Release Date: May 15, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Avinger Inc (AVGR, Financial) announced a strategic partnership with Zylox-Tonbridge, enhancing market access in Greater China and providing up to $15 million in equity financing.
- The company is making significant progress in the development of its first coronary product, with Phase 3 verification and validation studies underway.
- Avinger Inc (AVGR) has a new coronary device in development that combines real-time OCT guidance with precise control, potentially reducing procedure times and improving success rates.
- The partnership with Zylox-Tonbridge includes royalty-bearing sales and potential future cost reductions for Avinger Inc (AVGR) through manufacturing efficiencies.
- Avinger Inc (AVGR) continues to expand its peripheral business, with new sales representatives and clinical specialists enhancing market penetration.
Negative Points
- Avinger Inc (AVGR) reported a net loss of $5.5 million for the first quarter of 2024, indicating ongoing financial challenges.
- Gross margin declined to 18% in Q1 2024 from 34% in Q1 2023, reflecting lower production activity and optimization of inventory levels.
- Operating expenses increased to $5.4 million in Q1 2024, driven by costs associated with the Zylox-Tonbridge transaction and other corporate activities.
- The company's revenue remained flat at $1.9 million, showing no growth compared to the previous quarters.
- Avinger Inc (AVGR) faces uncertainties in the regulatory timelines for product registration in China, which could delay market entry and revenue generation from this region.
Q & A Highlights
Q: Can you provide an update on the commercialization timeline for Avinger's products in China through the Zylox-Tonbridge partnership?
A: Jeffrey Soinski, CEO of Avinger, indicated that Zylox is actively working on building their manufacturing capabilities and preparing the necessary documentation for product registration in China. The goal is to achieve registration by the end of 2025, aligning with the timeline for Zylox to establish their manufacturing capabilities.
Q: What are the current efforts and timelines for Avinger's products in the European market, particularly in Germany?
A: Jeffrey Soinski explained that Avinger is currently marketing its products in Europe under CE Mark, with Germany being the primary market due to favorable reimbursement structures and established relationships with key opinion leaders. The focus is on driving growth in Europe, and there are possibilities to distribute Zylox's CE Marked products in Germany.
Q: What steps remain for Avinger to submit the IDE application for the coronary CTO crossing system in the U.S., and what is the anticipated timeline?
A: Jeffrey Soinski outlined that Avinger needs to complete Phase 3 verification and validation testing, including biocompatibility testing and identifying initial clinical study sites. The company aims to file the IDE submission by the end of the third quarter of this year, pending successful completion of all required tests.
Q: How is Avinger managing its financials, particularly concerning revenue and gross margin trends?
A: Nabeel Subainati, CFO of Avinger, reported that total revenue remained stable at $1.9 million, consistent across the current and previous quarters and the same quarter last year. However, the gross margin decreased to 18% from 20% in the previous quarter and 34% in the same quarter last year, mainly due to lower production activity aimed at optimizing inventory levels and conserving cash.
Q: Can you discuss the financial restructuring efforts undertaken by Avinger, especially regarding the dealings with CRG Partners?
A: Nabeel Subainati detailed that CRG Partners converted their Series A preferred stock into new Series A-1 preferred stock valued at $10 million, significantly reducing the aggregate liquidation preference from $61 million. Additionally, CRG extended the principal payments on Avinger's debt from 2024 to 2027, with interest payments to be made during this period.
Q: What are the strategic benefits Avinger expects from the partnership with Zylox-Tonbridge?
A: Jeffrey Soinski emphasized that the partnership strengthens Avinger's balance sheet, provides access to significant new markets in Greater China, and creates opportunities to improve gross margins and cost structures over time. This collaboration is seen as pivotal for Avinger's expansion and financial health.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
