Cardiovascular Systems, Inc. Reports Fiscal 2019 Fourth-Quarter Financial Results

Cardiovascular Systems, Inc. (CSI^®) (NASDAQ: CSII), a medical device company developing and commercializing innovative interventional treatment systems for patients with peripheral and coronary artery disease, today reported financial results for its fiscal fourth quarter, ended June 30, 2019.

CSI’s fourth-quarter revenues were $68.2 million, an increase of $9.1 million, or 15.4%, from the fourth quarter of fiscal 2018. Gross profit margin was 80.3%.

Selling, general and administrative expenses increased 16.2% to $44.0 million due to increased investments in clinical specialists, medical education and international expansion. Research and development expenses increased 41.8% to $9.5 million as a result of planned new product development and patient enrollment costs in the ECLIPSE clinical trial.

Fourth-quarter net income was $1.5 million, or $0.04 per basic and diluted share, compared to net income of $3.7 million, or $0.11 per basic and diluted share, in the prior-year period. Adjusted EBITDA totaled $4.7 million.

Fiscal year 2019 revenues grew 14.3% to $248.0 million. Gross margin decreased to 80.8% compared to 81.8% in the prior year, primarily driven by the combined effect of increased international volumes and the expansion of the company’s product portfolio, partially offset by a reduction of unit costs. Operating expenses increased $25.8 million, or 14.7%, to $201.2 million. Net loss was $(0.3) million, or $(0.01) per basic and diluted share, for the full year compared to a net income of $1.7 million, or $0.05 per basic and diluted share in the prior year.

Scott Ward, CSI’s Chairman, President and Chief Executive Officer, said, “CSI’s fourth quarter and fiscal 2019 financial results reflect our efforts to reach more patients and accelerate revenue growth. Ongoing strength in our core orbital atherectomy business paired with new revenue from procedure support products and our first full year of international operations more than doubled our annual growth rate compared with last year. These revenue drivers combined with increased investments in new products and medical evidence are designed to improve the quality of care for patients suffering from complex coronary and peripheral artery disease and deliver attractive, sustainable growth.”

CSI Introduces Fiscal 2020 Guidance
Ward concluded, “Double-digit revenue growth in our domestic orbital atherectomy franchise combined with new support product revenue and continued international expansion are forecasted to drive fiscal 2020 revenue growth of 12% to 14%.”

For fiscal 2020 ending June 30, 2020, CSI anticipates:

• Revenue of $278 million to $283 million, representing 12% to 14% growth compared with fiscal 2019;
• Gross profit margin of 79% to 80%;
• Net income (loss) of approximately breakeven*; and
• Positive Adjusted EBITDA.

*Excluding intangible asset amortization and direct expenses associated with the WIRION acquisition.

First Patient Enrolled in REACH PVI Clinical Study
In June, CSI announced the first patient was enrolled in the REACH PVI study. The purpose of this study is to prospectively evaluate acute clinical outcomes of orbital atherectomy via transradial access for the treatment of peripheral artery disease (PAD) in lower extremity lesions. CSI’s low profile, 5Fr, Extended Length Diamondback 360^® Peripheral Orbital Atherectomy System (OAS) and Extended Length Stealth 360^® Peripheral OAS are the only atherectomy devices that allow radial access for the treatment of peripheral lesions.

National Primary Investigator for REACH PVI, Dr. Ankur Lodha, M.D., Interventional Cardiologist, Cardiovascular Institute of the South, Lafayette, La., enrolled the first patient.

Dr. Lodha said, “When endovascular intervention is necessary, PAD lesions are mostly treated through femoral artery access. However, many PAD patients could benefit from faster ambulation time post procedure that radial artery access offers. In addition, some patients may have comorbidities, such as obesity, that complicate or preclude femoral access.”

Dr. Lodha continued, “The benefits of radial access for percutaneous peripheral vascular interventions are well documented. We believe this study will demonstrate that many of these known benefits, such as low complication rates, high cost effectiveness, and short time to ambulation, can be achieved using orbital atherectomy to treat lower limb PAD lesions through radial access.”

Said Ward, “CSI continues to innovate and develop medical evidence to improve the care of patients suffering from PAD. The commercialization of the Extended Length orbital atherectomy systems and our investment in REACH PVI both demonstrate our commitment to physicians and the patients they serve.”

CSI Announces Acquisition of WIRION Embolic Protection System
In August, CSI announced the acquisition of the WIRION Embolic Protection System and related assets from Gardia Medical Ltd., a wholly owned Israeli subsidiary of Allium Medical Solutions Ltd. (TASE: ALMD).

The device, which received CE Mark in June 2015 and FDA clearance in March 2018, is a distal embolic protection filter used to capture debris that can be associated with all types of peripheral vascular intervention (PVI) procedures. Physicians typically use embolic protection devices in vessels located above the knee with long lesions, high plaque burden and poor run off.

Dr. Ehrin Armstrong, Professor of Medicine at the University of Colorado, said, “The use of an embolic protection device during peripheral interventions where the risk of embolization is higher provides assurance and protection from procedural complications.”

The WIRION System is easier to use and more versatile than other available embolic protection systems because it can be used with any .014” guidewire and for all types of peripheral interventions. In addition, the WIRION System is the only embolic protection device indicated for use with any atherectomy system. The WISE LE study also demonstrated a major adverse event (MAE) rate of 1.9%, which is lower than any other previously reported rates with other embolic filters. Importantly, no clinically significant distal embolization was observed when the WIRION System was used.

Asaf Alperovitz, Chief Executive Officer of Allium Medical Solutions, said, “Allium Medical’s mission is to develop innovative products to improve outcomes for patients around the world. We believe the WIRION System from Gardia Medical, one of our portfolio companies, will be highly synergistic with CSI’s growing portfolio of products. We will continue to partner with CSI to execute a timely manufacturing transfer and get the product in the hands of physicians.”

Said Ward, “The acquisition of the WIRION System further supports our commitment and mission of building a comprehensive portfolio of differentiated products aimed at saving limbs and improving outcomes for patients undergoing complex peripheral interventions.”

CSI plans to commercialize the WIRION System in the United States following the transfer of manufacturing from Gardia Medical. CSI expects the manufacturing transfer to be completed after a 12- to 15-month transition period. Gardia will retain the rights to the WIRION System for angioplasty and stenting procedures in the carotid arteries. – Business Wire