Avinger, Inc.

Good afternoon, ladies and gentlemen, and welcome to the Avenger fourth quarter and full year 2021 results call. At this time, all participants have been placed on a listen only mode and we'll open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Matt Kreps. Sir, the floor is yours.

Thank you, John. And thank you everyone for participating in today's call. I'd like to welcome you to Avenger's fourth quarter and full year 2021 conference call. Joining us today are Avenger CEO Jeff Zawinski and Chief Financial Officer Mark Wineswood. Earlier today, Avenger released financial results for the quarter and year ended December 31, 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 Security 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 on our current estimates and various assumptions. These statements involve material risks 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 Form 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 projections or forward-looking statements whether because of new information, future events, or otherwise. And with that, I'd like to now turn the call over to Jeff.

Thank you, Matt. Good afternoon, and thank you all for joining us. Avenger made significant progress across the company in 2021. We grew revenue by 16%, fueled by the launch of our new TigerEye CTO crossing catheter early in the year and the growth of our CTO business overall, which increased 47% year over year. This increase in revenue allowed us to improve gross margin by four percentage points during the period, and we expanded penetration of our platform with the launch of 23 new accounts during the year, including eight new accounts in the fourth quarter. In addition to our commercial progress, we took important steps to provide future growth opportunities for the company. In 2021, we filed five 10K submissions for two strategic initiatives, and in recent months, announced FDA clearance for both applications. In November, we received pre-marketing clearance to add an instant restenosis clinical indication for Pantheris, based on the outstanding clinical data from our INSIGHT trial. Pantheris is the only directional atherectomy device to have received this highly differentiating indication. In January of this year, we announced FDA clearance for our Lightbox 3 Next Generation Imaging Console, which brings significant advancements to our platform in a compact and portable form factor. We believe that both initiatives will prove to be significant growth drivers for Avenger. I'm proud of how the team has performed in the face of the continued challenges presented by COVID-19 resurgence during the year. The emergence of the Delta variant in the third quarter, followed by the onset of the Omicron variant late in the fourth quarter, led to hospital restrictions and staffing shortages that limited procedural volume in the second half of 2021. While we've started to see signs of improving market conditions in recent weeks, Omicron has negatively impacted procedural volume and revenue in the first quarter of this year. We're optimistic that the recent improving trends will continue and that procedural volume will return to more normal levels and allow the company to return to growth in the second quarter. As we look ahead in 2022, we are continuing to invest in strategic initiatives to expand penetration of our platform for the treatment of PAD and provide new catheter usage opportunities, including the development of our first product for the treatment of coronary artery disease, or CAD. First, we plan to expand availability of our Lightbox 3 Next Generation Imaging Console to full commercial launch in the second quarter. which we believe will energize existing users and bring efficiency to our new account acquisition activities. Second, we expect to file five 10 K applications for two new catheter line extensions in our peripheral product portfolio designed to broaden the appeal of our product line, expand our user base and drive volume growth. And third, We've initiated a formal program to expand our platform to the treatment of coronary artery disease with the development of the first-ever image-guided CTO crossing catheter. We believe expansion of the coronary market provides a transformational opportunity for Avenger due to its large addressable market, existing reimbursement profile, and the compelling clinical advantages of our lumavascular approach. Let me share some details on these initiatives. We're excited about the potential for our new Lightbox 3 imaging console to positively impact our business. The Lightbox 3 is a compact and portable console incorporating an advanced solid-state laser for high-definition OCT imaging, a more powerful computing platform, and a redesigned software system with an intuitive user interface designed for procedural efficiency. In February, leading interventional cardiologists in premier hospitals in Chicago and Arkansas successfully completed the first cases with the Lightbox 3. In March, we expanded our first-case experience with six additional hospitals in the Northeast and Ohio using the portable configuration of the system. Since initiating the field evaluation program, nine physicians have performed 35 image-guided CTO crossing and atherectomy procedures with our tiger eye and pantheris catheters in a wide variety of lesion types and anatomy. Physician feedback has been extremely positive, with users commenting on the enhanced imaging, ease of use, and increased efficiency of the new console. Based on this positive feedback and the performance and reliability of the console in real-world clinical conditions, we plan to expand the Lightbox 3 to full commercial availability in the second quarter of this year. As part of this expansion, we will make portable configurations of the system available to our sales territories for use in on-site demonstrations and evaluations to support catheter utilization in new accounts. As we continue to build inventory, we will make the Lightbox 3 available for permanent installation and sale to new accounts as part of a defined evaluation process, as well as provide an upgrade option for existing accounts. With its dramatically reduced size and weight, lower cost, and enhanced capabilities, we are confident the Lightbox 3 will play a crucial role in fulfilling the potential of our LumaVascular technology for both peripheral and coronary applications. We're thrilled with our experience with the new console so far and look forward to reporting our progress with Lightbox 3 in the coming quarters. Regarding our new product initiatives, we've continued to make significant progress in the development of two new catheters for the treatment of PAD. We believe these new products will increase usage with current physicians and broaden the appeal of our product line to new users. Our first new product in development is a line extension of our TigerEye CTO crossing catheter for the treatment of fully blocked arteries. This new device builds upon our experience with our current TigerEye catheter. It has an integrated 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 imaging system to facilitate consistent image interpretation across our platform. We expect to submit a 510K application for this innovative new device in mid-year 2022 with anticipated commercial availability in the second half of this year. Our second new catheter in development is a line extension of the Pantheris family of image-guided atherectomy devices. This new device is designed to provide a more streamlined approach for physicians and expand our capabilities for the treatment of larger vessels, such as the SFA and popliteal arteries, where the majority of procedures are performed. It utilizes a proprietary design for plaque apposition 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. While we've experienced some recent challenges regarding delivery times from suppliers on parts, which has impacted our schedule, We anticipate filing a 510 submission for this new device in the second half of 2022, which we expect to lead to commercial availability in the first half of 2023. On a very exciting note, we've advanced our initial development efforts for our first entry into the coronary market, an image-guided CTO crossing catheter for the treatment of CAD. This revolutionary new device leverages the advances we've made across our platform to address a massive potential market with unmet clinical needs for a safe and reliable patient-oriented solution for what can be complex, expensive, and uncertain procedures. It's estimated that approximately 50,000 CTO PCI procedures are performed in the U.S. each year at a growing number of hospital centers. CTO PCI crossing is a highly complex procedure requiring specialized and demanding technique with a steep learning curve, and the use of multiple devices. These procedures also require extended time under fluoroscopy, which results in high X-ray radiation exposure and contrast burden, problematic for both the medical team and patient. 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. We believe this market provides an attractive target for a proprietary new image-guided system that would make a percutaneous approach more accessible and reduce the need for extended time under fluoroscopy radiation. Percutaneous CTO crossing in the US already has high reimbursement of $10,000 to $16,000 per procedure. In addition, We anticipate that our high resolution OCT guided catheters with 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. Our development efforts are focused on catheter designs that combine real-time OCT guidance with precise control and steerability to facilitate an anti-grade approach and allow physicians to safely and efficiently cross coronary CTOs while avoiding damage to the vessel wall. We're 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 Avenger's peripheral catheters, our first coronary device will incorporate a precise measurement capability, ideally suited for physicians to properly size balloons or stents prior to placement, which is critical for optical 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. In addition to the progress in our development activities, we've also meaningfully advanced our clinical initiatives over the past year. We're continuing to build the clinical body of evidence in support of our lumavascular approach, which we believe is critical to driving adoption. Groundbreaking clinical data from our INSIGHT trial, evaluating Pantheris for the treatment of instant restenosis, or ISR, was presented at the VIVA clinical conference in October. The positive data from this IDE study provided the basis for our successful 510 submission to expand the Pantheris clinical indication to include the treatment of 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 is a large, recurring, and underserved market that will continue to grow as more stents are placed each year. Our Pantheris system provides the ability to visualize and direct treatment while avoiding the stent struts, which contributes to positive patient outcomes and provides a compelling competitive advantage in a challenging market. We're very proud of the data generated in the INSIGHT trial. Pantheris provided an 82% luminal gain following the procedure. 93% of patients in the study were free from target lesion revascularization, or TLR, and a measure of restenosis, at six months post-procedure, and 89% were free from TLR at 12 months. Both results are significantly better than those achieved by other atherectomy devices in their clinical trials for ISR. We've also made progress on our IMAGE-BTK clinical study. IMAGE-BTK is a post-market study evaluating the safety and effectiveness of Pantheris SV for the treatment of below-the-knee lesions in a real-world clinical setting. We anticipate enrolling up to 60 patients in the study, with patients evaluated 30 days, six months, and one year post-procedure. We're currently enrolling patients at two key opinion leader sites in the U.S. and are in the process of expanding the study to include two leading clinical centers in Germany. Most patients enrolled to date suffer from critical limb ischemia, or CLI, the most severe form of PAD. We expect to complete enrollment in 2022 with interim data results available for presentation later this year. We're excited about the clinical outcomes we've seen to date and the insights the physician investigators are already gaining from the high-definition visualization of below-the-knee disease provided by our Pantheris SV catheter. We made important strides to advance our business in 2021, and we're excited about the potential to expand our platform. With the commercial launch of Lightbox 3 this year, the filing of 510K submissions for two new PAD catheters, and our continued progress on the development of our first coronary product, we remain committed to our mission of radically changing the way vascular disease is treated and supporting physicians in providing the best possible care for their patients. At this point, I'd like to ask Mark to cover our financials, and then I'll return for Q&A. Mark? Thank you, Jeff.