Item 1A. Risk Factors. 29
Item 1B. Unresolved Staff Comments. 53
Item 2. Properties. 53
Item 3. Legal Proceedings. 54
Item 4. Mine Safety Disclosures. 54
Item 6. Selected Financial Data. 55
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 63
Item 8. Financial Statements and Supplementary Data. 63
Item 9A. Controls and Procedures. 64
Item 9B. Other Information. 64
PART III 64
Item 10. Directors, Executive Officers and Corporate Governance. 64
Item 11. Executive Compensation. 67
Item 14. Principal Accounting Fees and Services. 77
Item 15. Exhibits and Financial Statement Schedules. 78
PART
I
In
this Annual Report on Form 10-K, unless the context requires otherwise, the terms “we,” “our,” “us,”
or “the Company” refer to InspireMD, Inc., a Delaware corporation, and its subsidiaries, including InspireMD Ltd.,
taken as a whole.
Item
1. Business.
Overview
We
are a medical device company focusing on the development and commercialization of our proprietary MicroNetTM stent platform
technology for the treatment of complex vascular and coronary disease. A stent is an expandable “scaffold-like” device,
usually constructed of a metallic material, that is inserted into an artery to expand the inside passage and improve blood flow.
Our MicroNet, a micron mesh sleeve, is wrapped over a stent to provide embolic protection in stenting procedures.
Our
CGuardTM carotid embolic prevention system (“CGuard EPS”) combines MicroNet and a self-expandable nitinol stent
in a single device for use in carotid artery applications. Our CGuard EPS received CE mark approval in the European Union in March
2013 and was fully launched in Europe in September 2015. Subsequently, we launched CGuard EPS in Russia and certain countries
in Latin America and Asia, including India. In September 2020, we launched CGuard EPS in Brazil after receiving regulatory approval
in July 2020 and, as discussed below, on February 3, 2021 we executed a distribution agreement with Chinese partners for the purpose
of expanding our presence in China. Currently, we are seeking strategic partners for a potential launch of CGuard EPS in Japan.
On
September 8, 2020, we received approval from the U.S. Food and Drug Administration (“FDA”) of our Investigation Device
Exemption (“IDE”), thereby allowing us to proceed with a pivotal study of our CGuardTM Carotid Stent System,
CARENET-III, for prevention of stroke in patients in the United States. CARENET-lll is a prospective, multicenter, single-arm,
pivotal study to evaluate the safety and efficacy of the CGuardTM Carotid Stent System when used to treat symptomatic and
asymptomatic carotid artery stenosis in patients undergoing carotid artery stenting. The trial will enroll approximately 315 subjects
in a maximum of 40 study sites located in the United States. Additional sites in Europe may also participate in the study, contributing
a maximum of ~50% of the total enrollees. The primary endpoint of the study will be the composite of the following: incidence
of the following major adverse events: death (all- cause mortality), all stroke, and myocardial infarction (DSMI) through 30-days
post-index procedure, based on the clinical events committee (CEC) adjudication or ipsilateral stroke from 31-365 day follow-up,
based on Clinical Events Committee (CEC) adjudication.
Additionally,
we intend to continue to invest in current and future potential product and manufacturing enhancements for CGuard EPS that are
expected to reduce cost of goods and/or provide the best-in-class performing delivery system. In furtherance of our strategy that
focuses on establishing CGuard EPS as a viable alternative to vascular surgery, we are exploring adding new delivery systems and
accessory solutions for procedural protection to our portfolio.
We
consider the addressable market for our CGuard EPS to be individuals with diagnosed, symptomatic high-grade carotid artery stenosis
(HGCS, ≥70% occlusion) for whom intervention is preferable to medical (drug) therapy. This group includes not only carotid
artery stenting patients but also individuals undergoing carotid endarterectomy, as the two approaches compete for the same patient
population. Assuming full penetration of the intervention caseload by CGuard EPS, we estimate that the addressable market for
CGuard EPS was approximately $1.0 billion in 2017 (source: Health Research International 2017 Results of Update Report on Global
Carotid Stenting Procedures and Markets by Major Geography and Addressable Markets).
Our
MGuardTM PrimeTM embolic protection system (“MGuard Prime EPS”) is marketed for use in patients with acute
coronary syndromes, notably acute myocardial infarction (heart attack) and saphenous vein graft coronary interventions (bypass
surgery). MGuard Prime EPS combines MicroNet with a bare-metal cobalt-chromium based stent. MGuard Prime EPS received CE mark
approval in the European Union in October 2010 for improving luminal diameter and providing embolic protection. However, as a
result of a shift in industry preferences away from bare-metal stents in favor of drug-eluting (drug-coated) stents, in 2014 we
decided to curtail further development of this product in order to focus on the development of a drug-eluting stent product, MGuard
DESTM. Due to limited resources, however, our efforts have been limited to testing drug-eluting stents manufactured by potential
partners for compatibility with MicroNet and seeking to incorporate MicroNet onto a drug-eluting stent manufactured by a potential
partner. The FDA has clarified that the primary mode of action for drug-eluting cardiovascular stents, which are regulated as
combination products, is that of the device component and has assigned the FDA Center for Devices and Radiological Health (CDRH)
primary responsibility for premarket review and regulation, providing some clarity about what to expect regarding the regulatory
framework related to the development of MGuard DESTM.
We
also intend to develop a pipeline of other products and additional applications by leveraging our MicroNet technology to new applications
to improve peripheral vascular and neurovascular procedures, such as the treatment of the superficial femoral artery disease,
vascular disease below the knee and neurovascular stenting to seal aneurysms in the brain.
Presently,
none of our products may be sold or marketed in the United States.
We
were organized in the State of Delaware on February 29, 2008.
Recent
Developments
Public
Offerings
On
February 8, 2021, we closed an underwritten public offering of 29,032,258 units, with each such unit being comprised of one share
of our common stock, par value $0.0001 per share, and one Series G Warrant to purchase one-half of one share of common stock (the
“February 2021 Offering”). The offering price to the public was $0.62 per unit. The Series G Warrants were immediately
exercisable at a price of $0.682 per share, subject to adjustment in certain circumstances, and expire five years from the date
of issuance. We also granted the underwriter of the offering an option to purchase an additional 4,354,838 shares of common stock
and Series G Warrants to purchase 2,177,419 shares of common stock, which the underwriter exercised in full. , In connection with
the offering we granted to the underwriter a compensation warrant to purchase up to 1,669,355 shares of common stock with an exercise
price of $0.682 per share and which are exercisable for five years from February 3, 2021. Our net proceeds from the offering,
after giving effect to the exercise of the underwriter’s over-allotment option, were approximately $18.9 million, after
deducting underwriting discounts and commissions and payment of other expenses associated with the offering, but excluding the
proceeds, if any, from the exercise of Series G Warrants sold in the offering.
On
June 5, 2020, we closed an underwritten public offering of (i) 7,635,800 Units, with each Unit being comprised of one share of
our common stock, par value $0.0001 per share, and one Series F warrant to purchase one share of common stock, and (ii) 14,586,400
Pre-Funded Units, with each Pre-Funded Unit being comprised of one Pre-Funded Warrant to purchase one share of common stock and
one Series F Warrant. In connection with this public offering, the underwriter exercised the option practically in full, for 3,333,300
shares of common stock and 3,333,300 Series F Warrants. The offering price to the public was $0.45 per Unit and $0.449 per Pre-Funded
Unit. Our net proceeds from the offering and the exercise of the underwriter’s over-allotment option were approximately
$10.7 million, after deducting underwriting discounts and commissions and payment of other estimated expenses associated with
the offering, but excluding the proceeds, if any, from the exercise of Series F Warrants and the Pre-Funded Warrants sold in the
offering.
Distribution
and Purchase Agreement with Chinese Partners
On
February 3, 2021, we entered into a Distribution Agreement with three China-based partners, pursuant to which the Chinese partners
will be responsible for conducting the necessary registration trials for commercial approval of our products in China, followed
by an eight-year exclusive distribution right to sell our products in China with the term of the agreement continuing on a year-to-year
basis unless terminated. Under the Distribution Agreement, the China-based partners will be subject to minimum purchase obligations.
The Distribution Agreement may be terminated for cause upon failure to meet minimum purchase obligations, failure to obtain regulatory
approvals or for other material breaches.
In
addition, and on the same day, we entered into an investment transaction with QIDI, which included (i) an SPA, pursuant to which
QIDI agreed to invest $900,000 in exchange for shares of our common stock at a purchase price of $0.6708 per share, and (ii) an
IRA, whereby QIDI was provided certain customary registration rights, including a commitment by us to file a registration statement
with the SEC on Form S-1 or Form S-3 and have such registration statement become effective not later than 150 days following the
closing of the transactions under the SPA.
The
transactions closed on February 5, 2021.
Sixth
Amendment to the InspireMD, Inc. 2013 Long-Term Incentive Plan
Effective
as of August 31, 2020, our stockholders approved the Sixth Amendment to the Plan and, accordingly, increased the number of shares
of common stock available for issuance pursuant to awards under such Plan by 6,500,000 shares, to a total of 7,178,395 shares
of common stock.
Regained
Compliance with New York Stock Exchange
On
August 7, 2019, we received a notification from the NYSE American that we did not meet the continued listing standards of the
NYSE American as set forth in Part 10 of the Company Guide. Specifically, we were not in compliance with Section 1003(a)(iii)
of the Company Guide because we reported stockholders’ equity of less than $6 million as of September 30, 2019, and net
losses in our five most recent fiscal years ended December 31, 2018. As a result, we became subject to the procedures and requirements
of Section 1009 of the Company Guide. On October 11, 2019, the NYSE American accepted our plan to regain compliance with Section
1003(a)(iii) of the Company Guide by August 7, 2020.
On
August 7, 2020, following our submission to the NYSE American of our plan for regaining compliance, the NYSE American approved
such plan and, accordingly and as of such date, we are compliant with all of the NYSE American LLC continued listing standards
set forth in Part 10 of the NYSE American Company Guide. In particular, we regained compliance with the continued listing requirement
under NYSE American Company Guide Section 1003(a)(iii). The return to compliance was achieved as a result of our recently-consummated
public offering, in which we raised approximately $10.7 million of net proceeds from the sale of units and pre-funded units.
FDA
Approval of IDE
On
September 8, 2020, we received approval from the FDA of our IDE, thereby allowing us to proceed with a pivotal study of our CGuardTM
Carotid Stent System, CARENET-III, for prevention of stroke in patients in the United States.
ATM
Offering
On
July 28, 2020, we entered into a Sales Agreement with A.G.P. pursuant to which we may offer and sell, from time to time, at our
option, through or to A.G.P., up to an aggregate of approximately $9,300,000 of shares of common stock (the “ATM Facility”).
Any shares to be offered and sold under the Sales Agreement will be issued and sold pursuant to the Company’s Registration
Statement on Form S-3 (File No. 333-223130), filed with the SEC on February 21, 2018 and the prospectus supplement thereto filed
with the SEC on July 28, 2020, by methods deemed to be an “at the market offering” as defined in Rule 415(a)(4) promulgated
under the Securities Act of 1933, as amended, or if specified by us, by any other method permitted by law. On January 11, 2021,
we increased the aggregate amount of our shares of common stock that may be sold under the Sales Agreement from $9,300,000 to
$10,382,954, and, as a result, utilized and sold the maximum amount allowable under the ATM Facility, which resulted in an aggregate
amount of $10,381,958.
Registration
Clearance for CGuardTM MicroNet® in Brazil
On
July 23, 2020, we announced that we obtained registration from the Brazilian registration authority, Agéncia Nacional de
Vigiláncia Sanitária (ANVISA), for our CGuard MicroNet covered stent, clearing it for sale and distribution in Brazil.
New
Trial Results for CGuard EPS
On
June 10, 2020, we reported the publication of the results of our PARADIGM trial in the EuroIntervention journal. In that
trial, 101 unselected consecutive real-life patients were treated with our CGuard MicroNET covered stent for carotid stenosis
and were monitored for postprocedural neurologic events for a period of 12 months. The results displayed sustained protection
against any such neurologic events. At 30 days, only one adverse event occurred (a minor transient stroke with no other strokes,
myocardial infarctions, or deaths). Furthermore, those study results showed that no strokes occurred between 30 days and twelve
months.
On
June 25, 2020, we reported the results from an investigator-initiated SIBERIA randomized clinical trial of our CGuard EPS, which
evaluated 30-day silent brain infarcts associated with the use of the AcculinkTM conventional open-cell nitinol stent vs.
our CGuard Micronet-covered stent. Those results displayed that CGuard had a statistically significant (greater than three-fold)
reduction in the procedure-generated mean cerebral lesion volume relative to Acculink. At 30 days, there were zero new cerebral
lessons in the CGuard arm, compared to six in the Acculink arm, also statistically significant.
On
September 3, 2020 we reported the award for Best ESC Congress Poster for the presentation of updated data from the large, long-term
PARADIGM-EXTEND study of the CGuardTM Embolic Prevention System (EPS), as part of the European Society of Cardiology 2020
Carotid Update e-presentation at the European Society of Cardiology (ESC) Congress 2020. PARADIGM/EXTEND is an investigator-driven
on-going study performed with CGuard Carotid stent for primary and secondary stroke prevention in a large, consecutive all-comers
population, with 5 years (60 months) follow-up. The results for 480 patients of the expected total of 550 that completed the 30-day
follow-up were presented were no peri-procedural major strokes or death. The total death/stroke /myocardial incidence at 30 days
was 1.04% (5/480) due to two minor strokes, one myocardial infarction and two stent-unrelated deaths. In the study, 354/480 patients
completed the 12-month follow-up with only 1 patient experiencing in-stent restenosis, 0.28% (1/354). At the 12-month follow-up
there were no other device-related adverse clinical events. Finally, 46/480 patients completed the 60-month follow-up period with
one more case of in-stent restenosis and no additional cases of device-related stroke.
Appointment
of Dr. Gary Roubin, M.D. to our Board of Directors
On
October 12, 2020, our board of directors, or the Board, appointed Dr. Gary S. Roubin as a Class I member of the Board, effective
as of that date, with a term expiring at the Company’s 2021 annual meeting of stockholders. Dr. Roubin is an internationally
renowned interventional cardiologist recognized for his pioneering work in carotid stenting and embolic and protection devices.
He is also acknowledged for the development of coronary stenting and the first FDA-approved coronary stent. In connection with
his appointment, Dr. Roubin was granted options to purchase 79,650 shares of common stock and 238,950 shares of restricted stock.
Shortly after his appointment as a director, and on October 16, 2020, Dr. Roubin invested $100,000 in the Company in exchange
for 222,223 units consisting of (i) one share of common stock and (ii) one warrant to purchase our common stock with an exercise
price of $0.495. For additional biographical information about Dr. Roubin, please see “Management” herein.
COVID-19
Developments
In
an effort to contain and mitigate the spread of COVID-19, which the World Health Organization, or WHO, declared to be a pandemic
on March 12, 2020, many countries have imposed unprecedented restrictions on travel, quarantines and other public health safety
measures. As of the beginning of the second quarter of 2020, we began to experience a significant COVID-19 related impact on our
financial condition and results of operations, which we primarily attribute to the postponement of CGuard EPS procedures (non-emergency
procedures), as hospitals shifted resources to patients affected by COVID-19. To our knowledge, most European countries in which
we operate are slowly reinstating elective procedures, but we do not know when the hospitals will resume to normal pre-pandemic
levels with such procedures in light of recent increases in COVID-19 cases in the territories we sell into. We anticipate that
the continuation of the pandemic and related restrictions and safety measures would likely result in continued fluctuations in
sales of our products for the upcoming periods. For more discussion on our risks related to COVID-19, please see risk factors
included under “Item 1A. Risk Factors” herein.
In
response to significant market volatility and uncertainties relating to COVID-19, the fees and salaries of our Board, management
and most of our employees were reduced in order to alleviate corporate operating expenses.
Effective
April 1, 2020, the Board approved a 50% decrease in the annual cash compensation for non-employee directors from an aggregate
amount of $154,000 to $77,000.
On
April 21, 2020, Marvin Slosman, our President, Chief Executive Officer and Director, signed a waiver reducing his monthly base
salary from $33,333 to $16,666 for the period beginning April 1, 2020 and ending on such date as Mr. Slosman was to determine,
and Craig Shore, our Chief Financial Officer, Chief Administrative Officer, Secretary and Treasurer, signed a waiver reducing
his monthly base salary from NIS 80,125 to NIS 40,063 for the period beginning April 1, 2020 and ending on such date as Mr. Shore
was to determine.
Effective
April 1, 2020, we reduced the annual salaries of most of our employees by 20% to 30% until further notice.
Based
on a determination made by each of Mr. Slosman and Mr. Shore on June 10, 2020, following the closing of our underwritten public
offering in June 2020, as described above, each of Mr. Slosman’s and Mr. Shore’s monthly base salaries were reinstated
to $33,333 and NIS 80,125, respectively, effective as of June 1, 2020. Each of the salaries for the remaining officers, directors
and employees was similarly reinstated by no later than June 30, 2020.
As
a result of the reduction of those fees and salaries during the second quarter of 2020, our operating expenses were reduced by
approximately $235,000 in the second quarter of 2020.
Release
from Former Underwriter
The
terms of our engagement of the underwriter for our September 2019 financing contained a purported 12 month right of first refusal
in favor of such underwriter with respect to future financings. Due to, among other things, difficulties in the relationship with
that prior underwriter and our need to raise additional funds to finance our ongoing operations, we engaged A.G.P./Alliance Global
Partners in May 2020 as underwriter for our June 2020 public offering, and again in July 2020 for an ATM Facility.
On
July 28, 2020, we entered into a settlement agreement and release with that prior underwriter, under which it provided us a final,
unconditional release from any further obligations arising out of or related to the engagement agreements, underwriting agreements
and placement agency agreements which we had been party to with it and with respect to any services which it had provided to us.
We, in turn, provided the prior underwriter a final, unconditional release from any further obligations arising out of or related
to the prior agreements and services.
As
consideration for the final release provided to us, we paid to the prior underwriter $400,000 in cash and reduced, to $0.495,
the exercise price per share of warrants to purchase 274,029 shares of our common stock that had been issued by us to the prior
underwriter in various offerings that took place between March 2018 and September 2019. That reduced exercise price represents
the exercise price for the Series F Warrants that we issued in our June 2020 public offering. The warrants that were repriced
had existing exercise prices per share ranging from $187.50 to $2.25 and a weighted average exercise price per share of $7.32.
All other terms of those warrants remained unchanged. The related increase in expenses of $400,000 was recorded during the three
months ended June 30, 2020 to “General and Administrative expense” within the Consolidated Statements of Operations.
Our
Industry
Carotid
Carotid
arteries are located on each side of the neck and provide the primary blood supply to the brain. Carotid artery disease, also
called carotid artery stenosis, is a type of atherosclerosis (hardening of the arteries) that is one of the major risk factors
for ischemic stroke. In carotid artery disease, plaque accumulates in the artery walls, narrowing the artery and disrupting the
blood supply to the brain. This disruption in blood supply, together with plaque debris breaking off the artery walls and traveling
to the brain, are the primary causes of stroke. According to the World Health Organization (https://www.who.int/cardiovascular_diseases/resources/atlas/en/)
every year, 15 million people worldwide suffer a stroke, and nearly six million die and another five million are left permanently
disabled. According to the same source, stroke is the second leading cause of disability, after dementia.
In
2017, 2.2 million people were diagnosed with carotid artery disease, of which, approximately 600,000 patients had high grade carotid
stenosis requiring intervention for carotid artery disease (2017 Health Research International Market Report). Carotid
artery stenting is a minimally invasive treatment option for carotid artery disease and an alternative to carotid endarterectomy,
where a surgeon accesses the blocked carotid artery though an incision in the neck, and then surgically removes the plaque. Endovascular
techniques using stents and carotid embolic prevention system protect against plaque and debris traveling downstream, blocking
off the vessel and disrupting blood flow. We believe that the use of a stent with an embolic protection system should increase
the number of patients being treated since it would avoid the need for complex surgery.
Coronary
Physicians
and patients may select from a variety of treatments to address coronary artery disease, including pharmaceutical therapy, balloon
angioplasty, stenting with bare metal or drug-eluting stents, and coronary artery bypass graft procedures, with the selection
often depending upon the stage of the disease.
The
global market for coronary stents is estimated at $5.5 billion and projected to grow to $8 billion by 2025. (Global Market Insights,
Inc. Nov 06, 2019). Growth will be driven by a continued increases in incidence (Coronary heart disease burden is projected to
rise from around 47 million DALYs globally in 1990 to 82 million DALYs (Disability Adjusted Life Year)in 2020 – WHO Global
Burden of Coronary Heart Disease) – especially in developing countries). However, this market is dominated by drug eluting
stents (DES) which limits the opportunity for MGuard.
Neurovascular
The
neurovascular market focuses on catheter-delivered products used to treat strokes that already happened or unruptured brain aneurysms
that could lead to strokes. In the latter case, coils are wound into blood vessel bulges to block blood flow entering the aneurysms
to prevent the aneurysms from rupturing. Endovascular treatment of arterial aneurysm has evolved substantially over the past two
decades, transitioning from an investigational therapy into routine clinical practice and ultimately emerging as the treatment
of choice for many lesions (source: Medtech Ventures 2009, Aneurysm Flow Modulating Device Market). We believe that the
market for aneurysm flow modulating devices is still in the embryonic stage with windows of opportunities for early entrance.
The
neurovascular market includes over-the-wire, flow-guided microcatheters, guiding catheters, coil and liquid embolics, neurovascular
stents and flow diversion stents. According to iData Research, the market is expected to be driven by the conversion from surgical
procedures to endovascular techniques in the treatment of aneurysms and arteriovenous malformations.
Peripheral
Peripheral
vascular diseases (“PVD”) are caused by the formation of atherosclerotic plaques in arteries, which carry blood to
organs, limbs and head. It is also known as peripheral artery occlusive disease or peripheral artery disease. It comprises diseases
pertaining to both peripheral veins and peripheral arteries, affecting the peripheral and cardiac circulation in the body. PVD
includes diseases outside of the heart and brain, but most times refers to the leg and foot.
Peripheral
stents are more often used in combination with balloon angioplasty to open the veins, so that blood can flow through the blocked
veins in the body.
The
growing prevalence of PVD is expected to cause increased demand for treatment options. PVD is age related and its prevalence increases
markedly with advancing age. In addition PVD is more prevalent in lower and medium income countries than in higher income countries
(https://www.thelancet.com/journals/langlo/article/PIIS2214-109X(19)30255-4)
Our
Products
Below
is a summary of our current products and products under development, and their intended applications.
MicroNet
MicroNet
is our proprietary circular knitted mesh which wraps around a stent to protect patients from plaque debris flowing downstream
upon deployment. MicroNet is made of a single fiber from a biocompatible polymer widely used in medical implantations. The size,
or aperture, of the current MicroNet ‘pore’ is only 150-180 microns in order to maximize protection against the potentially
dangerous plaque and thrombus.
CGuard
– Carotid Applications
Our
CGuard EPS combines our MicroNet mesh and a self-expandable nitinol stent (a stent that expands without balloon dilation pressure
or need of an inflation balloon) in a single device for use in carotid artery applications. MicroNet is placed over and attached
to an open cell nitinol metal stent platform which is designed to trap debris and emboli that can dislodge from the diseased carotid
artery and potentially travel to the brain and cause a stroke. This danger is one of the greatest limitations of carotid artery
stenting with conventional carotid stents and stenting methods. The CGuard EPS technology is a highly flexible stent system that
conforms to the carotid anatomy.
We
believe that our CGuard EPS design provides advantages over existing therapies in treating carotid artery stenosis, such as conventional
carotid stenting and surgical endarterectomy, given the superior embolic protection characteristics provided by the MicroNet.
We believe the MicroNet will provide acute embolic protection at the time of the procedure, but more importantly, we believe that
CGuard EPS will provide post-procedure protection against embolic dislodgement, which can occur up to 48 hours post-procedure.
It is in this post-procedure time frame that embolization is the source of post-procedural strokes in the brain. Schofer, et al.
(“Late cerebral embolization after emboli-protected carotid artery stenting assessed by sequential diffusion-weighted magnetic
resonance imaging,” Journal of American College of Cardiology Cardiovascular Interventions, Volume 1, 2008) have
shown that the majority of the incidents of embolic showers associated with carotid stenting occur post-procedure.
Our
CGuard EPS with over-the-wire delivery system received CE mark approval in the European Union in March 2013. In October 2014,
we initiated a limited market release of CGuard EPS with over-the-wire delivery system for use in carotid artery applications
in Germany, Poland and Italy.
In
September 2014, we reported the results of the CGuard CARENET trial at the Transcatheter Cardiovascular Therapeutics (“TCT”)
conference in Washington D.C. In the CARENET trial, the CGuard EPS system demonstrated better results over historical data using
conventional commercially available carotid stents. In the third quarter of 2015 the results of the CGuard CARENET trial were
published in the Journal of the American College of Cardiology. In November 2015, positive twelve-month follow-up data from the
CGuard CARENET trial was presented at the 42nd Annual Symposium on Vascular and Endovascular Issues, documenting the benefits
of the CGuard MicroNet technology as well as the patency benefits (maintaining the artery open) of the internal and external carotid
arteries at twelve months.
In
the first quarter of 2015, we introduced CGuard RX, the new rapid exchange delivery system for CGuard EPS. The rapid exchange
delivery system has a guidewire that passes through the delivery system, running through the guiding catheter. It has one port,
and thus, can be operated by one operator, while an over-the-wire-delivery system has two lumens and ports and requires two operators
to perform the procedure. Our rapid exchange delivery system received CE mark approval in January 2015. We launched our CGuard
EPS in Europe with the rapid exchange delivery system in multiple medical specialties that perform carotid artery stenting. These
customers include interventional cardiologists, vascular surgeons, interventional neuroradiologists and interventional radiologists.
In
September 2015, we announced full market launch of CGuard EPS in Europe. Subsequently, we launched CGuard EPS in Russia and certain
countries in Latin America and Asia, including India. In September, 2020, we launched CGuard EPS in Brazil after receiving regulatory
approval in July 2020, and we are seeking strategic partners for a potential launch of CGuard EPS in Japan and China.
In
April 2017, we had a pre-IDE submission meeting with the FDA regarding CGuard EPS where we presented materials that we believed
would support a formal IDE submission seeking approval to conduct a human clinical trial in the United States which included our
draft synopsis for the clinical trial design. The FDA agreed to our pre-clinical test plan and clinical trial design. On July
26, 2019, we submitted an IDE application for CGuard EPS. In connection with such application, on August 23, 2019, we received
a request for additional information from the FDA in support of our application. On September 8, 2020, we received IDE approval
for CGuardTM Carotid Stent System, CARENET-III.
Additionally,
we intend to continue to evaluate potential product enhancements and manufacturing enhancements for CGuard EPS expected to reduce
cost of goods and/or provide the best-in-class performing delivery system. We cannot give any assurance that we will receive sufficient
(or any) proceeds from future financings or the timing of such financings, if ever for potential product enhancements and manufacturing
enhancements. In addition, such additional financings may be costly or difficult to complete. Even if we receive sufficient proceeds
from future financings, there is no assurance that we will be able to timely apply for CE mark approval following our receipt
of such proceeds. We believe these improvements may allow us to reduce cost of goods and increase penetration in our existing
geographies and better position us for entry into new markets.
MGuard
Products– Coronary Applications
Bare-Metal
Stent MGuard Product. Our MGuard Prime EPS coronary product is comprised of MicroNet wrapped around a cobalt-chromium
based bare-metal stent. In comparison to a conventional bare-metal stent, we believe our MGuard Prime EPS coronary product with
MicroNet mesh provides protection from dangerous embolic showers in patients experiencing ST-segment elevation myocardial infarction,
the most severe form of a heart attack, referred to as STEMI. Standard stents were not engineered for heart attack patients. Rather,
they were designed for treating stable angina patients whose occlusion is different from that of an occlusion in a heart attack
patient. In acute heart attack patients, the plaque or thrombus is unstable and often breaks up as the stent is implanted causing
downstream blockages in a significant portion of heart attack patients. Our MGuard Prime EPS is integrated with a precisely engineered
micro net mesh that is designed to prevent the unstable arterial plaque and thrombus that caused the heart attack blockage from
breaking off.
NGuard
— Neurovascular Applications
We
began developing a neurovascular flow diverter, which we refer to as NGuard, which is an endovascular device that diverts blood
flow away from cerebral aneurysms and ultimately seals the aneurysms. We have tested early flow diverter prototypes in initial
pre-clinical testing in both simulated aneurysm bench models using various MicroNet configurations with varying aperture sizes,
as well as in standard in vivo pre-clinical models, in which we observed aneurysm sealing and also wide open side branch vessels
across which the device was placed. We have suspended all further development activity of NGuard until we obtain sufficient funding
for such purpose.
PVGuard
— Peripheral Vascular Applications
We
intend to develop our MicroNet mesh sleeve and a self-expandable stent for use in peripheral vascular applications, to which we
refer to as PVGuard. PVDs are usually characterized by the accumulation of plaque in arteries in the legs. This accumulation can
lead to the need for amputation or even death, when untreated. PVD is treated either by trying to clear the artery of the blockage,
or by implanting a stent in the affected area to push the blockage out of the way of normal blood flow.
As
in carotid procedures, peripheral procedures are characterized by the necessity of controlling embolic showers both during and
post-procedure. Controlling embolic showers is so important in these indications that physicians often use fully covered stents,
at the risk of blocking branching vessels, to ensure that emboli do not fall into the bloodstream and move to the brain. We believe
that our MicroNet design will provide substantial advantages over existing therapies in treating peripheral artery stenosis.
However,
as we plan to focus our resources on the further expansion of our sales and marketing activities for CGuard EPS and, provided
that we have sufficient resources, potential product enhancements and manufacturing enhancements for CGuard EPS expected to reduce
cost of goods and/or provide the best-in-class performing delivery system and its submission for CE mark approval, we do not intend
to pursue the development of PVGuard in the near future.
Completed
Clinical Trials for CGuard EPS
CARENET
The
CARENET trial was the first multi-center study of CGuard EPS following the receipt of CE mark of this device in March 2013. The
CARENET trial was designed to evaluate feasibility and safety of CGuard EPS in treatment of carotid lesions in consecutive patients
suitable for coronary artery stenting (“CAS”) in a multi-operator, real-life setting. The acute, 30 day, magnetic
resonance imaging (“MRI”), ultrasound and six month clinical event results were presented at the LINC conference in
Leipzig, Germany in February, 2015. In the third quarter of 2015, the results of the CGuard CARENET trial were published in the
Journal of the American College of Cardiology. In November 2015, positive twelve month follow-up data from the CGuard CARENET
trial was presented at the 42nd Annual Symposium on Vascular and Endovascular Issues, documenting the benefits of the CGuard MicroNet
technology as well as the patency benefits (maintaining the artery open) of the internal and external carotid arteries at twelve
months.
MACCE
(myocardial infarction (“MI”), stroke or death) rate was 0.0% at 30 days. At six months, there was one death, which
was not device or procedure-related but did result in a MACCE rate of 3.6% at six months. At twelve months there were two additional
deaths, which were not device or procedure-related resulting in a MACCE rate of 10.7% at one year.
MACCE (MI, stroke, death) (0) 0.0 % (1) 3.6 % (3) 10.7 %
CAS
carries the risk of cerebral embolization during and following the procedure, leading to life-threatening complications, mainly
cerebral ischemic events. Diffusion-weighted magnetic resonance imaging (DW-MRI) is a sensitive tool used to identify cerebral
emboli during CAS by measuring “lesions” within the brain which are areas that are ischemic and do not receive oxygenated
blood due to cerebral emboli. In the CARENET trial, 37.0% of patients treated with CGuard EPS had new ischemic lesions at 48 hours
after the procedure, with an average volume of 0.039 cm3. Of these lesions, there was only one that remained at 30 days following
the procedure and all others had resolved. Complete details appear in the following table. Where there is a second number shown
below after a ± symbol, it indicates the potential error in the measurement.
Subjects with new Acute Ischemic Lesions (“AIL”) 10 1
Incidence of new lesions 37.0 % 4.0 %
Total number new AIL 83 1
Permanent AIL at 30 days — 1
The
healing process of the tissue and in-stent restenosis can be measured by a non-invasive form of ultrasound called duplex ultrasound.
This type of ultrasound measures the velocity of the blood that flows within the carotid arteries, which increases exponentially
as the lumen of the internal carotid artery narrows and the percent stenosis increases. One of the measurements is called PSV
(peak systolic volume) and is known to be highly correlated to the degree of in-stent restenosis; PSV values higher than 300 cm/sec
are indicative of >70% stenosis, while PSV values lower than 104 cm/sec are indicative of <30% restenosis and healthy healing.
In the CARENET trial, duplex ultrasound measurements done at 30 days, 6 months and 12 months following the stenting procedure
all attest to healthy normal healing without restenosis concerns, as the PSV values were 60.96 cm/sec ± 22.31, 85.24 cm/sec
± 39.56, and 90.22 cm/sec ± 37.72 respectively. The internal carotid artery was patent in all patients (100%).
The
conclusions of the CARENET trial were:
● All but one lesion had resolved completely by 30 days.
Physician-Sponsored
Clinical Trials for CGuard—PARADIGM-101 Study
PARADIGM-101
(Prospective evaluation of All-comer peRcutaneous cArotiD
revascularization In symptomatic and increased-risk asymptomatic carotid artery stenosis, using CGuardTM
Mesh-covered embolic prevention stent system-101) was an investigator-led, single center study with the objective
of evaluating feasibility and outcome of routine use of CGuard EPS in 101 consecutive unselected all-comer patients referred for
carotid revascularization, initiated in 2015. In May 2016, the 30-day results were presented at the EuroPCR 2016 Late-Breaking
Clinical Trial Session in Paris, and in the Journal of EuroIntervention.
Key
findings from the PARADIGM-101 study and the follow-up data are as follows:
● Periprocedural death/major stroke/ myocardial infarction (“MI”) rates were 0%;
The
results of the PARADIGM-101 study demonstrated that CGuard EPS can safely be used in a high risk, all-comer population of patients
with carotid artery stenosis and indicated that routine use of CGuard EPS may prevent cerebral events, such as strokes, by holding
plaque against the vessel wall, preventing emboli from being released into the blood stream. The PARADIGM-101 study found that
CGuard EPS is applicable in up to 90% of all-comer patients with carotid stenosis.
Clinical
Results and Mechanical Properties of the Carotid CGUARD Double-Layered Embolic Prevention Stent Study
“Clinical
Results and Mechanical Properties of the Carotid CGUARD Double-Layered Embolic Prevention Stent Study” was an investigator-led,
prospective single-center study which evaluated CGuard EPS in 30 consecutive patients with internal carotid artery stenosis disease
with the objective of reporting early clinical outcomes with a novel MicroNet covered stent for the internal carotid artery and
the in vitro investigation of the device’s mechanical properties. In October 2016, the 30-day positive results were published
online-ahead-of-print in the Journal of Endovascular Therapy.
Key
findings from the study are as follows:
● 100% success in implanting CGuard EPS without residual stenosis;
● No peri- or post-procedural complications;
● All vessels treated with CGuard EPS remained patent (open) at six months; and
Additionally,
based on engineering evaluations, the study concluded that CGuard EPS provides a high radial force and strong support in stenotic
lesions. The stent is easy to use and safe to implant because it does not foreshorten and its structure adapts well to changes
in diameter and direction of tortuous vascular anatomies. The MicroNet mesh of CGuard did not cause any changes to specific mechanical
parameters of the underlying stent.
CGUARD
Mesh-Covered Stent in Real World: The IRON-Guard Registry
“CGUARD
Mesh-Covered Stent in Real World: The IRON-Guard Registry using CGuard EPS” was a physician initiated prospective multi-center
registry that included 200 patients from 12 medical centers in Italy. The objective of the study was to report 30-day outcomes
(including MACCE) in a prospective series of patients who were treated with CGuard EPS between April 2015 and June 2016. In January
2017, 30-day results were presented at the Leipzig Interventional Course (LINC) 2017 and published in the Journal of EuroIntervention
in May 2017. The 12 month follow-up was published in the Journal of EuroIntevention in October 2018.
Key
30-day results presented were:
● 100% success in implanting CGuard EPS;
● No MI, major stroke or death at 30 days;
● Total elimination of post-procedural neurologic complications by 30 days;
● One myocardial infarction occurred at 12 months.
Peri-procedural
brain lesions prevention in CAS (3PCAS): Randomized trial comparing CGuard stent vs. WallStentTM Study
3PCAS
study was an independent investigator-led single center randomized clinical trial, comparing CGuard EPS vs. WallStentTM,
intended to evaluate the incidence of peri-procedural diffusion-weighted-magnetic-resonance-imaging (DW-MRI) new brain lesions
after carotid artery stenting. Sixty-one consecutive patients referred for carotid revascularization (between January 2015 and
October 2016) were eligible for the study. The results of the 3PCAS study was published in the International Journal of Cardiology
in September 2018. The discussion distinguished between peri-procedural (from procedure to 48h -72h) and post-procedural periods
(72h to 30 days) where the CGuard EPS demonstrated a reduction in the post-procedural embolic effect during the carotid plaque
healing period. In contrast, there was no difference between the two stent groups during the peri-procedural stage because of,
according to the published article, the presence of bilateral/contralateral lesions (lesions resulting from the contralateral
artery from the non-treated carotid) which suggest that the peri-procedural neurological damage may have originated from extra-carotid
sources (outside of the artery which was treated and outside the stent itself).
Initial
Clinical Study of the New CGuard EPS MicroNet Covered Carotid Stent: “One Size Fits All”
“Initial
Clinical Study of the New CGuard EPS MicroNet Covered Carotid Stent: ‘One Size Fits All’” was an investigator-led,
single-center study, which evaluated CGuard EPS in 30 consecutive patients with symptomatic stenosis of the internal carotid artery
with the objective of evaluating the CGuard EPS MicroNet covered stent for its ability to adjust to different vessel diameters.
The results of the study were published in the Journal of Endovascular Therapy in May 2019. The conclusion of the study as reported
was that CGuard EPS has high conformability combined with an almost equivalent outward radial force at expansion diameters ranging
from 5.5 to 9.0 mm. The first clinical results demonstrate the “One Size Fits All” stent can be implanted in internal
carotid arteries with reference diameters within this range.
Key
findings from the study were as follows:
● 100% technical success in implanting CGuard EPS;
● No neurological events within 30 days;
Preliminary
Results from a Prospective Real-World Multicenter Clinical Practice of Carotid Artery Stenting Using the CGuard Embolic Prevention
System: The IRONGUARD 2 Study
“Preliminary
Results From a Prospective Real-World Multicenter Clinical Practice of Carotid Artery Stenting Using the CGuard Embolic Prevention
System: The IRONGUARD 2 Study” is a physician initiated prospective multi-center registry enrolling 733 patients from 20
medical centers in Italy, from January 2017 to June 2019. The objective of the study is to evaluate periprocedural (24 hours),
post-procedural (up to 30 days), and 12-month outcomes in a largest, prospective, multicenter series of patients submitted for
protected carotid artery stenting with the CGuard Embolic Prevention System. The 24-hour, 30-day and 12-month preliminary results
(data available on 726 patients out of the 733 treated) were presented at the Leipzig Interventional Course (LINC) in January
2021. The study’s preliminary results from the IRONGUAURD 2 study suggested in a real-world evaluation of carotid artery
stenting, Cguard EPS can be safely used for treatment of extracranial carotid artery stenosis, allowing a low rate of post procedural
adverse events by 12 months.
Key
findings from the study are as follows:
● 100%% procedural success in implanting CGuard EPS;
The
SIBERIA Trial for Carotid Artery Stenosis: A Randomized Controlled Trial of Conventional Versus MicronetTM-Covered Stent
Use in Percutaneous Neuroprotected Carotid Artery Revascularization: Peri-procedural and 30-day Diffusion-Weighted Magnetic Resonance
Imaging and Clinical Outcomes
“The
SIBERIA Trial for Carotid Artery Stenosis: A Randomized Controlled Trial of Conventional Versus MicronetTM-Covered Stent
Use in Percutaneous Neuroprotected Carotid Artery Revascularization: Peri-procedural and 30-day Diffusion-Weighted Magnetic Resonance
Imaging and Clinical Outcomes” was an investigator-initiated randomized clinical trial, single-center study, which evaluated
one hundred patients who qualified for carotid revascularization with high risk for surgery and were randomized 1:1 to either
CGuard EPS or AcculinkTM. The primary endpoints were incidence and volume of new cerebral embolic post-procedural lesions
(24-48 hours) as determined by diffusion weighted magnetic resonance imaging (DW-MRI). The principal secondary endpoints included
incidence of periprocedural or postprocedural stroke, myocardial infarction and death at 30 days. The results of the study were
presented in a late-breaking session at the EuroPCR in June 2020. The conclusion of the study was that the CGuardTM MicronetTM-covered
stent use in consecutive unselected patients subjected to neuroprotected carotid artery stenting was associated with a greater
than three-fold reduction in the procedure-generated mean cerebral lesion volume, and with zero post-procedural cerebral embolisms
observed.
Key
findings from the study are as follows:
Completed
Clinical Trials for MGuard Bare-Metal Coronary Products
We
have completed eight clinical trials with respect to our first generation stainless steel-based MGuard coronary device and our
cobalt-chromium based MGuard Prime EPS stent. Our first generation MGuard stent combining the MicroNet with a stainless steel
stent received CE mark approval for the treatment of coronary artery disease in the European Union in October 2007. We subsequently
replaced the stainless steel stent with a more advanced cobalt-chromium based stent for MGuard Prime EPS.
The
First in Men (FIM) study conducted in Germany from the fourth quarter of 2006 through the second quarter of 2008 focused on patients
with occlusion in their stent graft. This group is considered to be in “high risk” for complications during and shortly
after the procedure due to the substantial risk of occurrence of a thromboembolic event. The study demonstrated MGuard’s
safety in this high risk group. This study was followed by the GUARD study in Brazil in 2007 with a similar patient population
which reinforced the safety profile of MGuard in patients prone to procedural complications. The MAGICAL study was a pilot study
in STEMI patients conducted in Poland from 2008 through 2012 which demonstrated safety, measured by MACE rates at 30 days following
the procedure, as well as efficacy results, measured by the ability of MGuard to reestablish blood flow into the infarcted area
of the muscle. Furthermore, we conducted three registries (iMOS, IMR and iMOS Prime) that confirmed the feasibility of MGuard
and MGuard Prime EPS for the treatment of STEMI patients and the safety of MGuard and MGuard Prime EPS in the STEMI patient group.
Safety was repeatedly demonstrated in these trials and registries by the low mortality rate in the first month after the procedure.
In
the second calendar quarter of 2011, we began the MGuard for Acute ST Elevation Reperfusion Trial (which we refer to as our “MASTER
I trial”), a prospective, randomized study, which demonstrated that among patients with acute STEMI undergoing emergency
PCI, patients treated with MGuard had superior rates of epicardial coronary flow (blood flow within the vessels that run along
the outer surface of the heart) and complete ST-segment resolution, or restoration of blood flow to the heart muscle after a heart
attack, compared to those treated with commercially-approved bare metal or drug-eluting stents. The results of this trial are
summarized in greater detail below.
Finally,
the MASTER II trial, which we initially initiated as part of our efforts to seek approval of our MGuard Prime EPS by the FDA,
was discontinued at our election in its current form in light of market conditions moving toward the use of drug-eluting stents
over bare-metal stents. Analysis of the patients already enrolled in the MASTER II trial prior to its suspension, however, reconfirmed
the MASTER I safety results due to a continued low mortality rate.