InspireMD Inc.

To all sites on hold, we do appreciate your patience and ask that you please continue to stand by. Thank you. Please stand by, your program is about to begin. If you should require assistance during your conference today, please press star zero. Good morning and welcome to the InspireMD second quarter 2024 earnings call. Currently, all participants are in a listen-only mode. Later, you will have the opportunity to ask questions during the question and answer session. You may register to ask a question at any time by pressing the star and one on your telephone keypad You may withdraw yourself from the queue by pressing star and two. Please note this conference is being recorded. I will now turn the conference over to Chuck Padala with Life Advisors. Thank you, and you may begin.

Thank you, Operator, and good morning, everyone. Thank you for joining us for the InspireMD second quarter 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, which are based upon management's current expectations, beliefs, and projections, many of which by their nature are inherently uncertain. These forward-looking statements involve risks and uncertainties that may cause actual results to differ materially from those expressed in such forward-looking statements. For more information about these risks, please refer to the risks factor described in Inspire Indeed's most recently filed periodic reports on Form 10-K and 10-Q or any updates in our current reports on Form 8-K filed with the U.S. Security and Standards Commission and Inspire Indeed's press release that accompanies this call, particularly the cautionary statements made in it. This call contains time-sensitive information that is accurate only as of today August 6, 2024, 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 of InspireMD. Please go ahead, Marvin.

Thank you, Chuck, and thanks to everyone for joining our call this morning. I'd like to begin with a recap of perhaps the most significant milestone in the company's history. The presentation of one-year outcomes data for our pivotal C-Guardians clinical trial of the C-Guard carotid stent system presented at the Leipzig interventional course on May the 28th. The data presented by our lead principal investigator, Dr. Chris Metzger, system vascular chief at OhioHealth, demonstrated an independently adjudicated major events rate of just 1.95% through 12-month post-procedure. which is the lowest such event rate of any carotid pivotal trial to date. These results build on the 30-day DSMI results of 0.95%, first presented in October of last year, and establish a new high bar for clinical outcomes, which remains the focus of our patient-first, implant-driven strategy as we work toward an anticipated U.S. approval in the first half of 2025. As remarkable as these results are, it is important to note that they also closely mirror the results we've seen across multiple studies involving over 1,100 patients in the published peer-reviewed literature showing that similarity of excellent patient outcomes can be achieved with C-Guard in real-world treatment as we've seen in this FDA IDE trial. With this data in hand, we are on track to submit a premarket approval application, or PMA, to the FDA this quarter, which, if approved, would allow us to execute on a robust commercial launch of C-Guard Prime in the U.S. beginning in the first half of 2025. C-Guard's foundation of more than 55,000 devices sold to date has consistently demonstrated superior short- and long-term patient outcomes. which we believe has the potential to catalyze C-Guard as the gold standard carotid implant. The presentation of these one-year results also triggered the first of four milestone-based financings pursuant to the transformational private placement of up to $113.6 million we announced in May of 2023. We were pleased to announce just a few weeks ago the full exercise of Series H warrants, which raised $17.9 million in gross proceeds for the company. We are very grateful to the highly regarded institutional investors who continue to show their support for our company and our vision. including Marshall Weiss, Orvimed, Rosalynn Nanahala, Solius, Velen, as well as members of our Board of Directors. We continue to work tirelessly to achieve additional significant milestones which would trigger the three remaining tranches and bring in an additional gross proceeds of $53.7 million. These milestones include, number one, an announcement of receipt of premarket approval, PMA, from the FDA for the C-Guard Prime carotid stent system, which we are targeting for the first half of next year. Number two, receipt of FDA clearance for SwitchGuard TCAR kit to include our C-Guard Prime stent. And number three, the completion of four quarters of commercial sales of C-Guard in the United States, which we anticipate in the back half of 2026. Turning now to an update on our U.S. commercial preparedness activities. We engage with one of the leading MedTech search firms, the Mullings Group, to accelerate the build-out of our world-class operations and commercial teams. This process is ongoing and we are very pleased to be onboarding several high-caliber candidates for critical roles to prepare the business for a robust market launch. We have also previously announced we will be establishing a U.S. headquarters in southeast Florida, including production capacity and customer training and support. Our growing leadership team will drive execution and launching our SeaGuard Prime in the U.S. market with world-class operations, sales, and sales support for both our CAS and TCAR programs. Our plan to study and submit our SwitchGuard Neuroprotection System Accessory Kit and C-Guard T-CAR compatible stent platform remains on track, and if cleared, will allow us to offer a complete T-CAR toolset with next generation enhancements, including the best performing implant and C-Guard Prime. As a reminder, the SwitchGuard NPS T-Card platform is designed to prevent embolic debris generated during a carotid stenting procedure from traveling to the brain, passing the blood through an integrated filter, and returning it to the patient in a closed circuit to minimize blood loss during the procedure. Both C-Guardians 2 and C-Guardians 3 remain on track for submission and clinical enrollment from previous guidance. As we've said before, our ongoing investment in both CAS and TCAR products and programs was intended to address the broadest physician base performing carotid revascularization and was done anticipating a time when product innovation and procedural reimbursement further shifted the tides toward an endovascular-first standard of care. Last year marked the beginning of what we believe is a shift toward a stent-first approach ignited by CMS's final national coverage determination in October, which expanded coverage of CAS and TCAR to include both asymptomatic and standard risk patients. With a best-in-class implant in C-Guard, we believe we're very well positioned to be the leader in this sea change. I would now like to provide a brief update on the ongoing CRES-2 clinical trial. CRES-2 enrollment and randomization of 1,240 subjects across 142 trial sites in the United States, Canada, Spain, and Israel, evaluating transfemoral stenting, or CAS, plus intensive medical management, IMM, versus IMM alone, while also evaluating carotid endarterectomy plus IMM versus IMM alone. The primary endpoint is the composite of any stroke and death within 44 days following randomization, and stroke ipsilateral to the target vessel thereafter up to four years. This week, we announced that enrollment in these trials was now complete, a tremendous milestone for CREST-2, and we are very pleased to have had C-Guard included as the only investigational device approved by FDA and used in 23 cases, despite being introduced late into the enrollment process with 82% complete at the time. We extend our congratulations to Dr. Brat, Dr. Macia, and Dr. Lal, along with the entire CREST II Executive Committee, investigators, and sites in completing this tremendous study and appreciate the opportunity to have contributed with our next generation C-Guard carotid stent platform. Turning now to our pipeline of expansion initiatives, we previously announced that we entered into a strategic agreement with the Jacobs Institute at the State University of New York at Buffalo and Dr. Adnan Siddiqui, Vice Chairman and Professor of Neurosurgery, to conduct an early feasibility study of C-Guard Prime for severe carotid stenosis and occlusion in conjunction with thrombectomy in patients presenting with acute ischemic stroke and tandem lesions. As a reminder, C-Guard Prime, with its proprietary Micronet mesh, is designed to provide superior embolic prevention during the carotid artery stenting, and we believe that this study will demonstrate safety and feasibility of using our stent in these acute stroke procedures. Our investment in this study reflects our strong commitment to the neuro community and represents a critical component of our long-term growth strategy. We anticipate that the first patient will be enrolled this quarter. Finally, we are pleased to announce total C-Guard revenue for the quarter was $1.74 million, representing a growth of 5.4% over the second quarter of last year, including a significant growth quarter in production of devices to meet anticipated market demand. We sold 2,969 C-Guard implants during the quarter, representing growth of nearly 6% over the same period last year. As we approach our potential approval for CGARD in the U.S., it is worth noting for context the difference in top-line revenue of our current served markets outside the U.S. and the potential of how these quarterly results would have translated in U.S. revenue. Outside the U.S., we compete in a much smaller cash market of approximately 40,000 total procedures versus 155,000 in the U.S. Without reimbursement for TCAR, pricing pressure through low reimbursement of an average sales price of $1,100 and distribution through channel partners resulting in a $600 transfer price per system. Despite these limitations, our investment in these 30 markets has enabled us to build an incredible foundation of best-in-class results, establishing a new standard of care for carotid intervention with double-digit share in all markets served. along with the most robust clinical evidence in studies of over 1,100 patients having sold over 55,000 devices to date. As we approach the possible FDA approval in the first half of 2025, it's worth a comparison of how our current unit volume would translate to top-line revenue. On $2,969 sold in the U.S., revenues would have been approximately $13.6 million for the quarter, assuming an equal mix of cash and TCAR sales at current ASPs. Further, to put these nearly 3,000 quarterly stints in perspective, we have a competitor with a TCAR-only business that reported $48.5 million in revenue on 6,700 procedures last quarter. So in terms of patients treated, our device would have treated nearly half the number of patients that they did without our device having even entered the U.S. market. So we believe that our entry into the U.S. market, along with the future introduction of our SwitchGuard NPS, sets us up very favorably for significant revenue growth beginning next year. We know how to create and service demand. are building a world-class commercial team, and are thrilled about the opportunity to enter the biggest carotid market in the world. At this point, I'll turn the call over to Craig to review the financials. Craig?