Hello and welcome to InspireMD's fourth quarter 2024 earnings conference call. [Operator instructions]. I would now like to turn the call over to Webb Campbell from Gilmartin Group for introductory disclosures. Please go ahead.

Thank you for joining us for the InspireMD fourth quarter 2024 conference call. Joining us today from InspireMD are Marvin Slosman, Chief Executive Officer, and Craig Shore, Chief Financial Officer. During the 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, or any updates in our current reports on Form 8-K filed with the US 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, March 12th, 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 Slosman, chief Executive Officer. Marvin, please go ahead.

Thank you and good morning. We're pleased to welcome everyone to the call today. I'd like to start by highlighting our strong fourth quarter and full-year performance. CGuard revenue reached a new quarterly high of $1.95 million in the fourth quarter, reflecting a 10.6% growth year-over-year, with $7 million in revenue for the full year 2024, translating our momentum in unit sales of 3,512 CGuard stents sold for the quarter and 12,100 units for the full year, thus benefiting thousands of patients in our end markets suffering from carotid artery disease. These results contribute to more than 60,000 implants sold to date as a testament to our strong global commercial foundation and real-world experience as we build toward anticipated approval and launch of CGuard Prime in the United States. I'm pleased to share that we remain on track for an anticipated US approval and launch of CGuard Prime in the first half of 2025. With the potential approval, I'd like to illustrate how our global Q4 sales would translate in US market revenue to help frame the potential opportunity. With 3,512 stents sold internationally during the fourth quarter, had this number of stents sold in the US, they would've generated over $16 million in revenue, assuming a balance mix between CAS and TCAR sales at current US market ASPs. To put this in perspective, we estimate that more than 7,000 US TCAR procedures were performed in the fourth quarter, making our global unit sales close to 50% of the US-only TCAR market before we've even entered the market with both CAS and TCAR solutions. Therefore, with the US market entry of both CAS and TCAR platforms, we are confident in the significant revenue expansion upon regulatory approval. To recap our regulatory status in the US, in September 2024, we submitted…

Thanks, Marvin. For the fourth quarter of 2024, total revenue increased 10.6% to $1.9 million from $1.7 million during the fourth quarter of 2023. This increase was predominantly driven by growth in existing and new markets. Gross profit for the fourth quarter of 2024 decreased by $36,000 or 7.1% to $469,000, compared to a gross profit of $505,000 for the fourth quarter of 2023. This decrease in gross profit resulted from an increase in cost of goods sold. The increase was primarily due to an increase in material and labor costs, driven mainly to higher sales volume and increased compensation expense for new and current employees. The increase of goods sold was offset by an increase of revenues. Gross margin decreased to 24.1% during the three months ended December 31, 2024, from 28.7% during the three months ended December 31, 2023, for reasons just mentioned. Total operating expenses for the fourth quarter of 2024 were $9.8 million, an increase of $3.5 million or 55.8%, compared to $6.3 million for the fourth quarter of 2023. This increase was primarily due to increase in expenses related to salaries and share-based compensation associated with our expected launch into the US market, offset by a reduction in clinical trial expenses as we near completion of the CGUARDIANS trial. Total financial income for the fourth quarter of 2024 was $252,000, a decrease of $216,000 or 46.1%, compared to $468,000 for the fourth quarter of 2023. This decrease was primarily due to less interest income from investments in marketable securities and money market funds. Net loss for the fourth quarter of 2024 totaled $9.1 million or $0.19 per basic and diluted share, compared to a net loss of $5.4 million or $0.16 per basic and diluted share for the same period in 2023. For the full…

Thank you. [Operator Instructions]. While that queue builds, we'll take our first question from Adam Maeder from Piper Sandler. Please go ahead.

Hi, good morning, Marvin, Craig, Shane. Thanks for taking the questions. Congrats on the quarter and the progress in 2024. A couple for me. Maybe just to start on US approval timing for CGuard Prime, the stent product, just wanted to see if there's anything more you can really kind of share around visibility into approval, the dialogue or discussion that you're having with reviewers. And anything to mention or call out just given some of the macro backdrop and the headlines with potential changes at FDA. Should we expect an impacted timing or still feeling pretty good about first half 2025? And then I had a couple of follow-ups. Thanks.

Good morning, Adam. Thanks for the question. Yes, we remain optimistic on the first half approval, as we've previously noted, and of course, are building our resources appropriately to build toward an effective launch following the approval. I would say that we've been having a very productive interactive approach with FDA, which has been helpful, as has been the modular approach that we selected to take from the beginning, allows us to organize the PMA submission in an efficient manner. No direct impact related to sort of the macro view and some of the unprecedented things that FDA is going through, and nothing material other than just continuing to work through what is generally a very complex process, as you know, for PMAs in general. And so, we remain committed to that timetable.

Yep. Okay, perfect. That's great to hear. And for the second question, you had some comments in the prepared remarks around CGUARDIANS II and III, but wanted to go a little bit deeper there. So, in terms of CGUARDIANS II enrollment, sounds like that's going well. In terms of timing for integration into the competitor neuroprotection system, is that still tracking to early 2026? And then for the second part of the question, CGUARDIANS III, sounds like you're going to initiate that study in Q2 of this year. Is first half 2026 still a good assumption for SwitchGuard approval and launch in the US? And then I had one more. Thanks.

Yes, so to answer the first question, Adam, enrollment is going well, and we’re holding the timeline related to that supplement being approved in early 2026 for commercial launch. We're still very enthusiastic about the feedback that we've received from the physicians using the product and look forward to entering the TCAR space with that strategy. So, everything remains on track related to that piece. And for the second part, timeline also remains consistent on SwitchGuard in the second half of 2026. Again, we're anticipating an approval and initiating enrollment. Many of the same sites and physicians are going to be both - enrolling in both of those. And so, we’re enthusiastic and optimistic for both of those entries as we get closer to the TCAR space.

Okay, fantastic. And Marvin, sorry, just one clarification for SwitchGuard, first half 2026 approval and launch or second half 2026?

Second half, sorry. I was referring to initiating the trial part of this in the first half of 2025, I guess, had my ears mixed up.

Okay. And just one last one on the guidance front. Well, sorry, I know you don't have guidance, but just wanted to ask how you're thinking about the business at a high level. The international businesses has done well, probably doesn't get enough attention. Obviously, a lot of the focus is on the US and you're getting closer and closer there. But just how do we think about the businesses at a high level for 2025 US versus OUS? Just any color you could offer up there would be much appreciated. Thanks again.

Yes, let me - I'll take a pass at that. And of course, we've got Shane in the room here, so he can certainly offer color to that as well. The OUS business continues to be strong and growing and we continue to focus our resources around that established market. It provides us a tremendous amount of value at many different levels. The shift toward the US focus will obviously continue, but the second half post-approval of 2025 is really a foundational building time for us. We're getting new reps into territories. We're having to go through administrative VAC committees and otherwise. So, I would sort of think about this as a foundational building time as we get through the second half of 2025. And so, we can get level set into 2026. We're also building our commercial team with a pretty predictable cadence of training classes and onboarding reps. So, we hope to take full advantage of the enthusiasm of CGuard Prime and what the market has indicated, but at the same time have to remain realistic about how quickly we can actually get into hospitals and into cases. And we of course, want to follow a very predictable approach to how those cases perform. Shane, anything you want to add?

That's helpful. Thank you.

Thank you. [Operator instructions]. We'll take our next question from Frank Takkinen with Lake Street Capital Markets. Please go ahead.

Great. Thanks for taking the questions. Congrats on all the progress. Maybe just start on kind of the commercial launch process of things. Is there anything you can be doing with the VAC analysis committees today to start preparing for launch? And then kind of a separate but related question, once you are launched and on the market, maybe speak to kind of expectations around adoption at a specific site. Do you feel like they test it for a quarter or two, or do they kind of jump in two feet first given the clinical data that's out there and kind of shift over their whole business in one swoop?

Good morning, Frank. I'm going to let Shane handle that one.

Yes, thanks, Marvin, and good morning, Frank, and Adam. So, I think this is one of those places where I use a phrase I might overuse, which is all politics is local and different hospitals act differently. What we can't do is go out and promote a product at this point, but as Marvin mentioned, we had our first cohort of sales people go through training last week, and they are armed with some really good claims data in terms of knowing about fishing where the fish are. They know where the procedures are happening, and we're hiring people that have longstanding relationships, knowledge of these accounts who can start to form their position in line for VAC reviews. So, most hospitals will not consider a product until it's approved, but we know when their next meetings are over the course of the next months and quarters. So, in many cases, we're able to kind of hold the place in line so that upon approval, we won't then be queuing up in the back of the line for consideration. So, that's probably the best thing we could be doing at this point, is holding our place so that we're closer to consideration at the time of approval. On the question about whether people will dabble or jump right in, again, it'll be a little bit of both, but we're seeing a lot of enthusiasm. We've been going to conferences for a couple of years here with this product. The data is becoming more and more understood, and there's more excitement about a next-generation dual layer mesh-covered stent entering the market. So, there are a lot of people at sight unseen have told us that they're excited to start using it and using it all the time. And of course, it's our job to go out there and solidify that and make that happen.

Okay, that's helpful. Appreciated the comments around the commercial infrastructure. I think you mentioned 14 personnel onboarded so far, and then you referenced kind of a steady cadence of new additions. Just maybe bring us a little bit into the split of that 14 of territory managers versus regional managers and then that cadence of new rep and territory manager additions going forward.

Yes, so we've got 13 people that were in here last week, and that includes the first four sales directors of west Central, Northeast, Southeast. And it's their job to build the team going forward. So, the rest of those are individual contributors and that's where we will continue our staffing for the balance of the year, both in territory manager and clinical specialist positions.

Okay, that's helpful. And then just final one for me, was hoping - I know you're not providing any guidance on the top line, but was hoping you can maybe speak anecdotally to the OpEx structure as we go forward. Obviously, there's a lot of commercial hiring, but how should we think about OpEx growth throughout 2025?

Yes, hi, this is Craig Shore, the CFO. As Shane just mentioned, there'll be significant growth in the sales organization, of course, through the hiring of the territory managers and the sales reps, but we also will have growth in the RD area as well. We're doing CGUARDIANS II, CGUARDIANS III, and we still have completion of CGUARDIANS I and the PMA submission costs associated as well. So, you will continue to see growth in the operating expenses.

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

Thank you. And next we'll go to Richard Nesbitt with InspireMD. Please go ahead.

I have one simple question for whoever wants to answer it. On a scale of one to 10, what are your expectations of meeting your goals for this year?

Oh, our expectations are always 10. They remain 10 consistently. We’re always shooting for the top to meet the expectations we've set for the group.

That's all I wanted to know. You feel very positive about all that you're projecting. Am I correct?

Indeed.

Okay, thank you.

Perfect. And now that our Q&A session has ended, I will now turn the call back over to Marvin Slosman for closing remarks.

I'd like to thank everyone for joining the call and for the ongoing support of our mission to lead the carotid revascularization market. We're very pleased with our execution in 2024 and look forward to the many milestones ahead in 2025, including the potential US approval and launch of CGuard Prime. We believe InspireMD is uniquely positioned to transform stroke prevention by addressing the vast unmet need with our differentiated technology and strong clinical foundation. With a clear path to market expansion and a commitment to improving patient outcomes, we believe the company is well equipped to drive meaningful impact for patients and providers alike, and we're excited for the opportunities ahead and remain committed to advancing care in this space. Thank you.

Thank you. And ladies and gentlemen, that does conclude today's conference. We appreciate your participation. You may disconnect at any time.