InspireMD, Inc. (NYSE: NSPR) is a biotechnology play that has developed a portfolio of medical device assets using a proprietary technology called MicroNet. It’s an alternative construction of a traditional stent, which removes some of the blockage risk associated with the current standard of care devices in the space.
The company’s business looks extremely promising as it continues to implement the strategy it set out last year. InspireMD continues to grow its sales with its distributors and expanding its distribution network globally. During the fourth quarter, and into 2019, NSPR has continued to add to the body of growing evidence suggesting that its novel best-in-class CGuard Embolic Prevention System which it refers to as CGuard EPS, provides safer and more durable benefits to patients suffering from carotid artery disease.
Recent/Upcoming Anticipated Milestones.
- Continued clinical trial/registry results
- Continued market execution and revenue growth
The company recently announced preliminary unaudited sales results for the fourth quarter of 2018.
- CGuard™ EPS featured in the transmission of two successful live cases at Leipzig Interventional Course (LINC) 2019
- Also, at LINC 2019, interim data from the first 50 patients in the investigator-initiated SIBERIA trial that the company presented. Patients treated with CGuard™ EPS had a significantly lower incidence of multiple lesions in the brain (16% vs 44%), large cerebral lesions (24% vs 40%) and major adverse clinical events after 30 days (0% vs 12%) as compared to patients treated with a conventional open-cell carotid stent
- Also, at LINC 2019, Prof. Christian Wissgott presented his findings using CGuard™ EPS with SmartFit™ technology to address a range of carotid artery diameters with a single diameter size device. SmartFit™ readily adapts to different artery diameters even over a range of diameters in the same patients with a single diameter sized device
- Announced the publication of a meta-analysis involving dual-layered and mesh-covered carotid devices in JACC: Cardiovascular Interventions concluding that carotid artery disease (CAD) patients treated with mesh-covered devices experienced a lower 30-day minor stroke rate than rates reported in other widely cited studies, such as CREST and ACT 1, for patients treated with both carotid endarterectomy (CEA) and those treated with conventional carotid stents
- During the 45th Annual Symposium on Vascular and Endovascular Issues, Techniques, Horizons Symposium (VEITHsymposium), updated positive efficacy and safety data from the ongoing PARADIGM-Extend and IRONGUARD 2 studies were presented
- Received regulatory and reimbursement approval of CGuard™ EPS in Australia and Mexico and regulatory approval in South Africa.
- Recently opened the third “Center of Excellence” for vascular surgeons in Rome Italy with Prof. Speziale that included participation by key physicians from Italy, Poland and Slovenia.
- Pre-clinical testing remains on track for U.S. IDE submission mid-2019
- Year-to-date CGuard™ EPS revenue through December 31 was $3.0 million compared to $1.9 million for the comparable period in 2017, an increase of 55%
- $9.4 million of cash as of December 31, 2018
Analysts’ views:
These positive developments in the company business and market profile speaks for itself and prove that “CGuard™ EPS is gaining widespread acceptance among key opinion leaders (KOLs) that treat carotid artery disease. The analyst tracking the stock believes that this growing interest, combined with its specialized distribution network, positions the company for an even stronger sales growth as it supports company’ expansion into the mainstream group of users that include vascular surgeons, interventional cardiologists, interventional radiologists, and interventional neuroradiologists.
Given the safety advantages of the CGuard™ EPS, it has the potential to become the standard of care and to be regarded by physicians as a relatively safer alternative to vascular surgery for patients with carotid artery disease, thereby expanding the addressable market opportunity.
Furthermore, from a market reach perspective, in addition to USA, Europe, NSPR is now establishing an incredibly strong foothold in Asia, evidenced by improving demand trends from India, Hong Kong, Taiwan, Australia, New Zealand, and Vietnam. For these and other reasons, the company is at a critical inflection point as it enters into 2019
The company’s Board of Directors has approved a one-for-fifty reverse stock split of its common stock that is scheduled to become effective after trading closes on March 29, 2019. Beginning on April 1, 2019, the Company’s common stock will trade on the NYSE American on a split adjusted basis.
About the Company: InspireMD seeks to utilize its proprietary MicroNet™ technology to make its products the industry standard for embolic protection and to provide a superior solution to the fundamental clinical issues of current stenting in patients with a high risk of distal embolization, no reflow and major adverse cardiac events.
Growing Intellectual Property Portfolio:
- Proprietary platform technology supported by a robust intellectual property portfolio
- Continue to strengthen and broaden patent protection globally to enable future pipeline products
key Demand Drivers and overall market size:
- Focused on the deadly and catastrophic problem of stroke that is estimated to cost the healthcare system more than $34BB annually in the US alone
- A Billion Dollar Market Opportunity – The current addressable market for CGuard TM EPS is estimated to be $1BB with the potential to further expand into the 1.6MM patient population which is diagnosed but not treated
- New commercial strategy beginning to take hold as indicated by sales growth over the last year
- Product pipeline to support continued growth in all geographies, including the United States
- There’s an enormous commercial opportunity for InspireMD in its products which can deliver significant value for its investors and make a substantial improvement in the care of patients.
- 2.2M diagnosed with carotid artery disease
- 2017: ~600,000 patients with high-grade carotid stenosis (HGCS) require interventions for CAD
- At present, ~80% are surgically treated with carotid endarderectomy (CEA)
- At a price of $1,650 per stent, the addressable market is more than $1 billion
Financials:
Revenue: Revenue for the twelve months ended December 31, 2018 was $3,601,000 compared to $2,761,000 for the same period in 2017. The increase was primarily due to an increase in sales of CGuard™ EPS as a result of the company’ transition from its prior exclusive distribution partner for most of Europe to local distributors, continued focus on expanding existing markets such as Germany, Russia, Spain and Italy, and expansion into new geographies such as India.
Profitability:
The Company’s gross profit for the twelve months ended December 31, 2018, was $995,000 compared to $585,000 for the same period in 2017. Gross margin increased to 27.6% in the twelve months ended December 31, 2018, from 21.2% in the same period in 2017, driven mainly by higher volume of sales and more efficient utilization of fixed manufacturing resources.
Net loss for the twelve months ended December 31, 2018, totaled $7,240,000, or $0.33 per basic and diluted share, compared to a net loss of $8,438,000, or $34.98 per basic and diluted share, for the same period in 2017.
Liquidity: As of December 31, 2018, cash and cash equivalents were $9,384,000, compared to $3,710,000 as of December 31, 2017.
Key risk factors and potential stock drivers:
- The long-term results of the company’ New commercial strategy
- The company is still at a nascent stage of operations. The outlook may be revised to ‘Positive’ in case of a sustainable increase in the company’s revenue and profitability along with efficient working capital management, resulting in an improvement in its financial risk profile.
- The company has $9.3 million worth of cash on hand, and if sales do not pick up drastically, the company could dilute over the near to medium term.
Stock Chart:
Comments:
A recent reverse stock split at rate of 1 for 50 has changed the numbers below-
- On Friday, March 29th, 2019, NSPR closed at $0.14, with an above average trading volume of 1.25M shares exchanging hands. The current RSI is 35.37
- In the past 52 weeks, shares of NSPR have traded as low as $0.13 and as high as $1.64
- At $0.14, shares of NSPR are trading below its 50-day moving average (MA) at $0.17 and below its 200-day moving average (MA) at $0.24
- The present support and resistance levels for the stock are at $0.12 & $0.15 respectively.
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