InspireMD Inc.

morning and welcome to inspires md third quarter 2025 earnings conference call currently all participants are in a listen only mode we will facilitate a question and answer session towards the end of today's call as a reminder this call is being recorded for replay purposes i would now like to turn the call over to webb campbell from gil martin group for introductory disclosures please go ahead

Thank you for joining us for the InspireMD third quarter 2025 conference call. Joining us today from InspireMD are Marvin Slossman, Chief Executive Officer, Mike Lawless, Chief Financial Officer, and Shane Gleason, Chief Commercial Officer. During this call, management will make forward-looking statements, 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 factors described in InspireMD's most recently filed periodic report on Form 10-K and Form 10-Q, or any updates in its current reports on Form 8-K filed with the U.S. Securities and Exchange Commission and InspireMD'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, November 4th, 2025. 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 Flossman, Chief Executive Officer.

Marvin, please go ahead. Thank you and good morning, everyone. I'm pleased to welcome you to today's call. Joining me on the line is Mike Lawless, our Chief Financial Officer, and Shane Gleason, our Chief Commercial Officer. We are dialed in live from VIVA, the Vascular Interventional Advances Conference in Las Vegas, where we're hosting many conversations on the introduction of Seagard Prime following our approval in June. I will share more on our market traction shortly, but want to start with a detailed overview of the results of the third quarter. I'm happy to share that our business is advancing with velocity and intention. In the third quarter, we reached $2.5 million in total revenue, representing year-over-year growth of 39% and sequential growth of over 40% since the last quarter. Our growth was driven by strong early momentum in the U.S. and continued demand for our C-Guard stent platform internationally. Our strong performance was a result of months of significant internal preparation, which positioned us to hit the ground running upon FDA approval. Following approval, which we received in late June, our team immediately activated our planned commercial efforts in the United States in July. When we say commercial activation, we mean a focused and deliberate effort to make sure that our device is accessible to U.S. providers and their patients who are at risk of stroke. Our team has been engaged with many physicians and hospital systems and are working through value analysis committee approvals, contract completions, and case initiation. We are building traction methodically with the goal to drive sustainable penetration and growth in the market. Demand for C-Guard Prime has been strong. As of today, we've completed more than 100 cases in the U.S., and many of these procedures were performed within some of the largest IDNs in the country. The demand and excitement for our technology reflects the foundational work we've done over the years establishing value and awareness for our best-in-class clinical results. Globally, we are now approaching 70,000 stents sold to date as the carotid interventional market shifts to a stent-first approach. We believe the established CMS reimbursement combined with our innovative protective mesh stent design evidence and real-world experience provide a pathway for us to lead the crowded market. We are equipped with high-caliber sales leadership and clinical support reflected in the remarkable progress our group has made in just a few months post-FDA approval. Their deep experience in vascular markets and established relationships with physicians and administrators combined with a best-in-class implant forms the backbone of our early and progressive success. The team is tasked with our commitment to expanding treatment to the vast patient population who could benefit from our technology. As a reminder, over 3 million people globally are diagnosed with carotid artery disease, yet only approximately 400,000 are treated annually. This massive gap in treatment leaves patients vulnerable to catastrophic stroke events. C-Guard Prime aims to redefine success for these patients and their providers by lowering the risk of strokes and other major adverse events to levels never achieved with first-generation stenting or surgery, validated with rigorous evidence, proven clinical results, reimbursement, and real-world outcomes. As I mentioned earlier, we are living the excitement of our technology firsthand here at VIVA. Today we're here in Las Vegas with many members of our team and board of directors engaging with our physician partners and champions as we continue to launch C-Guard Prime in the US. The energy of our commercial facing teams and the unmistakable momentum around endovascular intervention gives me incredible optimism for the future of our company. Before I provide a detailed update on our clinical trial work, I wanted to take a moment to welcome our new Chief Medical Officer, Dr. Peter Tsoukas. Dr. Tsoukas will oversee clinical and medical topics, further building on our best-in-class data, as well as advancing awareness of our technology stent platform to the physician community. This transformational time for crowd intervention requires continually building a world-class team and support, and Dr. Tsoukas will be a tremendous contributor to our work ahead. We're thrilled to have Dr. Tsoukas join as our CMO. Now to the clinical pipeline, a critical piece of our long-term growth strategy. We continue to advance multiple programs and clinical studies as we work to expand our reach of our technology by building clinical evidence, potentially unlocking additional market opportunities. Starting in TCAR with C-Guardians 2, which evaluates a short TCAR indicated version of C-Guard Prime designed to be compatible with neuroprotection systems that are already in use in the field today. I'm pleased to report that we're on track to complete enrollment by the end of the year and potential approval anticipated in mid-2026. Simultaneously, we're advancing SeaGuardians 3, the next phase of our TCAR strategy, evaluating our fully integrated TCAR solution, combining the SeaGuard Prime 80 stent with our proprietary switchguard neuroprotection system. This study is designed to showcase the full potential of our purpose-built solution for TCAR, offering physicians a comprehensive, streamlined option that we believe can set a new standard in the field. We currently expect FDA clearance and launch in mid-2027. The impact of these two studies highlights the versatility and clinical value of our platform and are expected to give us extremely competitive position in TCAR, a U.S. market that already exceeds 30,000 procedures annually. We also continue to make progress on our tandem lesion early feasibility study to expand the potential use of our technology in acute stroke care. The study is being conducted in partnership with Dr. Adnan Siddiqui and the Jacobs Institute in Buffalo, New York. This study evaluates the use of C-Guard Prime in acute stroke patients with tandem lesions in conjunction with thrombectomy. I'm happy to share that enrollment is over 50% complete. It is inspiring to hear physicians' excitement for having an option to treat this critical need with our technology in a challenging patient population. Let me also mention our awareness of the upcoming CREST-2 data that's scheduled to be presented at the VEEF and SVIN meetings in the coming weeks. We believe the culmination and sharing of this data is another reminder of the advancement of awareness of carotid intervention. and the importance of decoupling categories of therapy with specific implant-based performance to demonstrate the specificity and granularity of results. Clinical outcomes have been redefined with best-in-class evidence with C-Guard implant across a large population sample of both symptomatic and asymptomatic patient cohorts measured in both short- and long-term outcomes. The baseline of nearly 70,000 implants sold and 2,000 patients studied and peer review to date speaks volumes to the validation of our exceptional results. Our strong performance in the third quarter combined with the establishment of a robust commercial foundation gives me tremendous confidence in our ability to deliver meaningful growth and value over the coming quarters and years. Now I'll turn the call over to Mike to walk us through the financials. Mike.

Thanks, Marvin. For the third quarter of 2025, total revenue increased by 39% to $2.5 million. This increase was predominantly driven by the launch of Seagard Prime in the U.S., increased penetration of international markets with Seagard, and the favorable impact of foreign exchange. U.S. revenue for the third quarter was $497,000, driven by the launch of Seagard Prime. This is the first quarter we recorded U.S. commercial revenue following the FDA approval in late June. International revenue for the third quarter was $2.0 million, an increase of $223,000, or 12%, compared to $1.8 million for the third quarter of 2024, driven by increased usage in over 30 markets and the favorable impact of foreign exchange. Gross profit for the third quarter of 2025 increased by $450,000, or over 100%, to $864,000 compared to gross profit of $414,000 for the third quarter of 2024. This increase in gross profit resulted from higher revenue and a favorable shift in sales makes towards higher margin revenue from our commercial launch in the U.S., partially offset by higher production variances in training costs. Gross margin increased to 34.2% of revenue during the third quarter of 2025, up from 22.9% of revenue during the third quarter of 2024, driven primarily by the previously discussed favorable revenue mix and volume leverage of fixed operating costs. We expect continued expansion of gross margins in future quarters as our commercial sales ramp in the U.S. drives continued favorable mix and volume leverage. Total operating expenses for the third quarter of 2025 were $13.9 million, an increase of $5.0 million, or 57%, compared to $8.9 million for the third quarter of 2024. This increase was primarily due to higher headcount-related expenses as we continue to expand our U.S. personnel, particularly our commercial team, to drive the U.S. commercial launch of Seaguar Prime. A second driver of the increase in operating expenses was occupancy and infrastructure expense. related to the establishment of our U.S. headquarters. Financial income decreased by $229,000 to $343,000 from $572,000 in the third quarter of 2024. This decrease was primarily due to a $118,000 decrease in financial income from investments in marketable securities and money market funds and a $104,000 increase in financial expenses related to changes in exchange rates. Net loss for the third quarter of 2025 was $12.7 million, or 17 cents per basic and diluted share, compared to a net loss of $7.9 million, or 16 cents per basic and diluted share, for the same period in 2024. As of September 30, 2025, cash and cash equivalents in marketable securities were $63.4 million, compared to $19.4 million as of June 30, 2025. The increase in cash resources is a result of two financing events with significant impact during Q3. First, we raised gross proceeds of $40.1 million through a pipe offering with existing and new investors. Second, we raised gross proceeds of $17.9 million from the exercise of the second of four milestone-based financing tranches pursuant to our May 2023 equity private placement. The exercise of the warrants was triggered by the receipt of pre-market approval from FDA for our SeaGuard Prime carotid stent. The two remaining tranches are triggered by future milestone events, including, first, the completion of four quarters of commercial sales of SeaGuard Prime in the U.S., which we anticipate in the back half of 2026, and, second, receipt of FDA clearance for the SwitchGuard T-CAR system. neuroprotection system, along with TCAR-indicated C-Guard Prime stent, which we expect during 2027. So, turning to our financial outlook, we're encouraged by the initial traction for sales of C-Guard Prime in the U.S. and the continuing solid performance of C-Guard internationally. For the fourth quarter, we expect sequential growth in U.S. sales and steady demand trends internationally, resulting in revenue of approximately $1.5 2.5 to 3.0 million dollars in the fourth quarter when we report our fourth quarter 2025 results we will share our 2026 growth expectations informed by insights from an additional quarter of u.s launch progress this concludes our prepared remarks we will now open the call for questions for the q a segment we will be joined by shane gleason inspire md's chief commercial officer operator

Thank you. If you'd like to ask a question, please press star 1 on your keypad. To leave the queue at any time, press star 2. Once again, that's star 1 to ask a question. And we'll take our first question from Adam Meter with Piper Sandler. Please go ahead. Your line is open.

Hi. Good morning, Marvin, Mike, Shane. Thank you for taking the questions, and congrats on the progress. Can you hear me okay?

We can, Adam.

Okay, perfect. I was getting a little bit of feedback there. You know, maybe just to start, would love to hear a little bit more about the initial position feedback that you're getting from U.S. customers that have started to use Seaguard Prime. And then the second part of that is maybe it's a little bit early, but curious how Seaguard works. is being used in the doctor's armamentarium, you know, is this kind of being, you know, used as kind of the workhorse carotid stent for customers? And then I had a couple follow-ups. Thanks.

Adam, thanks for the question. We're really enthusiastic in the response from physicians. I think that there has been a buildup to anticipating Seaguard Prime's launch in the U.S. because of our baseline of experience outside of the U.S. And we purposefully launched this product over the many years outside the U.S. to build a very solid foundation of best-in-class clinical data and real-world experience. As you know, this world operates globally, and it was no secret anticipating this coming launch. So we're very enthusiastic about it. Frankly, we're trying to make sure that we follow a very deliberate, controlled approach the things to get on top of all the opportunity that we see in front of us, but to do it the right way and deliberately. We're following our playbook that was designed for a long view and leadership in this space with durability over time. So I think the early days, even though it's one quarter of data, really give us a lot of enthusiasm and encouragement. I'm going to ask Shane to kind of jump into the second part of your question in terms of where this fits in the armatarium of our customers across a pretty broad base of carotid users.

Yeah, thanks for the question, Adam. The excitement's been really strong. And as we mentioned earlier, we're at the Viva meeting. We were at the TCT conference last week. There are a number of other ones upcoming. And the team is in the field every day having these conversations. So the product's been very well received. And a lot of the discussion at the meetings has been exactly that. Where does this fit in? to people's carotid toolkit. And up until now, there have tended to be trade-offs between different stent platforms. A lot of advocacy for being comfortable with both an open-celled stent and a closed-celled stent for various anatomies. And one of the great things about Seaguard Prime is that it really meets both of those. So we envisioned this to be a workhorse product. That's what the folks at the podium are saying as well. So that's our expectation going forward.

Okay, perfect. Appreciate all the color there, guys. And for the next question, I was hoping to just go a little bit deeper into U.S. launch and wanted to see if you could share some metrics, I guess more specifically device ASP versus volume in the quarter. number of accounts that have implanted C-Guard at this point and visibility around that process for how we should think about onboarding accounts in Q4.

Thanks, Adam. I'm going to let Shane jump in on those topics. Again, early days and early data points, but I think thus far the expectations across that spectrum that you just mentioned have been really encouraging. It's sort of above expectations, but Shane, do you want to

I'll say in terms of pricing, our approach has been that we are coming in at a premium to the market, but not a prohibitive one. The conversations that we have frequently are that our major adverse event rates are a half or a third of what the first-generation stents have. So we could have taken the approach that we're two or three times as good, so we're going to charge you two or three times as much. price it like a drug-coated balloon or a drug-coated stent newly into the market. But we know that while that may eventually get us on the shelf in some places, it would likely limit adoption, certainly to being a workhorse product. So our communication is that we're requesting, I'll call it a modest premium, something versus the cast and TCAR stents, something in the hundreds of dollars, not thousands of dollars. and uh saying that we want it to be a workhorse set we don't want it to be priced to the point where you only use it in case of emergency you only use it in the worst of your worst cases but we want to be used in all of their cases so uh yeah i'd say a uh a more modest premium to the market which has been well received by physicians and administrators as well that's helpful shannon just any any color on

Accounts, yeah, sorry. Go ahead, please.

Yeah, I was just going to clarify the other question. So we mentioned that we've done over 100 cases since launch. Obviously, that number is growing every day. And in terms of accounts open, are we... Yeah, we've had about a dozen reps in the field until very recently. And I'll say that we... on average, opened several accounts per rep, even in the first quarter, which we've outpaced expectations where you kind of think, you know, VACs and product committees tend to be measured in quarters to years, not weeks or months. But we've actually had a lot of approvals in months and not quarters. And we've done cases in a lot of the key around the U.S., so we've made a lot of traction there in terms of opening accounts.

Yeah, and I would just add that, you know, this is a foundational build for us. When we talk about activation, it's all of those things, but the benefit of having a team on the field at approval, thanks to our capital strategy, was really important for us so that we could get into that activation mode quickly and will obviously benefit as that continues to mature.

Sure. Totally makes sense and appreciate the color. And just one last one, if I may sneak one more in. I think you just mentioned, Shane, 12 reps in the field in the U.S. until recently. Can you just remind us kind of how we should think about the Salesforce expansion plan as we get into this quarter, Q4, as well as 2026? So I'll leave it there, guys, and congrats again, and thanks for taking the questions.

Yeah, absolutely. So what we communicated last time that we have a U.S. commercial organization that was north of 20 people with most of them in the field. I mentioned the number of reps just a minute ago, but then you add in the sales directors and clinical specialists. We were exiting this year with more than 30, again, with most of them in the field. And the addition since then have all been territory manager, customer-facing sales roles. And then in terms of going forward, our plan has been to get to that point here as we exit the year, let them start to throw down some roots in their accounts, and then scale accordingly as we get into and through 2026. Thank you.

Thank you. In the interest of time, we do ask that you limit yourself to one question and one follow-up. And we'll take our next question from Frank Tackigan with Lake Street Capital Markets. Please go ahead. Your line is now open.

Great. Thanks for taking the questions. Congrats on the solid initial launch. I was hoping to follow up on, I think there was a guide right at the end of $2.5 to $3 million. I think I heard that was for total business. Can you maybe help us parse out OUS versus U.S. in that two and a half to three? Apologies if I missed it.

Yeah, sure. Hi, Frank. This is Mike.

Yeah, the breakdown of the guidance really consists of stable international sales relative to Q3 with expectations for some growth in the U.S.

market in Q4.

Perfect okay that's helpful and then maybe one I know it's probably early days here, but any comments around those who have started to use it, how they are how they are ordering product initially are they starting with a few units and then reordering are they putting a half dozen units on the shelf, how are they generally speaking ordering product to start.

Yeah, Frank, I'll jump in there and hand it off to Shane for the back half of that question. So far, patient outcomes are great. The stent performance is great. We're thrilled by the fact that expectations are certainly being met in those two parameters, which is what's most important and consistent with how we've done this globally and how the stent has performed globally. I'll let Shane kind of answer the general theme that we're following in terms of how we're stocking shelves doing cases, and most importantly, how the matrix of our products fits well into the size expectations that are on the shelf.

Yeah, thus far our goal has been to, we want our team in the cases as we launch this product. One of the nice things about this space is that eventually that won't be the requirement. We know that's a question of, do you build a model where you need to be present every single one of your cases? I'd say in the short term, as we launch the product, we want to be present in those cases. And then as we open things up going forward, we won't need to be. So what that spells is that we're not stocking shelves and running away and hoping they use it when we're not there, but primarily running the cases out of rep stock with reps present in the cases as we get started and we make sure that the users in the accounts that could use it are trained and familiar with it before we leave a bunch of product on customer shelves.

Yeah, Frank, I think it's all about utilization at this point. We want to make sure that this is the go-to product and it's utilized effectively as such.

Got it. That's helpful. And then maybe if I can just sneak one last one in, gross margin commentary, how should we think about where gross margins can go with scale?

Yeah, well, I think, as I mentioned on the call, the clear driver of that is the increasing mix of U.S.

sales as we go forward into the future. As our volumes grow, we'll get some scale leverage just from higher revenue, but we'll also get the benefit of the much higher margin mix of sales in the U.S. market. And so, I mean, I think at this point, I don't want to start giving forward guidance on margins, but suffice it to say that As U.S. becomes a larger and larger percentage of our revenue, we would expect that our margins would approach, you know, typical medical device type margins.

Okay, that's helpful. Thanks for taking the questions.

Thank you. At this time, we've reached our allotted time for questions. We'll now turn the call back over to Marvin Slovesman. Please go ahead.

I'd like to thank everyone for joining today's call and the continued support for our mission to lead and transform the crowd intervention market. We're really proud of the strong performance the team delivered globally in the third quarter and especially here in the U.S. in our first commercial quarter as we advance our activation efforts and accelerate momentum. If you happen to be here in Las Vegas at Viva, stop by the booth. We'd be happy to see you and look forward to great progress on our business. Thank you.

Thank you. This does bring us to the end of today's meeting. We appreciate your time and participation. You may now disconnect.