Silk Road Medical Reports Fourth Quarter and Full Year 2020 Financial Results

Rhea-AI Summary

Silk Road Medical reported a 19% increase in revenue for 2020, totaling $75.2 million, driven by growing adoption of its ENROUTE Transcarotid Stent System, despite COVID-19 impacts. The company submitted a PMA supplement to the FDA to expand treatment indications to standard surgical risk patients. Operating expenses rose by 28% to $96.8 million, primarily due to growth in personnel and commercialization efforts. The net loss for 2020 was $47.4 million, an improvement from the previous year's loss of $52.4 million. For 2021, revenue guidance is projected between $102 million and $108 million.

Positive

• 2020 revenue increased by 19% to $75.2 million.
• Net loss improved to $47.4 million compared to $52.4 million in 2019.
• Projected revenue for 2021 ranges from $102 million to $108 million.

Negative

• Operating expenses increased by 28% to $96.8 million.
• Gross margin declined to 72% from 75% due to unfavorable production variances.

Submitted PMA Supplement for ENROUTE Stent in Standard Surgical Risk Patients

SUNNYVALE, Calif., March 01, 2021 (GLOBE NEWSWIRE) -- Silk Road Medical, Inc. (Nasdaq: SILK), a company focused on reducing the risk of stroke and its devastating impact, today reported financial results for the three months and full year ended December 31, 2020.

Silk Road Medical also announced it has submitted a Pre-Market Approval (PMA) supplement to the Food and Drug Administration (FDA) for the ENROUTE Transcarotid Stent System which is intended to expand indications for use to include the treatment of patients at standard risk for adverse events from carotid endarterectomy. This supplement follows the original PMA approval for the ENROUTE Transcarotid Stent System in high surgical risk patients.

“Throughout 2020, we made meaningful progress on our strategic, market development, and commercial goals which is a testament to the tenacity of our team and the underlying demand for TCAR,” said Erica Rogers, President and Chief Executive Officer of Silk Road Medical. “We are well positioned for growth and success in 2021 and beyond, as we work to drive deeper physician adoption and further expand our total addressable market.”

Fourth Quarter 2020 Financial Results
Revenue for the fourth quarter of 2020 was $21.1 million, an increase of $2.5 million or 13%, compared to the fourth quarter of 2019.

Gross profit for the fourth quarter of 2020 was $15.9 million compared to $13.9 million for the fourth quarter of 2019. Gross margin for the fourth quarter of 2020 was flat at 75% compared to the fourth quarter of 2019 as improvements in productivity were offset by the timing of previously announced investments in manufacturing engineering and infrastructure projects.

Operating expenses were $30.9 million for the fourth quarter of 2020, compared to $21.4 million in the corresponding prior year period, which represents an increase of 44%. The increase was driven by selling, general and administrative expenses related to growth in personnel and continued commercialization initiatives as well as the timing of certain research and development expenses, partially offset by the continued reduction in travel, tradeshow and other expenses due to COVID-19.

Net loss was $16.8 million in the fourth quarter of 2020, or a loss of $0.49 per share, as compared to a loss of $8.3 million, or $0.27 per share, in the corresponding period of the prior year.

Full Year 2020 Financial Results
Revenue for the full year 2020 was $75.2 million, an increase of $11.9 million or 19%, compared to 2019. The increase was driven primarily by growing adoption of TCAR across an expanded base of hospital accounts, trained physicians, and sales territories, partially offset by the impact of COVID-19.

Gross profit for the full year 2020 was $53.9 million compared to $47.4 million for 2019. Gross margin for the full year 2020 declined to 72% compared to 75% in 2019, driven by unfavorable production variances as a result of temporarily idled manufacturing operations due to COVID-19, and previously announced investments in manufacturing engineering and infrastructure projects. The decline was partially offset by the decrease in the provision for sales returns in the second quarter.

Operating expenses were $96.8 million for the full year 2020, compared to $75.5 million in the corresponding prior year period, which represents an increase of 28%. The increase was driven by the timing of certain research and development initiatives and selling, general and administrative expenses related to growth in personnel and continued commercialization initiatives and partially offset by the continued reduction in travel, tradeshow and other expenses due to COVID-19.

Net loss was $47.4 million in the full year 2020, or a loss of $1.44 per share, as compared to a loss of $52.4 million, or $2.28 per share, in the corresponding period of the prior year. This metric for the full year 2019 included a $21.0 million noncash charge resulting from the remeasurement of the fair value of our convertible preferred stock warrant liability. We continued to record adjustments to the estimated fair value of the convertible preferred stock warrants until they were exercised in connection with our IPO offering in April 2019.

Cash, cash equivalents, and short-term investments were $147.5 million as of December 31, 2020.

2021 Financial Guidance
Silk Road Medical projects revenue for the full year 2021 to range from $102 million to $108 million.

Conference Call
Silk Road Medical will host a conference call at 1:30 p.m. PT / 4:30 p.m. ET on Monday, March 1, 2021 to discuss its fourth quarter and full year 2020 financial results. The call may be accessed through an operator by calling (844) 883-3861 for domestic callers and (574) 990-9820 for international callers using conference ID: 3554549. A live and archived webcast of the event will be available at https://investors.silkroadmed.com/.  

About Silk Road Medical
Silk Road Medical, Inc. (NASDAQ: SILK), is a medical device company located in Sunnyvale, California, that is focused on reducing the risk of stroke and its devastating impact. The company’s flagship procedure, TransCarotid Artery Revascularization (TCAR), is clinically proven to treat blockages in the carotid artery at risk of causing a stroke. For more information on how Silk Road Medical is delivering brighter patient outcomes through brighter clinical thinking, visit www.silkroadmed.com and connect on Twitter, LinkedIn and Facebook.        

Forward-Looking Statements
This press 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 statements include statements regarding the impact of COVID-19 on our business, financial guidance, progress made on achieving our corporate goals, and the overall strength of our business and culture. 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 risks described in the section entitled Risk Factors and elsewhere in our filing made with the Securities and Exchange Commission in Silk Road’s Quarterly Report on Form 10-Q filing made with the Securities and Exchange Commission on November 16, 2020. These forward-looking statements speak only as of the date hereof and should not be unduly relied upon. Silk Road Medical disclaims any obligation to update these forward-looking statements.

Investors:
Lynn Lewis or Caroline Paul
Gilmartin Group
investors@silkroadmed.com

Media:
Michael Fanucchi
Silk Road Medical
mfanucchi@silkroadmed.com

SILK ROAD MEDICAL, INC.
Statements of Operations Data
(Unaudited, in thousands, except share and per share data)

			Three Months Ended December 31,								Year Ended December 31,
				2020				2019				2020				2019
Revenue			$	21,133			$	18,634			$	75,227			$	63,354
Cost of goods sold				5,217				4,721				21,291				15,927
		Gross profit		15,916				13,913				53,936				47,427
Operating expenses:
	Research and development			10,036				3,264				21,271				12,272
	Selling, general and administrative			20,872				18,156				75,524				63,220
		Total operating expenses		30,908				21,420				96,795				75,492
		Loss from operations		(14,992	)			(7,507	)			(42,859	)			(28,065	)
Interest income				152				441				1,104				1,656
Interest expense				(791	)			(1,217	)			(4,411	)			(4,952	)
Loss on debt extinguishment				(1,119	)			-				(1,119	)			-
Remeasurement of warrant liability and other income (expense), net				(6	)			(8	)			(80	)			(21,054	)
		Net loss		(16,756	)			(8,291	)			(47,365	)			(52,415	)
Other comprehensive loss:
	Unrealized gain (loss) on investments, net			(113	)			-				37				2
Net change in other comprehensive loss				(113	)			-				37				2
Net loss and comprehensive loss			$	(16,869	)		$	(8,291	)		$	(47,328	)		$	(52,413	)
Net loss per share, basic and diluted			$	(0.49	)		$	(0.27	)		$	(1.44	)		$	(2.28	)
Weighted average common shares used to compute net loss per share, basic and diluted				34,063,121				30,989,705				32,965,539				22,956,679

SILK ROAD MEDICAL, INC.
Balance Sheets Data
(Unaudited, in thousands)

							December 31, 2020				December 31, 2019
Assets
Current assets
	Cash and cash equivalents						$	69,466			$	39,181
	Short-term investments							78,016				51,508
	Accounts receivable, net							9,070				8,601
	Inventories							9,989				10,322
	Prepaid expenses and other current assets							6,787				2,878
					Total current assets			173,328				112,490
	Long-term investments							-				18,224
	Property and equipment, net							2,844				2,734
	Restricted cash							310				310
	Other non-current assets							2,832				3,644
					Total assets		$	179,314			$	137,402
Liabilities and stockholders' equity
Current liabilities
	Accounts payable						$	2,598			$	1,898
	Accrued liabilities							16,957				15,034
					Total current liabilities			19,555				16,932
	Long-term debt							48,533				44,879
	Other liabilities							3,726				3,700
					Total liabilities			71,814				65,511
Stockholders' equity
	Preferred stock, $0.001 par value							-				-
	Common stock, $0.001 par value							34				31
Additional paid-in capital								346,318				263,384
Accumulated other comprehensive income								39				2
Accumulated deficit								(238,891	)			(191,526	)
					Total stockholders' equity			107,500				71,891
					Total liabilities and stockholders' equity		$	179,314			$	137,402

FAQ

What were Silk Road Medical's 2020 revenue results?

Silk Road Medical reported revenues of $75.2 million for the full year 2020, a 19% increase from 2019.

What is the projected revenue for Silk Road Medical in 2021?

Silk Road Medical projects its revenue for 2021 to be between $102 million and $108 million.

What was the net loss for Silk Road Medical in 2020?

The net loss for Silk Road Medical in 2020 was $47.4 million, an improvement from a loss of $52.4 million in 2019.

What is the significance of the PMA supplement submitted by Silk Road Medical?

The PMA supplement aims to expand the use of the ENROUTE Transcarotid Stent System to standard surgical risk patients, enhancing market potential.