Item 1A. Risk Factors. 28
Item 1B. Unresolved Staff Comments. 55
Item 2. Properties. 55
Item 3. Legal Proceedings. 55
Item 4. Mine Safety Disclosures. 55
Item 6. [Reserved] 56
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
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 64
PART III 65
Item 10. Directors, Executive Officers and Corporate Governance. 65
Item 11. Executive Compensation. 69
Item 14. Principal Accounting Fees and Services. 78
Item 15. Exhibits and Financial Statement Schedules. 79
SPECIAL
NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
Annual Report on Form 10-K contains “forward-looking statements,” which include information relating to future events, future
financial performance, strategies, expectations, competitive environment and regulation, including, revenue growth and anticipated impacts
on our business of the ongoing COVID-19 pandemic and related public health measures. Words such as “may,” “will,”
“should,” “could,” “would,” “predicts,” “potential,” “continue,”
“expects,” “anticipates,” “future,” “intends,” “plans,” “believes,”
“estimates,” and similar expressions, as well as statements in future tense, identify forward-looking statements. Forward-looking
statements should not be read as a guarantee of future performance or results and will probably not be accurate indications of when such
performance or results will be achieved. Forward-looking statements are based on information we have when those statements are made or
our management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that
could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements.
Important factors that could cause such differences include, but are not limited to:
● negative clinical trial results or lengthy product delays in key markets;
● our ability to maintain compliance with the Nasdaq listing standards;
● our ability to adequately protect our intellectual property;
● market acceptance of our products;
● inability to carry out research, development and commercialization plans;
● loss of a key customer or supplier;
● product malfunctions;
● price increases for supplies and components;
● adverse economic conditions;
● loss or retirement of key executives and research scientists.
The
foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or
risk factors that we are faced with that may cause our actual results to differ from those anticipated in our forward-looking statements.
You should review carefully the risks and uncertainties described under the heading “Item 1A. Risk Factors” in this Annual
Report on Form 10-K for a discussion of these and other risks that relate to our business and investing in shares of our common stock.
Moreover, new risks regularly emerge, and it is not possible for our management to predict or articulate all the risks we face, nor can
we assess the impact of all risks on our business or the extent to which any risk, or combination of risks, may cause actual results
to differ from those contained in any forward-looking statements. All forward-looking statements included in this Annual Report are based
on information available to us on the date of this Annual Report. Except to the extent required by applicable laws or rules, we undertake
no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified
in their entirety by the cautionary statements contained above and throughout this Annual Report.
The
forward-looking statements contained in this Annual Report on Form 10-K are expressly qualified in their entirety by this cautionary
statement. We do not undertake any obligation to publicly update any forward-looking statement to reflect events or circumstances after
the date on which any such statement is made or to reflect the occurrence of unanticipated events.
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. 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 and other Asian countries.
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, C-Guardians, for
prevention of stroke in patients in the United States. C-Guardians 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 was designed to enroll approximately 315 subjects in a maximum of 40 study
sites located in the United States and Europe. Study sites in Europe may contribute a maximum of approximately 50% of the total enrollees.
The primary endpoint of the study will be the composite of incidence of death (all-cause mortality), all stroke, and myocardial infarction
(DSMI) through 30-days post-index procedure, based on the clinical events committee (CEC) adjudication and ipsilateral stroke from 31-365
day follow-up, based on Clinical Events Committee (CEC) adjudication.
On
July 23, 2021, we announced the initiation of enrollment and successful completion of the first cases of our C-Guardian trial of CGuard
EPS. The first patients, who were under the care of principal investigator, Chris Metzger, M.D., system chair of clinical research at
Ballard Health System in Eastern Tennessee, were successfully implanted with the CGuard EPS stent device. These are the first of 315
patients who are expected to be enrolled in the trial and receive CGuard EPS in the treatment of carotid artery stenosis in symptomatic
and asymptomatic patients undergoing carotid artery stenting. We are currently continuing with the enrollment phase.
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 current 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 will be
approximately $666 million in 2022 (source: Health Research International Personal Medical Systems, Inc. September 13, 2021 Results of
Update Report on Global Carotid Stenting Procedures and Markets by Major Geography and Addressable Markets). According to this same report,
assuming full penetration of the caseload for all individuals diagnosed with high-grade carotid artery stenosis, we estimate that the
total available market for CGuard EPS in 2022 will be approximately $5 billion.
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, or 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. Over the past years there has been a shift in
industry preferences away from bare-metal stents, such as MGuard Prime EPS in ST-Elevation Myocardial Infarction (“STEMI”)
patients. As a result of declining sales of the MGuard Prime EPS, which we believe this is largely driven by the predominant industry
preferences favoring drug-eluting, or drug-coated, stents, we intend to phase out future sales of our MGuard Prime EPS in 2022.
We
also intend to develop a pipeline of other products and indications by leveraging our MicroNet technology to improve peripheral procedures
such as the treatment of the superficial femoral artery disease and vascular disease below the knee as well as neurovascular procedures,
such as the treatment of acute stroke.
Presently,
none of our products may be sold or marketed in the United States, but we do derive revenues from the use of our products in the currently
ongoing trials.
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 1,935,484 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 $9.30 per unit. The Series G Warrants were immediately exercisable at a price
of $10.23 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 290,322 shares of common stock and Series G Warrants to purchase
145,161 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 111,290 shares of common stock with an exercise price of $10.23 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.
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 $10.062 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.
2021
Equity Incentive Plan
On
September 30, 2021, at our 2021 annual meeting of stockholders, our stockholders approved our 2021
Equity Incentive Plan.
ATM
Offering
On
July 28, 2020, we entered into a Sales Agreement with Alliance Global Partners (“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.
Reverse
Stock Split
On
April 14, 2021, our stockholders approved a reverse stock split of our common stock, following which, and on the same date, our board
of directors approved a ratio of 1-for-15 for the reverse stock split, or the Reverse Stock Split. On April 14, 2021, the Delaware Secretary
of State approved our Certificate of Amendment to our Amended and Restated Certificate of Incorporation, which set an effective date
of April 26, 2021, for the Reverse Stock Split. The post-Reverse Stock Split CUSIP number for our common stock is 45779A 846.
On
the April 26, 2021, the total number of shares of our common stock held by each stockholder was converted automatically into the number
of whole shares of common stock equal to (i) the number of issued and outstanding shares of common stock held by such stockholder immediately
prior to the Reverse Stock Split, divided by (ii) 15.
No
fractional shares were issued in connection with the Reverse Stock Split, and no cash or other consideration was be paid. Instead, we
issued one whole share of the post-Reverse Stock Split common stock to any shareholder who otherwise would have received a fractional
share as a result of the Reverse Stock Split.
Appointment
of Kathryn Arnold to our Board of Directors
On
May 10, 2021, the board of directors appointed Ms. Kathryn Arnold as a Class III member of the Board, effective as of that date, with
a term expiring at the Company’s 2023 annual meeting of stockholders. In connection with her appointment, on May 10, 2021, Ms.
Arnold was granted (a) options to purchase 3,512 shares of Common Stock (the “Options”), and (b) 10,536 shares of restricted
stock (the “Restricted Stock”, together with the Options the “Arnold Grant”). The Options have an exercise price
equal to the closing fair market value of the Common Stock on the date of grant, subject to the terms and conditions of the Company’s
2013 Long-Term Incentive Plan (the “Plan”). The Options and the Restricted Stock will vest and become exercisable in three
equal annual installments beginning on the one-year anniversary of the date of the Arnold Grant, provided that in the event that Ms.
Arnold is either (i) not reelected as a director at the Company’s 2023 annual meeting of stockholders, or (ii) not nominated for
reelection as a director at the Company’s 2023 annual meeting of stockholders, any unvested Options or Restricted Stock will vest
in full and become exercisable on the date of the decision not to reelect or nominate her (as applicable). The Options have a term of
10 years from the date of grant.
Nasdaq
Listing
On
May 10, 2021, we announced that our shares that previously traded on the NYSE American were approved for listing on the Nasdaq Capital
Market (“Nasdaq”) and such shares began trading on Nasdaq on May 21, 2021 under the symbol, “NSPR.” On May 27,
2021, we announced that our warrants that previously traded on the NYSE American were approved for listing on Nasdaq, and such warrants
began trading on June 8, 2021. On July 7, 2021, our Series A warrants that previously traded under symbol “NSPRW” expired.
National
Commission for the Evaluation of Medical Devices and Health Technologies
On
October 13, 2021, we announced that our CGuard EPS stent system received a positive opinion from the National Commission for the Evaluation
of Medical Devices and Health Technologies (CNEDIMTS) of the French National Authority for Health (HAS) regarding reimbursement in France,
and the CGuard EPS was being added to the list of reimbursed medical products (LPPR) effective October 25, 2021. This was the final step
to full commercial launch of CGuard EPS following CNEDIMTS’ positive opinion for reimbursement received by the Company on May 11,
2021 for the treatment of symptomatic and non-symptomatic lesions when surgery is not indicated.
COVID-19
Developments
The
COVID-19 global pandemic has led governments and authorities around the globe to take various precautionary measures in order to limit
the spread of COVID-19, including government-imposed quarantines, lockdowns, and other public health safety measures. We experienced
a significant COVID-19 related impact on our financial condition and results of operations, primarily during the year ended December
31, 2020, which we primarily attribute to the postponement of CGuard EPS procedures (non-emergency procedures), as hospitals have shifted
resources to patients affected by COVID-19. To the best of our knowledge, there are European countries in which we operate reinstated
non-emergency procedures. However, new COVID-19 variants, and potentially increasing infection rates make the current COVID-related environment
highly volatile and uncertain and we anticipate that the continuation of the pandemic and related restrictions and safety measures will
likely result in continued fluctuations in sales of our products, potentially enrollments in our studies as well as potential disruptions
to our supply chain for the upcoming periods.
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
2021, 2.8 million people between the age of 50 and 89 years old were estimated to be diagnosed with high grade carotid artery disease,
of which, approximately 380,000 of those diagnosed required intervention for carotid artery disease (according to the Health Research
International Personal Medical Systems, Inc. September 13, 2021 Results of Update Report on Global Carotid Stenting Procedures and Markets
by Major Geography and Addressable Markets). There are two current intervention treatments used for carotid artery disease. The first
is a carotid endarterectomy where a surgeon accesses the blocked carotid artery though an incision in the neck, and then surgically removes
the plaque. The second is carotid artery stenting, which is a minimally invasive endovascular treatment for carotid artery disease and
an alternative to carotid endarterectomy. 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.
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
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 on
February 3, 2021, we executed a distribution agreement with Chinese partners for the purpose of expanding our presence in China. On October
13, 2021, we announced that our CGuard EPS stent system received a positive opinion regarding reimbursement in France. Currently, we
are seeking strategic partners for a potential launch of CGuard EPS in Japan.
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, C-Guardians, for prevention of stroke in patients in the United States. C-Guardians 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 was designed to enroll approximately
315 subjects in a maximum of 40 study sites located in the United States and Europe. Study sites in Europe may contribute a maximum of
approximately 50% of the total enrollees. The primary endpoint of the study will be the composite of incidence of death (all-cause mortality),
all stroke, and myocardial infarction (DSMI) through 30-days post-index procedure, based on the clinical events committee (CEC) adjudication
and ipsilateral stroke from 31-365 day follow-up, based on Clinical Events Committee (CEC) adjudication.
On
July 23, 2021, we announced the initiation of enrollment and successful completion of the first cases of our C-Guardian trial of CGuard
EPS. The first patients, who were under the care of principal investigator, Chris Metzger, M.D., system chair of clinical research at
Ballard Health System in Eastern Tennessee, were successfully implanted with the CGuard EPS stent device. These are the first of 315
patients who are expected to be enrolled in the trial and receive CGuard EPS in the treatment of carotid artery stenosis in symptomatic
and asymptomatic patients undergoing carotid artery stenting. We are currently continuing with the enrollment phase. 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.
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. Over the past years there has been
a shift in industry preferences away from bare-metal stents, such as MGuard Prime EPS in ST-Elevation Myocardial Infarction STEMI patients.
As a result of declining sales of the MGuard Prime EPS, which we believe this is largely driven by the predominant industry preferences
favoring drug-eluting, or drug-coated, stents, we intend to phase out future sales of our MGuard Prime EPS in 2022.
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 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 and published (Randomized Controlled Trial of Conventional Versus MicroNet-Covered Stent in Carotid Artery Revascularization,
JACC Cardiovascular Interventions, Vol. 14, November 21, 2021). 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. The MicroNet
covered stent significantly reduced periprocedural and abolished post procedural cerebral embolism in relation to a conventional carotid
stent. This is consistent with the MicroNet covered stent’s sustained embolism prevention, translating into cerebral protection
not only during but after carotid artery stenting.
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.
MASTER
I Trial
In
the second calendar quarter of 2011, we began the MASTER I trial, a prospective, randomized study in Europe, South America and Israel
to compare the MGuard with commercially-approved bare metal and drug-eluting stents in achieving superior myocardial reperfusion (the
restoration of blood flow) in primary angioplasty for the treatment of acute STEMI, the most severe form of heart attack. The MASTER
I trial enrolled 433 subjects, 50% of whom were treated with MGuard and 50% of whom were treated with a commercially-approved bare metal
or drug-eluting stents. The detailed acute and 30 days results from the trial were presented at the TCT conference on October 24, 2012
and published (Prospective, Randomized, Multicenter Evaluation of a Polyethylene Terephthalate Micronet Mesh–Covered Stent (MGuard)
in ST-Segment Elevation Myocardial Infarction, Stone et. al, JACC, 60; 2012). The results were as follows:
The
six month results from the MASTER I trial were presented at the 2013 EuroPCR Meeting, the official annual meeting of the European Association
for Percutaneous Cardiovascular Interventions, on May 23, 2013 in Paris, France. The results were as follows:
The
twelve month results from the MASTER I trial were presented at the TCT conference on October 29, 2013 and published (Mesh-Covered Embolic
Protection Stent Implantation in ST-Segment–Elevation Myocardial Infarction Final 1-Year Clinical and Angiographic Results From
the MGUARD for Acute ST Elevation Reperfusion Trial, Dudek et. al, Coronary Interventions, 2014). The results were as follows:
In
summary, the MASTER I trial 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 compared to those treated with commercially-approved bare metal or drug-eluting stents. In addition, patients treated
with MGuard showed a slightly lower mortality rate and a slightly higher major adverse cardiac event rate as compared to patients treated
with commercially-approved bare metal or drug-eluting stents six and twelve months post procedure.
A
detailed table with the results from the MASTER I trial is set forth below. The “p-Value” refers to the probability of obtaining
a given test result. Any p value less than 0.05 is considered statistically significant.
MGuard Bare Metal Stents/Drug Eluting Stents p-Value
30 day major adverse cardiac event 1.8 2.3 0.75
6 month major adverse cardiac event 5.2 3.4 0.34
12 month major adverse cardiac event 9.1 3.3 0.02
Future
Clinical Trials for CGuard EPS and MGuard Prime EPS
Post-marketing
clinical trials (outside the United States) could be conducted to further evaluate the safety and efficacy of CGuard EPS in specific
indications. These trials would be designed to facilitate market acceptance and expand the use of the product. We expect to be able to
rely upon CE mark approval of the product and other supporting clinical data to obtain local approvals.
We
do not anticipate conducting additional post-marketing clinical trials for our bare-metal MGuard coronary products.
Growth
Strategy
Our
primary business objective is to utilize our proprietary MicroNet technology and products to become the industry standard for treatment
of stroke, complex vascular and coronary disease and to provide a superior solution to the common acute problems caused by current stenting
procedures, such as restenosis, embolic showers and late thrombosis. We are pursuing the following business strategies to achieve this
objective.
Competition
The
markets in which we compete are highly competitive, subject to change and impacted by new product introductions and other activities
of industry participants.
Carotid
The
carotid stent markets in the United States and Europe are dominated by Abbott Laboratories, Boston Scientific Corporation, Covidien Ltd.
(currently part of Medtronic, Inc.), and Cordis Corporation (currently part of Cardinal Health, Inc.). Gore Medical and Terumo Medical
Corporation produce a polytetrafluoroethylene mesh-covered stent and a double layer metal stent, respectively. All of these larger companies
have substantially greater capital resources, larger customer bases, broader product lines, larger sales forces, greater marketing and
management resources, larger research and development staffs and larger facilities than ours and have established reputations and relationships
with our target customers, as well as worldwide distribution methods that are more effective than ours. However, we believe that the
European market is somewhat fragmented, and, in our opinion, smaller competitors may be able to gain market share with greater flexibility.
Neurovascular
Leading
industry players in the global neurovascular devices market include Medtronic, Stryker, Terumo and Johnson & Johnson. Acquisitions
and mergers are increasingly used as a strategy for product portfolio expansion and to grow footprint. (Global Market Insights, Inc.
- Devices Market Share 2018-2024 Industry Size Report. https://www.gminsights.com/industry-analysis/neurovascular-devices-market)
Sales
and Marketing
Sales
and Marketing
Based
on the positive CGuard EPS clinical data, we initiated the commercial launch of CGuard EPS in CE marked countries in early 2015. In September
2015, we announced full market launch of CGuard EPS in Europe. Since 2017 we are focusing on sales of our products through local distribution
partners and our own internal sales initiatives to gain greater reach into all the relevant clinical specialties and to expand our geographic
coverage. Our current strategy seeks to broaden our sales efforts to increase CGuard EPS penetration within the community of interventionalists.
In parallel, we aim at transitioning vascular surgeons from carotid endarterectomy procedures to carotid stenting with CGuard EPS and