BioCardia, Inc 10-K for FY2019

BioCardia, Inc. (BCDA)

10-K 2020-04-09 For: 2019-12-31

Added on April 06, 2026

About this 10-K

BioCardia, Inc filed this 10-K on April 9, 2020, covering the fiscal year ended December 31, 2019 (FY2019).

Headline figures

Fiscal year ended December 31, 2019, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $710K; up 13.6% from $625K a year earlier
Net loss: $14.71M; compared with a net loss of $13.99M a year earlier

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Delaware	23-2753988
(State or Other Jurisdiction of Incorporation or Organization)	(I.R.S. Employer Identification Number)

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

		Page

PART I

Item 1.	Business	1

Item 1A.	Risk Factors	21

Item 1B.	Unresolved Staff Comments	51

Item 2.	Properties	51

Item 3.	Legal Proceedings	51

Item 4.	Mine Safety Disclosures	52

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	53

Item 6.	Selected Financial Data	53

Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	54

Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	61

Item 8.	Financial Statements and Supplementary Data	61

Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	85

Item 9A.	Controls and Procedures	85

Item 9B.	Other Information	86

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	86

Item 11.	Executive Compensation	94

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	98

Item 13.	Certain Relationships and Related Transactions, and Director Independence	101

Item 14.	Principal Accounting Fees and Services	102

PART IV

Item 15.	Exhibits, Financial Statement Schedules	104

	(i)	the plans and objectives of management for future operations, including plans or objectives relating to the development of our cell therapy systems,
	(ii)	the timing and conduct of the clinical trials for our products, including statements regarding the timing, progress and results of current and future preclinical studies and clinical trials as well as our research and development programs;
	(iii)	the timing or likelihood of regulatory filing, approvals and required licenses for our cell therapy systems;
	(iv)	our ability to adequately protect our intellectual property rights and enforce such rights to avoid violation of the intellectual property rights of others;
	(v)	the timing, costs and other aspects of the commercial launch of our products;
	(vi)	our estimates regarding the market opportunity, clinical utility, potential advantages and market acceptance of our products;
	(vii)	the impact of government laws and regulations;
	(viii)	our ability to recruit and retain qualified clinical, regulatory and research and development personnel;
	(ix)	the availability of reimbursement or other forms of funding for our products from government and commercial payors;
	(x)	difficulties in maintaining commercial scale manufacturing capacity and capability and our ability to generate growth;
	(xi)	uncertainty in industry demand;
	(xii)	general economic conditions and market conditions in our industry;
	(xiii)	the effects that the COVID-19 outbreak, or similar pandemics, could have on our business, preclinical studies and clinical trials;
	(xiv)	the depth of the trading market in our securities;
	(xv)	a projection of income (including income/loss), earnings (including earnings/loss) per share, capital expenditures, dividends, capital structure or other financial items;
	(xvi)	our future financial performance, including any such statement contained in a discussion and analysis of financial condition by management or in the results of operations included pursuant to the rules and regulations of the SEC; and
	(xvii)	the assumptions underlying or relating to any statement described in points (i), (ii) or (iii) above. These statements are not guarantees of future performance and are subject to numerous risks, uncertainties, and assumptions that are difficult to predict.

	•	Continue to develop and selectively partner our Helix^™ biotherapeutic delivery system for use with other biotherapeutics.

	•	Continue to develop and commercialize Morph catheter products.

US Patent No.	Patent Title	Expiration on or after
10,520,505	Methods of measuring therapeutic potency and defining dosages for autologous cell therapy		2034
10,071,226	Radial and trans-endocardial delivery catheter		2034
10,035,982	Method of preparing autologous cells and methods of use for therapy		2029
9,945,854	Methods of measuring therapeutic potency potential and defining dosages for autologous cell therapy		2034
9,752,123	Method of Preparing Autologous Cells and Methods of Use for Therapy		2029
9,517,199	Treatment for chronic myocardial infarct		2027
9,504,642	Treatment for chronic myocardial infarct		2027
9,301,975	Method of preparing autologous cells and method of use for therapy		2029
8,496,926	Treatment for chronic myocardial infarction		2027

	•	completion of nonclinical laboratory tests and animal studies according to good laboratory practices, or GLP, regulations and applicable requirements for the humane use of laboratory animals or other applicable regulations;

	•	submission to the FDA of an IND application, which must become effective before human clinical trials may begin and must be updated annually or when significant changes are made;

	•	approval by an independent Institutional Review Board, or IRB, or ethics committee at each clinical site before the trial begins;

	•	performance of adequate and well-controlled human clinical trials according to the FDA’s regulations, commonly referred to as good clinical practices, or GCPs, and any additional requirements for the protection of human research subjects and their health information, to establish the safety, purity and potency of the proposed biological product for its intended use;

	•	preparation of and submission to the FDA of a BLA for marketing approval, after completion of all pivotal clinical trials;

	•	satisfactory completion of an FDA Advisory Committee review, if applicable;

	•	a determination by the FDA within 60 days of its receipt of a BLA to file the application for review;

	•	satisfactory completion of an FDA inspection of the manufacturing facility or facilities where the biological product is produced to assess compliance with GMP, to assure that the facilities, methods and controls are adequate to preserve the biological product’s identity, strength, quality and purity and, if applicable, the FDA’s current good tissue practices, or GTPs, for the use of human cellular and tissue products;

	•	potential FDA audit of the nonclinical study and clinical trial sites that generated the data in support of the BLA; and

	•	FDA review and approval, or licensure, of the BLA for particular indications for use in the United States, which must be updated annually when significant changes are made.

	•	the proposed product is biosimilar to the reference product;

	•	the proposed product is expected to produce the same clinical result as the reference product in any given patient; and

	•	refusal to grant export approval for our products;

	•	criminal prosecution; and

	•	In order for a pharmaceutical product to receive federal reimbursement under the Medicare Part B and Medicaid programs or to be sold directly to U.S. government agencies, the manufacturer must extend discounts to entities eligible to participate in the 340B drug pricing program. The required 340B discount on a given product is calculated based on the AMP and Medicaid rebate amounts reported by the manufacturer. Effective in 2010, the Affordable Care Act expanded the types of entities eligible to receive discounted 340B pricing, although, under the current state of the law, with the exception of children’s hospitals, these newly eligible entities will not be eligible to receive discounted 340B pricing on orphan drugs when used for the orphan indication. In July 2013, the Health Resources and Services Administration (HRSA) issued a final rule allowing the newly eligible entities to access discounted orphan drugs if used for non-orphan indications. While the final rule was vacated by a federal court ruling, HRSA has stated it will continue to allow discounts for orphan drugs when used for any indication other than for orphan indications. In addition, as 340B drug pricing is determined based on AMP and Medicaid rebate data, the revisions to the Medicaid rebate formula and AMP definition described above could cause the required 340B discount to increase.

	•	Effective in 2011, the Affordable Care Act imposed a requirement on manufacturers of branded drugs and biologic agents to provide a 50% discount off the negotiated price of branded drugs dispensed to Medicare Part D patients in the coverage gap (i.e., “donut hole”).

	•	size of the patient population;

	•	severity of the disease under investigation;

	•	design of the trial protocol;

	•	eligibility criteria for the particular trial;

	•	perceived risks and benefits of the product candidate being tested;

	•	proximity and availability of clinical trial sites for prospective patients;

	•	availability of competing therapies and clinical trials;

	•	efforts to facilitate timely enrollment in clinical trials;

	•	patient referral practices of physicians;

	•	ability to monitor patients adequately during and after treatment; and

	•	the degree of treatment effect in event-driven trials.

	•	adverse publicity, warning letters, fines, injunctions, consent decrees and civil penalties;

	•	repair, replacement, refunds, recall or seizure of our products;

	•	operating restrictions, partial suspension or total shutdown of production;

	•	refusing our requests for premarket approval of new products, new intended uses or modifications to existing products;

	•	withdrawing premarket approvals that have already been granted; and

	•	criminal prosecution.

	•	recruiting and retaining talented people;

	•	training employees that we recruit;

	•	setting the appropriate system of incentives;

	•	managing additional headcount; and

	•	integrating a new business unit into an existing corporate architecture.

	Years ended December 31,
	2019			2018
Revenue:
Net product revenue	$	182		$	282
Collaboration agreement revenue		528			343
Total revenue		710			625
Costs and expenses:
Cost of goods sold		358			517
Research and development		8,562			8,453
Selling, general and administrative		6,003			5,757
Total costs and expenses		14,923			14,727
Operating loss		(14,213	)		(14,102	)
Other income (expense):
Interest income		87			118
Gain on change in fair value of redemption feature embedded in convertible notes		52			—
Interest expense		(112	)		—
Loss on extinguishment of convertible notes		(521	)		—
Other expense		(2	)		(3	)
Other income (expense)		(496	)		115
Net loss	$	(14,709	)	$	(13,987	)

	Page
Report of Independent Registered Public Accounting Firm	61
Consolidated Balance Sheets	62
Consolidated Statements of Operations	63
Consolidated Statements of Stockholders’ Equity	64
Consolidated Statements of Cash Flows	65
Notes to Consolidated Financial Statements	66

	December 31,			December 31,
	2019			2018
Assets

Current assets:
Cash and cash equivalents	$	5,585		$	5,358
Accounts receivable, net of allowance for doubtful accounts of $2 and $9 at December 31, 2019 and December 31, 2018		147			274
Inventory		4			141
Prepaid expenses and other current assets		642			445
Total current assets		6,378			6,218
Property and equipment, net		181			145
Operating lease right-of-use asset, net		1,065			—
Other assets		54			54
Total assets	$	7,678		$	6,417
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable	$	914		$	743
Accrued expenses and other current liabilities		2,561			1,805
Operating lease liability - current		528			—
Total current liabilities		4,003			2,548
Operating lease liability - noncurrent		614			—
Deferred revenue		691			—
Deferred rent		—			77
Total liabilities		5,308			2,625
Stockholders’ equity:
Preferred stock, $0.001 par value, 25,000,000 shares authorized as of December 31, 2019 and December 31, 2018; no shares issued and outstanding as of December 31, 2019 and December 31, 2018		—			—
Common stock, $0.001 par value, 100,000,000 shares authorized as of December 31, 2019 and December 31, 2018; 6,825,183 and 4,845,697 shares issued and outstanding as of December 31, 2019 and December 31, 2018		7			5
Additional paid-in capital		103,433			90,148
Accumulated deficit		(101,070	)		(86,361	)
Total stockholders’ equity		2,370			3,792
Total liabilities and stockholders’ equity	$	7,678		$	6,417

	Common stock					Additional		Accumulated
	Shares			Cost		paid in capital		deficit			Total
Balance at December 31, 2016		4,236,813		$	4	$	80,720	$	(60,142	)	$	20,582
Exercise of stock options		9,706			—		144		—			144
Share-based compensation		—			—		2,707		—			2,707
Net loss		—			—		—		(12,308	)		(12,308	)
Balance at December 31, 2017		4,246,519		$	4	$	83,571	$	(72,450	)	$	11,125
Adjustments to opening balance for change in accounting principle		—			—		—		76			76
Sale of common stock and warrants, net of issuance costs of $200		592,597			1		3,799		—			3,800
Restricted stock units vested and issued		6,344			—		—		—			—
Exercise of stock options		237			—		4		—			4
Share-based compensation		—			—		2,774		—			2,774
Net loss		—			—		—		(13,987	)		(13,987	)
Balance at December 31, 2018		4,845,697		$	5	$	90,148	$	(86,361	)	$	3,792
Reverse stock split fractional share true up		(494	)		—		—		—			—
Restricted stock units vested and issued		27,426			—		—		—			—
Issuance of sale of stock and warrants, net of issuance costs of $1,259		1,741,667			2		9,194		—			9,196
Issuance of stock and warrants from conversion of convertible notes		210,887			—		1,204		—			1,204
Issuance of restricted stock units in lieu of 2018 cash bonus		—			—		165		—			165
Share-based compensation		—			—		2,722		—			2,722
Net loss		—			—		—		(14,709	)		(14,709	)
Balance at December 31, 2019		6,825,183		$	7	$	103,433	$	(101,070	)	$	2,370

Asset	Estimated useful lives (in years)
Computer equipment and software		3
Laboratory and manufacturing equipment		3
Furniture and fixtures		3
Leasehold improvements	5 years or lease term, if shorter

	As of December 31, 2019

	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	4,637	$	—	$	—	$	4,637

	As of December 31, 2018
	Level 1		Level 2		Level 3		Total
Assets:
Money market funds	$	5,358	$	—	$	—	$	5,358

	December 31,
	2019
Straight-line rent expense recognized for operating lease	$	601
Variable rent expense recognized for operating lease		264
Total rent expense	$	865

Weighted average remaining lease term (in years)		2.0
Weighted average discount rate		12.05	%

	December 31,
	2019
Cash paid for amounts included in the measurement of lease liabilities	$	612
Cash lease expense (imputed interest expense component of net income)	$	161

For the years ended December 31,	2019
2020	$	630
2021		649
Total undiscounted lease payments		1,279
Less imputed interest		137
Total operating lease liabilities	$	1,142

For the years ended December 31,	2018
2019	$	612
2020		630
2021		649
Total undiscounted lease payments	$	1,891

	Number of Common Stock Warrants		Weighted Average Exercise Price
Balance, December 31, 2018		296,296	$	6.75
Warrants for common stock sold		2,139,512	$	6.30
Warrants for common stock exercised		-
Balance, December 31, 2019		2,435,808	$	6.36

	Options outstanding
	Number of shares			Weighted average exercise price		Weighted average remaining contractual term (years)		Aggregate intrisinsic value (in thousands)

Balance, December 31, 2018		608,547		$	25.20		7.8
Stock options granted		254,785			5.28
Stock options exercised		—			—
Stock options canceled		(41,868	)		26.86
Balance, December 31, 2019		821,464		$	18.99		7.6	$	-
Exercisable and vested, December 31, 2019		428,793		$	23.62		6.6	$	-

				Weighted
				average
				grant date
	Number of			fair value
	shares			per share
Balance, December 31, 2018		29,698		$	25.56
RSUs granted		34,713			4.75
RSUs vested		(27,430	)		19.46
RSUs forfeited		-			—
Balance, December 31, 2019		36,981		$	10.56

	Years ended December 31,
	2018				2017
Risk-free interest rate		2.80	-	2.95%	2.25	-	2.40%
Volatility		78	-	85%	81	-	87%
Dividend yield			None			None
Expected term (in years)		7.6	-	8.8	8.6	-	9.8

	Class		Age		Position	Director Since⁽⁴⁾		Current Term Expires
Directors with Terms expiring at the Annual Meeting
Peter Altman, Ph.D.		I		53	President, Chief Executive Officer and Director		2002		2020
Fernando L. Fernandez⁽¹⁾		I		58	Director		2016		2020

Continuing Directors
Jim Allen⁽³⁾		II		64	Director		2019		2021
Andrew Blank⁽¹⁾⁽²⁾		II		63	Director		2019		2021
Richard Pfenniger, Jr.⁽²⁾		II		64	Director		2016		2021
Richard Krasno, Ph.D.⁽³⁾		III		77	Director		2016		2022
Jay M. Moyes⁽¹⁾⁽²⁾		III		65	Director		2011		2022
Simon H. Stertzer, M.D.⁽³⁾		III		83	Chairman of the Board of Directors		2002		2022

(1)	Member of the audit committee

(2)	Member of the compensation committee

(3)	Member of the nominating and corporate governance committee

(4)	Service on our board of directors prior to 2016 noted in the narrative below includes service with BioCardia Lifesciences, Inc., the company we merged with in our reverse merger transaction in October 2016.

Position	Annual Cash Retainer		Equity Grant
Base Fee	$	40,000	$	44,000
Chairperson Fee
Chairman of the Board		25,000
Audit Committee		15,000
Compensation Committee		10,000
Nominating and Corporate Governance Committee		7,500
Committee Member Fee
Audit Committee		7,500
Compensation Committee		5,000
Nominating and Corporate governance		3,750

Director	Fees Earned or Paid in Cash($)⁽¹⁾		Stock Awards ($)⁽²⁾		Option Awards ($)⁽²⁾		Total ($)
Fernando L. Fernandez	$	47,500.00	$	—		—	$	47,500.00
Richard Krasno, Ph.D.	$	43,750.00	$	—		—	$	43,750.00
Jay M. Moyes	$	58,125.00	$	—		—	$	58,125.00
Richard C. Pfenniger, Jr.	$	46,250.00	$	—		—	$	46,250.00
Thomas Quertermous, M.D.⁽³⁾	$	38,812.50	$	—		—	$	38,812.50
Simon H. Stertzer, M.D.	$	76,250.00	$	—		—	$	76,250.00
Allan R. Tessler⁽³⁾	$	41,250.00	$	—		—	$	41,250.00
Jim Allen	$	10,937.50		—		—	$	10,937.50
Andrew Blank	$	13,125.00		—		—	$	13,125.00

Name	Aggregate Number of Stock Options Outstanding as of December 31, 2019			Aggregate Number of Stock Awards Outstanding as of December 31, 2019
Fernando L. Fernandez		—			567	⁽¹⁾
Richard Krasno, Ph.D.		—			567	⁽¹⁾
Jay M. Moyes		5,931	⁽²⁾		—
Richard C. Pfenniger, Jr.		—			567	⁽¹⁾
Thomas Quertermous, M.D.		3,921	⁽³⁾		—
Simon H. Stertzer, M.D.		12,218	⁽⁴⁾		—
Allan R. Tessler		1,508	⁽⁵⁾		567	⁽¹⁾
Jim Allen		—			—
Andrew Blank		—			—