Item 1A. Risk Factors. 26
Item 1B. Unresolved Staff Comments. 53
Item 2. Properties. 53
Item 3. Legal Proceedings. 53
Item 4. Mine Safety Disclosures. 53
Item 6. [Reserved] 54
Item 7A. Quantitative and Qualitative Disclosures About Market Risk. 60
Item 8. Financial Statements and Supplementary Data. 60
Item 9A. Controls and Procedures. 61
Item 9B. Other Information. 61
Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 61
PART III 62
Item 10. Directors, Executive Officers and Corporate Governance. 62
Item 11. Executive Compensation. 66
Item 14. Principal Accounting Fees and Services. 77
Item 15. Exhibits and Financial Statement Schedules. 78
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. 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:
● market acceptance of our products;
● 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;
● inability to carry out research, development and commercialization plans;
● loss of a key customer or supplier;
● product malfunctions;
● price increases for supplies and components;
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.
All
information in this Annual Report on Form 10-K relating to shares or price per share reflects the 1-for-15 reverse stock split effected
by us on April 26, 2021.
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 for
the treatment of carotid artery disease and other vascular disease. A stent is an expandable “scaffold-like” device, usually
constructed of a metallic material, that is inserted into the lumen of the artery to create patency and revascularization of blood flow.
MicroNet, a micron mesh sleeve, is attached over a stent to provide embolic protection both during and after stenting procedures.
Our
CGuardTM carotid embolic prevention system (“CGuard EPSTM”) combines MicroNet and a unique self-expandable nitinol
stent in a single device for use in carotid artery revascularization. Our CGuard EPS originally received CE mark approval under Medical
Device Directive 93/42/EEC (“MDD”) in the European Union (“EU”) in March 2013 and was fully launched in Europe
in September 2015. Subsequently, we launched CGuard EPS in over 30 countries and on February 3, 2021, we executed a distribution agreement
with Chinese partners for the purpose of expanding our presence in the Asian markets. Currently, we are seeking strategic partners for
a potential launch of CGuard EPS in Japan and other Asian countries.
Our
CE mark for CGuard EPS under the MDD expired on November 12, 2022 and we are in the final stages of technical documentation review
by the Notified Body auditor to meet the Medical Device Regulation (“MDR”) (MDR 2017/745) requirements (which replaced
the MDD) for recertification. In the meantime, on February 14, 2023, we received a derogation per Article 97 paragraph 1 of
Regulation 2017/745 from the Agency for Medicines and Health Products (FAMHP) allowing us to continue marketing CGuard EPS in the EU
until August 15, 2023 subject to certain procedural requirements. Subsequently, on March 20, 2023, Regulation (EU) 2023/607 was
published allowing us to continue marketing CGuard EPS in EU countries under the MDD directive until December 31, 2027. As a result
of the foregoing, we may market and sell CGuard EPS in the EU and certain other jurisdictions subject to certain procedural
requirements while our MDR CE recertification is pending. We continue to expedite the review process for recertification under the
MDR.
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 Sten 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. The composite index will be compared to a performance goal based
on the observed rate of the two components of the primary endpoint from previous pivotal stent trials which are considered industry standard.
The performance goal will be considered met if the upper bound of the two-sided 95% confidence interval calculated from the observed
primary endpoint rate is < 11.6% and the p-value is less than 0.025.
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. These are 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 enrolment phase at
approximately 20 trial sites and expect it to be completed approximately at the end of the second quarter of 2023.
Additionally,
we intend to continue to invest in current and future potential new indications, products and manufacturing enhancements for CGuard EPS
that are expected to reduce cost of goods and/or provide the best-in-class performing delivery systems, such as CGuard PrimeTMfor
transfemoral access. In furtherance of our strategy that focuses on establishing CGuard EPS as a viable alternative to vascular surgery,
we are developing a new transcarotid artery revascularization (TCAR) delivery system, SwitchGuardTM, for transcarotid access and
neuro protection. In addition, we intend to explore new indications for CGuard EPS to leverage the advantages of stent design and mesh
protection, well suited in labels such as acute stroke with tandem lesions.
We
consider our 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 $1.3 billion in 2023 (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 and internal estimates). According
to this same report, and internal estimates, 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 $9.3 billion. Our mission
is to offer a comprehensive set of delivery solutions (TCAR and Transfemoral) in order to deliver best in class results through patient
outcomes by way of stent performance with CGuard EPS.
We
were organized in the State of Delaware on February 29, 2008.
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
2022, 3.0 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 394,000 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 three 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 transcarotid artery revascularization where a surgeon accesses the blocked carotid artery though an incision
in the neck, and then surgically removes the plaque while combining high-rate blood flow reversal to protect the brain. The third 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.
Our
Products and Product Candidates
MicroNet
Mesh Platform Technology
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.
The MicroNet mesh is the core technology around which we have developed products for specific applications.
CGuard
EPS – Carotid Artery 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 original received CE mark approval in the EU in March 2013 and was fully launched in Europe in September 2015. Subsequently,
we launched CGuard EPS in 30 plus countries 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 and other
Asian countries.
Our
CE mark for CGuard EPS under the MDD expired on November 12, 2022 and we are in the final stages of technical documentation review by
the Notified Body auditor to meet the MDR requirements for recertification. In the meantime, on February 14, 2023, we received a derogation
per Article 97 paragraph 1 of Regulation 2017/745 from the Agency for Medicines and Health Products (FAMHP) allowing us to continue marketing
CGuard EPS in the EU until August 15, 2023, subject to certain procedural requirements. Subsequently, on March 20, 2023, Regulation (EU) 2023/607 was published allowing us to continue
marketing CGuard EPS in EU countries under the MDD directive until December 31, 2027. As a result of the foregoing, we may market and sell CGuard EPS in
the EU and certain other jurisdictions subject to certain procedural requirements while our MDR CE recertification is pending. We continue to expedite the
review process for recertification under the MDR.
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. The composite index will be
compared to a performance goal based on the observed rate of the two components of the primary endpoint from previous pivotal stent trials
which are considered industry standard. The performance goal will be considered met if the upper bound of the two-sided 95% confidence
interval calculated from the observed primary endpoint rate is < 11.6% and the p-value is less than 0.025.
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. Since then we have continue to enroll subjects in the trial at approximately 20 trial sites and expect to complete
enrollment approximately at the end the second quarter of 2023.
CGuard
Prime Delivery System
The
CGuard PrimeTM System is a mesh-covered self-expanding carotid stent that is loaded into a transfemoral rapid exchange (Rx) delivery
system that we are developing and that is subject to regulatory approval.
The
CGuard Prime Carotid Stent is a self-expanding nitinol stent covered with a MicroNet bio-stable sleeve woven from a single strand of
23 μm Polyethylene Terephthalate (PET). The MicroNet sleeve is designed to trap and seal thrombus and plaque against the vessel wall,
providing continuous embolic prevention. The CGuard Prime Carotid Stent is available in diameters ranging from 6.0mm to 10mm and in lengths
of 20, 30, 40 and 60mm. The CGuard Prime Delivery System is a rapid exchange (Rx), delivery system with a 6Fr profile that can accommodate
all stent sizes from 6mm to 10mm. The CGuard Prime Rx Delivery Systems are available in two lengths: 80 cm and 135 cm.
CGuard
PrimeTM advances the first generation CGuard transfemoral delivery system with new handle design for deployment accuracy, new catheter
design for more flexible navigation of tortuous anatomy especially in acute revascularize settings as well as two lengths, 135cm and
80cm for booth transfemoral and trans ,carotid access.
Switchguard
SwitchGuard
is a Class IIa, non-invasive transcarotid artery revascularization (TCAR) device that we are developing and that is subject to regulatory
approval that is composed of medical grade tubing with male Luer lock connectors at each end and an in-line 200-micron blood filter.
The device is intended as an external arterial-venous (A-V) shunt, allowing arterial blood to flow into the venous system, while filtering
particulate before returning blood to the patient on the venous side.
The
SwitchGuard arterio-venous extension line with filter is intended for flow circuit and particle removal when connecting arterial and/or
venous introducers during interventional procedures.
SwitchGuard
is being developed to answer a need of flow reversal for cerebral protection in CAS since symptomatic distal embolization, caused by
the release of material (thrombotic, necrotic, or atherosclerotic) from the site of the lesion during the intervention, is the most frequent
and important complication of CAS. Reversing blood flow has been shown to reduce stroke risk during carotid artery procedures.
Physicians
frequently use extension lines constructed from blood filter transfusion sets during interventional procedures for the purpose of A-V
shunting.
NGuard
EPS – Acute Stroke with Tandem Lesions
In
approximately 20% of acute strokes, the carotid artery is included in the cerebral occlusion pathway. Currently there is no indicated
use of CAS for these lesions during stroke treatment. We believe CGuard EPS is optimally suited for intervention in this acute setting
by way for design (flexible / low metal structure) as well as MicroNet mesh offering embolic protection both during and post procedural
implantation. Our goal is to develop CGuard EPS to mitigate strokes in this acute setting.
MGuard
Prime
We
historically developed and sold MGuard Prime embolic protection system (“MGuard Prime EPS”) which was marketed for use in
patients with acute coronary syndromes, notably acute myocardial infarction (heart attack) and saphenous vein graft coronary interventions,
or bypass surgery. Over the past years there has been a shift in industry preferences away from bare-metal stents, such as MGuard Prime
and as a result of declining sales and practical market utilization of the MGuard Prime EPS, which we believe was largely driven by the
predominant industry preferences favoring drug-eluting or drug-coated, stents, during the second quarter of 2022 we ceased sales of our
MGuard Prime EPS following a phase out period.
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. In September 2022, the results of the CGuard CARENET
trial five year follow up were published in the Journal of the American College of Cardiology: Cardiovascular Interventions Vol. 15,
No 18, 2022 September 26, 2022:1883-1891. There was no ipsilateral stroke or ipsilateral stroke-related death which occurred throughout
the five years. In addition, no stent restenosis or external carotid artery occlusion occurred in CARENET by 5 years, indicating normal
healing and uncompromised side-branch patency.
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 and PARADIGM -500 Studies
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. In Dec 2020, the 12 month results were presented in the Official Journal of the EuroPCR and the European Association
of Percutaneous Coronary Interventions, EuroIntervention 2020;16:e950-e952. DOI: 10.4244/EIJ-D-19-01014) 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.
PARADIGM-101
was subsequently increased to include 500 consecutive patients with symptomatic or increased stroke risk asymptomatic atherosclerotic
carotid stenosis patients. The new study is known as PARADIGM -500. In June 2022, the 1 year results were presented at the EuroPCR in
Leipzig, Germany.
Key
findings from the PARADIGM-500 study are as follows.
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.
Safety
and Efficacy of the New Micromesh-Covered Stent CGuard in Patients Undergoing Cartoid Artery Stenting: Early Experience From a Single
Center
“Safety
and Efficacy of the New Micromesh-Covered Stent CGuard in Patients Undergoing Carotid Artery Stenting: Early Experience From a Single
Center” was an investigator-led, single-center study which evaluated CGuard EPS in 82 consecutive patients. The aim of the study
was to evaluate the safety (technical success) and efficacy (clinical success) of the CGuard stent system – a new nitinol stent
covered by a closed-cell polyethylene and terephthalate mesh designed to prevent embolic events. In 2017, the 30-day positive results
were published online-ahead-of-print in the European Journal of Vascular and Endovascular Surgery (2017), https://doi.org/10.1016/j.ejvs.2017.09.015.
Key
findings from the study are as follows:
● 100% success in implanting CGuard EPS;
● One case of acute stent thrombosis occurred within 4 hours of the procedure:
● No new adverse neurological events were recorded at the post-operative period.
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.
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;
Thirty-Day
Results of the Novel CGuard-Covered Stent in Patients Undergoing Carotid Artery Stenting
“Thirty-Day
Results of the Novel CGuard-Covered Stent in Patients Undergoing Carotid Artery Stenting” was an investigator-led, prospective
single-center study which evaluated CGuard EPS in 103 patients that underwent carotid artery stenting procedures. The aim of the study
was to provide early-term evaluation, safety, and efficacy of the novel CGuard micromesh self-expanding stent with embolic protection
system (EPS). In April 2021, the 30-day positive results were published in the Journal of Endovascular Therapy, DOI: 10.1177/15266028211007466.
Key
findings from the study are as follows:
● 100% technical success was achieved in all patients:
● No major adverse events (death, stroke, or myocardial infarction) at 30 days.
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 (RCT trial)
“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 30 day 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. The incidence of restenosis and vessel occlusion according to the ICA (internal carotid
artery) ultrasound and the incidence of strokes, myocardial infarctions or deaths between the study arms at 365 days were presented at
the LINC conference in Leipzig, Germany in June , 2022. The 12 month outcomes demonstrated a significantly higher prevalence of the combined
endpoint of death, stroke or myocardial infarctions and in-stent restenosis and vessel occlusion rate in the first generation (single
layer) carotid stent, AcculinkTM, versus the MicroNet-Covered Stent, CGuardTM.
Key
findings from the study are as follows:
Future
Clinical Trials
Pre
and post-marketing clinical trials (outside the United States) could be conducted to further evaluate the safety and efficacy of CGuard
EPS in specific indications and new products, such as SwitchGuard. These trials would be designed to facilitate market acceptance and
expand the use of the product.
Growth
Strategy
Our
primary business objective is to utilize our proprietary MicroNet technology and products to become the industry standard for treatment
of stroke and complex vascular 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
With
respect to competition for our carotid embolic prevention system, CGuard EPSTM, the manufacturers of products used in connection
with CAS procedures in the United States, is comprised of a number of large companies, including Abbott Laboratories, Boston Scientific
Corporation, Covidien Ltd. (currently part of Medtronic, Inc.) and Cordis Corporation. In Europe, in addition to the above mentioned
manufacturers, Terumo Medical Corporation is also a market participant that has a share of the market for products used in connection
with CAS procedures. As we develop and seek regulatory approval in the United States and Europe for our new TCAR delivery system, SwitchGuardTM,
and continue to seek greater market share for CGuard EPSTM, we expect to compete with Silk Road Medical in the total carotid artery
revascularization market that comprises both CAS and carotid endarterectomy (“CEA”).
Many
of these companies are larger companies or divisions of publicly-traded companies that have certain competitive advantages, including
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, relationships with our target
customers and worldwide distribution methods that are more effective than ours. However, while there are currently many market participants
in the U.S. carotid stent market, we believe that the European market is somewhat more fragmented for CEA and CAS products, and, in our
opinion, smaller competitors may be able to gain market share with greater flexibility and more efficiently than in the United States.
We
believe the principal competitive factors in our market include the following:
● Patient outcomes and adverse event rates;
● Patient experience;
● Acceptance by treating physicians and referral sources;
● Physician learning curve;
● Ease-of-use and reliability;
● Patient recovery time and level of discomfort;
● Economic benefits and cost savings;
● Availability of reimbursement; and
● Strength of clinical evidence.
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
accessory devices, which we believe can greatly expand our customer base. We have focused and we plan to continue to focus our marketing
efforts primarily on key growth markets and to evaluate opportunities in new territories if and when they become available. In addition,
we are using international trade shows and industry conferences to gain market exposure and brand recognition. We continue to work with
leading physicians to enhance our marketing effort and are developing relationships with new key opinion leaders to champion our technology
and work with us in clinical studies. In additional we have begun to sell direct to hospitals in certain markets, such as France and
the United Kingdom, in order to increase our growth in the market and gross profit margins.
Product
Positioning
When
treating carotid artery disease, we believe that CGuard has potential to become the standard of care in treading carotid artery disease.
It is a second-generation stent with positive patient outcomes demonstrating significant reduction in post-procedural neurological events.
Additionally,
we intend to continue to evaluate potential product enhancements and manufacturing enhancements for CGuard EPS expected to reduce cost
of goods or provide the best-in-class performing delivery system and accessory solutions. 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. Finally,
we do not expect that it would be crucial to use a drug-eluting stent platform to compete in certain new markets such as the neurovascular
market, and hence, we plan to continue to explore this area of opportunity.
Insurance
Reimbursement
In
most countries, a significant portion of a patient’s medical expenses is covered by third-party payors. Third-party payors can
include both government-funded insurance programs and private insurance programs. While each payor develops and maintains its own coverage
and reimbursement policies, payors, in many instances, have similarly established policies, and in the U.S., for example, coverage policies
and reimbursement rates of private payors are often influenced by those established by the U.S. Department of Health and Human Services
Centers for Medicare and Medicaid Services (CMS). The CGuard product sold to-date in applicable foreign countries have been designed
and labeled to facilitate the utilization of existing reimbursement codes for such countries, and we intend to continue to design and
label our present and future products in a manner consistent with this goal.
While
most countries have established reimbursement codes for stenting procedures, certain countries may require additional clinical data before
recognizing coverage and/or to obtain a certain level of reimbursement for one or more of our products. In these situations, we intend
to complete the required clinical studies to obtain reimbursement approval in countries where it makes economic sense to do so.
Intellectual
Property
Patents
We
have 58 issued patents, including 16 patents issued in the U.S., and 17 pending patent applications, 6 of which are pending in the United
States. Many of these patents and applications cover aspects of our CGuard and MGuard technology. Patents outside the U.S. have been
filed in Canada, China, Europe, Israel, India, Japan, Australia, and South Africa. The patents and applications fall into a number of
patent families, as listed below:
Handle for Two-Stage Deployment of a Stent US EP CN JP IN
Shunts with Blood-Flow Indicators US PCT
Device for Shunting Blood Between the Arterial and Venous Systems PCT
Devices for shunting blood US
The
patents and patent applications listed above cover various aspects of our products, specifically focusing on the mesh sleeve covering
our stents, as well as methods for production and delivery mechanisms of the stents. We believe that our patents, in particular those
covering the use of a knitted micron-level mesh sleeve over a stent for various indications, as well as our pending patent applications
(if issued as patents with claims substantially in their present form), create a significant barrier against other companies seeking
to use similar technology. We believe these patents and patent applications collectively cover all our existing products and may be useful
in protecting our future technological developments. We intend to aggressively continue patenting new technologies and to actively pursue
any infringement of our key patents.
Trade
Secrets
We
also rely on trade secret protection to protect our interests in proprietary know-how and/or for processes for which patents are difficult
to obtain or enforce. As part of our trade secret policy, we rely on non-disclosure and confidentiality agreements with employees, consultants
and other parties to protect trade secrets and other proprietary technology.
Trademarks
We
have registered or applied to register the following trademarks, which we use in connection with our products:
● InspireMD® (US, European Union, and UK)
● MGuard® (European Union, and UK)
● CGuard® (US, European Union, and UK)
● MGuard Prime® (European Union, and UK)
● NGuard® (European Union and UK)
● PVGuard® (European Union, and UK)
● Micronet® (US)
● (MNP Micronet Protection logo) (European Union and UK)
● Carenet®)European Union and UK)
● SmartFitTM (US, UK and CN)
● SmartFit Logo (EP, UK, CN)
● CGuard Prime (EP, UK, US, CN, JP)
● SwitchGuard (EP, UK, US, JP)
● True North Medical (US, EP, UK)
● MicroMesh (US)
● MicroMesh logo (US, EP, UK CN, JP)
● Micronet logo (updated version) (US, EP, UK, CN, JP)
The
trademarks are renewable indefinitely, so long as we continue using the marks and make the appropriate filings when required. We also
use and may have common-law rights to various trademarks, trade names, and service marks.
Government
Regulation
The
manufacture and sale of our products are subject to regulation by numerous governmental authorities, principally the European Union CE
mark and other corresponding foreign agencies.
Sales
of medical devices outside the United States are subject to foreign regulatory requirements that vary widely from country to country.
These laws and regulations range from simple product registration requirements in some countries to complex approval process, clinical
trials and production controls in others. As a result, the processes and time periods required to obtain foreign marketing approval may
be longer or shorter than those necessary to obtain FDA market authorization. These differences may affect the timeliness of international
market introduction of our products. For the European Union nations, medical devices must obtain a CE mark before they may be placed
on the market. In order to obtain and maintain the CE mark, we must comply with EU law on medical devices, which, until May 26, 2021
was governed by the MDD, by presenting comprehensive technical files for our products demonstrating safety and efficacy of the product
to be placed on the market and passing initial and annual quality management system audit as per ISO 13485 standard by a European Notified
Body. We have obtained ISO 13485 quality system certification and CGuard EPS that we currently distribute into the European Union, displays
the required CE mark. In order to maintain certification, we are required to pass an annual surveillance audit conducted by Notified
Body auditors. The European Union replaced the MDD with the new MDR regulation. The MDR entered into force after a transitional period
of three years and a one year extension of that transition period due to the COVID-19 pandemic on May 26, 2021 and which changes several
aspects of the regulatory framework in the European Union. Manufacturers had the duration of the transition period to update their technical
documentation and processes to meet the new requirements in order to obtain a CE Mark.
In
our specific case, our CE mark for CGuard EPS under the MDD expired on November 12, 2022, and we are in the final stages of technical
documentation review by the Notified Body auditor to meet the MDR requirements for recertification. In the meantime, on February 14,
2023, we received a derogation per Article 97 paragraph 1 of Regulation 2017/745 from the Agency for Medicines and Health Products (FAMHP)
allowing us to continue marketing CGuard EPS in the EU until August 15, 2023, subject to certain procedural requirements. Subsequently, on March 20, 2023, Regulation (EU) 2023/607
was published allowing us to continue marketing CGuard EPS in EU countries under the MDD directive until December 31, 2027. As a result of the foregoing, we may market and sell CGuard EPS in the EU and certain other jurisdictions subject to certain procedural requirements while our MDR CE recertification is
pending. We continue to expedite the review process for recertification under the MDR.
We
have or had regulatory approval and made sales of CGuard EPS either through distributors pursuant to distribution agreements or
directly, in the countries listed in the table below. While each of the European Union member countries accepts the CE mark as its
sole requirement for marketing approval, some of these countries still require us to take additional steps in order to gain
reimbursement rights for our products. Furthermore, while we believe that certain of the below-listed countries that are not members
of the European Union and accept the CE mark as a primary requirement for marketing approval, each such country requires additional
regulatory requirements for final marketing approval of our products. Furthermore, we are currently targeting additional countries
in Europe, Asia, and Latin America; however, even if all governmental regulatory requirements are satisfied in each such country, we
anticipate that obtaining marketing approval in each country could take as few as three months or as many as twelve months or more,
due to the nature of the approval process in each individual country, including typical wait times for application processing and