Motus GI Reports First Quarter 2019 Financial Results and Provides Corporate Update

– Full clinical results of REDUCE Study to be presented at Digestive
Disease Week
® 2019

–Pure-Vu® System GEN2 Special 510(k) Notice
to FDA Submitted

– Commercial launch of Pure-Vu® System GEN2
in the U.S. hospital market on track for 2019

FORT LAUDERDALE, Fla.–(BUSINESS WIRE)–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, today reported its
financial results for the quarter ended March 31, 2019 and provided a
corporate update.

“We have been working diligently on key market development activities to
prepare for a successful launch of the second generation of the Pure-Vu®
System — Pure-Vu® GEN2 — upon approval from the FDA. We
continue to build meaningful relationships with world renowned
gastroenterologists who have become experts in the use of our system and
whom we plan to collaborate with in developing Centers of Excellence as
we deploy the Pure-Vu® System in 2019,” commented Tim
Moran, Chief Executive Officer of Motus GI.
“Additionally, we
continue to generate compelling data validating the Pure-Vu®
System’s ability to improve clinical and economic outcomes commonly
associated with insufficient bowel prep for colonoscopy. We are
encouraged by the statistically significant interim data from the REDUCE
study conducted in real-world hospital settings and look forward to
presenting the full clinical results from the study in May at the 2019
Digestive Disease Week. We are also excited about a number of additional
investigator-initiated clinical studies focused on accelerating the time
to a successful colonoscopy in inpatients, including our EXPEDITE study,
as well as high risk outpatient populations.”

Recent Corporate Highlights

  • Announced that REDUCE study per protocol planned interim analysis of
    the first 45 patients showed statistical significance for the primary
    endpoint of improvement in bowel cleanliness from baseline.
  • Announced its upcoming presentation at Digestive Disease Week®
    2019 (“DDW”) of clinical results from all patients enrolled in the
    REDUCE study evaluating the Pure-Vu® System.
  • Strengthened intellectual property portfolio with issuance of
    additional patents related to the Pure-Vu® System to expand
    global patent estate to support strategic pathway for the Pure-Vu®
    System to become standard of care.
  • Announced that its manuscript titled, “An intra-procedural
    endoscopic cleansing device for achieving adequate colon preparation
    in poorly prepped patients
    ,” was published in the peer-reviewed
    Journal of Clinical Gastroenterology and its manuscript titled, “A
    novel device for intra-colonoscopy cleansing of inadequately prepared
    colonoscopy patients – a feasibility study
    ,” was published in the
    peer-reviewed journal, Endoscopy.

Pure-Vu® System Update

Motus GI has submitted the Special 510(k) to the FDA for the
Second-Generation Pure-Vu® System (“Pure-Vu®
GEN2”). Pure-Vu® GEN2 has been designed to improve the
mobility and setup logistics of the system and will retain all the same
functionality as the current generation of the Pure-Vu®
System in terms of colon cleansing.

The Company is currently focused on post-approval clinical trials and
market development programs with leading U.S. hospitals that are
utilizing the Pure-Vu® System on a pilot basis in preparation
for commercial launch in the U.S. The initial launch will focus on the
inpatient colonoscopy market where challenges with insufficient bowel
prep slow diagnosis, diminish the quality of care, and add significant
costs to hospital systems. 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

Motus GI recently announced it will present clinical results from all
patients in its REDUCE (Reliable Endoscopic
Diagnosis Utilizing
Cleansing Enhancement)
study at Digestive Disease Week® 2019 (“DDW”) in May 2019.
The REDUCE study is a multi-center inpatient prospective trial designed
to evaluate the Pure-Vu® System’s ability to consistently and
reliably cleanse the colon to facilitate a successful colonoscopy a
timely manner in patients who are indicated for a diagnostic
colonoscopy. The primary endpoint of the study is to determine the
Pure-Vu® System’s rate of improved bowel cleansing level
using the BBPS index for all segments examined. The data being presented
is embargoed until the day of the presentation. Following the
presentation, the poster will be available in the Pure-Vu®
Publications
section on Motus GI’s website.

The Company previously reported that per protocol planned interim
analysis of the first 45 patients showed statistical significance for
the primary endpoint of improvement in the BBPS for segments of the
colon that were examined. Other key data being collected in the study
includes the proportion of patients who receive a successful colonoscopy
for the intended indication in the first attempt, which correlates to
the quality of the exam as well as hospital length of stay and costs
required for the episode of care.

Over the course of 2019, Motus GI plans to sponsor as well as support
additional investigator initiated clinical studies focused on
accelerating the time to a successful inpatient colonoscopy as well as
high risk outpatient populations. These clinical studies include
EXPEDITE, which is primarily designed to assess the Pure-Vu®
System’s ability to minimize the use of conventional bowel preparation
regimens in order to further accelerate the time to a successful
colonoscopy in the inpatient population. Faster diagnosis of critical
emergent conditions such as GI bleeding may improve clinical outcomes
and potentially reduce costs and complications.

Near-Term Milestones Expected to Drive Value

  • Announce full top-line results from the REDUCE study at Digestive
    Disease Week® 2019 in May 2019;
  • Commence investigator-initiated clinical studies focused on
    accelerating the time to a successful colonoscopy for inpatients as
    well as high risk outpatient populations;
  • Secure regulatory approval and launch of Pure-Vu® GEN2 that
    offers enhanced features and superior usability ahead of full
    commercial launch;
  • Continue to expand field-based sales and clinical resources in key
    U.S. locations;
  • Continue to expand market development programs to engage hospitals,
    physician champions and staff through pilot utilization of the Pure-Vu®
    System;
  • Continue to grow clinical and health economic awareness through
    peer-reviewed publications;
  • Continue to refine in-servicing and training programs in preparation
    for the full commercial launch;
  • Commercial launch of the Pure-Vu® System in the U.S. for
    inpatient colonoscopy in the U.S.;
  • Continue building an extensive intellectual property portfolio to
    provide long-term protection for multiple key aspects of the Pure-Vu®
    System; and
  • Participate in key scientific conferences over the course of 2019.

Financial Results for the Quarter Ended March 31, 2019

For the quarter ended March 31, 2019, Motus GI reported a net loss of
approximately $6.3 million, or a net loss per diluted share of $0.29,
which included non-cash expenses of approximately $1.0 million
principally related to stock based compensation.

The Company ended the quarter with $15.3 million in cash, cash
equivalents and investments. Cash used in operations in the quarter
included annual cash payments for 2018 corporate bonuses and 2019
corporate insurance policies.

   
Motus GI Holdings, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets

(In thousands, except share and per share amounts)

 
March 31, December 31,
2019 2018
(unaudited) (*)
 
ASSETS
 

Current assets

Cash and cash equivalents $ 10,248 $ 18,050
Investments 5,078 3,043
Accounts receivable 1 5
Inventory 115 23
Prepaid expenses and other current assets   1,034   930
Total current assets 16,476 22,051
 
Fixed assets, net 842 846
Right-of-use assets 990
Other non-current assets   13   57
 
Total assets $ 18,321 $ 22,954
 
LIABILITIES AND SHAREHOLDERS’ EQUITY
 

Current liabilities

Accounts payable and accrued expenses $ 2,195 $ 2,140
Operating lease liabilities – current 316
Other current liabilities   80   253
Total current liabilities 2,591 2,393
 
Contingent royalty obligation 1,926 1,953
Operating lease liabilities – non-current 683
Other non-current liabilities   38   91
 
Total liabilities   5,238   4,437
 

Shareholders’ equity

 
Preferred Stock $0.0001 par value; 8,000,000 shares authorized; zero
shares issued and outstanding
Preferred Series A Stock $0.0001 par value; 2,000,000 shares
authorized; zero shares issued and outstanding

Common Stock $0.0001 par value; 50,000,000 shares authorized;
21,450,877 and
21,440,148 shares issued and outstanding as of
March 31, 2019 and December 31, 2018, respectively

2 2
Additional paid-in capital 80,732 79,893
Accumulated deficit   (67,651 )   (61,378 )
Total shareholders’ equity   13,083   18,517
 
Total liabilities and shareholders’ equity $ 18,321 $ 22,954
 

(*) Derived from audited consolidated financial statements

 

The accompanying notes are an integral part of these condensed
consolidated financial statements.

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 U.S. FDA cleared
medical device indicated to help facilitate the cleaning of a poorly
prepared colon during the colonoscopy procedure. The device integrates
with standard and slim colonoscopes to enable safe and rapid cleansing
during the procedure while preserving established 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 incomplete 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
and Facebook.

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 26, 2019, 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.

Contacts

Investor and Media Contact:
Jenene
Thomas
Jenene Thomas Communications, LLC
(833) 475-8247
[email protected]

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