Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Management attributed the second quarter's flat revenue to the voluntary recall of the CGuard Prime 135 system, which necessitated $734,000 in customer credits that offset underlying U.S. sales growth.
International business grew 21% year-over-year, serving as a strategic proof point for the CGuard implant's clinical efficacy and physician demand despite domestic regulatory setbacks. The company implemented a 20% workforce reduction to align its cost structure with near-term regulatory priorities, aiming to preserve cash while maintaining a lean commercial core for relaunch. Management emphasized that the CGuard implant itself remains the foundational value driver, with the recall being a 'well-defined and manageable' issue isolated to the delivery system rather than the stent technology.
Operational focus has shifted to a dual-track U.S. strategy, preparing to address the entire 75,000-procedure stenting market by offering both TCAR and CAS platforms simultaneously. Strategic OUS efforts are pivoting toward margin expansion and pricing optimization to ensure the international segment contributes more effectively to the bottom line as it matures. Management anticipates potential FDA approval for both the CGuard Prime 80 (TCAR) and the original CGuard CAS platform in the fourth quarter of 2026.
The redesigned CGuard Prime 135 delivery system is currently targeted for a first-half 2027 market reentry, though management is optimistic that an earlier approval is possible if the FDA grants an accelerated review. Cost-saving initiatives are expected to be fully realized by the fourth quarter of 2026, providing approximately $9 million in annual savings to extend the company's financial runway. The SwitchGuard neuroprotection system is tracking toward a back-half 2027 U.S. approval, with enrollment in the CGUARDIANS III pivotal study currently underway at high-volume sites.
Guidance for the U.S. relaunch assumes a 'pent-up demand' scenario, leveraging a deliberate commercial playbook focused on high-volume territories identified through claims data. The voluntary recall resulted in a $612,000 impairment charge for CGuard Prime 135 inventory that was deemed no longer commercially viable. A restructuring charge between $900,000 and $1.2 million is expected in the third quarter of 2026 to cover severance and related costs from the 20% headcount reduction.
Reported gross margin was negative 43.7% due to recall-related credits and impairments, though adjusted gross profit remained positive at $0.6 million when excluding these one-time items. Cash and equivalents decreased to $30.4 million as of June 30, 2026, down from $54.2 million at year-end 2025, reflecting increased R&D and commercial readiness spending. Nvidia-level potential. 30M+ investors trust Moby to find it first.
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