Avinger Reports First Quarter 2024 Results
Avinger (Nasdaq: AVGR), a medical device company specializing in image-guided systems for vascular disease, reported Q1 2024 revenue of $1.9 million with an 18% gross margin. Operating expenses rose to $5.4 million, resulting in a net loss of $5.5 million. The company initiated Phase III studies for its coronary CTO-crossing system and announced a $15 million equity funding agreement with Zylox-Tonbridge, opening access to the Chinese market. Avinger also exchanged $61 million Series A preferred stock for $10 million Series A-1 stock with no liquidation or dividend preference.
- Revenue steady at $1.9 million in Q1 2024.
- Phase III studies initiated for coronary CTO system.
- Strategic $15 million equity funding agreement with Zylox-Tonbridge.
- Debt restructuring extending principal payments to 2027.
- Potential market expansion to China.
- Gross margin fell to 18% from 34% YoY.
- Net loss increased to $5.5 million from $4.6 million YoY.
- Operating expenses increased to $5.4 million from $4.9 million YoY.
- Adjusted EBITDA loss of $3.9 million, unchanged YoY.
- Series A preferred stock exchanged for significantly lower value Series A-1 stock.
Insights
Avinger, Inc. reported its first quarter 2024 financials, showing total revenue of
Operating expenses increased to
For retail investors, the flat revenue and increasing losses may be concerning. The strategic partnership with Zylox-Tonbridge has potential but hasn't yet translated into financial performance improvements. If the gross margin continues to fall and operating expenses rise, profitability remains a distant goal.
The initiation of Phase III verification and validation studies for Avinger's image-guided coronary CTO-crossing system is an important step towards filing an IDE application. This is a critical phase where the product's safety and efficacy are rigorously tested before it can be used more widely. If successful, it could lead to FDA approval, allowing Avinger to tap into the coronary artery disease market, which is significantly larger than the peripheral vascular disease market they currently serve.
The ongoing commercial launch of the Tigereye ST and Pantheris LV devices should be closely monitored. These products, if adopted widely, have the potential to drive revenue growth. However, this is contingent on clinical success and patient outcomes which will take time to manifest. Investors should be aware that the medical device approval process is lengthy and can be fraught with setbacks.
The new strategic partnership with Zylox-Tonbridge is noteworthy. It not only brings immediate funding but also facilitates market entry into China, a rapidly growing market for medical devices. Zylox-Tonbridge's established channels can expedite Avinger's market penetration in China, potentially increasing sales volume significantly.
However, investors should consider the risks associated with entering a new market, such as regulatory hurdles, competition from local players and cultural differences in business practices. Furthermore, the restructuring of the Series A preferred stock reduces the financial burden but reflects a significant devaluation, which can be seen as a red flag regarding investor confidence in existing assets.
Advances New OCT-Guided Coronary Product Development
REDWOOD CITY, CA / ACCESSWIRE / May 15, 2024 / Avinger, Inc. (Nasdaq:AVGR), a commercial-stage medical device company developing and marketing the first and only intravascular image-guided, catheter-based systems for diagnosis and treatment of vascular disease, today reported results for the first quarter ended March 31, 2024.
First Quarter and Recent Highlights
- Reported first quarter 2024 revenue of
$1.9 million , and gross margin of18% - Continued full commercial launch of Tigereye ST, Avinger's most advanced image-guided peripheral CTO-crossing device, and limited launch of the new Pantheris LV (large vessel) image-guided atherectomy device
- Initiated Phase III verification and validation studies for Avinger's proprietary image-guided coronary CTO-crossing system in preparation for IDE submission, anticipated in the third quarter of 2024
- Announced a strategic partnership and up to
$15 million equity funding agreement with Zylox-Tonbridge, of which$7.5 million was funded in March 2024, opening a pathway to the greater China market - Exchanged Series A preferred stock with an aggregate liquidation preference of
$61 million for new Series A-1 preferred stock with a value of$10 million and no liquidation or dividend preference
"We are excited to commence Phase III verification and validation studies for our innovative coronary CTO solution in preparation for filing an IDE application later this year," said Jeff Soinski, Avinger's President and CEO. "We believe that our proprietary image-guided approach has the potential to offer superior, simplified, and more predictable clinical outcomes for crossing chronic total occlusions in the coronary arteries, redefining this large and underserved market, while immediately accessing established reimbursement codes for both coronary CTO-crossing and OCT-diagnostic imaging following clearance.
"We recently began a new strategic partnership with Zylox-Tonbridge, a dynamic leader in the peripheral interventional market in China, providing strategic equity funding and opening a proven commercial channel for Avinger products to enter the robust and growing greater China market. The strategic relationship also provides the opportunity to partner with Zylox-Tonbridge to develop a more cost-efficient manufacturing structure to support the growth of global sales and improve gross margin."
First Quarter 2024 Financial Results
Total revenue was
Gross margin for the first quarter of 2024 was
Net loss and comprehensive loss for the first quarter of 2024 was
Adjusted EBITDA, as defined under non-GAAP financial measures in this press release, was a loss of
Cash and cash equivalents totaled
In March 2024, CRG Partners, the primary holder of Avinger debt and preferred equity exchanged its Series A preferred stock with an aggregate liquidation preference of
Conference Call
Avinger will hold a conference call today, May 15, 2024, at 4:30pm ET to discuss its fourth quarter 2023 financial results.
To listen to a live webcast, please visit http://www.avinger.com and select Investor Relations. To join the call by telephone, please dial +1-973-528-0011 and use passcode 971186. A webcast replay of the call will be available on Avinger's website following completion of the call at www.avinger.com.
About Avinger, Inc.
Avinger is a commercial-stage medical device company that designs and develops the first image-guided, catheter-based system for the diagnosis and treatment of patients with vascular disease in the peripheral and coronary arteries. Avinger is dedicated to radically changing the way vascular disease is treated through its Lumivascular platform, which currently consists of the Lightbox series of imaging consoles, the Ocelot and Tigereye® family of chronic total occlusion (CTO) catheters, and the Pantheris® family of atherectomy devices for the treatment of peripheral artery disease (PAD), estimated to affect more than 200 million people worldwide. Avinger is developing its first product application for the treatment of coronary artery disease (CAD), an image-guided system for CTO-crossing in the coronary arteries, which provides the opportunity to redefine a large and underserved market. Avinger is based in Redwood City, California. For more information, please visit www.avinger.com.
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Forward-Looking Statements
This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. These forward-looking statements include statements regarding our future performance, patient and physician benefits of our products, our anticipated filing of an IDE application, the impacts of our products on the treatment of vascular disease, our ability to successfully develop new products, the benefits of our partnership with Zylox-Tonbridge, including relating to our products entering the China market, the opportunity to develop a more cost-efficient manufacturing structure and potential revenue growth and increased sales productivity. Such statements are based on current assumptions that involve risks and uncertainties that could cause actual outcomes and results to differ materially. These risks and uncertainties, many of which are beyond our control, include our dependency on a limited number of products; the resource requirements related to Pantheris, Tigereye and our Lightbox imaging console; the outcome of clinical trial results; the adoption of our products by physicians; our ability to obtain regulatory approvals for our products; as well as the other risks described in the section entitled "Risk Factors" and elsewhere in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 20, 2024, and Quarterly Reports on Form 10-Q. These forward-looking statements speak only as of the date hereof and should not be unduly relied upon. Avinger disclaims any obligation to update these forward- looking statements.
Non-GAAP Financial Measures
Avinger has provided in this press release financial information that has not been prepared in accordance with generally accepted accounting principles in the United States (GAAP). The Company uses these non-GAAP financial measures internally in analyzing its financial results and believes that the use of these non-GAAP financial measures is useful to investors as an additional tool to evaluate ongoing operating results and trends and in comparing the Company's financial results with other companies in its industry, many of which present similar non-GAAP financial measures.
The presentation of these non-GAAP financial measures should not be considered in isolation or as a substitute for comparable GAAP financial measures, and should be read only in conjunction with the Company's financial statements prepared in accordance with GAAP. A reconciliation of the Company's non-GAAP financial measures to their most directly comparable GAAP measures has been provided in the financial statement tables included in this press release, and investors are encouraged to review these reconciliations.
Adjusted EBITDA. Avinger defines Adjusted EBITDA as net loss and comprehensive loss plus interest expense, net, plus other income, net, plus stock-based compensation expense plus certain inventory charges plus certain depreciation and amortization expense. Investors are cautioned that there are a number of limitations associated with the use of non-GAAP financial measures as analytical tools. Furthermore, these non-GAAP financial measures are not based on any standardized methodology prescribed by GAAP, and the components that Avinger excludes in its calculation of non-GAAP financial measures may differ from the components that its peer companies exclude when they report their non-GAAP results of operations. Avinger compensates for these limitations by providing specific information regarding the GAAP amounts excluded from these non-GAAP financial measures. In the future, the Company may also exclude other non-recurring expenses and other expenses that do not reflect the Company's core business operating results.
Investor Contact:
Matt Kreps
Darrow Associates Investor Relations
(214) 597-8200
mkreps@darrowir.com
Public Relations Contact:
Phil Preuss
Chief Commercial Officer
Avinger, Inc.
(650) 241-7942
pr@avinger.com
Statements of Operations and Comprehensive Loss
(in thousands, except per share amounts) (unaudited)
| For the Three Months Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2024 | 2023 | 2023 | ||||||||||
Revenues | $ | 1,859 | $ | 1,906 | $ | 1,888 | ||||||
Cost of revenues | 1,516 | 1,532 | 1,252 | |||||||||
Gross profit | 343 | 374 | 636 | |||||||||
Operating expenses | ||||||||||||
Research and development | 1,062 | 1,152 | 1,356 | |||||||||
Selling, general and administrative | 4,370 | 3,837 | 3,538 | |||||||||
Total operating expenses | 5,432 | 4,989 | 4,894 | |||||||||
Loss from operations | (5,089 | ) | (4,615 | ) | (4,258 | ) | ||||||
Interest expense, net | (416 | ) | (427 | ) | (392 | ) | ||||||
Other income (expense), net | (12 | ) | 18 | 6 | ||||||||
Net loss and comprehensive loss | (5,517 | ) | (5,024 | ) | (4,644 | ) | ||||||
Accretion of preferred stock dividends | (65 | ) | - | (1,218 | ) | |||||||
Gain on exchange of Series A for Series A-1 convertible preferred stock | 1,908 | - | - | |||||||||
Net loss applicable to common stockholders | $ | (3,674 | ) | $ | (5,024 | ) | $ | (5,862 | ) | |||
Net loss per share attributable to common stockholders | ||||||||||||
basic and diluted | $ | (2.49 | ) | $ | (3.93 | ) | $ | (10.70 | ) | |||
Weighted average common shares used to compute | ||||||||||||
net loss per share, basic and diluted | 1,477 | 1,280 | 548 | |||||||||
| All share and per share data reflect the impact of the reverse stock split effective September 12, 2023. | ||||||||||||
Reconciliation of Adjusted EBITDA to Net Loss and Comprehensive Loss
(in thousands) (unaudited)
| For the Three Months Ended | ||||||||||||
| March 31, | December 31, | March 31, | ||||||||||
| 2024 | 2023 | 2023 | ||||||||||
Net loss and comprehensive loss | $ | (5,517 | ) | $ | (5,024 | ) | $ | (4,644 | ) | |||
Add: Interest expense, net | 416 | 427 | 392 | |||||||||
Add: Other (income) expense, net (1) | 12 | (18 | ) | (6 | ) | |||||||
Add: Stock-based compensation | 1,096 | 237 | 245 | |||||||||
Add: Certain depreciation and amortization charges | 83 | 75 | 72 | |||||||||
Adjusted EBITDA | $ | (3,910 | ) | $ | (4,303 | ) | $ | (3,941 | ) | |||
| (1) Other (income)expense, net primarily represents other miscellaneous income and expenses. Since these charges are non-operational, unusual or infrequent in nature, they are excluded accordingly. | ||||||||||||
Balance Sheet
(in thousands, except per share amounts) (unaudited)
| Assets | March 31, | December 31, | ||||||
| 2024 | 2023 | |||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 7,174 | $ | 5,275 | ||||
Accounts receivable, net of allowance for doubtful accounts | ||||||||
of | 1,377 | 1,014 | ||||||
Inventories | 4,562 | 5,298 | ||||||
Prepaid expenses and other current assets | 1,008 | 575 | ||||||
Total current assets | 14,121 | 12,162 | ||||||
Right of use asset | 1,991 | 1,102 | ||||||
Property and equipment, net | 523 | 487 | ||||||
Other assets | 225 | 19 | ||||||
Total assets | $ | 16,860 | $ | 13,770 | ||||
Liabilities and Stockholders' Deficit | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 747 | $ | 777 | ||||
Accrued compensation | 2,523 | 2,311 | ||||||
Accrued expenses and other current liabilities | 822 | 817 | ||||||
Leasehold liability, current portion | 1,156 | 1,102 | ||||||
Preferred stock dividends payable | 65 | - | ||||||
Borrowings | 14,751 | 14,293 | ||||||
Total current liabilities | 20,064 | 19,300 | ||||||
Leasehold liability, long-term portion | 835 | - | ||||||
Other long-term liabilities | 15 | 672 | ||||||
Total liabilities | 20,914 | 19,972 | ||||||
Stockholders' deficit: | ||||||||
Convertible preferred stock, par value | - | - | ||||||
Common stock, par value | 2 | 1 | ||||||
Additional paid-in capital | 422,157 | 414,493 | ||||||
Accumulated deficit | (426,213 | ) | (420,696 | ) | ||||
Total stockholders' deficit | (4,054 | ) | (6,202 | ) | ||||
Total liabilities and stockholders' deficit | $ | 16,860 | $ | 13,770 | ||||
SOURCE: Avinger, Inc.
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