Avinger, Inc. is a commercial-stage medical device company that has been making waves in the vascular disease treatment landscape. With its innovative Lumivascular platform, the company is on a mission to significantly improve patient outcomes through the introduction of advanced, image-guided catheter-based technologies.
Company Background
Avinger was founded in 2007 and is headquartered in Redwood City, California. The company’s core focus is on the design, manufacture, and sale of a suite of products used to treat peripheral artery disease (PAD), a condition characterized by a build-up of plaque in the arteries that supply blood to areas away from the heart, particularly the pelvis and legs. Avinger’s Lumivascular platform is the industry’s only intravascular real-time high-definition image-guided system available in this market, providing a unique advantage in the treatment of vascular disease.
Product Development and Regulatory Milestones
The company has achieved several significant milestones in its product development and regulatory approvals. Avinger obtained CE Marking for its original Ocelot product in September 2011 and received FDA 510(k) clearance in November 2012. The Pantheris product line received initial FDA 510(k) clearance in October 2015, with an enhanced version cleared in March 2016. A next-generation version of Pantheris obtained additional 510(k) clearance in May 2018. In April 2019, the company received 510(k) clearance for Pantheris Small Vessel (SV), targeting smaller vessels, and began sales in July 2019. Avinger’s next-generation CTO crossing system, Tigereye, received 510(k) clearance in September 2020.
Product Portfolio
Avinger’s product portfolio includes the Ocelot, Tigereye, and Pantheris families of devices. Ocelot and Tigereye are designed to allow physicians to penetrate chronic total occlusions (CTOs), while Pantheris is an image-guided atherectomy product line that enables precise plaque removal. The company is also in the process of developing next-generation CTO crossing devices to target the coronary CTO market, a significant untapped opportunity.
Financials
Financially, Avinger has faced its share of challenges in recent years. The company reported annual net losses of $18.3 million in 2023 and $17.6 million in 2022, with revenue declining from $10.1 million in 2021 to $8.3 million in 2022 and $7.7 million in 2023. This downward trend was primarily attributable to the adverse effects of staffing shortages, resource constraints on the company’s hospital customers, and the impact of a competitive talent market on the retention of Avinger’s commercial team.
In response to these headwinds, the company implemented a strategic cost-saving initiative in the third quarter of 2024, reducing its overall headcount by 24% and streamlining its peripheral sales force by one-third. This realignment allowed Avinger to maintain approximately 90% of its revenue compared to the prior quarter and the same period last year, while improving gross margin to 26% from 21% in the third quarter of 2023.
For the first nine months of 2024, Avinger generated $5.36 million in revenues, down 7% compared to the same period in 2023. This decrease was primarily attributable to the impact of the reduced size of the company’s field sales force as well as a strategic decision to realign the focus of the sales force on driving utilization within the current active user base rather than building new active users. Gross margin for the first nine months was 21%, down from 28% in the prior year period, due to lower production levels and rising material costs.
In the most recent quarter (Q3 2024), Avinger reported revenue of $1.65 million, a net loss of $3.71 million, operating cash flow of -$2.86 million, and free cash flow of -$2.86 million. The decrease in revenue compared to the prior year quarter was primarily due to the strategic decision to reduce the size of the sales force and focus on higher-volume customer accounts. This resulted in a 9% decrease in revenue, but also drove a 14% decrease in cost of revenues, leading to a 5 percentage point improvement in gross margin to 26%.
Research and development expenses for the first nine months of 2024 were $3.05 million, down 10% year-over-year, as the company has completed the development efforts for its newer products like Tigereye ST and Pantheris LV. Selling, general and administrative expenses increased 7% to $10.98 million, primarily due to increases in professional services, taxes, and regulatory/compliance activities.
In terms of geographic performance, 94% of the company’s revenues in Q3 2024 were derived from the United States, with the remaining 6% coming primarily from Germany.
Strategic Initiatives and Future Outlook
Despite the challenges, Avinger remains focused on advancing its product pipeline and expanding its footprint in the rapidly growing vascular disease treatment market. The company’s recent launch of the Pantheris LV large vessel atherectomy system and the ongoing development of its promising coronary CTO crossing device have generated significant excitement among industry experts.
Avinger’s strategic partnership with Zylox-Tonbridge, a leading player in the Chinese peripheral vascular and neurovascular markets, also holds tremendous potential. The collaboration provides Avinger with access to the vast and growing Greater China market, while also offering the opportunity for cost-effective manufacturing of its devices for global distribution. The company expects regulatory approval of its products in the Chinese market in the second half of 2025, with Zylox-Tonbridge completing the manufacturing scale-up for Avinger’s devices in China by mid-2025.
As Avinger navigates the complex landscape of the medical device industry, the company’s commitment to innovation and its focus on improving patient outcomes have remained unwavering. With a pipeline of promising technologies, a strengthened operational structure, and strategic partnerships in place, Avinger is well-positioned to capitalize on the significant opportunities in the vascular disease treatment market and deliver long-term value for its shareholders.
Management and Revenue Generation
The company has assembled a team with extensive medical device development and commercialization experience in both start-up and large, multi-national medical device companies. Avinger generates revenues from sales of its various PAD catheters in the United States and select international markets, Lightbox consoles, and related services.
Liquidity
Avinger has primarily financed its operations through private and public placements of its preferred and common securities, and to a lesser extent, debt financing arrangements. In September 2015, the company entered into a loan agreement with CRG, under which it was able to borrow up to $50 million. Avinger has entered into several amendments to this loan agreement since then, including extensions of the interest-only period and other modifications. As of September 30, 2024, the total amount outstanding under the CRG loan was $4.2 million.
As of December 31, 2023, Avinger reported cash and cash equivalents of $5.28 million. The company’s debt-to-equity ratio stood at 1.08, with a current ratio of 0.63 and a quick ratio of 0.36. The company has a $50 million term loan facility with CRG, of which $14.29 million was outstanding as of December 31, 2023. This loan has an interest-only period through December 2026 and a maturity date of December 2028.
Future Developments
Looking ahead, Avinger expects to file an Investigational Device Exemption (IDE) application with the FDA for their coronary CTO crossing system in the first half of 2025. The company anticipates beginning patient enrollment for the coronary CTO crossing system clinical study upon receiving FDA approval of the IDE, which is expected in the first half of 2025. This development represents a significant step in Avinger’s expansion into the coronary artery disease market, which the company believes has the potential to redefine treatment approaches in this field.
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