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Presentation

InspireMD, Inc. misses on earnings expectations. Reported EPS is $-0.22 EPS, expectations were $-0.17.

Operator: Good morning, and welcome to InspireMD’s First Quarter 2025 Earnings Conference call. [Operator Instructions] We will facilitating 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 Gilmartin Group for introductory disclosures.

Webb Campbell: Thank you for joining us for the InspireMD’s First Quarter 2025 Conference Call. Joining us today from InspireMD are Marvin Slosman, 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 risk factors described in InspireMD’s most recently filed periodic reports on Form 10-K and Form 10-Q and any updates in our 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, May 9, 2025. Except as required by law, InspireMD disclaims any intention or 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 Slosman, Chief Executive Officer. Marvin, please go ahead.

Marvin Slosman: Thank you, and good morning. We’re pleased to welcome everyone to the call today. I’d like to start by highlighting our first quarter performance. CGuard revenue reached $1.53 million, reflecting a 1.2% growth year-over-year. This revenue translates to unit sales of 2,611 CGuard stent sold, providing world-class treatment to thousands of patients suffering from carotid artery disease. These results contribute to our growing body of real-world experience with roughly 64,000 implants sold to date, underscoring our expertise in the space and global commercial foundation as we prepare for the anticipated U.S. approval and launch of CGuard Prime. Turning to our CGuard Prime approval status. Based on our latest communication with FDA, we are optimistic for approval in the third quarter of 2025.

We are actively addressing feedback and remain confident in achieving this approval. Anticipating a positive outcome, we’re preparing for commercial launch with a growing world-class team expecting significant demand for CGuard Prime as the only next-generation proven carotid stent platform demonstrating best-in-class results and superior patient outcomes. To better illustrate the opportunity ahead in the U.S. using our current sales as a benchmark, during the first quarter, we sold 2,611 stents internationally. Had this volume been realized in the U.S. at current market ASPs, it would have generated approximately $12 million in revenue, assuming a balanced mix of CAS and TCAR procedures. The market growth of both CAS and TCAR remains significant with data suggesting the conversion of majority of the procedures from surgery to stenting is underway with endovascular procedures, potentially representing the majority sometime next year.

We believe the introduction of CGuard Prime will further catalyze this shift as it introduces true next-generation performance and results. Given the strong starting point, we are highly confident that the U.S. launch of CGuard Prime combined with the potential introduction of our SwitchGuard Neuroprotection System for TCAR will serve as a powerful catalyst for significant revenue expansion following regulatory approval. We remain committed to strategically expanding our commercial and clinical foundation throughout 2025, and we believe these investments will drive robust growth over the coming years. As we continue to engage with the FDA, we’ve been diligently building a world-class commercial and operational engine to support our highly anticipated U.S. launch.

We’ve onboarded and trained roughly 20 high-powered sales and marketing professionals. Our cadence will continue adding talent to the team to address what we believe to be tremendous demand from our Carotid technologies. Thus far, we are thrilled by the caliber of individuals who bring extensive experience, deep relationships and proven track records of launching new products in the vascular space. Their expertise in this field, along with their trusted connections to our customers, built a foundation of field presence across the United States ready to deliver results. The overwhelming interest from highly talented seasoned professionals who are eager to join our organization at this pivotal time is a clear reflection of the excitement surrounding CGuard Prime and the broader shift taking place in carotid revascularization toward endovascular-first solutions.

Our sales organization will also leverage robust claims data along with their knowledge of market dynamics and relationships to inform strategic targeting and optimize opportunity capture. Our evolving data ecosystem is laying the groundwork for precision and execution. We are not just prepared for launch. We are ready to aggressively execute a comprehensive commercial launch. We firmly believe CGuard Prime is positioned to redefine the treatment of carotid disease and stroke prevention and we intend to fully capitalize on the market momentum toward less invasive solutions. We expect our state-of-the-art facility in Miami, Florida to complement our commercial buildout, illustrating our commitment to scaling U.S. operations. Domestic production will enable us to meet market demand efficiently while also providing a diversified supply chain in the face of macroeconomic uncertainty.

I was able to witness the excitement of our technology firsthand a few weeks ago at the Charing Cross International Symposium in London. The focus on the carotid intervention and groundswell around our technology was palpable, with great interest at our booth, both from physicians already using CGuard and from those who are just learning of our story and want to be involved, including prominent U.S. doctors. Additionally, there were about five hours of carotid programming plus two fully subscribed CAS hands-on workshops and a tremendous shift in focus from prior years. Contingent upon U.S. approval, we believe we are exceptionally well positioned to meet robust demand for CGuard Prime. With the infrastructure expertise, operational readiness we’ve built, we are confident in our ability to drive significant and sustained success in the U.S. market.

Shifting to our clinical pipeline, where we continue to make strong progress. As a reminder, in October 2024, we received FDA approval for our investigational device exemption, or IDE, application to begin the C-GUARDIANS II pivotal study of our CGuard Prime carotid stent system and TCAR procedures. This important study is designed to evaluate the safety and effectiveness of our novel CGuard Prime stent platform in a short TCAR indicated version compatible with existing commercially available neuroprotection systems. I’m pleased to share our enrollment remains strong and growing with new sites participating and contributing, and we remain on track to achieve our clinical milestones with an anticipated first half of 2026 approval. At the same time, we are advancing our broader TCAR strategy.

We are engaged with FDA and our C-GUARDIANS III IDE submission, which will study our fully integrated TCAR solution pairing the CGuard Prime 80 stent, our proprietary SwitchGuard Neuroprotection System. We anticipate approval and initiation of our study in Q3 with possible FDA clearance in late 2026 as we advance our TCAR focus with next-generation SwitchGuard kit designs. TCAR represents a significant and growing opportunity with more than 30,000 procedures performed annually in the U.S. As we expand our clinical footprint, we’re building a differentiated, comprehensive solution for carotid revascularization one we believe can meaningfully reshape the market and drive long-term growth. Turning now to our other clinical initiatives. We are excited to announce that we have successfully enrolled the first four patients in our Tandem Lesion Early Feasibility Study.

This study conducted in partnership with Dr. Adnan Siddiqui and the Jacobs Institute in Buffalo, New York focuses on evaluating CGuard Prime stent in acute stroke patients with tandem lesions in conjunction with thrombectomy. As a reminder, the CGuard Prime stent features a proprietary MicroNet mesh, which is designed to provide superior embolic protection during carotid artery stenting. We believe this study will demonstrate the safety and feasibility of using our stent in these acute stroke procedures. This investment reflects our deep commitment to the neurovascular community and underscores the critical component of our long-term growth strategy. Our ongoing focus of both CAS and TCAR technology positions us to serve the broadest physician base while also preparing us to lead as procedural reimbursement and clinical practice increasingly shift toward an endovascular first standard of care.

As a reminder, receipt of premarket approval from the FDA would trigger the second of four milestone-based financing tranches pursuant to the transformational private placement of up to $113.6 million that we originally announced in May of 2023. It fully exercised the second tranche would raise an additional $17.9 million in gross proceeds. After premarket approval, the remaining two milestones would each trigger additional tranche financings, including the receipt of FDA clearance of SwitchGuard, TCAR Neuroprotection System along with the TCAR indication for the CGuard Prime stent and the completion of four full fiscal quarters of commercial sales of CGuard Prime in United States, which we anticipate in the back half of 2026, pending the approvals I mentioned earlier and based on our current plans.

This quarter has positioned us to hit the ground running as we move toward these transformational milestones. Now I’ll turn the call over to Craig to walk through the financials. Craig?

Craig Shore: Thank you, Marvin. For the first quarter of 2025, total revenue increased 1.2% to $1,529,000. This increase was driven by growth in existing markets, offset by the impact of foreign exchange and distributors managing CGuard inventory levels in anticipation of CGuard Prime approval in Europe. Gross profit for the first quarter of 2025 of $292,000 was flat compared to the first quarter of 2024. Gross margin during the three months ended March 31, 2025, was 19.1%. Total operating expenses for the first quarter of 2025 were $11,752,000, an increase of $4 million or 52.5% compared to $7,706,000 for the first quarter of 2024. This increase was primarily due to higher salaries and share-based compensation tied to U.S. sales force expansion ahead of FDA approval.

Additional increases stemmed from CGuard Prime launch preparation, U.S. facility rent and CFO recruitment fees. Total financial income for the first quarter of 2025 was $294,000, a decrease of $88,000 or 23% compared to $382,000 for the first quarter of 2024. This decrease was primarily due to less interest income from investments in marketable securities and money market funds. Net loss for the first quarter of 2025 totaled $11,166,000 or $0.22 per basic and diluted share compared to a net loss of $7,032,000 or $0.21 per basic and diluted share for the same period in 2024. As of March 31, 2025, cash and cash equivalents and marketable securities were $26,086,000 compared to $34,637,000 as of December 31, 2024. This concludes our pre-prepared remarks.

We will now open the call for questions for the Q&A segment. We will be joined by Shane Gleason, InspireMD’s Chief Commercial Officer. Operator?

Operator: Thank you. [Operator Instructions] We’ll take our first question from Adam Maeder with Piper Sandler. Please go ahead.

Adam Maeder: Hi, good morning, Marvin, Shane, Craig. Thank you for taking the questions. Just a couple for me and really kind of wanted just to level set on time lines for the different products? And maybe just starting with CGuard Prime, your transfemoral stents and just FDA approval. It looks like maybe a little bit of a push out on anticipated FDA approval now to Q3. So what’s the primary reason for the slight change in timing certainly realize it’s unique times at the agency. But I wanted to get some more color there. Just a level of confidence that you’ll get across the regulatory goal line in Q3 and maybe just flesh out the latest dialogue with FDA and kind of what’s left to do from your side, if anything? And then I have a follow-up or two. Thanks.

Marvin Slosman: Great. Thanks, Adam and good morning. I think it’s important to level set the context that in June of 2024, we submitted Module 3 of our PMA, which is the site inspection component. And subsequently, we filed the final PMA dossier on September 16. So following the submission, we maintained active engagement with the FDA, including a successfully completed 100-day meeting. That key milestone obviously underscores the strength of our submission, and we remain very interactive with the agency since that time. The facility site audit, unfortunately, could not be scheduled until February of 2025 and was only complete on February 18, just so less than month before this 180-day statutory review deadline. And so the subsequent time required for FDA’s feedback, our responses and the necessary follow-up is just compress that window for final approval.

We continue to engage interactively with FDA on the feedback and responses to the observations from the audit and continue to be very confident in the approval. We’re simply building some room into the approval time line to accommodate these final steps, which given the current situation, as you noted, we believe, is a prudent step to take. So I think on balance the simple answer is, is that we’re very engaged with the FDA, and we feel that we’re on top of all the remaining details and topics. But we believe, given the current circumstances, statutory response times and otherwise, we wanted to build in some additional room.

Adam Maeder: That’s really helpful color. Appreciate all that, Marvin. Thank you. And I guess for the follow-up, just wanted to see if we could get some more color on enrollment progress in C-GUARDIANS II, it sounds like that’s still tracking to first half 2026 FDA approval. I think I heard that in the prepared remarks, but yes, just maybe any – just any more color you can provide in terms of enrollment in that trial and kind of how things are going? And then I have one more follow-up. Thanks.

Marvin Slosman: Sure. Thanks, Adam. Enrollment is going remarkably well. Most importantly, there’s tremendous enthusiasm for the users of CGuard Prime in this particular case vascular surgeons who are using the product for the first time. The long pole in the tent was obviously a lot of administrative work building the number of sites and getting them online and active. We have eight active sites currently. And so the cadence of enrollment continues to progress really nicely, and we believe we’ll remain consistent with all those approvals that we’ve previously discussed. But as is always the case, one aspect is to perform a well-executed trial, most importantly, the feedback from the doctor’s has been, resoundingly positive and enthusiastic about ultimately being able to use this device in TCAR procedures, which has been long overdue in many of their minds. So we’re very enthusiastic on every level and continue to maintain our pace there.

Adam Maeder: Okay. Perfect. Good color there. And just one last one for me, and then I’ll jump back in queue. Just wanted to discuss SwitchGuard and the update there. So it sounds like you’re engaged with FDA regarding C-GUARDIANS III submission. Hopefully I heard that right. I did hear possible clearance in late 2026 for U.S. Is that a little bit of a wiggle Marvin? Because in my notes, I had mid 2026 approval for SwitchGuard? So did we have a little bit of a slide timelines? And if so, what’s driving the revised time line there? Thank you.

Marvin Slosman: Yes. Thanks, Adam. To answer that question specifically, we have resubmitted our IDE to FDA and expect approval on that in the next month or so, so that we can begin enrollment. At this point, we’re calling late 2026 clearance for the device and some of that is just driven by the enrollment process, obviously, which is still somewhat undetermined until we get formal feedback from FDA. So I think that window remains the right one to take, which is late 2026 clearance for the device there.

Adam Maeder: Thank you.

Marvin Slosman: Thank you.

Operator: We’ll take our next question from Frank Takkinen with Lake Street Capital. Please go ahead.

Frank Takkinen: Great. Thanks for taking the questions and maybe I’ll kind of follow up on Adam’s first question related to CGuard at bottom in Q3. It sounds like it’s really just related to a matter of timing, but just given some of the cost cuts in the FDA and some of the layoffs there. I just wanted to check one more time on – have you had any change to your view team? Has there been any feedback that’s been coming slower? Or is this really just – things that just taking a little bit longer than anticipated, but the team still remains intact, and we’re still in good shape from an interaction perspective with the FDA?

Marvin Slosman: Frank, good morning. Thanks for the question. So I would characterize it this way. Everything that we have been progressing on – related to FDA, including the lead enroller – or I’m sorry, the lead administrative contacted FDA remains consistent. And in fact, we’re very positive and continually interactive with that group. The follow-up that’s required is from the audit, which is a different group within FDA. And so just the combination of being able to communicate these – this information back and forth and provide all the evidence from the results of that audit continue to create time. And so the disruption to the FDA have clearly impacted to a certain extent, the overall program. But I would say within the context of our submission, we remain confident that everything is on track.

However, as you know, there are statutory requirements for certain time lines of responsiveness and otherwise. We’ve completed all of our evidence and responses, and we’re just trying to build in a reasonable bandwidth there in order to get that feedback processed and assimilated given circumstances and resources and just being prudent about the time line.

Frank Takkinen: Okay. That’s helpful. And then I wanted to ask one commercial organization related. Obviously, you guys have been ramping up a really high-quality team in the last couple of quarters in advance of the trial, how should we kind of think about your cadence of hiring with – in light of some of the FDA commentary, should expect you to maybe moderate that a little bit until you get the approval? And how does that kind of maybe impact models as we’re thinking about operating expense throughout the year?

Marvin Slosman: I’ll take the first pass on that. We’ve got Shane on the line, and I’m sure he can add some additional color. I think we’ve established a tremendous foundation within the commercial organization thus far and are building a team of professionals that we think can launch the product very effectively. We always architect its plan around the consistency of the time lines that we just noted. I mean clearly, we want to be very prudent about how fast we add additional resources. But I think in terms of our establishment of architecting the right people in the right places, given the time line and the launch sequence and our intention to aggressively launch the product into the market, we feel very comfortable that we’ve – we’ve got the right start and the right foundation. And certainly, we’ll keep a close eye on next classes that are added to our training program. Maybe Shane can add additional to that.

Shane Gleason: Yes, I think that’s exactly right. Good morning, Frank. The plan has been to get the foundation built training, marketing, sales operations and the foundational members of the field team and then to be able to scale in earnest upon approval. So that all remains unchanged.

Frank Takkinen: Perfect. That’s helpful. And then maybe one related to CREST-2. I know it’s come up on conference calls in the past, but I think we’re looking for a readout of that trial in the second half of 2025. So maybe kind of help us, maybe reiterate how you think that, that could go in different market impacts we could see from that?

Marvin Slosman: So Shane’s become our CREST-2 expert in the organization, not to put him on the spot, but maybe I’ll let Shane take that one, if you don’t mind.

Shane Gleason: Yes, I’d be happy to. So the enrollment has been completed. Just as a reminder, CREST-2 is really two separate trials. One was randomizing optimized medical therapy against carotid endarterectomy. And then a separate enrolling trial was randomizing optimized medical therapy to carotid stenting and in both of those intervention parts, surgery and stenting, the patients also received optimal medical therapy. And as I’m starting to hear this discussed quite a bit from the podium at the conferences. The tone seems to be that it all depends what the results look like, all depends on the types of patients that are enrolled. If a lot of patients who are unlikely to have strokes are enrolled patients with less severe disease than there won’t be many strokes to prevent and the intervention will likely be overwhelmingly positive or superior, there.

Again, if you’re treating patients who are unlikely to have strokes within the follow-up window, there won’t be as many strokes to prevent so the curves won’t be able to diverge. However, if patients that have more severe disease are enrolled time and time again in the study as those patients are shown to have events that they’re not intervened upon. And if we treat – if the patients who were enrolled had more severe disease, then that’s going to look more and more positive for the intervention arms. So I think we’re all kind of waiting to see what the results are. There will be subset analysis. And I think the expectations are that it won’t change practice much because the less severe patients are the ones in practice, although the guidelines may allow treatment in practice, they typically are not treated until the disease gets more severe.

So I think the tone that I hear from the meetings is a lot of people kind of expect it to tell us exactly what we already know and not change practice in any meaningful way.

Frank Takkinen: Got it. That’s helpful. Thank you. I’ll stop there.

Operator: Thank you. And that does conclude our question-and-answer session. I’d now like to turn the call back to Marvin Slosman for closing remarks. Please go ahead.

Marvin Slosman: Yes. Thank you very much. I’d like to thank everyone for joining the call and for the ongoing support of our mission to lead the carotid revascularization market at InspireMD. We’re very pleased with our execution in Q1 of 2025 and look forward to the many milestones ahead, including the potential M&A U.S. approval and launch of CGuard Prime. Thanks very much.

Operator: Thank you. And this concludes today’s program. Thank you for your participation. You may disconnect at any time.