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Operator
Greetings and welcome to Avengers 2021 third quarter conference call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. Please press star 1 if you wish to enter the queue to ask a question. This conference is being recorded and it is now my pleasure to introduce Matt Kreps, Managing Director at Darrow Associates Investor Relations. Mr. Kreps, you may begin.
Matt Kreps
Thank you, Paul. And thank you all for joining and participating in today's call. I would like to welcome you to Avenger's third quarter 2021 conference call. Joining us today are Avenger's CEO, Jeff Zielinski, and Chief Financial Officer, Mark Wineswood. Earlier today, Avenger released financial results for the third quarter ended September 30th, 2021. A copy of the release is posted on the Avenger website under investor relations. Before we begin, I'd like to remind you that management will make statements during this call. that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical fact should be deemed to be forward-looking statements. All forward-looking statements, including without limitation our future financial expectations, are based upon our current estimates and various assumptions. These statements involve material risk and uncertainties that could cause actual results or events to materially differ from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and description of the risks and uncertainties associated with our business, please see our Form 10-K and 10-Q filings with the Securities and Exchange Commission. Avenger disclaims any intention or obligation, except as required by law, to update or revise any financial projections or forward-looking statements, whether because of new information, future events, or otherwise. With that, I'd like to now turn the call over to Jeff.
Paul
Thank you, Matt. Good afternoon, and thank you all for joining us. On this Veterans Day, we wish our best and give our thanks to any military veterans listening to our call this afternoon. During the third quarter, we took important steps to advance our strategic initiatives in several key areas. Early in the quarter, we announced the submission of a 510K application to expand the clinical indication for Pantheris to include an instant restenosis claim, based upon the positive clinical data generated in our INSIGHT clinical trial. In August, we filed a 510K submission for our next generation Lightbox 3 imaging console. Throughout the quarter, we made significant advancements in the development of two new catheter line extensions for our peripheral product portfolio. As we explore opportunities to extend our technology platform into new therapeutic areas, we've also initiated a formal development program for the first ever image-guided CTO crossing catheter for the treatment of coronary artery disease, which we believe could be a transformational opportunity for our company. While we're pleased with the progress we made in these important strategic areas, the third quarter was challenging as hospitals across the country reduced access and limited procedures due to a surge in COVID cases related to the Delta variant. The impact of these restrictions, along with hospital staffing shortages, was particularly strong in hospital accounts in the southern U.S., a key market area for us. Even with these challenges, we were able to deliver modest revenue growth in the third quarter compared to the prior year quarter. Our revenue declined from the second quarter of this year, which had minimal impact from COVID-19 restrictions. There were some positive notes in the third quarter, including the opening of eight new Lumavascular accounts, underscoring the appeal of our value proposition to new users. We've seen this pattern before as the market pulled back in response to the original surge of COVID-19 infection in 2020, followed by a recovery in case volumes that propelled us to rapid growth and record results in subsequent quarters. While we continue to feel the effect of the COVID-related restrictions and hospital staffing shortages in the fourth quarter, we believe these limitations will be transient and that case activity at hospitals will increase as the situation improves in the coming quarters. Our Pantheras NextGen, Pantheras SV, and CTO crossing devices, including TigerEye, fulfill an important need in the market, and there is clear demand for our highly differentiated products. Launching three new innovative devices over the past three years has enabled us to make inroads into new accounts and secure a greater share of cases at existing user sites, even during the pandemic-driven challenges for hospital access. We believe our two newest 510 filings will build upon that success and provide the opportunity to accelerate adoption of our technologies in the future. In July, we announced the filing of a 510 submission to expand our US label for Pantheris to include the treatment of instant restenosis or ISR. With 200,000 stents deployed in the lower extremity arteries annually and a high propensity for restenosis over a two to three year timeframe, ISR represents a large and underserved market that will continue to grow as more stents are placed each year. We believe Pantheris provides a significant and exciting competitive advantage in ISR, combining the ability to visualize and direct treatment while avoiding the stent struts, advantages other devices simply cannot offer for these challenging cases. Our 510 case submission for the treatment of ISR is supported by positive clinical data from the INSIGHT trial, which was designed to evaluate the safety and effectiveness of Pantheris for treating instant restenosis in the lower extremity arteries. INSIGHT is a multicenter, prospective, single-arm trial that was conducted at 17 institutions with 97 subjects enrolled. In October, Dr. John George, a leading interventional cardiologist and endovascular medicine specialist at the University of Pennsylvania Health System, presented clinical data from the INSIGHT study at the Vascular Interventional Advances, or VIVA, conference in Las Vegas. Key outcomes presented from the trial included 82% luminal gain, which is the increase in the channel for blood flow following the procedure. 93% of patients were free from target lesion revascularization, or TLR, which is an indication of restenosis, at six months post-procedure. and 89% of patients were free from TLR at 12 months. Both results are significantly better than those achieved by laser atherectomy in the XITE ISR trial. Dr. George made particular note of the extremely high 12-month freedom from TLR delivered by Pantheris in the INSIGHT study and the stability of this endpoint between six and 12 months, indicating a long-lasting and durable outcome. 97% of subjects, were free of device-related major reverse events at 30 days, indicating the safety of the procedure, and there were no amputations at 6 and 12 months post-procedure. Mean ankle brachial index, or ABI, at 6 months was 0.96, a 39% improvement from the baseline of 0.69 pre-procedure. And there was a 71% improvement in Rutherford class, a measurement of disease severity at six months with 77% of subjects at Rutherford Class 0 or 1. We are very pleased with this data and excited about what our proprietary system can offer to patients suffering from ISR if approved for the expanded clinical indication. Our second 510 case submission announced in the third quarter is for our next generation Lightbox 3 imaging console. which we believe represents a major leap forward for our platform. We filed this 510 in August and hope to receive US pre-marketing clearance by the end of this year. In addition, we've taken the steps required to receive CE marking for the Lightbox 3 so that we can market the new console in Europe and other CE mark countries. We expect to receive CE marking this quarter, and pending approval, plan to conduct our first cases with the Lightbox 3 in Germany prior to the end of the year. The Lightbox 3's dramatically reduced size and weight provides for increased portability and seamless integration into the cath lab environment. The Lightbox 3 is designed to fit into a case similar in size to a carry-on suitcase and weighs less than 20 pounds, a 90% reduction compared to our current console. The new Lightbox 3 also has improved economics, reducing cost by as much as 50%. In addition to these size and cost improvements, the Lightbox 3 incorporates enhanced capabilities, including an advanced solid-state laser, a more powerful computing platform, and a redesigned software system with highly intuitive user interface, which is designed to streamline workflows for practitioners and support increased utilization of our image-guided devices. We expect this new platform to accelerate the speed and efficiency of new account acquisition, as well as provide the opportunity to support new catheter capabilities in the future for both potential peripheral and coronary applications. In addition to these recent 510 filings, we are making excellent progress on the development of two additional new catheter line extensions for our peripheral product portfolio. As we've demonstrated with our Pantheris SV and Tiger Eye launches, the introduction of new products to expand our addressable market and bring new capabilities to our platform has a galvanizing effect on growing our business. Our first new product in development is a line extension of our Tiger Eye CTO crossing catheter for the treatment of fully blocked arteries. This new device has a spinning outer tip for tough caps and calcium. an advanced shaft design for pushability and torque response in a challenging environment, and a three-marker system to facilitate consistent image interpretation across our platform. Our second new catheter product in development is an extension of the Pantheris family of image-guided atherectomy devices, designed to provide a more streamlined approach for physicians when treating PAD. This new product, is seven French sheath compatible and is designed to expand our capabilities for the treatment of larger vessels three to seven millimeters in diameter. It utilizes a proprietary design for plaque opposition without the need for a balloon and is designed to operate at higher rotational speeds and challenging plaque. This new Pantheris line extension also adds rotational control for efficient guide wire management and a modified plaque management system for tissue packing and removal. We're excited about these two new devices, which have the potential to expand our product line to a wider group of physicians and streamline procedural efficiency. We expect a complete development for both devices over the next few months and file for regulatory clearance in the U.S. and CE-MARC countries in the first half of 2022. If all goes according to plan, this will provide the opportunity for us to receive pre-marketing clearance and launch both devices into the U.S. and international markets next year. While we've continued to make important advances in our peripheral portfolio, expanding our technology to new markets is critical to our long-term growth opportunities. Our first foray is into the coronary artery disease market, and our initial area of focus is to extend our proprietary image-guided platform to crossing CTOs in the coronary arteries on a less invasive, percutaneous basis. We believe this could be a transformational opportunity for Avenger that would significantly increase the addressable market for our products and change the standard of care in a clinically challenging and largely underserved market. It's estimated that approximately 50,000 CTO PCI procedures are performed in the U.S. each year. While the number of hospital centers performing these procedures is growing, CTO PCI crossing continues to be a highly complex and challenging procedure. requiring specialized and demanding technique with a steep learning curve, the use of multiple devices, and significant time under fluoroscopy, which results in high X-ray radiation exposure and contrast burden. In addition, an estimated 200,000-plus highly invasive coronary artery bypass grafting, or CABG surgeries, are performed in the U.S. annually, with estimates of up to 30% of these procedures related to the treatment of coronary CTOs. This creates a sizable and growing market that we believe is ripe for expansion with proprietary new tools that would make a percutaneous approach more accessible and reduce the need for extended time under fluoroscopy radiation. High reimbursement of $10,000 to $16,000 per procedure is already in place for CTO PCI in the US. In addition, we anticipate that our OCT-guided catheters with their high-resolution imaging and anticipated diagnostic and measurement capabilities would qualify for existing OCT diagnostic imaging reimbursement in the coronary arteries. We believe that an image-guided catheter designed for crossing efficiency and the need for fewer support devices combined with an attractive reimbursement scenario provides the opportunity for a highly positive clinical and economic value proposition. Augmented by the learning with our CTO crossing catheters in peripheral arteries, we've made good progress on our initial development efforts for the first image-guided CTO crossing device for the treatment of coronary artery disease. Our development efforts are focused on catheter designs that combine real-time OCT guidance with precise control and steerability to allow physicians to safely and efficiently cross CTOs while avoiding damage to the vessel wall. We are designing our first coronary CTO catheter in a low-profile, four French size to provide for accessibility and maneuverability in small coronary vessels. Similar to our peripheral catheters, our coronary devices are expected to incorporate a precise measurement capability, ideally suited for physicians to properly size balloons or stents prior to placement, which is critical for optimal outcomes. We anticipate the U.S. regulatory pathway for this new device to be a 510 submission supported by data from an IDE clinical study. We expect to complete product design for our first coronary device in 2022 with the goal of conducting a clinical study in 2023 to support our regulatory submission. As we reflect on our experience this year and look to the future, we saw significant growth in the first half of the year as case volumes returned to normal following the initial waves of COVID-19 infection in 2020 and widespread vaccinations being made available throughout the U.S. With the recent resurgence of COVID-19, our business was impacted negatively. As market conditions improve and our new products and clinical indications come online, we expect to return to a more accelerated pace of growth. We have the best product catalog in our history and have grown revenue for our Pantheris family of atherectomy catheters by greater than 250% over the past three years. Pantheris SV, our small vessel catheter, has been a major growth driver for the company, extending our reach to the treatment of below the knee or BTK lesions. TigerEye has reinvigorated our image-guided CTO franchise and expanded our share of the approximately $100 million peripheral CTO market. We've now sold TigerEye to more than 50 sites. With the addition of TigerEye, our combined CTO sales have grown by 67% in the first nine months of this year, compared to the same period in 2020. We've made tremendous strides in developing our portfolio and are excited about the potential of our new product development efforts, including the exciting opportunity to expand our platform to coronary applications in the future. As we drive growth across our primary product lines, add upside opportunities from our Lightbox 3 and ISR indication, and develop new products to expand our addressable market, we provide new growth opportunities for the company, and most importantly, empower physicians to provide the best possible care for their patients with the most advanced therapeutic devices on the market. At this point, I'd like to ask Mark to cover our financials, and then I'll return for Q&A. Mark?
Matt
Thank you, Jeff. Total revenue for the third quarter of 2021 was $2.4 million, a 3% increase from the year-ago quarter. Third quarter revenues reflect the impact of hospital access limitations, primarily due to a surge in COVID-19 cases in a number of large markets that Avenger serves, particularly in markets located in the Southern US. We are working closely with our sites to support procedural needs and maintain readiness to treat patients when hospitals return to more normal procedure levels. Third quarter 2021 catheter sales increased 5% year over year as we continue to focus on increasing utilization with strong market interest in our Pantheris SV and new TigerEye CTO catheter. Growing our recurring disposable revenue streams continues to be a core element of our commercial strategy. Gross margin in the third quarter was 34%, similar to the third quarter of last year. Avenger's contribution margin from incremental sales of disposable products is far higher than our reported gross margin providing important leverage in our operating model as we scale the business to drive more revenues. Operating expenses for the third quarter were $5.3 million, compared with $4.9 million in the year-ago period. We are continuing to make investments in expanding our product offering, including our new lightbox and next-generation catheter solutions, supporting our commercial sales team, and funding clinical programs, which we believe will provide avenues for growth. As Jeff discussed previously, we believe these new products are key to our future success. Net loss attributable to common shareholders was $6 million in the third quarter compared with $5.5 million in the third quarter a year ago. Adjusted EBITDA, which is a non-GAAP measure that excludes certain excess and obsolete inventory charges, depreciation and amortization expenses, stock compensation, and other items, as noted in the tables in today's press release, was a loss of $4.1 million, compared with a loss of $3.5 million in the year-ago period. A copy of the reconciliation from net loss to adjusted EBITDA can be found in today's press release, which is also posted on our website at www.aventure.com under the Investor section. Cash and cash equivalents totaled $23.1 million, down from $26.7 million at June 30th. We believe our cash position is sufficient to fund new product development, our commercial efforts, and clinical plans through 2022. At this point, I'd like to turn the call back to Jeff for Q&A.
Paul
Thanks, Mark. The third quarter saw continued positive momentum on our strategic initiatives, including the announced filings of two new 510 submissions, the significant progress on our new catheter products expected to be released commercially next year, and the stabilization of our commercial efforts in the face of the COVID-19 resurgence. We're focused on executing our strategy to build up value for Avenger stockholders by driving meaningful growth of our business and fulfilling our mission of radically changing the way vascular disease is treated. At this point, we'd be happy to take your questions.
Operator
Ladies and gentlemen, the floor is now open for questions. If you have any questions or comments, please press star 1 on your phone at this time. We ask that while posing your question, you please pick up your handset if listening on speakerphone to provide optimum sound quality. Please hold while we poll for questions. And the first question today is coming from Mark Weisenberger from B. Reilly Securities. Mark, your line is live.
Mark Weisenberger
Thank you. Good afternoon. I'm wondering if you could talk about procedure dynamics across the different geographies as the Delta variant surged and Is it possible to isolate procedures in progress in markets that were either unaffected or less affected by COVID, and how did those do?
Paul
Yeah, so thanks for the question, Mark. As we said in our statement and as we've heard in the reports from other companies, the markets that were hardest hit were in the south and especially the southeast, kind of the deep south, where the infection rates were highest. And that led to challenges in the hospital setting, both due to limitations on elective procedures, the requirement to hold hospital beds for potential COVID patients, and also increased testing and other criteria for a patient to be admitted to the hospital, even for an outpatient procedure. This was all exacerbated, especially in those markets by hospital staffing shortages. So, you know, we saw key markets in Louisiana, Arkansas, certain places in Texas really hit at a more significant level than other markets in the north. It becomes really a market by market, state by state. You know, the shortfall in our business was primarily driven in those markets, which typically are responsible for about 50% of our business, the southern markets. We are seeing those markets start to pick up. We are hearing about and still feeling the effect of COVID in markets across the country and are hearing reports of increased levels of infection now starting to hit certain areas in the northeast, and I think there's an anticipation over the winter months. So it's very hard to forecast, but there is definite markets of real strength that had been less impacted and markets that had been more impacted. I'd also say that the hospital is generally more impacted by the OBL. And so we're really pleased with how our business held up and how well we fared versus even other companies with large peripheral concentration over this past quarter. given that over 80% of our business is in the hospital market.
Mark Weisenberger
Very helpful. And in your prepared remarks, you talked about how in prior episodes with COVID surges, you were able to bounce back pretty strongly. However, this time, you have talked about some of the staffing shortages, not only in clinical but some primary care and referral shortages maybe that kind of filter through the entire chain. I'm wondering how you think the subsequent bounce back will be impacted by these kind of labor dynamics that are new relative to earlier episodes.
Paul
Yeah, it is a new, I think, a new dynamic that we're dealing with, right, all of us in this industry and this market. I am reluctant to predict how quickly that will change. As I said, we are seeing an improvement in key markets related to available procedure time, more cath labs being open, some elective procedures coming back. But the staffing shortages, I think, are still a very real issue, and it would be very hard for me to predict how the industry works through that. Got it.
Mark Weisenberger
Okay. And I believe there were some recent OBL physician fee changes. Wondering how you think that might expect your hospital business going forward?
Paul
Yes, it was an interesting, you know, past few months as it relates to reimbursement. So, and what you're referring to for those on the call who aren't as familiar as you are is CMS published the final physician fee schedule for 2022 recently, and what that included was a 15% reduction for atherectomy procedures in the OBL, the office-based lab setting, versus 2021. Hospital reimbursement we anticipate to remain very strong. Now, the 15% reduction in the OBL was significantly better than the 22% reduction initially proposed. However, CMS indicated that reimbursement levels will continue to decline in the OBL over a four-year transition period. Now, again, we're less impacted since over 80% of our business is in the hospital market. We do expect, however, that these this reduction and the continued reduction in OBL pricing will continue to put more price pressure on devices for the OBL market. And while it's obviously way too soon to say what the impact will be, as reimbursement in the OBL continues to decline, that could keep more procedures in the hospital setting, which would not be a bad thing for Avenger in the long run. So I guess the other reimbursement move that happened over the past couple of months is you might be aware that the AMA CPT panel had an item on their agenda for the September-October meeting related to a comprehensive review of the lower extremity revascularization codes. This is an agenda item that had been postponed from an earlier meeting, and then during the September-October CPT panel meeting, it was again postponed indefinitely. So we see this as an indication that there won't be significant changes to the lower extremity codes in the near future. And most analysts and companies that we're tracking don't anticipate that any new codes will be established until 2024 at the earliest. So kind of the net of this is that we expect hospital reimbursement to remain really strong. OBL reimbursement has been reduced, but not at the, you know, as high a level that had been, you know, potentially anticipated. And it will continue to be an evolving story.
Mark Weisenberger
Very helpful for all that color. Just a final one for me. I know you had plans to continue to expand the sales force and drive growth. Wondering how the labor dynamics are impacting you there and how we should think about Salesforce expansion into the end of the year and the early part of 22. Thank you.
Paul
Yeah, no, thank you for the question, Mark. So, given the challenges presented by the pandemic, we've stabilized our sales headcount and are not planning on adding significantly to the group, at least through the end of the year. As the market works through the current challenges and we start to see case volumes return to more normal levels, we'll resume our efforts. We anticipate, obviously, in 2022 to build the commercial team. But we have stabilized kind of where we are and don't expect significant expansion in the near term.
Mark Weisenberger
Got it. Very helpful. Thank you. Thank you, Mark.
Operator
Thank you. And the next question is coming from Nathan Weinstein from Aegis Capital. Nathan, your line is live.
XITE - ISR
Thank you. Hi, Jeff and Mark, and thanks for taking my questions.
Paul
Hi, how are you doing, Nathan? Nice to talk to you.
XITE - ISR
Likewise. Thanks so much. Okay, so one of the more exciting things about Avenger, I think most would agree, is the company has really proven itself to be an engine of innovation and And the product bag really feels like it's starting to hit critical mass. So, maybe you could share with us a sense of the timing and when you see a lot of these cross-sell opportunities come together that could maybe drive a higher inflection in the growth rate.
Paul
Great. Yeah, thanks for the question. So, you know, when you look at the number of milestones and the activity coming up over the next, you know, few quarters, it's pretty exciting. So, starting with the ISR 510 , which is not, as you know, a new product, but it is an expanded clinical indication that we will treat as a new product launch when we get the allowance. We are, based on, you know, how the review process is going and the strength of our submission, including how strong the data is from Insight, we're hopeful that we'll receive that clearance in the not-too-distant future. And that will be exciting for us because it not only is highly differentiating, but it will allow our sales force to directly promote pantheris for treating instant restenosis. And the data from that study, which I outlined, was so positive, especially compared to the, you know, the only other major study that had been done in the treatment of instant restenosis with atherectomy, XITE-ISR for laser atherectomy. And it's really important to note that we will be the only directional atherectomy product that has this claim. In fact, the only other directional atherectomy catheters, non-imaging atherectomy catheters that are marketed by Medtronic, the Hawk family, are actually contraindicated for ISR. So we see the ISR claim, which we are hopeful will still happen this quarter, as a way to expand utilization in existing accounts and also a way into new accounts. So that's one big I think an important step forward and we've invested quite a bit in clinical work and preparation for taking good advantage of that claim and the strong clinical data. The next milestone we have coming up is CE marking for our new Lightbox 3. We expect to receive that pretty confidently this quarter. And we're preparing to have our first cases in Germany this quarter as well at two important KOL sites. And so that will provide an opportunity for us to get our first, you know, real-time case experience with the Lightbox 3, which as you know, Nathan, since you followed us for a while, is part of our process to prepare for our U.S. introduction and launch. So we're hopeful, again, that we will receive the Lightbox 3 clearance prior to the end of the year or at least sometime early in 2022. And that will allow us to initiate a limited launch in the U.S., likely in the first quarter of 2022, where we can get experience, train our sales force, start to understand how to best transition to this new imaging console and take advantage of the many benefits it provides, especially as it relates to new account acquisition and efficiency in a case. And so that should be an early 22 milestone. Coming on the heels of that, We have two line extensions of our peripheral portfolio in development. We have our Tiger Eye product, which has a spinning tip and other improvements and developments related to the treatment of tough caps and calcium. And we have our Pantheris line extension, a larger vessel device for the SFA and popliteal that we believe will have a significantly streamlined procedure by by no longer or by not requiring a balloon for plaque apposition. We expect to file 510K applications. And these again to underscore would be line extensions, not replacements of current devices. So the whole idea here is to expand our usage base. But we expect to file 510Ks and CE marks for both of those products in the first half of next year. Given our track record, we expect that that will lead to clearance, first cases in Europe and ideally commercial launch in the second half of 2022. And then in addition to the peripheral products, we shared some information today on the really what we believe is an extremely attractive opportunity to take our image-guided approach to the coronary arteries. In many ways, I feel like all of the work we've been doing up to this point has really prepared us for this. We see a major market opportunity to cross, to enable more physicians to safely and efficiently cross CTOs and the coronary arteries on a percutaneous basis. We have brought in additional resource to help us with that. We are making good early progress. And we expect to complete our design phase in 2022, which we are hopeful will prepare us and enable us to begin enrollment in the clinical trial in 2023. Again, we think the regulatory route there will be a 510 , but that a clinical trial will be required. But that's a very big exciting opportunity for us. The reimbursement is already very strong, CTO specific reimbursement for CTO PCI crossing. There is already OCT diagnostic reimbursement in the coronary arteries. So a very exciting clinical and I believe economic value proposition. And then in addition to the product development efforts, we are still enrolling in our image BTK study that had slowed down a bit because of the new resurgence of COVID infection. But we do expect to complete enrollment and have at a minimum our 30-day data release in 2022, and hopefully, and I would imagine we will have at least a large cohort of six-month patients prior to the end of the year. So, again, bringing new data in a market that is hungry for data. I mean, we as a small company have invested quite a bit in well-designed clinical trials with meaningful clinical outcomes and data. And then I guess the other backdrop for 22 is now that Insight has wrapped up, we will be working with the principal investigators on publication in peer-reviewed journals of those results. And there's a lot of great information that we're excited to get out to the market in a peer-reviewed journal. So a lot going on. We're busy here. And, of course, all of this in the backdrop of continuing to address opportunities in the commercial markets, continuing to cell catheters, get more and more catheters used all the time, and most importantly, help our physicians do a great job and deliver outstanding outcomes for their patients.
XITE - ISR
Wow, that's fantastic. Thanks so much for the helpful color on all of that, Jeff. And just one follow-up, if I might. You discussed several very exciting initiatives, including the line extension products. But I just couldn't help but notice that OPEX overall, and in particular, the R&D spend has been trending down sequentially in year over year. So just curious, is that a sign that the organization is working at increasing efficiency, or how do we think about the R&D side?
Matt
Yeah, thank you for the question, Nathan. So if we look at our R&D spending, that also includes our clinical studies work. As we noted, you know, the vast majority of work on the insight side on the INSIGHT study was completed in the first and second quarter of this year. And so the reduction that you saw in the third quarter was primarily due to that. We are actually, we actually did expand a little bit in terms of some increased spending because we have actually started this new development opportunity on the coronary program. And that is, and we are putting some investments in there. You should expect to see our research and development costs, you know, tick up slightly, you know, through the end of this year and also into next year. as we continue to put more and more efforts into expanding that research and development program.
XITE - ISR
Great. Thanks again, Jeff and Mark, for taking my questions, and we look forward to continued progress in the business ahead.
Operator
Thank you, and there are no remaining questions in queue. I will now turn the call back to Jeff Swinsky for closing remarks.
Paul
Well, thank you for joining our call this afternoon. We very much appreciate your interest in our company. We appreciate your support and look forward to reporting our continued progress in our year-end call. Thank you.
Operator
Thank you, ladies and gentlemen. This does conclude today's conference. You may disconnect at this time and have a wonderful day. Thank you for your participation.
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