Avinger(AVGR) - 2024 Q1 - Earnings Call Transcript

Financial Data and Key Metrics Changes - Total revenue for Q1 2024 was $1.9 million, unchanged from Q4 2023 and Q1 2023 [11] - Gross margin decreased to 18$5.4 million in Q1 2024 from $5.0 million in Q4 2023 and$4.9 million in Q1 2023, attributed to increased sales headcount and expenses related to the Zylox-Tonbridge transaction [11] - Net loss for Q1 2024 was $5.5 million, compared to$5.0 million in Q4 2023 and $4.6 million in Q1 2023 [12] - Adjusted EBITDA loss was$3.9 million in Q1 2024, an improvement from a loss of $4.3 million in Q4 2023, remaining the same as Q1 2023 [12] - Cash and cash equivalents totaled$7.2 million as of March 31, 2024 [13] Business Line Data and Key Metrics Changes - The peripheral business continued to progress, with new sales representatives gaining clinical proficiency and building sales pipelines [10] - The Tigereye ST CTO crossing device launched in the second half of the previous year is increasing market penetration [10] Market Data and Key Metrics Changes - Avinger announced a strategic partnership with Zylox-Tonbridge, which will facilitate entry into the greater China market [6][8] - Zylox will invest up to $15 million in Avinger, with the first tranche of$7.5 million already funded [8] Company Strategy and Development Direction - Avinger is focusing on expanding its product offerings in the coronary market, with plans to file an IDE submission for a CTO crossing device by Q3 2024 [9] - The partnership with Zylox-Tonbridge is expected to strengthen Avinger's balance sheet and provide access to new markets, potentially improving gross margins and cost structure [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the rapid progress in the partnership with Zylox and the development of the coronary product [14] - The timeline for product registration in China is projected to be completed by the end of 2025, with manufacturing capabilities expected to be validated within the same timeframe [18] Other Important Information - CRG Partners exchanged its Series A preferred stock for new Series A-1 preferred stock, extending principal payments on Avinger's debt to Q1 2027 [13] Q&A Session Summary Question: Anticipated commercialization timeline for products in China - Management expects product registration in China could be achieved by the end of 2025, with manufacturing capabilities coming online within that timeframe [18] Question: Commercialization of products in Europe - Avinger currently markets products under CE Mark in Germany and is prioritizing regulatory clearance efforts for Zylox in China [20] Question: Status of IDE submission for CTO crossing system - The IDE submission requires completion of Phase 3 verification and validation testing, with a target to file by the end of Q3 2024 [22]