TEL AVIV, Israel, Nov. 15, 2011 /PRNewswire/ -- InspireMD, Inc. (OTC BB: NSPR) ("Inspire" or the "Company"), a medical device company focusing on the development and commercialization of its proprietary stent platform technology, today announced that it has filed its Form 10-Q for the three months ended September 30, 2011 with the U.S. Securities and Exchange Commission. The Company provided an update on progress year-to-date:
- Year-to-date shipment volumes increased 85% compared to the first nine months of last year, reflecting increased global demand and an expanding distribution network.
- InspireMD advanced its regulatory strategy for the U.S. approval of the MGuard stent for patients with Myocardial Infarctions by entering into a clinical trial services agreement with Harvard Clinical Research Institute, Inc., (HCRI); HCRI will manage the FDA study entitled "MGuard Stent System to Treat Patients with Acute Myocardial Infarction" on behalf of InspireMDwith the goal of securing FDA approval ultimately clearing InspireMD to sell its product in the United States. The Study is expected to enroll more than 650 patients in approximately 50 clinical sites in the United States and Europe with the potential to expand the study by additional 150 patients. InspireMD expects to select a primary investigator and initiate the study in 2012.
- On October 25, 2011, InspireMD received notice of allowance for U.S. patent 8,043,323 for "In Vivo Filter Assembly" from the U.S. Patent and Trademark Office. The patent, authored by InspireMD founders Asher Holzer, Ph.D, Ofir Paz and Eli Bar, covers the invention of in vivo filters that filter debris from a fluid stream in which the filter is disposed. MGuard is based on a stent which is wrapped with an expandable, MicroNet (mesh) made of a single knitted PET fiber.
- The Company expanded its board of directors with the addition of three highly prominent independent directors:
- Biotechnology industry veteran Sol J. Barer, former Chairman and CEO of Celgene, joined the Company's Board, bringing over 30 years of experience with publicly traded biotechnology companies.
- Paul S. Stuka, Managing Member of Osiris Partners and a 30-year investment industry veteran, also joined InspireMD's Board. Mr. Stuka's career includes senior roles at Longwood Partners, State Street Research and Management, and Fidelity Management and Research.
- Eyal Weinstein, C.P.A., an executive and consultant, joined InspireMD's Board. Mr. Weinstein served as an auditor for Kost-Lev-Ari, the Israeli branch of Ernst &Young, and also served as a senior executive of three firms.
Dr. Asher Holzer, Co-Founder of InspireMD and the Company's President, commented, "The positive clinical data and the need for a solution to address the currently unmet need for treatment of Acute MI (myocardial infarction) continues to drive demand for our MGuard stent system from early adopting doctors outside the United States. We have captured the interest of cardiologists, and this will benefit us as we complete our MASTER randomized trial. On November 9, 2011, we hosted a breakfast meeting at the TCT conference, where Dr. Gregg W. Stone discussed 'Thrombus Management in STEMI with MGuard Micro-Mesh Technology: Complex Lesions and the MASTER Trial.' We are also pleased to be working with the Harvard Clinical Research Institute, one of the leading research organizations, as we pursue FDA approval for our technology. The HCRI has performed hundreds of studies with respect to FDA approval applications and we are pleased to work with such a respected and experienced organization."
Ofir Paz, Co-Founder and CEO of InspireMD, added, "Simultaneous with our efforts to bolster our clinical data, we are expanding our global sales and marketing efforts in anticipation of the completion of the MASTER trial. This effort produced meaningful results in the third quarter, as we saw an 88% increase in shipments and a notable increase in revenues. We are also pleased to have received notice of our patent from the USPTO, bolstering the intellectual property protection for our first product. In addition, we remain focused on innovation, and plan to introduce additional products based on our mesh net technology. We are excited about our progress to date."
Third Quarter Financial Results
For the quarter ended September 30, 2011, total revenue was $2.0 million, an increase of 62.4% compared to the $1.2 million for the third quarter last year and a sequential increase of 91.0% compared to the $1.0 million for the second quarter of 2011. On a product delivery basis, shipments increased 87.8% during the third quarter of 2011 compared to the same period in 2010. Gross profit was $1.2 million, or 59.7% gross profit margin, compared to gross profit of $662,000, or 54.1% gross profit margin in the third quarter last year. Higher margins were due to higher average selling prices for the Company's stents and improved economies of scale. Total operating expenses were $3.3 million during the third quarter of 2011, compared to total operating expenses of $1.4 million in the same period in 2010. The majority of the increase was due to a $0.2 million, or 179%, increase in research and development expense, primarily related to investments in future products and the clinical validation of existing products as well as salaries, and a 175% increase in general and administrative expense, primarily related to $1.3 million non-cash charges for share-based compensation for one of the Company's new directors as well as public company, legal and investor relations expenses. Selling and marketing expenses remained relatively flat as compared to the same quarter in 2010.
The Company reported a loss from operations of $2.2 million compared to a loss from operations of $717,000 in the year-ago quarter. The net loss was $2.3 million, or $0.04 per weighted average share, compared to a net loss of $847,000, or $0.02 per weighted average share last year. Net income for the third quarter was negatively impacted by a non-cash charge of $1.1 million in share-based compensation for one of the Company's new directors, which is recorded in general and administrative expenses.
Year-to-Date Financial Results
For the first nine months of 2011, the period ended September 30, 2011, total revenue was $4.7 million, an increase of 11.4% compared to the $4.2 million for the first nine months last year. On a product delivery basis, shipments increased 85.3% year-to-date compared to the first nine months last year. Gross profit was $2.4 million, or 50.3% gross profit margin, compared to gross profit of $1.9 million, or 43.8% gross profit margin in the same period last year. Total operating expenses were $7.9 million compared to total operating expenses of $3.9 million. The increase was due to a 142% increase in general and administrative expense, primarily related to share based compensation expenses, ($1.1 million increase), legal expenses, ($0.7 million increase), salary expenses, ($0.4 million increase), and investor relations expenses, ($0.4 million increase), a 69% increase in research and development expense, primarily related to investments in future products and the clinical validation of existing products, ($0.8 million increase), as well as salaries, ($0.2 million increase), and a 47% increase in selling and marketing expense, primarily related to non-cash share based compensation expenses, ($0.2 million increase), salary expenses ($0.2 million increase), and commissions expense, ($0.1 million increase).
The Company reported a loss from operations of $5.5 million compared to a loss from operations of $2.1 million in the year-ago period. The net loss was $6.4 million, or $0.11 per weighted average share, compared to a net loss of $2.2 million, or $0.05 per weighted average share last year. Year to date net income was negatively impacted by a non-cash charge of $1.1 million in share-based compensation for one of the Company's new directors, which is recorded in general and administrative expenses.
The Company completed the quarter with cash and cash equivalents of approximately $7.5 million, as compared to $636,000 as of December 31, 2010. The Company's cash utilization rate, year-to-date, was approximately $1.3 million per quarter, inclusive of cash inflows from operations.
About MGuard Coronary
MGuard is proprietary coronary stent combining a coronary stent with embolic protection specifically designed for Acute MI patients. The embolic protection is comprised of an ultra-thin polymer micron net that wraps the stent. The MGuard stent is intended to provide outstanding and lifelong embolic protection, without affecting deliverability. MGuard is CE Mark approved. Mesh-based protection is now recommended for use in the recent Guidelines of the Task force of Myocardial Revascularization of the European Society of Cardiology (ESC). MGuard and MGuard Prime are not approved for sale in the United States.
About InspireMD Inc.
InspireMD, Inc. is a medical device company focusing on the development and commercialization of its proprietary stent platform technology, MGuard. InspireMD intends to pursue applications of this technology in coronary, carotid and peripheral artery procedures. InspireMD's common stock is listed on the OTC BB under the ticker symbol "NSPR". For more information, visit www.inspiremd.com.