BioCardia, Inc. (NASDAQ:BCDA) Q4 2022 Earnings Call Transcript

BioCardia, Inc. (NASDAQ:BCDA) Q4 2022 Earnings Call Transcript March 29, 2023

Operator: Ladies and gentlemen, thank you for standing by. Good afternoon, and welcome to the BioCardia 2022 Yearend Conference Call. At this time, all participants are in a listen-only mode. I would now like to turn the conference over to of BioCardia Investor Relations. Please go ahead, .

Unidentified Company Representative: Good afternoon, and thank you for participating in today’s conference call. Joining me from BioCardia’s leadership team are Peter Altman, PhD, President and Chief Executive Officer; and David McClung, the Company’s Chief Financial Officer. During this call, management will be making forward-looking statements including statements that address BioCardia’s expectations for future performance and operational results, references to management’s intentions, beliefs, projections, outlook, analogies or current expectations. Such factors include, among others, the inherent uncertainties associated with developing new products, technologies and obtaining regulatory approvals. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements.

For more information about these risks, please refer to the risk factors and cautionary statements described in BioCardia’s reports on Form 10-K filed with the SEC this morning. The content of this time call contains time-sensitive information that is accurate only as of today, March 29, 2023. Except as required by law, the company disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It is now my pleasure to turn the call over to Peter Altman, PhD, BioCardia’s President and CEO. Peter, please go ahead.

Peter Altman: Thank you, Moranda , and good afternoon to everyone on the call. We had a great fiscal year in 2022, but, before we get into the details, I always like to take a few moments to review what we’re doing and why we’re doing it. BioCardia’s efforts are focused on advancing two cell therapy platforms to treat significant unmet cardiovascular and pulmonary diseases, specifically ischemic heart failure, chronic myocardial ischemia, and acute respiratory distress syndrome. All of our cell-based therapies involve local delivery of the therapeutic to the heart or lungs, where we intend them to act locally. In the heart, our own proprietary Helix minimally invasive delivery system is used to deliver the cells to target regions of damage.

For the lungs, we intend to use intravenous delivery, which will result in the investigational cells being localized in the small blood vessels of the lungs. Local delivery of therapeutics to the target location where their action is desired, maximizes their effective dosage within the tissues, where delivered and minimizes potential negative effects remote from the target tissues. Heart failure is the first problem we’re going after. Heart failure is an enormous unmet need that affects more than 26 million people worldwide. The latest blockbuster drugs in ischemic heart failure of reduced ejection fraction provide great benefits to patients, but don’t appear to have much of an impact on mortality. Patients in the published results of the pivotal trials for these new drugs have a cardiac mortality of roughly 77% and an all-cause mortality of 10%, per year regardless of whether they were treated or controlled patients.

This data makes clear that heart failure is still a problem in great need of new therapeutic solutions. Our autologous mononuclear cell therapy platform, which we call CardiAMP cell therapy, is being advanced in two cardiac clinical indications. In preclinical studies, cardiac mononuclear cell therapy has been shown to release proteins locally within the tissue to facilitate cardiac recovery after heart damage with improvements in heart perfusion and contractile function. All known previous clinical studies similar to the approach we are taking in our two lead CardiAMP Cell Therapy programs have shown patient benefits on average. In some of these studies, including our own, the benefits have been remarkable. The FDA has supported this promise by granting breakthrough device designation to CardiAMP Cell Therapy in the indication of ischemic heart failure, reduced ejection fraction.

Advancing this and our other three therapeutic candidates is what we are all about. Our efforts to complete the CardiAMP Autologous Cell Therapy, pivotal clinical trials for the indications of heart failure or BCDA-01 and chronic myocardial ischemia or BCDA-02 are furthest along clinically with an estimated combined 1.6 million patients in a reachable US market. The CardiAMP Cell Therapy Heart Failure Trial, or BCDA-01, is a Phase III 260-patient randomized controlled clinical study, intended to provide the primary data to support safety and efficacy in pursuit of market clearance. Clinical investigators at 22 active partner sites across the United States and Canada, have enrolled 119 patients today with 10 additional controlled patients having crossed over to receive therapy.

We currently have eight active consents and 15 additional patients in the pre-consent queue. There is clearly increased momentum here, potentially driven by the clinical data. Data published to date has shown improved functional capacity and quality of life in treated patients. Earlier this month, clinical investigators presented blinded echocardiography data from the Yale University core laboratory from the Open-Label rolling cohort of the CardiAMP Heart failure Trial at the Annual Meeting of the American College of Cardiology. Results presented showed a 35% improvement in left ventricular ejection fraction as compared to baseline with a 100% survival at two year follow up. These are remarkable results in this population and the scientific poster presentation is available on our website if you are interested.

Photo by Robina Weermeijer on Unsplash

The Independent Data Safety Monitoring Board completed both its fifth and sixth pre-specified data reviews in 2022, including a risk benefit assessment with more than a 100 patients past the primary clinical readout. Following the review, the Data Safety Monitoring Board indicated that it had no significant safety concerns and recommended the study continue as designed. The Data Safety Monitoring Board also supported the company implementing an adaptive statistical analysis plan, which could enable an early readout for study treatment efficacy. Working with distinguished consultants, including former FDA leaders and a respected statistical consulting group, we have developed and submitted a supplement with a proposed adaptive statistical analysis plan to the FDA in February, 2023.

We have a meeting scheduled to discuss the FDA’s comments on March 31, 2023, which is this Friday. The next pre-specified formal data safety monitoring board review is anticipated in the second quarter of 2023, and we believe it is likely we will be able to have the Adaptive Statistical Analysis plan in place for the meeting. The specific details of any potential adaptive statistical analysis plan in combination with any modifications to the Data Safety Monitoring Board charter will dictate what happens at the next subsequent Data Safety Monitoring Board reviews. As the CardiAMP Cell Therapy trial in heart failure was over 90% powered for success with a range of 86 patients to 126 patients, there is potential that the trial could meet its primary efficacy endpoint on the patients that have all — have been enrolled to date.

However, when the Data Safety Monitoring Board next meets, they may also recommend that the trial continue for plan, be stopped for safety or be stopped for futility if the data does not support achieving that primary endpoint is possible. Our second therapeutic program with the same autologous cell therapy for the treatment of chronic myocardial ischemia with refractory angina or BCDA-02. The CardiAMP chronic myocardial ischemia trial is a Phase III multicenter, randomized, double-blinded controlled study of up to 343 patients at up to 40 clinical sites. The Phase III pivotal trial is also designed to provide the primary support for the safety and efficacy of the CardiAMP cell therapy system for this indication. It uses many of the same novel aspects of the CardiAMP heart failure trial and is expected to leverage our experience and investment in the heart failure trial.

This program benefits from the 2022 Center for Medicaid and Medicare Services or CMS reimbursement for both treatment and control procedures at up to $20,000 for both trials. A significant number of patients to complete the open labelled rolling cohort have — excuse me, a sufficient number of patients to complete the open label rolling cohort have already been consented. It is anticipated this trial will report out the open label rolling results in 2023. Trial designed modifications to enhance enrolment efficiency for the randomized cohort are being planned for submission to FDA. As we have shared previously in July, we had our second consultation with Japan’s pharmaceutical and medical device agency regarding registration of CardiAMP cell therapy for ischemic heart failure.

After working with distinguished physician leaders, BioCardia expects to complete its formal submission for Japanese approval in the second quarter of 2023. As I’ve mentioned in previous calls, Japanese researchers established the building blocks of this therapy many years ago. The therapeutic approach we are pursuing was first studied in the preclinical model by physician scientists in Oklahoma. This early work was performed in parallel to another Japanese vascular biology scientist who identified important aspects of bone marrow-derived mononuclear cells and tissue repair. Their early efforts underlie our CardiAMP cell therapy and we hope to be able to provide this therapy to the many in Japan we could benefit from it. Now I’d like to move to our two allogeneic cell therapy product candidates, based on our allogeneic Neurokinin-1 Receptor Positive mesenchymal stem cells platform.

These are off the shelf cells from young healthy donors intended to be expanded to produce many doses for many patients. The Neurokinin-1 Receptor Positive mesenchymal stem cells are particularly interesting as Neurokinin-1 is the primary receptor for Substance P, an important neuropeptide mediator of inflammation, which plays a central role in both heart failure and regenerative processes following myocardial injury. I encourage listeners to Google Substance P, to understand why advancing the mesenchymal stem cells that bind to this neuropeptide is exciting. Our allogeneic mesenchymal stem cell program in ischemic ideology heart failure of reduced ejection fraction is designed designated as BCDA-03. This is a Phase I/II, multi-center, randomized, double-blinded, controlled study of up to 69 patients, designed to assess the safety and efficacy of this therapeutic candidate.

The investigational new drug application was approved by the FDA in December, 2022. The trial is designed for patients with New York Heart Association Class II and III ischemic heart failure of reduced ejection fraction, whose own cell composition makes them ineligible for the company’s Phase III CardiAMP Heart Failure Trial studying autologous cell therapy or BCDA-01. Clinical grade allogeneic cells for this program have been manufactured in our Sunnyvale facility and are ready for use. These cells will be delivered under the protocol with our proprietary minimally invasive biotherapeutic delivery system. We expect to begin enrolling patients in the second quarter of 2023. Our allogeneic mesenchymal stem cell program in patients recovering from acute respiratory distress syndrome secondary to COVID, which we have designated BCDA-04 was approved by the FDA in April 2022, to treat patients.

The trial is a Phase I multi-center open-label study of up to nine patients. While the number of patients with COVID-induced ARDS has decreased, ARDS’ unrelated to COVID is still significantly impacting patients. The company intends to work with the FDA to modify the study eligibility criteria to include these patients. In this trial, increasing dosages of the cells will initially be evaluated and then the optimal dose will be taken to Phase II in a randomized study in adult patients recovering from ARDS. This therapy is intended to address the enormous unmet need of sustained, local and systemic inflammation, after a patient is taken off respiratory support, with the goals of accelerating recovery, enhancing survival, and reducing both relapse and rehospitalisation.

Clinical grade cells are also ready for use in this study. The ARDS trial is expected to commence following the initiation of BCA-03, studying these allogeneic mesenchymal stem cells for heart failure reduced ejection fraction. In summary, we are advancing four clinical stage therapeutic product candidates that address important unmet cardiac and pulmonary diseases, based on our autologous and our allogeneic cell therapy platforms. From these therapeutic development efforts, we now have four active business development initiatives. First is partnering our CardiAMP cell therapy platform internationally. Second, is licensing out our clinical stage Neurokinin-1 Receptor Positive mesenchymal stem cells platform for other clinical indications, which is shown promise with other mesenchymal stem cell preparations.

Third is licensing our catheter-based biotherapeutic delivery system for cell gene and protein therapy candidates to the heart, such as in the BlueRock relationship we began last year. And fourth, is monetizing our Avance transseptal introducer sheath product. Our steerable sheath assets were initially developed to help navigate our biotherapeutic delivery systems and we use these products in every cardiac cell therapy procedure today. There have been recent acquisitions of established product offerings similar to our Avance product offering for between $70 million to $1.5 billion. Our Avance is our first FDA-approved offering for this transseptal indication and incorporates patented technology that may provide compelling benefits. Next week we expect to announce the issuance of two additional new patents related to these steerable sheath assets.

We are also looking forward to announcing an additional patent issuance related to our Neurokinin-1 Receptor Positive mesenchymal stem cells that has been allowed and a patent that we expect soon to be allowed related to our Helix Biotherapeutic delivery platform. I will now pass the call to David McClung, our CFO will review our 2022 financial results. David?

David McClung: Thanks Peter and good afternoon, everyone. Today I’ll review our financial results for the year ended December 31, 2022. Revenues for the fiscal year 2022 increased to $1.4 million from $1.0 million in fiscal year 2021, primarily due to the increased revenue from new and existing collaborative partners including the Bluerock relationship Peter just mentioned. Our revenues today contribute to reducing our burn rate and they have the potential to develop in the meaningful licensing and royalty revenues, if the underlying therapies prove to be effective and commercialized. The company continues to manage its financial resources carefully and economically. Total operating expenses were down approximately $300,000 year over year, $13.3 million in 2022 compared to $13.6 million in 2021.

R&D expenses modestly to $8.8 million in 2022 compared to $8.6 million in 2021, primarily due to increased expenses in support of the CardiAMP cell therapy heart failure trial, particularly as our clinical sites continue to emerge from the effects of the pandemic. Selling, general and administrative expenses decreased to $4.4 million in 2022 versus $5.1 million in 2021, even as we established and licensed our new cell therapy and device manufacturing facility. The decrease was primarily due to reduced professional service fees and lower stock compensation expense. Our net loss in 2022 was $11.9 million compared to a net loss of $12.6 million in 2021, and cash used in operations totalled $10.6 million in 2022, comparable to the $10.6 million in 2021.

While CardiAMP ended the year with cash and cash equivalence totalling $7.4 million, which provides runway into the third quarter without additional capital or funding from business development activities. This concludes management’s remarks and we’re happy to take questions.

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Q&A Session

Operator: And our first question here comes from Joe Pantginis with H.C. Wainwright. Please go ahead.

Joe Pantginis: Hey guys, good afternoon. Thanks for taking the question. Have three questions, one of which hopefully will be based on getting some, I believe important perspective. So maybe I’ll start with that one. So, Peter, when we look at the blinded echo data for the roll in at ACC, 35% overall improvement in LVF, maybe can you give the perspective of how that would compare, to the inclusion criteria of the patient population and how that would relate to their natural history?

Peter Altman: Joe, thank you for — no, Joe, great question and that’s something that it always makes it difficult to compare one trial to another, but in our population as we look at the data sets, we’re looking at New York Heart Association Class II and III ischemic etiology heart failure with reduced ejection fraction patients. Ejection fraction is also 20% to 40% of these patients. So this lines up well with what has been done in some of the other larger trials, whereas the data I shared and mortality of — cardiac mortality of 7% to 8% in all caused mortality of 10% per year in these patients. Now there are things that we’re doing that could actually wind up excluding patients who are sicker. So for example, the patients we’re treating have to be eligible for cardiac catheterization and that could conceivably tilt us towards a healthier population.

In addition, our cell population analysis selects patients who have really compelling potential for the autologous therapy and there is potential that having superior autologous or patient’s own cells could have an impact on their long-term prognosis. But, it’s a 100% survival in a patient population that we should have seen a 10% mortality per year, and at the same time, we’re seeing improvements in a patient population group that typically deteriorates. So we recognize it’s a small data set, but it’s completely in line with what we saw on Phase I and in Phase II were patients approved across many metrics. And so the question that you pose is, how does this compare to a true placebo-controlled population or a controlled population and that’s what we’re going to find out in this trial.

Joe Pantginis: Great. No, that’s helpful. Thank you. And then, I guess, especially when you talk about cost management right now, expense management and you have multiple ongoing studies and what have you, I want to focus on manufacturing with regard to your ability to serve your larger studies right now and your additional initiatives versus, do you have any immediate term or nearer term needs, with regard to manufacturing capacity?

Peter Altman: So right now, I actually think that our current manufacturing capabilities will be fine for all four clinical trials for both the autologous BCDA-01 and BCDA-02, and the allogeneic BCDA-03 and BCDA-04. We have taken — made the decision to own it and control it. So in our new facility that David mentioned, we are certified here for drug manufacturing as well as medical device manufacturing for those — for the delivery of those drugs with our delivery systems. So, and our partnering with others could result in greater need, but most of the folks we’re partnering with are not as far as advanced as we are in the clinic. So, they’re aspiring to do a 10-patient trial, while we’re working towards a 343 patient trial in BCDA-02.