ClearPoint Neuro, Inc. announced financial results for its first fiscal quarter ended March 31, 2020.
IRVINE, Calif., May 12, 2020 (GLOBE NEWSWIRE) -- ClearPoint Neuro, Inc. (Nasdaq: CLPT) today announced financial results for its first fiscal quarter ended March 31, 2020.
Total revenues were approximately $3.1 million and $2.5 million for the three months ended March 31, 2020 and 2019, respectively, an increase of 26% year-over-year.
Functional neurosurgery revenue, which consists of disposable product commercial sales related to cases utilizing the ClearPoint system, increased 5% to $1.7 million for the three months ended March 31, 2020, from $1.6 million for the same period in 2019. This increase was lower, relative to recent quarterly year-over-year increases, due to the effects of the COVID-19 pandemic, in which elective surgical procedures, historically representing approximately 80% of the Company’s ClearPoint system case volume, were temporarily suspended commencing in the second half of March 2020.
Biologics and drug delivery revenues, which include sales of disposable products and services related to customer-sponsored clinical trials utilizing the ClearPoint system, increased 169% to $1.0 million for the three months ended March 31, 2020, from $382,000 for the same period in 2019.
Capital equipment revenue, consisting of sales of ClearPoint reusable hardware and software, as well as fees related to capital equipment, decreased 29% to $345,000 for the three months ended March 31, 2020, from $486,000 for the same period in 2019.
Gross margin for the three months ended March 31, 2020 was 71%, as compared to 64% in 2019, due primarily to a shift in the mix of revenues by line of business that resulted in service revenues, which bear higher gross margins in comparison to other product lines, representing a greater contribution to total sales for the three months ended March 31, 2020, relative to the same period in 2019.
Operating expenses for the three months ended March 31, 2020 were $3.4 million, a 33% increase from operating expenses of $2.6 million for the same period in 2019. This increase was comprised of: (a) research and development costs, which increased 42% resulting primarily from increases in product development costs and departmental compensation; (b) sales and marketing expenses, which increased 25% resulting primarily from expansion of the Company’s team of clinical specialists and marketing leadership; and (c) general and administrative expenses, which increased 37% resulting primarily from increases in share-based compensation and outside professional fees.
“We were on-track for another record quarter before the measures implemented in March 2020 to address the COVID-19 crisis resulted in the postponement of elective surgeries, historically constituting approximately 80% of our case volume,” commented Joe Burnett, President and CEO of ClearPoint Neuro. “With the significant impact felt by patients, providers and other businesses from the pandemic, it seems hollow to celebrate our pre-COVID-19 successes. Rather, we want to focus on the new reality our employees and our patients face. April 2020 has been the first month in which we experienced the full impact of the COVID-19 measures. In April, we performed a total of eleven surgical cases compared to a forecast of 80 procedures, which represents an approximate 85% reduction in case volume. The eleven cases took place at sites that perform mostly urgent tumor biopsy and ablation procedures. Hospitals that perform mostly drug delivery and deep brain stimulation procedures have had to postpone them. As a result, on April 16, 2020, we withdrew our case and revenue forecast for 2020.
“We see a number of challenges to the resumption of elective procedures in the months ahead, which include the limited access to personal protective equipment and ventilators,” Mr. Burnett continued. “Our procedures are primarily performed under general anesthesia, thus requiring the use of ventilators. However, these ventilators are currently in demand to treat COVID-19 patients. Further, even if some hospitals restart elective procedures, patients might have reluctance to enter the hospital environment because their families are not allowed to be with them.”
As previously disclosed, in January 2020, the Company completed a financing transaction with two investors whereby the Company issued an aggregate principal amount of $17,500,000 of senior secured convertible notes, resulting in net proceeds of approximately $16.8 million. From the net proceeds, the Company repaid principal and accrued interest aggregating $3.8 million to retire secured notes that otherwise would have been due in October and November 2020 (the “2010 Notes”). As a result, the Company’s cash and cash equivalent balances at March 31, 2020 aggregated approximately $17.0 million. During the quarter ended March 31, 2020, the Company’s operational cash burn was $2.3 million, of which $960,000 represented the payment of accrued interest related to the retirement of the 2010 Notes.
Teleconference Information
Investors and analysts are invited to listen to a live broadcast review of the Company’s 2020 first quarter financial results today at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) that may be accessed by visiting the Company’s website at www.clearpointneuro.com and selecting “Investors” / “News” / “IR Calendar.”
Investors and analysts who would like to participate in the conference call may do so via telephone at (877) 407-9034, or at (201) 493-6737 if calling from outside the U.S. or Canada.
For those who cannot access the live broadcast, a replay will be available shortly after the completion of the call until May 28, 2020 by calling (877) 660-6853, or (201) 612-7415 if calling from outside the U.S. or Canada, and then entering conference I.D. number 413671. An online archive of the broadcast will be available on the Company’s website at www.clearpointneuro.com, on the “Investor Relations” page.
About ClearPoint Neuro
ClearPoint Neuro’s mission is to improve and restore quality of life to patients and their families by enabling therapies for the most complex neurological disorders with pinpoint accuracy. Applications of the Company’s current product portfolio include deep-brain stimulation, laser ablation, biopsy, neuro-aspiration, and delivery of drugs, biologics and gene therapy to the brain. The ClearPoint® Neuro Navigation System has FDA clearance, is CE-marked, and is installed in 60 active clinical sites in the United States. The Company’s SmartFlow® cannula is being used in partnership or evaluation with more than 20 individual biologics and drug delivery companies in various stages from preclinical research to late stage regulatory trials. To date, more than 3,500 cases have been performed and supported by the Company’s field-based clinical specialist team which offers support and services for our partners. For more information, please visit www.clearpointneuro.com.
Forward-Looking Statements
Statements herein concerning the Company’s plans, growth and strategies may include forward-looking statements within the context of the federal securities laws. Statements regarding the Company’s future events, developments and future performance, as well as management’s expectations, beliefs, plans, estimates or projections relating to the future, are forward-looking statements within the meaning of these laws. Uncertainties and risks may cause the Company’s actual results to differ materially from those expressed in or implied by forward-looking statements. Particular uncertainties and risks include those relating to: future revenues from sales of the Company’s ClearPoint Neuro Navigation System products; the Company’s ability to market, commercialize and achieve broader market acceptance for the Company’s ClearPoint Neuro Navigation System products; the impact of COVID-19 and the measures adopted to contain its spread; and estimates regarding the sufficiency of the Company’s cash resources. More detailed information on these and additional factors that could affect the Company’s actual results are described in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, which has been filed with the Securities and Exchange Commission, and the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2020, which the Company intends to file with the Securities and Exchange Commission on or before May 15, 2020.
Contact:
Harold A. Hurwitz, Chief Financial Officer
(949) 900-6833
hhurwitz@clearpointneuro.com
Jacqueline Keller, Vice President, Marketing
(949) 900-6833
jkeller@clearpointneuro.com
