Avinger, Inc.

Greetings and welcome to the Avenger first quarter 2023 results call. At this time all participants are in a listen only mode and a question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference please press star zero on your telephone keypad. Please note this conference is being recorded and I will now turn the conference over to your host Matt Kreps. Sir you may begin.

Thank you, Ali, and thank you all for participating in today's call. I'd like to welcome you to Avenger's first quarter 2023 conference call. Joining us today are Avenger's CEO, Jeff Soensky, and Principal Financial Officer, Nabil Spinelli. Earlier today, Avenger released financial results for the quarter-ended March 31, 2023. 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. They will 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 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 filing with the Securities and Exchange Commission. Average or 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. Today's presentation will also include reference to non-GAAP financial measures, such as the adjusted EBITDA. The reconciliation of these non-GAAP financial measures to the most comparable GAAP financial measures is also available within the earnings release, which can be found on Avenger's website. 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. During the first quarter and early part of the second quarter, we've made important progress in advancing our business and our mission of radically changing the way vascular disease is treated. In April, we received 510 clearance for our new Tiger Eye ST image-guided CTO crossing catheter and have already initiated limited launch activities. In January, we filed a 510 submission for Pantheris LV, our next generation large vessel image-guided atherectomy system. Since that time, we've advanced the regulatory review process with the FDA and continue to anticipate pre-market clearance in the mid-year timeframe, providing the opportunity for two new peripheral product launches in the second half of this year. Along with the introduction of our new Lightbox 3 imaging console in 2022, We believe the launch of these two new catheter systems in 2023 will fully build out our image-guided PAD product portfolio, allowing us to focus most of our R&D efforts on the development of our first coronary product application. Over the past several months, we've made significant progress on this initiative, advancing design candidates through the development process, gaining valuable feedback from coronary CTO specialists, and preparing for our first animal studies later this quarter. Based on our progress to date, we believe we remain on track to file an Investigational Device Exemption, or IDE, application with the FDA in the next nine to 12 months to allow for initiation of a clinical study in 2024. While we made significant progress in our new product development activities, we also reported continued improvement in our operating metrics. During the first quarter, we increased gross margin by six percentage points and sustained our efficient operating cost model, driving significant improvement in adjusted EBITDA compared to the year-ago period. While revenue remained flat compared to the prior year, sales productivity, or revenue per sales head, improved by more than 25% as we delivered the same amount of revenue with lower sales head count. We continue our recruiting efforts to build our clinical sales force and have recently added two new clinical specialists, with two more expected to join our team this quarter. In addition to expanding our sales team throughout the year, we are confident that the anticipated full commercial launch of our two new peripheral products in the second half of the year will provide new growth opportunities for our business, expanding the addressable market for our products and increasing usage occasions and existing accounts. Our new Tiger IST CTO crossing catheter incorporates design upgrades to the tip configuration and catheter shaft to increase crossing power and procedural success in challenging morphology. It also incorporates design enhancements for ease of image interpretation during the procedure. Tiger IST continues to provide the distinctive high-definition real-time imaging, user-controlled deflectible tip, and faster rotational speeds introduced to the platform in 2021, all of which perform exceptionally well with our advanced Lightbox 3 imaging platform. We've already initiated limited launch and expect to announce the completion of first cases with Tiger Eye ST this month. The limited launch period provides important benefits to fully appreciate the clinical capabilities of this exciting new device and to prepare our clinical sales team for full commercial launch. If all goes according to plan, we expect to expand to full commercial availability in the third quarter of this year. As mentioned earlier, we filed a 510K submission for our new Pantheris LV image-guided atherectomy catheter in January and anticipate FDA clearance in the mid-year timeframe. Pantheris LV is our new large vessel device that incorporates key design principles from our highly successful Pantheris SV device. Pantheris LV is designed to treat vessels 3 to 7 millimeters in diameter and is ideally suited to treat lesions in the SFA and popliteal arteries, above and behind the knee, where the majority of PAD procedures are performed. Pantheris LV incorporates a proprietary design for plaque apposition without the need for a balloon and operates at significantly higher rotational speeds than our current large vessel offering. It also introduces enhanced guidewire and plaque management systems to the platform. Combined with our LightBox 3 imaging console, we believe these design innovations will streamline the atherectomy procedure, open additional case opportunities for our platform, and expand the mainstream appeal of our image-guided approach. Our 510 filing for Pantheris LV continues to advance through the regulatory review process. We've answered all open questions and provided documentation and additional testing requested by FDA and have no open requests on our 510 submission at this time. While subject to change, based on the progress we've made to date, we anticipate FDA clearance mid-year which would allow us to initiate limited launch in the third quarter and provide the opportunity for expansion to full commercial availability in the fourth quarter of this year. Within our existing product portfolio, our Pantheris SV small vessel atherectomy device continues to be a strong performer, delivering significant growth in procedures and revenue compared to the prior year. As discussed on past calls, Pantheris SV is primarily used to treat patients with below the knee lesions, many of whom suffer from critical limb ischemia or CLI, the most severe form of PAD. Pantheris SV provides tremendous benefits to physicians treating lesions within these very small two to four millimeter diameter vessels. The real-time imaging and precise control provided by Pantheris SB allows physicians to precisely target the disease while avoiding damage to the arterial vascular structures, which can lead to adverse events and a re-narrowing of the vessel or re-stenosis with conventional approaches. We are documenting the excellent clinical results physicians are achieving with this unique and highly differentiated device in our IMAGE-BTK post-market clinical study. designed to evaluate Pantheris SV for the treatment of below-the-knee lesions in a real-world clinical setting. We continue to build the clinical data set at the 12-month post-procedure study endpoint and expect to complete patient enrollment by the third quarter of this year. We are excited to share expanded outcomes data with the broader clinical community in the coming months with principal investigators for the study in the U.S. and Europe scheduled to present updated interim results at major clinical conferences in the second and third quarter. In addition to these efforts, in April, we announced the presentation of clinical data from our groundbreaking INSIGHT trial at the prestigious Charing Cross International Symposium in London by Dr. Arne Schwent, a vascular surgeon and one of the leading enrollers in the study. As a reminder, INSIGHT is an IDE study designed to evaluate the safety and effectiveness of Pantheris for the treatment of instant restenosis, or ISR, when a previously implanted stent becomes occluded. The highly positive results from this study form the basis for a 510K application to the FDA to add a specific ISR indication for Pantheris. Based on the strength of the data, the FDA provided clearance to add this indication in November 2021, with Pantheris becoming the only directional atherectomy device approved for use in the treatment of ISR, a significant and challenging problem for thousands of patients every year. Key outcomes data presented from the INSIGHT study include 82% luminal gain or increase in the channel for blood flow following the procedure, 93% freedom from target lesion restenosis at six months post-procedure. 89% freedom from target lesion restenosis at 12 months post-procedure. Zero amputations for the six and 12 month patient cohorts. A 0.96 mean ankle brachial index or ABI at six months from the baseline of 0.69 pre-procedure. and a 71% improvement in the Rutherford class score, a measure of disease severity at six months. These are remarkable results, which speak volumes to the safety and efficacy of our catheters in a high-risk, difficult-to-treat patient population. Dr. Schwent noted, the results from the INSIGHT trial support Pantheris as a frontline treatment option for ISR, with the best combination of efficacy and safety in this patient cohort as compared to any other statistically significant data set produced by alternative technologies. Again, demonstrating the ability for real-time imaging combined with precisely controlled therapeutic catheters to make a clinically significant difference in the lives of PAD patients. As we look to the future, we're excited about the progress we are making in the development of our first coronary product application. targeting a superior image-guided solution to the complex, expensive, and uncertain procedures currently used to cross chronic total occlusions in the coronary arteries. By leveraging our proprietary technology platform, we believe we can redefine this market with the first and only fully integrated image-guided system for crossing coronary CTOs, and by doing so, provide a transformational value opportunity for Avenger. Our coronary CTO development program focuses on low-profile catheter designs that combine real-time OCT guidance with precise control and steerability to facilitate an integrated approach and allow a larger number of physicians to safely and efficiently cross coronary CTOs. Similar to our peripheral catheters, our coronary devices will incorporate a precise measurement capability to help physicians properly size balloons or stents prior to placement. critical for optimal outcomes. Perhaps most exciting from a business perspective, an image-guided coronary CTO crossing device with diagnostic capabilities would access existing reimbursement codes both for the therapeutic procedure and for coronary OCT diagnostic imaging immediately upon FDA clearance. We believe that an OCT-guided catheter designed for crossing efficiency with the need for fewer support devices and less contrast media usage, combined with an attractive reimbursement scenario, provides the opportunity for a differentiating and highly compelling economic value proposition. As we focus our R&D efforts on this initiative, we've made significant progress in our development program. In recent months, we've had multiple interactions with members of our clinical advisory board. made up of highly experienced interventional cardiologists in the fields of coronary CTO crossing and intravascular imaging. And through those interactions, gained valuable feedback for the evolution of our design prototypes. We are making final preparations to evaluate our leading design candidates in the first round of animal studies this quarter, as we work towards our goal of filing an IDE application with the FDA within the next nine to 12 months to allow for initiation of a clinical study for this revolutionary new device in 2024. I'll close my opening remarks today by reiterating the three strategic areas introduced on our March call to drive growth of our peripheral business. First, increasing case coverage capability and catheter utilization in our core geographic areas through the expansion and training of our clinical sales team. Second, Leveraging our new Lightbox 3 imaging console to drive new account activity and expand our user base. And third, completing the regulatory approval process for our two new peripheral devices in preparation for commercial launch in the second half of 2023, which we believe will broaden the appeal of our product portfolio and create new usage drivers for our platform. We are also making important investments for our future with the expansion of our proprietary technology platform to the larger coronary artery disease or CAD market with the defined goal of filing an IDE application with the FDA for our first coronary device in the next 9 to 12 months to allow for the initiation of a clinical study in 2024. Despite a challenging economic environment, we've made tangible progress against each of these goals in the first part of this year, while driving continued improvement in operating results. We look forward to reporting our continued progress against these initiatives throughout the year. At this point, I'd like to turn the call over to Nabil Spinetti, our principal financial officer and accounting officer, to take us through the financial results, and then I'll return for Q&A. Nabil?