Avinger Inc (AVGR) Reports 2Q:17 Results; Shares Plummet


Avinger Inc (NASDAQ:AVGR) reported results for the second quarter ended June 30, 2017.

Second Quarter and Recent Highlights

  • Executed strategic reorganization in April, reducing sales headcount by approximately 50% and resulting in a significant reduction in cash usage
  • Revenue of $2.5 million, a 30% sequential decrease from the first quarter in 2017
  • Received an investigational device exemption (IDE) from the FDA to initiate the INSIGHT
  • tudy for the use of Pantheris in the treatment of in-stent restenosis (ISR)
  • Reduced cash burn to $9.1 million compared to $13.1 million in the first quarter of 2017

“Following our strategic reorganization in April, I’m pleased with how our more focused commercial organization has come together to drive utilization within our installed base of Lumivascular accounts,” said Jeff Soinski, Avinger’s president and CEO. “We’ve also continued to make solid progress on our next generation of Pantheris catheters, which we believe will significantly improve user experience and allow us to approach new markets in 2018 and beyond. We expect to begin enrollment in our INSIGHT study for the treatment of in-stent restenosis in the third quarter, and believe that our expanded claims and clinical data programs will be important contributors to our future growth. While we continue to make progress on these growth initiatives, we’ve also significantly reduced our cash burn as we review strategic and financial alternatives.”

Second Quarter 2017 Financial Results

Total revenue was $2.5 million for the second quarter ended June 30, 2017, a 47% decrease from the second quarter of 2016 and a 30% decrease from the first quarter of 2017. Revenue from disposable devices was $2.0 million for the second quarter of 2017, a 46% decrease compared to the second quarter of 2016 and a 31% decrease from the first quarter of 2017. Revenue related to Lightbox imaging consoles was $0.5 million, a 50% decrease compared to the second quarter of 2016 and a 17% decrease from the first quarter of 2017.

Gross margin for the second quarter of 2017 was -59%, down from 22% in the comparable quarter of 2016 and down from -17% in the first quarter of 2017. The decreased gross margin was primarily attributable to $2.3 million in charges for excess and obsolete inventories, primarily related to reduced expectations for the opening of new Lumivascular accounts through 2018. Without this charge, gross margin for the quarter would have been 35%.

Operating expenses for the second quarter of 2017 were $9.8 million, compared to $13.3 millionin the second quarter of 2016. This decrease was primarily attributable to higher sales and marketing expenses in 2016 when the Company previously expanded its commercial organization in conjunction with the commercial launch of Pantheris. Operating expenses for the second quarter of 2017 included a $0.5 million charge related to the Company’s organizational restructuring activities during the quarter.

Loss from operations for the second quarter of 2017 was $11.3 million, compared to $12.3 million for the second quarter of 2016, and net loss for the second quarter of 2017 was $12.8 million, compared to $13.5 million for the second quarter of 2016. Loss per share for the second quarter of 2017 was $0.54, compared to $1.06 for the second quarter of 2016. The decreased loss per share reflects the impact of the issuance of 9.9 million shares in the Company’s follow-on public offering, which closed on August 16, 2016, and 1.1 million shares issued throughout 2016 under the Company’s at-the-market (ATM) program.

Adjusted EBITDA, a non-GAAP measure, was a loss of $9.0 million for the second quarter of 2017, compared to a loss of $10.3 million for the second quarter of 2016.

Cash and cash equivalents totaled $14.0 million as of June 30, 2017, compared to $23.0 millionas of March 31, 2017. Based on the Company’s recent organizational restructuring and other expense reduction measures, the Company expects cash utilization to decrease to approximately $7 million per quarter by the third quarter of 2017, compared to an average of $13.4 million per quarter in 2016 and $9.1 million in the second quarter of 2017.

Shares of Avinger are falling nearly 9% to $0.41 in after-hours trading Tuesday. AVGR has a 1-year high of $5.15 and a 1-year low of $0.35. The stock’s 50-day moving average is $0.47 and its 200-day moving average is $1.17.

On the ratings front, Avinger has been the subject of a number of recent research reports. In a report issued on June 15, BTIG analyst Sean Lavin assigned a Hold rating on AVGR. On May 4, Canaccord Genuity’s Jason Mills reiterated a Hold rating on the stock and has a price target of $1.00.

According to TipRanks.com, which ranks over 7,500 financial analysts and bloggers to gauge the performance of their past recommendations, Sean Lavin and Jason Mills have a yearly average return of 12.2% and 21% respectively. Lavin has a success rate of 60% and is ranked #303 out of 4628 analysts, while Mills has a success rate of 68% and is ranked #61.

Avinger, Inc. is a commercial-stage medical device company that designs, manufactures and sells image-guided, catheter-based systems that are used by physicians to treat patients with peripheral artery disease, or PAD. Its products include Pantheris, Lightbox, Ocelot, Ocelot MVRX, Ocelot PIXL, Pantheris, Wildcat, Juicebox and Kittycat 2. The company offers its products to interventional cardiologists, vascular surgeons, and interventional radiologists.