Avinger(US:AVGR)2024-03-20 21:56Financial Data and Key Metrics Changes - Total revenue for Q4 2023 was $1.9 million, compared to $1.8 million in Q3 2023 and $2.0 million in Q4 2022 [24] - Gross margin for Q4 2023 was 20%, down from 21% in Q3 2023 and 34% in Q4 2022, primarily due to lower production activity and increased non-cash stock compensation [24] - Operating expenses for Q4 2023 were $5.0 million, up from $4.4 million in Q3 2023 and $4.5 million in Q4 2022, driven by increased sales headcount and corporate expenses related to the Zylox-Tonbridge transaction [25] - Net loss for Q4 2023 was $5.0 million, compared to $4.5 million in Q3 2023 and $4.2 million in Q4 2022 [25] - Adjusted EBITDA for Q4 2023 was a loss of $4.3 million, compared to a loss of $3.7 million in Q3 2023 and a loss of $3.8 million in Q4 2022 [25] - Cash and cash equivalents totaled $5.3 million as of December 31, 2023, with an additional $7.5 million raised in March 2024 from the Zylox-Tonbridge investment [27] Business Line Data and Key Metrics Changes - The company expanded its U.S. sales force by more than 25%, adding six sales professionals since the end of Q3 2023 [14] - Tigereye ST revenue increased by over 50% in Q4 2023 compared to Q3 2023, with 32 physicians at 25 sites using the device since its introduction [16] - Pantheris LV was limited launched in Q3 2023, with 19 physicians performing approximately 50 cases since then, with expectations for full commercial launch by mid-2024 [18] Market Data and Key Metrics Changes - The atherectomy market in the U.S. is valued at approximately $600 million to $700 million, characterized by significant competition [33] - The atherectomy market in China is still in early stages, with only a few products approved, presenting a significant opportunity for growth [33] Company Strategy and Development Direction - Avinger announced a strategic partnership with Zylox-Tonbridge, which includes an equity financing agreement of up to $15 million and exclusive rights for Zylox to distribute Avinger's products in Greater China [8][9] - The partnership aims to open new markets and improve cost structures, with Avinger also gaining access to Zylox's peripheral products for distribution in the U.S. and Germany [10][12] - The company is focusing R&D efforts on developing its first coronary product application, leveraging its image-guided technology to address coronary artery disease [20][22] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the regulatory clearance process for products in China, estimating a timeline of 9 to 15 months for Zylox to begin commercialization [30] - The company is confident in its manufacturing capabilities to support both U.S. growth and Zylox's needs in China [35] - Management anticipates that new sales personnel will become productive within approximately six months, contributing to revenue growth [37] Other Important Information - The company has extended its lease for its manufacturing facility to ensure support for Zylox's business prior to their manufacturing capability being cleared [35] - The strategic partnership and related transactions are seen as critical steps to strengthen Avinger's balance sheet and improve its capitalization structure [12][13] Q&A Session Summary Question: How long does it take for Zylox to get approval in China for commercialization? - Management indicated that the clearance process is anticipated to take around 9 to 15 months, aiming for a launch in the first half of 2025 [30] Question: What is the size of the Greater China opportunity for peripheral vascular catheters? - The atherectomy market in China is still developing, with significant opportunities for growth as it is less competitive than the U.S. market [33] Question: Does the company have enough resources to support Zylox while growing its U.S. business? - Management confirmed that current manufacturing capabilities can support both U.S. growth and Zylox's needs [35] Question: How long does it take for new sales personnel to become productive? - Typically, it takes around six months for new hires to start contributing to top-line growth [37] Question: How long will it take to reach $2.5 million per quarter in revenue? - Management expects to achieve this growth as new hires become productive and new products are launched, targeting the second half of the year and into 2025 [40]