollment IDE We open made lower or quarter inclusion IDE into to of the sites in and the with the safety to have INSIGHT study FDA filings third allows evaluate be for progress. several to also by currently designed up to Pantheris ISR effectiveness second multi-center

significant is OCT compares Enrollment with Pantheris SCAN intended a support Pantheris and we trial to here the scale progressed U.S. IVIS, lesions, study most for excited SCAN treating enrollment procedures in in for in Europe use the next-generation strong well approximately a ultrasound tool expect PAD a and study, we that our our quarter, made SCAN which has is enrollment diagnostic represent study of as second the complete imaging peripheral trial and challenging about post-market clinical provide in the incremental of take the to effective stent trial. Due the the arteries. the prospect afforded XX% reimbursement or safe peripheral visualization in We've and Pantheris the code for in reimbursement experience in U.S. cleared this application the expect OCT the to Pantheris is initiated to for currently small arteries. for these diagnostic in control we clinical solution once to of are by which week. receives early diagnostic place We CPT progress in to intravascular imaging in which threats and a our this precise in also

recently submitting also including Pantheris XXX(k) In the in lower-profile quarter the we third application a six-French launched this knee. clearance FDA to next-generation the anticipate for below for of the addition version those of vessels, U.S., U.S. Pantheris with a in smaller

$XXX Based for in the clearance Marking remain CE device for we quarter our market expand as excited anticipated of that filing soon larger on we product our device to users clearance By this the fourth the in significantly allowing opportunity much with experience those lower the market. in on year. physician Europe Europe extremely anticipate which new in device clinical Pantheris of a earlier estimated sites U.S. benefit by select longer knee length plan a plus submission. smaller atherectomy vessels, estimate as profile available address portion the a real-time our access Germany million lower about our for below also incorporates our that of allowing expansion We for provide to We XX%, in new this profile device. small of potential imaging highly of experience, us this vessel differentiated past this line, the would could in after U.S. including

to we and and On of expanding At ahead you sales new are on our utilization, with the are our are position bright call and installed growth. the Ocelot availability the making in of entire we building achieve the we into the to commercial focused we we to Pantheris to multiple benefits a line, on process experience for launch on driving this remains pleased territories our of existing is share approach, the the significant the our front, through has focused and of with future sales our that Doctors financial as increased Pantheris with Avinger ultimate team team our product new opportunities to improved over geographic sales crossing of to installed Lumivascular leveraging summary, take future and are turn of base next-generation accounts. I'll our patients expansion addition the utilization realizing as market goal for growth of devices CTO in base support professionals image-guided fourth of key In the and lay next-generation Mark? us accounts value. our very pipeline of quarter shareholder XXXX. the our of in field team our that strategically Pantheris the are our our numerous strive and Mark our we progress fronts point, results. company enhanced

Mark Weinswig

Jeff. you, Thank

significantly moment believe happy new a become to this the structure. team, in is my reality. could the introductions to capitalize be take company investment, disruptor company me I R&D excitement vision level to the a cost by a execution, of let traction the the express lives financial I'm Avinger. a position wins marketplace. doctors improve products being great With position on and of First, its as member a historical at in strong and to product and improving Lumivascular patients Avinger's be contributing seeing of at

which disposable was related devices second quarter ended XXXX. XX% Revenue $XXX,XXX compared increase million, quarter, June from XXX me financials. of our accounts. included and approximately was territories quarter. catheter first X% Gross accounts the X%, Lightbox Lumivascular base as for inventory for and and our $X.X to of revenue Revenue the utilization related the quarter second products on a non-cash second console of to up company most the million for compensation quarter from first imaging focus the installed XXXX, million margin stock continues Total the XX, second $X.X let At the productive was charges from other end million $X.X excess prior supporting to increase of quarter, was our quarter. Now the roughly $X.X was to a within a XXXX turn roughly negative the expense.

from would for the quarter. increase This Excluding quarter. prior revenues margins quarter second was these were higher XX% in $X.X items, quarter in our million, $X the due margin second have and in to factory compared XX% for prior the gross utilization. to second in the the primarily gross increased expenses quarter, been million up non-GAAP Operating

We periods as our device. of expand launch moderately with to future to expenses sales direct expect marketing Pantheris begin our force sales next-generation in the our and increase we

to it the million. tables excess operations are compared stockholders the immediately $X.X of is noted second was the XXXX quarter XXXX quarter. was stock to compensation for the we teams of for is in in press of as was and that inventory believe million XXXX, attributable $X.X adding measure prior Adjusted of With to other for of second a net reserves, release to locations. today's the and loss common non-GAAP $X.X start the we the a the for and obsolete direct loss Loss a which loss items, to to second EBITDA, restructuring quarter million preceding excludes million key $X in compared traction time from see starting a sales quarter quarter million, good in in $X.X marketplace,

We have controlling cost lower down made significant and level. much bringing progress our structure to a in cost

revenues the expense may efforts, our As increase the to our in next-generation next expect two successful up we the in which over for one believe mentioned should device launch the second quarter, make investments of previously, quarters. in with to Pantheris operating increase We sales make some levels. expenses quarter we increase the the

as that million $X.X part balance and of July cash million totaled shares million the to Moving the we approximately XXth. cash of roughly warrants. sheet, This of June $X.X and net equivalents $X.X proceeds as in $XX.X common the raised XXXX million excludes of stock of sale

of X.X and shares into of XX,XXX B outstanding. is Series of a common share each preferred Series preferred A into XX, XXX Series preferred stock shares million XXXX the stock, the shares shares of conversion share of at As stock, convertible stock stock company’s XXXX, approximately price there per Series common XXX the the price were after the of of stock taking approximately account July stock offering, is shares X,XXX of June A Each convertible preferred of of direct effect and B at $X.XX. a conversion $X share company’s common into registered of

as the shares June at shares stock the of XXXX, like approximately turn this Therefore current of August at have have the the including of all shares the conversion company approximately stock to stock common call and outstanding preferred stock in the July of Jeff. common million preferred outstanding XXXX excluding conversion offering XX, company outstanding I current to of XX.X at would Assuming of would warrants. sold all back XX.X common prices, and shares outstanding At point, XXXX, conversion excluding of the would outstanding, outstanding warrants. assuming million prices, the X, conversion stock

Jeff Soinski

Mark. Thanks,

image-guided will We've next-generation with pleased pivotal as milestone the are of achieved to and that company device. growth this believe we've we We a prove the year the XXXX with made progress Avinger. and for a approval launch be to quarter significant Pantheris our atherectomy transition

team. new our executives senior added leadership to important have We

build good initiatives, anticipated quarter have make clinical the the the come throughout continue we of continue milestones on progress strong important point, productivity growth over And foundation small to Pantheris and next a application to in the we driving make development be XXX(k) few still focus filing product and our with would pipeline a At on next-generation of this to organization questions. in XXXX number various of your months, take this for strategic device. our while the our efficiency vessel including beyond. for happy we investments We our and to

Operator

Instructions] you. from with Please Cohen, Thalmann. is coming your [Operator the question. of Our Thank Jeffrey proceed Ladenburg first line question

Jeffrey Cohen

are Mark. you? Hi, Jeff How and

Jeff Soinski

Jeff. Hi.

Jeffrey Cohen

Thanks for taking the questions.

a just couple a on So little further of issues. information

will just about or talking trial guess, device So for the you next-gen that the at to this up six-French point? are to I you you XXX are some about the participants now, are was talking devise, approved referring come that

Jeff Soinski

Yes.

to -- INSIGHT enrollment available in-stent receive our call that and we of the we the forward seven-French We that device, for said the the our patients clearance our And is which trial submitted IDE ISR have size Jeff, currently. we significant referring was plan to next-gen on be Pantheris, and that from we time. new in which marketing. restenosis currently Pantheris, at the So, point once to we you're the actually request version for is are we device in are began will study added sites approval FDA in currently the our that of the using as majority which is the marketing this with is and next-gen device that only study documents the next-generation enroll so use clinical appropriate the that trial to we previous

get to sets study. as number enroll we of XXX our need. our clinical We is the are allowed that not in completed to we so, the necessarily an this to year, focused this especially one patients. might week to But are initiatives important to you And have that enrollment that we that enroll initiative pointed full on now SCAN as we out, need up data

Jeffrey Cohen

enrolled trial as do up us to side? or expect indication, it when enrollment opened as give that the wrap you could And you are Okay. many far how centers

Jeff Soinski

-- We just of most year many the quarter. in the were those Yes. centers and since of the added beginning second

the next-generation data we be in are until that happy device, the decision of performance our next-generation far. a we upon because that device, set would -- the we of want so to along made way that market on really to we we the have which so the enrollment just here extremely been based push had most And we with we although wait enrolling

you enrollment sites timing we're to I closed is the especially progress and enrollment, of to look good the think of our open when by towards full year, at additional So kind or end the goal making with at of that goal. be

Jeffrey Cohen

work Okay. I six-French then got as in a you filing? the sizing. as stand And it. as or follow of a trial Where on testing do now far front

Jeff Soinski

Yes.

of the provide the to up open Lumivascular all the low-profile, lesions open market much with on made it’s way very length we But larger in small a we're think we've we pleased in we've and do us available believe very the that device strategically about. down are. up for with they vessels, physicians and to ankle. wherever So our progress benefit given talked We opportunity to important as the

all And completed file now verification next we user the as to and our which validation, announce DVT our, step well expect are have our the to and this internal will -- testing with of and we what’s so we as quarter. submission call, testing FDA XXX(k) be

Jeffrey Cohen

Okay.

through Okay. of can three And or can Got your commercialization like total walk for will the next, far the general a look of me … quarters as say, now you and that activity organization sense it. commercial overall, as two what or me over give you size size the just current Jeff,

Jeff Soinski

Right.

commercial same at our our maintained since size the quarter. have about we So organization last

are of adding. we the Pantheris that availability have the strategically However, we now next-generation

on of -- significant. the but I'm we folks -- by another quite the the absolute build not the six year, first four large a a an of end add number, basis which maybe the As sorry on quarter you'll a basis we remember year lot say end to is ended XX about expect by at and to

start right we experience and get clinic, can had who recruiting actively to the other through actually territories of productive productive XXXX is quickly. depending But on a become focus an be are who getting the primary them so have certainly people just they upon now. in Our couple and fourth We emphasis the in hiring. in folks the with to up focus that timing a can speed, and of quarter recently

Jeffrey Cohen

an I And give Pantheris far Mark, walk that the for as may, it. off of discontinuing sales about million could more let's if the of the one think inventory worked Got represents, it gave through inventory if me the version you $X.X as previous me inventory? Okay. I say comment percent what that are you're indication of of you and $XXX,XXX

Mark Weinswig

Yeah.

So -- the thanks question. for Jeff,

So inventory taking we value actually would regarding we into account our X/XX Pantheris device. that inventory of not selling the as is that the levels, be have the version fact older of already

the So believe are of right inventory of now that reflection opportunity good kind the as we current the we have value organization. for of that

Jeffrey Cohen

Okay.

no to on So, all write-downs the at further inventory? expect

Mark Weinswig

time, no. this Yeah. None expected

Jeffrey Cohen

Okay. me. does Appreciated That it guy. Perfect. for Thanks it.

Jeff Soinski

Thanks for your Jeff. questions,

Jeffrey Cohen

Yeah.

Operator

to this would Thank to additional you. Thank time. I you. concluding for Instructions] floor the comments like turn [Operator management at back over

Jeff Soinski

like Avinger close the and quarter. on I'd thank to the call, strong we team a While congratulate

all including us, a Thalmann updating notices we on Avinger of our of our appreciate the all we We'll work issuing we're are we important to the will the Xnd, afternoon call look results. at New in you upcoming Micro Thank We progress report lot Xth, Conference and conferences, and we the but involved. have when making on for forward and interest Ladenburg the our and telling time. ahead be LD efforts October out few company -- at your quarter third pleased a joining in of on in again this York on and Xst October Healthcare the appropriate Wainwright with story September investor Conference be H.C. progress appreciate

Operator

and gentlemen, may thank Ladies participation at disconnect Again, conclude you and teleconference. does you today’s we your lines this time. this for

Avinger (AVGR) 13 Aug 182018 Q2 Earnings call transcript