Market Overview

Motus GI Reports 2018 Second Quarter Financial Results and Provides Business Update

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– Building clinical and health economic evidence demonstrating
potential value of the Pure-Vu® System in high need patient populations
with focus on inpatient colonoscopy market –

– Initiated enrollment in the REDUCE study, evaluating the ability of
the Pure-Vu® System to facilitate successful, timely colonoscopy for
emergent inpatients –

– Advancing market development programs to build foundation for
expected commercial launch of the Pure-Vu® System for inpatient
colonoscopy in 2019 –

Motus
GI Holdings, Inc.
, (NASDAQ:MOTS) ("Motus GI" or the "Company"), a
medical technology company dedicated to improving clinical outcomes and
enhancing the cost-efficiency of colonoscopy, announced today its
financial results for the quarter ended June 30, 2018 and provided a
business update.

"The first half of 2018 was marked with significant progress toward our
primary strategic objective of establishing the Pure-Vu® System as a new
standard of care to streamline and facilitate inpatient colonoscopy
procedures to improve clinical outcomes and significantly reduce costs
for hospitals," stated Mark
Pomeranz, CEO of Motus GI
. "We continue to amass a growing body of
clinical and health economic data while our market development programs
are enabling us to establish strong working relationships with physician
champions and their staff within leading institutions who are providing
vital, real-time clinical feedback which we believe will help to
accelerate adoption of the Pure-Vu® System."

"We are focused on the continued successful execution and completion of
our clinical studies that can provide important clinical and health
economic evidence of how the Pure-Vu® System may accelerate the time to
colonoscopy, overcome the burden of insufficient bowel prep, improve
diagnosis, avoid repeat preps and procedures, reduce length of stay and
open up much needed hospital beds to new patients. We are excited to be
working with key experts and clinical centers in the U.S. and Europe and
are expanding our outreach to additional centers during this pre-launch,
market development phase as we prepare for the full commercial launch of
the Pure-Vu® System in 2019. We believe we are well positioned to
achieve key catalysts for the business and create shareholder value in
both the near and long-term," concluded Mr. Pomeranz.

Recent Corporate Highlights

  • Announced the appointment of Jeff
    Hutchison as VP of U.S. Sales and Commercial Operations
    who brings
    over 25 years of executive sales leadership and new market development
    experience in the medical device industry, having previously served as
    Area Vice President of Sales for Medtronic GI Solutions (NYSE:MDT)
    and Director of U.S. Sales for BÂRRX Medical. Mr. Hutchison will be
    responsible for building Motus GI's U.S. sales organization and
    driving the Company's pre-launch market development programs ahead of
    the planned launch of the Pure-Vu®
    System
    into the inpatient colonoscopy market in 2019.
  • Commenced patient enrollment in the REDUCE (Reliable
    Endoscopic Diagnosis
    Utilizing Cleansing
    Enhancement) inpatient study designed to
    facilitate bowel cleansing in approximately 100 hospitalized patients
    who are indicated for a diagnostic colonoscopy procedure. Motus GI
    expects to complete the study in the fourth quarter of 2018.
  • Presented data from a cost-minimization analysis simulating the
    average lifetime costs and incidence of new colorectal cancer (CRC)
    comparing colonoscopy using Motus GI's Pure-Vu® System versus standard
    colonoscopy (SC) at Digestive
    Disease Week® 2018
    ("DDW"). The data presented indicates that the
    Pure-Vu® System has the potential to reduce inadequate colon prep rate
    for colonoscopy, leading to reduced cost of repeated colonoscopy
    procedures due to inadequate prep by approximately 77% - 82% and lower
    projected incidence of CRC in average and high-risk patients.
  • Strengthened Intellectual Property portfolio with issuance of
    additional patents related to the Pure-Vu® System to expand global IP
    portfolio to support strategic pathway for Pure-Vu® System to become
    standard of care.
  • Appointed Seth A. Gross, MD, FACG, FASGE, AGAF, to its Medical
    Advisory Board comprised of leading experts in the gastroenterology
    and endoscopy field who actively work with the Company to advise,
    develop and execute the clinical trials and development strategy. Dr.
    Gross also serves as the principal investigator in the Company's
    REDUCE study.

Pure-Vu® System Update

The
Pure-Vu® System
, Motus GI's flagship, FDA-cleared medical
device system, enables physicians to rapidly cleanse the colon during
the colonoscopy procedure to facilitate improved visualization and
enable a quality exam. The device integrates with standard colonoscopes
to enable cleaning during the procedure while preserving standard
procedural workflow and techniques.

The Company is currently focused on post-approval clinical trials and
marked development programs with leading U.S. hospitals that are
utilizing the Pure-Vu® System on a pilot basis in preparation for a full
commercial launch in the U.S. and select international markets in 2019
focused on the inpatient colonoscopy market where challenges with
insufficient bowel prep slow diagnosis, diminish the quality of care,
and add significant costs to the hospitals. Challenges with bowel
preparation for inpatient colonoscopy represent a significant area of
unmet need that directly affects clinical outcomes and increases the
cost of care in a market segment that comprises approximately 1.5
million annual procedures in the U.S. and approximately 4 million annual
procedures worldwide. Published studies have found that the inpatient
population experiences rates of insufficiently prepped colons at the
time of colonoscopy as high as 55%. This has been shown to lead directly
to significantly longer hospital stays and other additional costs due to
the need for repeated preps, repeated colonoscopies and additional
diagnostic procedures. This is exemplified in a recently published study
from Northwestern University Hospital System which showed an average
hospital stay extension of two days and cost increase of as much as
$8,000 per patient as a result of challenges associated with bowel
preparation. Motus GI believes that the Pure-Vu® System may improve
quality of care and potentially reduce healthcare costs by reliably and
predictably moving patients through the hospital system to a successful
examination.

Clinical Programs Update

Patient enrollment is underway in the REDUCE study, a multi-center
prospective trial designed to evaluate the Pure-Vu® System's ability to
consistently and reliably cleanse the colon to facilitate a successful
colonoscopy in a timely manner in patients who are indicated for an
inpatient diagnostic colonoscopy procedure. The primary endpoint of the
study is to determine the Pure-Vu® System's rate of improved bowel
cleansing level using the Boston Bowel Preparation Scale ("BBPS") index,
a validated assessment instrument. Other key data to be collected as
part of the study include the proportion of patients who receive a
successful colonoscopy for the intended indication in the first attempt
and the time to successful colonoscopy compared to current care
algorithms, both key data in evaluating speed and quality of diagnosis
as well as evaluating hospital costs and length of stay. The Company
remains on track to complete the REDUCE study in the fourth quarter of
this year.

Over the course of the remainder of the year, Motus GI plans to initiate
additional clinical studies which will include the evaluation of
inpatients with reduced preparation including lower GI bleed patients
who may benefit from accelerated diagnosis. The clinical studies in the
inpatient settings are designed to evaluate the Pure-Vu® System's
ability to rapidly cleanse poorly prepped patients during colonoscopy
with BBPS as the measure of cleanliness, as well as assess its ability
to reduce healthcare costs by reliably and predictably moving patients
through the hospital system to a successful examination.

Near-Term Milestones Expected to Drive Value in 2018 and Beyond

  • Launch slim-scope compatible version of the Pure-Vu® System;
  • Initiate accelerated, reduced preparation inpatient study with a focus
    on lower GI bleeding;
  • Continue to grow clinical and health economic awareness through peer
    reviewed publications;
  • Complete the REDUCE inpatient study;
  • Participate in key scientific conferences in 2018 including United
    European Gastroenterology (UEG) Week, the American College of
    Gastroenterology (ACG) Annual Meeting, and the New York Society for
    Gastroenterology (NYSG) Annual Meeting;
  • Continue building an extensive intellectual property portfolio to
    provide long-term protection for multiple key aspects of the Pure-Vu®
    System;
  • Continue to expand market development programs to engage hospitals,
    physician champions and staff through pilot utilization of the
    Pure-Vu® System;
  • Continue to refine in-servicing and training programs in preparation
    for the full commercial launch;
  • Finalize development, secure regulatory approval and launch 2nd
    generation of the Pure-Vu® System that offers enhanced features and
    superior usability ahead of full commercial launch; and
  • Full commercial launch of the Pure-Vu® System in the U.S. and select
    international markets for inpatient colonoscopy in 2019.

Financial Results for the Quarter Ended June 30, 2018

For the quarter ended June 30, 2018, Motus GI reported a net loss of
approximately $4.2 million, or a net loss per diluted share of $0.27.
For the six months ended June 30, 2018, Motus GI reported a net loss of
approximately $11.5 million, or a net loss per diluted share of $0.80,
which included a one-time non-cash warrant expense charge of $3.2
million.

At June 30, 2018, the Company had cash and cash equivalents, and
short-term investments of approximately $14.9 million.

About Motus GI and the Pure-Vu® System

Motus GI Holdings, Inc. is a medical technology company, with
subsidiaries in the U.S. and Israel, dedicated to improving clinical
outcomes and enhancing the cost-efficiency of colonoscopy. The Company's
flagship product is the Pure-Vu® System, a 510(k) U.S. Food and Drug
Administration cleared medical device indicated to help facilitate the
cleaning of a poorly prepared colon during the colonoscopy procedure.
The device integrates with standard colonoscopes to enable cleaning
during the procedure while preserving standard procedural workflow and
techniques. The Pure-Vu® System has received CE mark approval in Europe.
The Pure-Vu® System is currently being introduced on a pilot basis in
the U.S. market, and the Company is planning to initiate a full
commercial launch focused on the inpatient colonoscopy market in the
U.S. and select international markets in 2019. Challenges with bowel
preparation for inpatient colonoscopy represent a significant area of
unmet need that directly affects clinical outcomes and increases the
cost of care in a market segment that comprises approximately 1.5
million annual procedures in the U.S. and approximately 4 million annual
procedures worldwide. Motus GI believes the Pure-Vu® System may improve
outcomes and lower costs for hospitals by reducing the time to
successful colonoscopy, minimizing delayed and aborted procedures, and
improving the quality of an exam. In clinical studies to date, the
Pure-Vu® System significantly increased the number of patients with an
adequate cleansing level, according to the Boston Bowel Preparation
Scale Score, a validated assessment instrument.

For more information, visit www.motusgi.com
and connect with the Company on Twitter,
LinkedIn,
Facebook
and Google+.

 
Motus GI Holdings, Inc.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share amounts)
 
  June 30,   December 31,
2018 2017
(unaudited) (*)
 
ASSETS
 

Current assets

Cash and cash equivalents $ 5,071 $ 6,939
Short-term investments 9,874
Accounts receivable 31 5
Inventory 81 6
Prepaid expenses and other current assets 862 734
Deferred financing fees     602
Total current assets 15,919 8,286
 
Fixed assets, net 825 783
Other long-term assets   86   99
 
Total assets $ 16,830 $ 9,168
 
LIABILITIES AND SHAREHOLDERS' EQUITY
 

Current liabilities

Accounts payable and accrued expenses $ 1,403 $ 1,733
Other current liabilities   69   250
Total current liabilities 1,472 1,983
 
Contingent royalty obligation 1,821 1,662
Other long-term liabilities   66  
 
Total liabilities 3,359 3,645
 

Shareholders' equity

Common Stock $0.0001 par value; 50,000,000 shares authorized;
15,645,755 and
   10,493,233 shares issued and outstanding as
of June 30, 2018 and December
   31, 2017, respectively

2 1

Preferred Series A stock $0.0001 par value; 2,000,000 shares
authorized; 0 and
   1,581,128 shares issued and outstanding
as of June 30, 2018 and December 31,
   2017, respectively

Preferred stock $0.0001 par value; 8,000,000 shares authorized;
zero shares
issued and outstanding

Additional paid-in capital 64,110 44,643
Accumulated deficit   (50,641 )   (39,121 )
Total shareholders' equity   13,471   5,523
 
Total liabilities and shareholders' equity $ 16,830 $ 9,168
 

(*) Derived from audited consolidated financial statements

Forward-Looking Statements

This press release contains certain forward-looking statements.
Forward-looking statements are based on the Company's current
expectations and assumptions. The Private Securities Litigation Reform
Act of 1995 provides a safe-harbor for forward-looking statements. These
statements may be identified by the use of forward-looking expressions,
including, but not limited to, "expect," "anticipate," "intend," "plan,"
"believe," "estimate," "potential," "predict," "project," "should,"
"would" and similar expressions and the negatives of those terms,
including without limitation, risks inherent in the development and
commercialization of potential products, uncertainty in the timing and
results of clinical trials or regulatory approvals, maintenance of
intellectual property rights or other risks discussed in the Company's
Form 10-K filed on March 28, 2018, and its other filings with the
Securities and Exchange Commission. Prospective investors are cautioned
not to place undue reliance on such forward-looking statements, which
speak only as of the date hereof. The Company undertakes no obligation
to publicly update any forward-looking statement, whether as a result of
new information, future events or otherwise.

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