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Operator
First quarter 2022 earnings call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anybody would need operator assistance, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. At this time, I'd like to turn the call over to your host, Chuck Padala, LifeSci Advisors. Thank you. You may begin.
Chuck Padala
Thank you, operator, and good morning, everyone. Thank you for joining us for the InspireMD first quarter 2022 financial results and corporate update conference call. Joining us today from InspireMD are Marvin Slossman, Chief Executive Officer, and Craig Shore, Chief Financial Officer. During this call, management will be making forward-looking statements, not historical facts, that are based upon management's current expectations, beliefs, and projections, many of which, by their nature, are inherently uncertain. They involve risks and uncertainties that may cause actual results to differ materially from those expressed in forward-looking statements. For more information about these risks, please refer to the risk factors described in InspireMD's most recently filed periodic reports on Form 10-K and Form 10-Q filed with the U.S. Security and Exchange Commission and InspireMD's press release that accompanies this call, particularly the cautionary statements made in it. The call contains time-sensitive information that is accurate only as of today, May 10, 2022, except as required by law, InspireMD disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn the call over to Marvin Slossman, Chief Executive Officer. Go ahead, please, Marvin.
Marvin Slossman
Q1 2022 proved to be a very busy and productive quarter at InspireMD, with approximately 1,910 C-Guard stent systems sold to our 31 served markets, representing revenue of $1.161 million. We accelerated enrollment in our C-Guardians FDA trial, including initiating our first European site, preparing for enrollment of the first randomized cases in the CRES-2 trial, received regulatory approval for our European logistics hub, enabling our direct sales in the UK and France, and prepared for expansion into more direct sales markets. We added five new members of our expanding global team, including seasoned sales and marketing professionals, as well as bolstering our world-class engineering department to keep pace with our expanding R&D programs and commercial growth. Our mission at InspireMD is to establish a new standard of care for addressing carotid artery disease and stroke prevention, which is foundationally different than any other company. Best patient outcomes, both short and long term, depend on a stent platform which delivers unmatched clinical results to this ever-expanding endovascular-focused market. The C-Guard carotid stent system, through its unique design and proprietary Micronet mesh protection, delivers and maintains superior vascular patency compared to all other stent devices and open surgery. In order to enable this change to better patient care and to make C-Guard ubiquitous in this market, we're focusing on all specialties treating carotid artery disease. By approaching this market in this comprehensive stent-centric approach, we believe we can enable the conversion of this surgically dominated $5 billion global total addressable market to a less invasive endovascular standard of care with sustained results. Revenue for Q1 was $1.161 million, reflecting a 20% growth year-over-year in C-Guard sales on 1,910 procedures and units sold. It is important to note procedural volume as a more accurate indicator of the strength and size of our business as we currently share a proportion of the average sales price in the major markets with our distributor partners, further emphasizing our priority to convert more markets to a direct sales approach to fully capture top-line revenue recognition. Our European hub will facilitate and accelerate our planning of a more direct market conversion for distribution during 2022. Turning to our advancing enrollment in the Sea Guardians FDA IDE trial, our expanded site training and enrollment continues with 13 sites currently enrolling in the U.S. with plans for three more, along with our first site in Europe with plans to start three more there, all during the next two quarters. Patient enrollment continues to accelerate rapidly with more investigators experience and gained confidence in C-Guard. Our current outlook remains consistent, anticipating the completion of enrollment of the trial in Q1 2023. We continue talks in Japan with distributor partners interested in representing C-Guard, which would complement our distribution agreement in China signed last year. We believe the Asian market offers an opportunity for C-Guard, as the existing standard of care for procedural intervention is predominantly endovascular focused and less surgically dominated. As we announced in our previous reporting, our commercial pathway to business growth for C-Guard will be facilitated by a new transfemoral delivery system, C-Guard Prime, offering a greater navigation flexibility to address challenging patient anatomy as well as broader set of evolving indications. C-Guard Prime will be available in both standard and short-shaft versions compatible with the development of our SwitchGuard TCAR accessory device, thus enabling a trans carotid option for our toolset designed for those clinical needs and conversion of greater surgical procedures to a stent platform with C-Guard EPS. Both devices are planned to launch in early 2023, and we believe will foundationally change the landscape of C-Guard utilization to the broadest group of specialists performing endovascular procedures. Thus far, the feedback from our KOL community has been enthusiastic and encouraging. As we chart a new course of how carotid stenosis is managed and how strokes are prevented, with our clinically proven C-Guard EPS system, our mission is to provide the best patient outcomes and broad a set of tools to unlock this tremendous potential in this rapidly growing and evolving market segment. With that, I'll turn the call over to Craig to review our first quarter financials. Craig?
Craig
For the first quarter of 2022, revenue increased 18% to $1,183,000 from $1,006,000 during the first quarter of 2021. This increase was predominantly driven by a 20% increase in sales volume of Seagard EPS from $969,000 in the same period one year ago to $1,161,000 for the first quarter of 2022. This sales increase was mainly due to growth in existing and new markets, as well as the returning demand from hospitals in a post-COVID-19 environment. In addition, U.S. sales increased due to stents used in the Cigardian FDA clinical trial. Due to the ongoing conflict in Russia, Belarus, and Ukraine and related currency restrictions, we did not sell to these three countries during Q1, limiting our reported growth. If we eliminate the impact of these countries, there would have been a 32% year-over-year growth in CGARD EPS versus the 20% reported number. Gross profit for the first quarter of 2022 increased by $16,000 to $122,000 compared to a gross profit of $106,000 for the first quarter of 2021. This increase in gross profit resulted from decreases in write-offs, which were driven mainly by component supply issues. Gross margin was 10.3% during the three months ended March 31st, 2022, versus 10.5% during the prior year period. Total operating expenses for the first quarter of 2022 were $4.6 million, an increase of $1.2 million compared to $3.4 million for the first quarter of 2021. This increase was primarily due to increases in expenses related to the commencement of the Seagonians FDA study and share-based compensation. Net loss for the first quarter of 2022 totaled $4.5 million, or 57 cents per basic and diluted share, compared to a net loss of $3.2 million, or 53 cents per basic and diluted share, for the same period in 2021. As of March 31, 2022, cash, cash equivalents, and short-term bank deposits were $29.9 million, compared to $34 million as of December 31st, 2021. I'd like to now turn the call over to the operator for questions.
Operator
Thank you. Ladies and gentlemen, at this time, we'll be conducting a question and answer session. If you'd like to ask a question, you may press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star key. Our first question comes from the line of Ben Hainer with Alliance Global Partners. Please proceed with your question.
Ben Hainer
Good morning, gentlemen. Thanks for taking the question. And congrats on the progress. It seems like things are moving along nicely. Now, on the co-principal investigator that you have in Poland, I know he's been pretty prolific in doing C-Guard cases in the past. I was wondering, you know, if you expect his, you know, cadence to be similar to someone like Dr. Metzger or slightly slower?
Marvin Slossman
Yeah. Hi, Ben. Thanks for the question. Professor Piotr Misialek is the person you're referring to, and he has been a KOL of ours for quite some time, probably has the most experience with C-Guard of anyone in the world. And we certainly believe that his volume of procedures and contribution to the trial is will be on par with any of the top carotid stenting physicians in the world. So we're incredibly enthusiastic about Professor Musialek being involved as a co-PI and also driving incremental enrollment in Europe in general. He'll be leading the effort with our investigators there.
Ben Hainer
Okay, great. And then on the conversion to direct and the distribution, hub agreement that you guys signed. What countries do you intend in Europe to go direct first? I know you're already direct in France, but what are the next ones kind of on the list?
Marvin Slossman
Yeah, so Ben, right now we're direct in France and the UK both, and we're in the process of fine-tuning the details on the other countries. As you can imagine, it's a bit sensitive given the fact that we have distribution agreements in place in many of those areas. So we're working through the details now, but the first step was to put this logistics hub in, get it cleared from a regulatory perspective, and make sure that we're in a position to be able to sell efficiently on a direct basis. There'll be much more information in subsequent calls, but our plan is to engage a number of countries on a direct model to take advantage of the higher ASP and much more control of of the market space with new products in the pipeline, we certainly want to control the effort and make sure that we're doing that on a direct basis, but much more on that topic in subsequent calls.
Ben Hainer
Okay, so stay tuned there. Did I hear you correctly in the prepared remarks that you're in the CREST II trial and have done the first cases? And if so, how many cases do you think might be available to you guys Yeah, I forget exactly where the enrollment stands on that trial and the stent arm.
Marvin Slossman
Yeah, we're preparing for first cases right now. Obviously, there's a considerable amount of paperwork to be done and logistics to be sorted out. We're thrilled to have been approved to participate in the stenting arm at the CREST II trial. That was a huge milestone for us, and we've been working diligently with the CREST II Executive Committee to get the right locations lined up, some of which are current Sea Guardians sites. We will have much more detail on that and enrollments, hopefully, during the quarter that we can share in detail. But right now, we're preparing those sites. And we don't have a firm number for you at the moment, but we certainly think that Sea Guard is bringing a refreshed view of those operators being interested in contributing to the stenting arm. So that, we believe, will help considerably in the effort with the CREST II enrollments.
Ben Hainer
Okay, that's helpful. And then, you know, I don't know if you guys have better information, but I thought I had heard that the stenting arm was a decent amount behind the other arm there. CEA arm there. Do you guys have any sense of that and, you know, any additional code that you have on how that trial is progressing?
Marvin Slossman
We don't, Ben. We don't have any specific details that we can share. You know, we certainly have heard similar feedback, but don't have a quantitative measure at this point. But with CGAR being available to enrollment, we hope that that, you know, continues to provoke the stenting side of the enrollment and make that more robust. But I don't have a specific number for you at this point.
Ben Hainer
Okay, that's fair enough. And then, you know, just back on your KOL event, I think Dr. Metzger and Dr. Leiden both made statements kind of suggesting that CMS was kind of in the process of reviewing the national coverage determination for stenting and may have been likely to kind of expand coverage in the near term to kind of match CEA. Is there anything more on that front that you guys have heard?
Marvin Slossman
We don't have any more details except we're certainly supportive of the effort and encouraged by the trend here. We hope that CMS does begin to cover standard risk and, you know, that would be a tremendous milestone for us and obviously all of those that, you know, contribute to the stenting side of the business and an endovascular approach. So we're, again, encouraged by the progress. We don't have any details other than we continue to you know, support all of the efforts industry-wide that are going on to try to, you know, enable that change. And that would be a huge uplift, obviously, for us and for the space in general.
Ben Hainer
Yeah, big deal for sure. And then lastly for me, just, you know, what activities remain on C-Guard Prime and SwitchGuard, you know, regarding development and submission and all that fun stuff? And then what geographies do you plan on launching that in first and I guess, is the decision to go direct partially driven by those products?
Marvin Slossman
Yeah, absolutely, Ben. I think you're right on there. Our direct effort in many of the countries is driven by the fact that we've got new products to launch, and we certainly want to take full advantage of that momentum. Right now, we're well into the R&D and what we call V&V stage of of getting these products through the pipeline and getting all the clinical data required to get that into the regulatory pathway. So our hope is to continue that effort and to have all of those approvals take place in a timely manner. We're anticipating a Q1 launch of both the products and we're incredibly enthusiastic about both of those because they offer tremendous access to a much broader base of physicians interested in stenting, and most importantly, that's a comprehensive approach to both the interventionalists as well as vascular surgeons. You know, that is fundamentally different about how we approach the business. We see this as a comprehensive approach, and the ultimate goal is to place C-Guard stents. That is the basis of our business, and frankly, from a patient quality of life and clinical outcomes perspective, the stent is really what matters. So we're We're really looking forward to having those delivery systems in the pipeline and available in 2023.
Ben Hainer
Excellent. Great update, and congrats on the progress, gentlemen. That's all I have.
Marvin Slossman
Thanks, Ben.
Operator
If there are no further questions in the queue, I'd like to hand the call back over to Marvin Flussman for closing remarks.
Marvin Slossman
Thank you. I'd like to thank everyone for taking the time today to join the call and for the ongoing support. We're extremely proud of the progress from the quarter and look forward to 2022 being a breakthrough year for InspireMD.
Operator
Ladies and gentlemen, this does include today's teleconference. Thank you for your participation. You may disconnect your lines at this time and have a wonderful day.
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