InspireMD, Inc. (NSPR) Q2 2025 Earnings Report, Transcript and Summary

Good morning, and welcome to InspireMD's Second Quarter 2025 Earnings Conference Call. [Operator Instructions] We will be facilitating a question-and-answer session towards the end of today's call. As a reminder, this call is being recorded for replay purposes. I would now like to turn the call over to Marissa Bych with -- from Gilmartin Group for introductory disclosures.

Thank you for joining us for the InspireMD Second Quarter 2025 Conference Call. Joining us today from InspireMD are Marvin Slosman, Chief Executive Officer; and Mike Lawless, Chief Financial Officer. During this call, management will be making forward- looking statements, not historical facts, which are based upon management's current expectations, beliefs and projections, many of which, by their nature, are inherently uncertain. These forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those expressed in such forward-looking statements. For more information about these risks, please refer to the risk factors described in InspireMD's most recently filed periodic reports on Form 10-K and Form 10-Q or any other updates in our current reports on Form 8-K filed with the U.S. Securities and Exchange Commission and InspireMD's press release that accompanies this call, particularly the cautionary statements made in it. This call contains time-sensitive information that is accurate only as of today, August 5, 2025. Except as required by law, InspireMD disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn the call over to Marvin Slosman, Chief Executive Officer. Marvin, please go ahead.

Thank you, and good morning, everyone. We're happy to welcome you to today's call at this exciting and transformative moment for our company. Before we review our recent progress and second quarter results, I'd like to take a moment to formally welcome Mike Lawless, our new Chief Financial Officer. Mike brings decades of financial leadership and deep expertise to InspireMD as well as a clear commitment to our mission and to the patients we serve. I'd also like to thank Craig Shore for his contribution and dedication over the past 15 years. His impact on the company's foundation and trajectory has been invaluable and is a big part of why we are here today. Turning to our recent progress as a business. Today's call comes just about a month after we received FDA premarket approval for our CGuard Prime Carotid Stent System, the most significant milestone in our company's history to date. We are now commencing on our U.S. commercial launch, leveraging our wealth of experience from over 30 OUS markets with over 60,000 patients treated to date to take the first step toward our mission of leading the U.S. carotid interventional market. I want to take a moment to reiterate what sets us apart as we step into this immense opportunity. Our mission is clear: to transform the carotid intervention market and deliver best-in-class patient outcomes through a stent-first approach. Over 3 million people globally have been diagnosed with carotid artery disease with countless others remaining undiagnosed, while only 155,000 are treated annually in the United States. These patients are at risk of stroke with deadly and profound debilitating outcomes. We've invested years of effort and expertise to build an innovative stent platform, CGuard Prime, that redefines success for these patients and their providers by lowering the risk of strokes and other major adverse events to levels never achieved with stenting or surgery as validated with rigorous evidence, proven clinical results and real-world experience. We are the first company to invest in the broadest toolkit of carotid procedures supporting both carotid artery stenting known as CAS and transcarotid artery revascularization known as TCAR with an implant-first procedure-agnostic strategy. Our approach has resonated strongly with physicians who are eager for innovation to improve outcomes and practice performance while addressing the full scope of carotid intervention. In 2023, a CMS shift further catalyzed this opportunity, positioning stenting as the emerging go-to treatment. We've built a strong foundation to capitalize on this shift with a world-class team, solid infrastructure and a sizable balance sheet, all fueling our momentum. Thanks to our investors' confidence in our strategy and plan, we were funded and well prepared to commercialize at approval. We're now building traction and velocity to create and capture market demand. At the core of our business, we have a stent platform delivering next-level outcomes ready to transform the vascular market. With the assets we've built, the evidence we've generated and the team we've assembled, we are now well positioned to execute our U.S. launch with excellence to drive growth, expansion and shareholder value. Turning to our launch progress. In recent weeks, we've begun to strategically execute our commercial playbook in many U.S. centers. Our sales team is taking a methodical approach, leveraging claims and market data to target accounts. Early interest has been strong as we navigate value analysis committee approvals and educate providers about our differentiated stent system. As of today, we've successfully completed approvals, orders and commercial procedures in numerous accounts and hospital systems, a reflection of the enthusiasm and demand. We are not simply executing a product launch. We are laying the foundation to redefine the carotid intervention market. A successful launch starts with the right team, and we are proud of the exceptional group we've assembled. Our sales and clinical support specialists bring deep experience in the vascular markets, established relationships with physicians and administrators and a proven ability to launch innovative products successfully. Their expertise and understanding of account dynamics are already driving engagement and establishing our presence nationwide. We continue to receive overwhelming interest from highly experienced professionals eager to join our team. This is a testament to the demand and awareness of CGuard Prime in the field, the promise of the talent we've already attracted and the sizable opportunity in a stent-first carotid intervention. Our team experienced the enthusiasm of our technology firsthand just a few weeks ago at the Society of NeuroInterventional Surgery's Annual Meeting. The energy surrounding CGuard Prime was unmistakable. Our booth was the constant hub of activity, drawing the attention of many prominent U.S. physicians eager to learn more about how our innovation can transform carotid care. Time and again, we are hearing from doctors who are genuinely excited to offer this technology to elevate the standard of care and improve the lives of their patients. Moments like this reinforce our conviction in our technology and in our mission. We have built the infrastructure, assembled the team and developed the operational readiness to execute this launch with excellence, and we look forward to updating you all on our progress as we move through foundation building toward more robust commercial scale over the coming quarters. Turning now to our clinical pipeline, a critical component of our long-term growth strategy. We continue to make steady progress on multiple fronts as we work to expand the reach of our technology, build clinical evidence and unlock additional market opportunities. First, I'll update you on our pivotal studies in TCAR. In C-GUARDIANS II, we are evaluating CGuard Prime in a catheter designed for TCAR procedures used with neuroprotection systems that are already used commercially today. This study is designed to demonstrate the safety and effectiveness of CGuard Prime in TCAR procedures and to open this important segment of the market to our platform. We received the FDA IDE approval to initiate the study in late 2024, and I'm pleased to report that enrollment continues at a good pace as we continue to work toward first half of '26 approval. At the same time, we're advancing the next phase of our TCAR strategy with C-GUARDIANS III, which evaluates our fully integrated TCAR solution, combining a CGuard Prime 80 stent with our proprietary SwitchGuard neuroprotection system. This study is designed to showcase the full potential of our purpose-built solution for TCAR, offering physicians a comprehensive streamlined option that we believe can set a new standard in the field. Given the variability of time lines surrounding clinical enrollment and FDA review, we now anticipate clearance and launch in 2027. Together, these 2 pivotal studies are designed to strengthen our competitive position in TCAR, a U.S. market that already exceeds 30,000 procedures annually and to demonstrate the versatility and clinical value of our differentiated platform. We're also making progress in expanding the potential use of our technology into acute stroke care, particularly our tandem lesion early feasibility study, which we're conducting in partnership with Dr. Adnan Siddiqui at the Jacobs Institute in Buffalo, New York. This study evaluates the use of CGuard Prime in acute stroke patients with tandem lesions in conjunction with thrombectomy. These are highly complex, high- risk cases where embolic protection is critical, and we believe our proprietary MicroNet mesh technology is uniquely suited to deliver superior outcomes in this setting. To date, enrollment is roughly halfway complete. Initial physician interest underscores the unmet need and potential impact of our technology in this challenging patient population. Each of these clinical initiatives reflect our commitment to advancing the standard of care in carotid and neurovascular disease, building evidence to support our differentiated portfolio and unlocking new pathways for growth. We believe our dual focus on CAS and TCAR positions us to serve the broadest space of physicians while leading the shift toward a stent first standard of care. Before I turn the line to Mike to review our Q2 performance, I want to highlight 2 major recent achievements that strengthen our balance sheet. Last week, we successfully entered into a securities purchase agreement with a group of leading institutional investors, raising $40.1 million in gross proceeds through a private placement. In addition, we raised $17.9 million for the exercise of warrants that were triggered by FDA approval of CGuard Prime. This is the second tranche of warrants that were originally issued as a part of the company's milestone-based financing announced in May of 2023. These transactions achieved several important objectives in support of our growth strategy as we launch CGuard Prime in the U.S. market. First, they deepen the commitment of several of our largest existing shareholders while expanding our investor base with the addition of high-quality investors. Second, they significantly strengthened our cash position collectively bolstering our resources by over $58 million in proceeds, allowing us to invest in the commercial scale necessary to achieve key growth milestones and execute toward long-term profitability. Now we are even more confident in our ability to scale U.S. commercial operations effectively and position InspireMD to deliver meaningful growth and value over the coming quarters and years. Now I'll turn the call over to Mike to walk us through the financials. Mike?

Thanks, Marvin. Before I begin, I'd like to briefly say how excited I am to join InspireMD at such a pivotal moment in the company's trajectory. It's a tremendous opportunity to contribute to a team that's driving meaningful progress, and I look forward to supporting our continued growth and success. With that, let's turn to the second quarter results. For the second quarter of 2025, total revenue increased by 2% to $1.8 million. This increase was predominantly driven by increased usage in our international markets from the continued adoption of CGuard technology and the positive impact of foreign exchange, partially offset by decreased revenue from Russia and European distributors managing CGuard inventory levels in anticipation of the CGuard Prime launch in Europe. As expected, we did not recognize commercial revenue in the U.S. in Q2 as our FDA approval came in the last week of the quarter. However, we have begun to recognize U.S. commercial sales this quarter, positioning us for sequential revenue growth in Q3 and beyond. Our Q2 volumes add to the growing body of real-world experience. Globally, we have sold more than 60,000 implants to date. This track record reinforces our expertise, validates our innovative platform and highlights the strength of our global commercial infrastructure, all of which position us well as we shift our focus to the significant U.S. opportunity. Gross profit for the second quarter of 2025 decreased by $18,000 or 5.7% to $313,000 compared to a gross profit of $331,000 for the second quarter of 2024. This decrease in gross profit resulted from an increase in some production variances, partially offset by lower material and labor costs. Gross margin decreased to 17.6% during the 3 months ended June 30 from 19.0% during the 3 months ending June 30, 2024, driven by the above factors. Total operating expenses for the second quarter of 2025 were $13.3 million, an increase of $4.7 million or 55% compared to $8.6 million for the second quarter of 2024. This increase was primarily due to increases in headcount-related expenses as we continue to expand our U.S. personnel, particularly our commercial team to support the commercial launch of CGuard Prime in the United States. A second driver of our OpEx increase was occupancy and related expenses related to the establishment of our U.S. headquarters. Financial income decreased by $483,000 to $132,000 of financial expense from $351,000 of financial income for the second quarter of 2024. This decrease was primarily due to a $313,000 increase in financial expense related to changes in exchange rates and a $169,000 decrease in financial income from investments in marketable securities and money market funds. Net loss for the second quarter of 2025 totaled $13.2 million or $0.26 per basic and diluted share compared with a net loss of $7.9 million or $0.22 per basic and diluted share for the same period in 2024. As of June 30, 2025, cash and cash equivalents and marketable securities were $19.4 million compared to $26.1 million as of March 31, 2025. The June 30 cash balance does not include the $58 million in gross proceeds from our previously mentioned financing events. As mentioned above, the receipt of premarket approval from the FDA triggered the second of 4 milestone-based financing tranches pursuant to the transformational private placement of up to $113.6 million that we originally announced in May 2023. The remaining 2 milestones would each trigger additional tranche financings, including: one, the completion of 4 quarters of commercial sales of CGuard Prime in the United States, which we anticipate in the back half of 2026; and two, receipt of FDA clearance for the SwitchGuard TCAR neuroprotection system, along with the TCAR indicated CGuard Prime stent. While we are not providing guidance at this stage for our commercial launch, we look forward to sharing more about our progress and outlook when we report our Q3 results. Please keep in mind that while we are excited about the opportunity ahead, we know that a strong adoption trajectory will not be achieved overnight. We are executing a methodical launch to Marvin's earlier comments and we'll spend the next few months laying the foundation for robust future expansion. This concludes our prepared remarks. We will now open the call for questions. For the Q&A segment, we will be joined by Shane Gleason, InspireMD's Chief Commercial Officer. Operator?

[Operator Instructions] We'll take our first question from Adam Maeder with Piper Sandler.

Congrats on the progress. And to you, Mike, welcome and Craig, wishing you the best in the future. Two for me, and I guess I'll start with the first one, which is a little bit of a myopic question, but I just wanted to see if there's any more detail that you can share regarding your progress with U.S. account openings since FDA approval for CGuard Prime in late June? And as we think about subsequent quarters and even 2026 for that matter, are there any targets or framework that you want to provide for The Street as we think about kind of initial launch, whether that's revenue, market share, number of accounts, et cetera? And then I did have one follow-up.

Adam, this is Shane. I'll go ahead and start that one off and then maybe hand it off to Marvin for the second part of that. So we got approval about 6 weeks ago this week, and we're really excited about the progress that we've made. As we've noted previously, we have a commercial organization in the U.S. of around 20 people with a great majority of them in the field. We plan to continue scaling that and we're planning on adding roughly 10 people to that number by the end of the year. Having that group onboard at the time of approval, let us hit the ground running, I think it's common to see 6 weeks into an approval that very little, if anything, has occurred in the way of cases. We've actually done procedures with double-digit physicians, and we've even reached the point of beginning to secure shelf space with stocking orders in a number of those accounts. So I'd say the early reception has been exactly what we'd expected and hoped it to be, and we're off to a healthy start.

Adam, yes, this is Marvin. I think Shane framed it perfectly. I think that the opportunity for us was in our May 2023 financing. We were able to fuel a commercial team, a game plan and a playbook that allowed us to hit the road when we had approval, and we will continue to build off that momentum. We certainly understand that there's headwinds involved with building administrative approvals and all the things associated with readiness, and we have to have some patience in that regard. But I think overall, we've hired to the standard of being able to build access to these facilities and physicians. And so far, as Shane said, the reception has been overwhelming, and we really appreciate the fact that the market is receiving CGuard Prime as well as they have.

Okay. Perfect. That's great color there. And for the follow-up, I did want to ask about C-GUARDIANS III and SwitchGuard, your proprietary TCAR device, if I heard correctly in the prepared remarks, now expect clearance and launch in '27, a little bit of a wiggle from late '26, which I think was the prior expectation. Just wanted to, I guess, kind of better understand kind of what's driving the change in expected time lines? Is it related to device design? Is it pinning down clinical strategy and trial construction? Is it something else? And yes, just trying to kind of better understand the change in timing there and the confidence in getting clearance in '27.

Sure, Adam. Thanks. So just let's go back as a reminder of our overall TCAR strategy. It was built around the entry into the market with a TCAR indicated catheter first to unlock the potential of the implant first, which is most sought after by the physicians and remains Phase I, which is in line with our prior time lines. SwitchGuard was designed as a next-generation platform for neuroprotection and as such, requires the entirety of the development process from design through production build. And in parallel, we've also considered the clinical enrollment aspect, FDA regulatory requirements, statutory time lines, all those kinds of things. So we're progressing exceptionally well in all of these areas, but just believe that the time line should reflect a broader window to clearance. There's variability in all of these aspects of bringing new products to market, and we're just trying to expand the window to give us room to deal with the uncertainties of those aspects of all of these launch parameters, but nothing other than that trying to be realistic and compensate for that. As you've seen in the past, we've previously demonstrated that we'll continue to find passive lease resistance and deliver accordingly and time lines in our world remain as aggressive as we can in hopes that we can beat expectations.

We'll take our next question from Frank Takkinen with Lake Street Capital Markets.

Congrats on all the progress. I was hoping you could refresh us on some account metrics. I know we've talked about it in the past, how many high potential accounts do you see out there? How many do you intend to target with the initial sales footprint? And then how does that kind of roll out progress as you bring on more reps?

Yes. Thanks, Frank. This is Shane again. So one of the nice things here is that carotid stenting is an established market. We have claims data that shows we know that there are roughly 60,000 annualized procedures and growing. They're performed by 4,000 physicians in the U.S. We have claims data showing who they are, where they are, where they practice and what their volumes are. So in terms of the old fish where the fish are, we're putting -- we're hiring our team selectively in locations that have the highest density of procedures. We're targeting the physicians that do above average number of procedures, obviously, in the busier accounts. So what we're tracking early on, the obvious one is revenue. The other ones are just physicians in every stage of our sales funnel who's expressed interest, who's in their value analysis committee who is evaluating the product and where have we secured business. So we're tracking all of those metrics in the early stages, and they're tracking in the direction that we expected them to do.

Got it. That's helpful. And then maybe also partially a refresher and just a kind of update on the broader market. The 60,000 procedures you talked about, my understanding is that's transfemoral as well as TCAR in that number. And then there's approximately another 100,000 or so that are still being completed open. What are kind of the latest trends in that mix? And then how do you think about that trend towards an endovascular first mindset progresses over the next few years?

Yes, that's exactly right. We see the trend where it used to be 70% plus surgery, that gap is closed to where it's now less than 60% surgery. And with the 40% plus being stent-based, which, to your point, could be transfemoral, could be transradial, could be TCAR. And we see those lines continuing to converge. So we expect within the next year or so that we'll likely reach a 50-50 point for the first time. And then in the coming years for carotid intervention to look just like every other vascular intervention in the U.S. where there are products, there's reimbursement and an endo first standard of care. So between CAS and TCAR, we -- that is -- there is a mix there. It's about 50-50. And really, what we do with the claims is we can tell who's doing cases. We choose not to assume which approach they're going to take. Not all surgeons prefer TCAR, not all interventionalists prefer CAS. So we don't assume what they're doing, but then with our long-term strategy, we'll be able to serve all approaches. But in the short term, the goal is to find those that have a use for our CAS indicated stents and target those in the early stages here.

We have reached the end of our question-and-answer session. I will turn the program back over to Marvin Slosman for any additional or closing remarks.

Great. I'd like to thank everyone for joining the call today and your continued support of our mission to lead and transform the carotid intervention market. We're proud of the strong execution we delivered in the second quarter of '25 and even more excited about the milestones ahead as we enter the critical first quarters of our U.S. commercial launch of CGuard Prime. With a differentiated technology, strong clinical foundation and a clear strategy to expand the market and improve outcomes, we believe InspireMD is uniquely positioned to reshape stroke prevention in the United States. As we execute on this launch and build momentum, our focus remains on driving meaningful impact for patients, physicians and shareholders alike. We're confident in our path forward and energized about the opportunity ahead to expand provider treatment options, advance patient care and establish CGuard Prime as the standard of carotid intervention. Thanks for joining today.

Thank you. This does conclude today's program. Thank you for your participation. You may disconnect at any time, and have a wonderful day.