Avinger, Inc. (NASDAQ:AVGR) Q3 2023 Earnings Call Transcript

Avinger, Inc. (NASDAQ:AVGR) Q3 2023 Earnings Call Transcript October 26, 2023

Avinger, Inc. misses on earnings expectations. Reported EPS is $-2.92 EPS, expectations were $-2.85.

Operator: Greetings. Welcome to the Avinger Third Quarter 2023 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] Please note, this conference is being recorded. I will now turn the conference over to your host, Matt Kreps, Investor Relations at Avinger. You may begin.

Matt Kreps: Thank you and thank you all for participating in today’s call. I’d like to welcome you to Avinger’s third quarter 2023 conference call. Joining us today are Avinger’s CEO, Jeff Soinski; and Principal Financial Officer, Nabeel Subainati. Earlier today, Avinger release financial results for the quarter ended September 30, 2023. A copy of the release is posted on the Avinger website under Investor Relations. Before we begin, I’d like to remind you that management will make statements during this call that include forward-looking statements within the meaning of federal securities laws, which may be pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical fact should be deemed to be forward-looking statements.

All forward-looking statements, including, without limitation or future financial expectations, are based upon our current estimates and various functions. These statements involve material risks and uncertainties that could cause actual results or events to differ materially from those anticipated or implied by these forward-looking statements. Accordingly, you should place — you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please see our Form 10-K and 10-Q filings with the Securities and Exchange Commission. Avinger disclose any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events or otherwise.

Today’s presentation will also include references to non-GAAP financial measures such as adjusted EBITDA. A reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures is available within the earnings release, which can be found on Avinger’s website. Now, with that, I’d like to now turn the call over to Jeff.

Jeff Soinski: Thank you, Matt. Good afternoon and thank you all for joining us. The third quarter was another exciting period for Avinger as we started commercial activities on two innovative new devices, Tigereye ST and Pantheris LV, after receiving FDA 510(k) clearance in the second quarter. These two products not only bring new capabilities to their respective markets, they also represent the first time we have had the opportunity to launch two new major catheter products in the same year. While revenue declined as a result of lower sales head count during the quarter, we maintained good momentum in our business on a sales productivity basis. We announced today an exciting growth initiative for our sales team and we are confident that the commercial introduction of Tigereye ST and Pantheris LV combined with an expanded field presence will provide meaningful growth opportunities for our PAD business in 2024.

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Q&A Session

With the launch of these two new catheter products, the build-out of our image-guided peripheral portfolio is largely complete, allowing us to focus our primary R&D efforts on the development of our first coronary product application. We believe we can redefine the market for coronary CTO crossing with a superior, simplified and more predictable image-guided solution for a complex and challenging condition, and we are excited to extend our proprietary image-guided technology to this large and underserved market with established reimbursement already in place. We made significant progress on this initiative during the third quarter, including successfully completing a second round of animal studies and a first round of human cadaver heart studies at a leading clinical institution.

Based on our progress to-date, we believe we remain on track to file an investigational device exemption or IDE application with the FDA in the middle of next year to allow for initiation of a clinical study following approval. While we are excited about the potential for our new products to provide new growth opportunities for the company, we are also focused on improving operating metrics for our current PAD portfolio. While we saw a decline in total revenue related to a reduction in sales headcount, sales productivity or revenue per sales head remains strong for our existing team members in the third quarter. With revenue per sales rep increasing and revenue for total sales heads remaining consistent with the prior quarter. In our press release today, we announced plans to expand our direct sales team by more than 25% in the fourth quarter.

By investing in the growth of our sales team over the next 12 months, we expect to strengthen our selling capabilities in existing territories and enable our organization to provide more focused and consistent clinical support in high volume hospital centers. We also provide the opportunity to expand our sales footprint to new territories that are contiguous with our highest performing regions, as well as expand into new geographic areas over the next 12 months. Combined with our two new catheter product launches and our highly portable Lightbox 3 imaging console launched last year, we are confident that these investments will drive meaningful revenue growth for our PAD business in 2024. In our press release, we also announced that Phil Preuss will lead these efforts in his new role as Chief Commercial Officer, with executive management responsibility for all sales and marketing activities.

Phil is one of Avinger’s longest-serving employees and he brings over 15 years of direct industry experience to this expanded role. He understands the clinical setting and our customer needs at a deep level and has led the commercial launch and development of our advanced product portfolio in his prior position as Chief Marketing Officer. Phil has the full support of our sales leadership team and I am confident he will make a positive impact in this new role. Let me take a few minutes to provide updates on our two newest peripheral products. We received 510(k) clearance for our new Tigereye ST high-speed CTO crossing catheter in April and initiated limited launch in May. Based on the positive physician feedback, clinical outcomes and product reliability demonstrated during the limited launch period, we made the decision in September to advance Tigereye ST to full commercial launch.

17 physicians at 13 sites have now completed approximately 60 cases with the new system. Our sales team is focused on expanding the penetration of Tigereye ST into new sites and new users in existing sites and we are excited about the potential for this advanced technology platform to drive growth of our CTO business in the fourth quarter. For those new to the call, Tigereye ST is a low-profile 5 French system designed across chronic total occlusions or CTOs, which are completely blocked arteries in the peripheral vasculature both above and below-the-knee. Tigereye ST spin at speeds up to 1,000 RPM and generates high definition OCT imaging during the procedure, providing real-time information to guide treatment and help physicians stay in the true lumen during crossing, a critical advantage for the patient.

Tigereye ST has an innovative and unique user-controlled deflectable tip to precisely direct the catheter during treatment and incorporates multiple design upgrades in the tip configuration and catheter shaft to increase crossing power and procedural success. In June, we received 510(k) clearance for our new Pantheris LV image-guided atherectomy system, marking the first time Avinger has received 510(k) clearance for two new catheter products in the same year and making a tremendous leap forward for our high-speed peripheral portfolio. We developed Pantheris LV with the objective of streamlining the atherectomy procedure, opening additional user and case opportunities for our platform and in combination with our Lightbox 3 imaging console, expanding the mainstream appeal of our image-guided platform.