Earnings Call Transcript - BCDA Q1 2024

Operator, Operator

Ladies and gentlemen, thank you for standing by. Good afternoon and welcome to the BioCardia First Quarter 2024 Financial Results and Business Update Conference Call. At this time, all participants are in a listen-only mode. Participants of this call are advised that the audio of this conference call is being broadcast live over the Internet and is also being recorded for playback purposes. A webcast replay of the call will be available approximately one hour after the end of the call. I would now like to turn the call over to Miranda Peto of BioCardia Investor Relations. Please go ahead, Miranda.

Miranda Peto, Investor Relations

Thanks, Debbie. 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, analyses, and 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 report on Form 10-K filed with the SEC on March 27th, 2024. The content of this call contains time-sensitive information that is accurate only as of today, May 14th, 2024. 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 Dr. Peter Altman, BioCardia's President and CEO. Peter, please go ahead.

Peter Altman, CEO

Thank you, Miranda and good afternoon to everyone on the call. This has been a big quarter for BioCardia as our clinical investigators have presented positive results from each of our three ongoing autologous and allogeneic cell therapy clinical trials to treat ischemic heart failure and chronic myocardial ischemia. In this call, we will share an update on these product candidates in the active clinical development. Our lead CardiAMP autologous cell therapy is targeted to treat ischemic heart failure of reduced ejection fraction, an enormous unmet clinical need. We now have results from three clinical trials; CA BMI, CA CTHFT, and CardiAMP HF with the CardiAMP cells that support both the safety and therapeutic efficacy of these cells for patients having ischemic heart failure of reduced ejection fraction. Although we have seen positive signals of reduced mortality and reduced major adverse cardiac events in all patients treated in the most recent CardiAMP Heart Failure trial, the remarkable benefits in patients treated with elevated NT-proBNP, a well-established biomarker of active heart failure, is where we are focused today. Results in these patients shared late in the first quarter show a remarkable 86% relative risk reduction in heart death equivalents and a 24% relative risk reduction in non-fatal major adverse cardiac and cerebrovascular events. Our death equivalents include all-cause death, cardiac transplantation, and implantation of a left ventricular assist device to replace heart function. This is particularly exciting as therapies that are available today do not have a significant impact on mortality for these patients. And unfortunately, mortality for these patients is still approximately 50% at five years. Further, the recent interim results in these patients show all clinical outcomes favor CardiAMP Cell Therapy, including improved quality of life as measured using the Minnesota Living with Heart Failure Questionnaire, reduction of NT-proBNP levels, greater six-minute walk test distances, and improved echocardiography parameters of left ventricular ejection fraction, left ventricular end-systolic volume, and left ventricular end-diastolic volume. Both the reduced heart death equivalents and improved quality of life outcomes demonstrated statistical significance, favoring therapy in the patients with elevated NT-proBNP. Our goal is to have final results available for both scientific presentation and for regulatory submission in the fourth quarter of 2024. There is enormous ongoing activity by the BioCardia team to monitor patients enrolled in this study. As we already have more than 90% of the patient follow-up data that we will ultimately have in the final analysis, we don't expect the results to change significantly. The final results are expected to be provided to Japan's Pharmaceutical and Medical Device Agency as a key element of a submission for approval. Our previous consultations with Japan's Pharmaceutical and Medical Device Agency supported that if the data remains as good as it currently appears to be at the final analysis, they are willing to consider approval based on this data without requiring an additional clinical trial in Japan. Subsequent interactions and consultations with Japan's Pharmaceutical and Medical Device Agency are expected. A post-marketing study is already in active discussion with world-class heart failure cardiology and interventional cardiology leaders in Japan who attended our last consultation with the agency. We are thankful for their involvement. The confirmatory CardiAMP Heart Failure II trial in the United States is focused on the patients with elevated NT-proBNP. The trial was approved by the FDA in December, activated in February, and approved for reimbursement by Medicare in March. We estimate that the Medicare reimbursement reduces the cost of doing this study by more than $5 million as we record payments from centers as a reduction in our R&D expense as these dollars are then paid back to centers to cover research costs for patient follow-up. This confirmatory trial has a greater than 90% power or statistical probability of success to meet the primary endpoint based on the CardiAMP Heart Failure trial interim results. Our world-class Executive Steering Committee and the distinguished cardiologists on our Data Safety Monitoring Board are continuing to support this program. We expect additional world-class heart failure clinicians to join our Executive Steering Committee soon. We are actively working with our heart failure network and leaders in cardiology to enable this study to be fully enrolled in two years when the first patient enrolled, with results being available in three years. This is an aggressive goal, but we feel that the experience and data that we have will enable this to be achieved. We are actively onboarding sites and this effort will accelerate in the months ahead. Our CardiAMP cell therapy trial for chronic myocardial ischemia or BCDA-02 is a Phase 3 multi-center randomized double-blinded controlled study intended to include up to 343 patients at up to 40 sites. The company roll-in cohort results were presented in a call last month, showing patients with refractory angina, demonstrating an average 107-second increase in exercise tolerance and an 82% reduction in angina episodes at the primary six-month follow-up endpoint compared to before receiving the study treatment. Planning for the randomized phase continues based on these positive results. Part of this planning includes utilizing the Medicare reimbursement in place for both the control and treatment arms of this investigational therapeutic study to offset the clinical costs. The company's CardiALLO allogeneic cell therapy for ischemic heart failure or BCDA-03 is a Phase 1/2 clinical trial program encompassing 69 patients. At the Technology and Heart Failure Therapeutics Meeting in March, it was reported that there have been no adverse events and follow-up in the first low-dose cohort patient enrolled. The CardiALLO heart failure study is intended to build on three previous trials of mesenchymal stem cells in ischemic heart failure that we have co-sponsored at BioCardia. This is a precision medicine study as we are focusing this therapy for the first time on patients who have elevated NT-proBNP and elevated high-sensitivity C-reactive protein, a marker of inflammation that has been correlated with responsiveness to immunomodulatory mesenchymal stem cells in a significant previous study. We intend the Phase 2 portion of the CardiALLO study to be performed in both the United States and in Japan, where it has potential to receive conditional approval based on this one trial. Our biotherapeutic delivery partnering business focuses on long-term partnerships, where BioCardia participates meaningfully in the value created. In March 2024, we announced a biotherapeutic delivery partnership with StemCardia to advance StemCardia's investigational pluripotent stem cell product candidate for the treatment of heart failure, initially through a Phase 1/2 clinical study. In May of 2024, biotherapeutic delivery partner, CellProthera, announced that they would have results this week at the European Society of Cardiology Heart Failure Meeting in Lisbon from their Phase 1/2 cell therapy study in post-myocardial infarction. Today, I am delighted to congratulate CellProthera on the positive clinical results they have just announced. In summary, with our three cardiovascular biotherapeutic clinical programs and our biotherapeutic delivery partnering, we have multiple pathways to succeed as a business and provide significant shareholder returns on investment. We are aiming for approval of the first therapy based on our lead program in Japan as early as 2025, which could be followed in the USA soon thereafter. I will now pass the call to David McClung, our CFO, who will review our Q1 2024 financial results. David?

David McClung, CFO

Thank you, Peter, and good afternoon everyone. Revenue for the three months ended March 2024 was $55,000, compared to $65,000 for the same period in 2023. Expenses decreased by 35% quarter-over-quarter. Research and development expenses fell to $1.2 million during the first quarter of 2024, down from $2.4 million in the first quarter of 2023, mainly due to the completion of enrollment in the CardiAMP Heart Failure trial in the fourth quarter of 2023 and corresponding reductions in clinical and supporting function expenses. Selling, general, and administrative expenses slightly decreased to $1.1 million for the three months ended March 2024, down from $1.2 million for the same period last year. BioCardia's net loss decreased to $2.3 million in the first quarter of 2024, compared to $3.5 million in the first quarter of the previous year, largely due to the aforementioned reduction in expenses. We utilized $1.5 million in cash for operations in the first quarter of 2024, compared to $2.6 million in the first quarter of 2023. While we expect cash usage to increase moderately as we continue our trials, our history shows BioCardia's capability to operate efficiently and achieve goals in a capital-efficient manner. This concludes management's prepared comments. We welcome questions from attendees.

Operator, Operator

We will now begin the question-and-answer session. The first question comes from Joe Pantginis with H.C. Wainwright. Please go ahead.

Lander Egaña-Gorroño, Analyst

Hi everyone, this is Lander on for Joe. Thanks for taking our question. So, I wanted to ask about the CardiAMP CMI program. Should we expect additional patients to be added to the roll-in cohort? If I'm not wrong, there's one patient that has not completed the six months follow-up. Or do you think that the roll-in data with four patients is enough to proceed to the randomized phase?

Peter Altman, CEO

Thank you, Lander. I appreciate the question. For CardiAMP chronic myocardial ischemia in patients with refractory angina, there is indeed one additional patient who has been consented but not yet treated, and that patient is currently progressing through the pipeline. We have decided to stop enrolling more patients at this time. We feel confident in moving forward with the randomized cohort. The results from the initial patients enrolled have been excellent, and we will be taking steps to initiate the randomized phase of the trial. This is a pivotal trial, and we aim to have an adaptive readout after 100 patients have been randomized. The follow-up endpoint is set at six months. Additionally, the safety data we presented in our heart failure program will support this initiative, as it uses essentially the same therapy in a clinical context that precedes ischemic heart failure. To answer your question, yes, there is one more patient. However, we are uncertain if they will ultimately be part of the roll-in cohort, as this is a long process for these patients moving through the trial. Regardless, we will acknowledge their enrollment, and we are comfortable proceeding to the randomized controlled trial.

Lander Egaña-Gorroño, Analyst

Okay, perfect. Thanks for clarifying. And for the CardiAMP HF in Japan, besides the final results from the original CardiAMP HF program, is there any other discussion points that you think that are important that are still going on with PMDA?

Peter Altman, CEO

The latest update on our interactions with PMDA is that we last met with them in November. During that meeting, they indicated that they would accept foreign data, specifically data from the United States, to support our approval process. They expressed keen interest in the data we will have by the end of this year. While the trial is still ongoing, we have gathered 90% of the follow-up data on the patients, and we don't expect any major changes. However, we still need to finish the follow-up and assess the quality of the entered data in preparation for the submission. We plan to engage in further discussions with PMDA in due course, and we are feeling optimistic about the submission process. It's worth noting that they recently approved a cell therapy for heart failure in Japan based on data from seven patients. Another therapy is expected to seek approval with around ten patients enrolled. Both therapies are associated with potential arrhythmias and necessitate surgical intervention, which our therapy does not. We have significantly more data than those therapies, indicating a strong chance for approval, which could lead to head-to-head studies of therapies in Japan. We are excited about moving forward and feel privileged to collaborate with prominent experts in Japan as we continue these discussions.

Lander Egaña-Gorroño, Analyst

Perfect. That’s helpful. Thank you very much.

Peter Altman, CEO

Appreciate the question. Thank you so much.

Operator, Operator

The next question comes from Brent Pearson, a Private Investor. Please go ahead.

Unidentified Analyst, Analyst

Good afternoon gentlemen. I wanted to wish you congratulations on both your partnership front and your trial front. The first question I had today was around the results from CellProthera's announcement today. It appears that they've announced some positive results around their Phase 1/2b trial. And I seem to recall that there was potentially an ability with the EMA to apply for a conditional marketing approval based on this study. And I was wondering if you guys had color. I know it's early and that this is pretty new information. But any expectation around an advancement of that conditional approval?

Peter Altman, CEO

So, Brent, thank you for the question. And one of the nuances of our biotherapeutic partnering is we need to let our partners tell their stories. So, there is potential in Europe for early access. That's something that CellProthera is looking at in their business and their clinical trial efforts ahead. So, we don't comment on that, but we are very encouraged by the results. We think what they have done with their therapy and their development strategy makes enormous sense. And in our own data that we've published on, we've shown that you can have approximately 18 times the efficiency of delivery of these types of cells when delivered intramyocardially. And so in their clinical indication, all of the past data has been done with an intracoronary artery infusion, which has very low long-term retention of these types of cells. So, I think they've done a great job. They followed their Phase 1 work. They've got Phase 2 data that they've just presented today and we're hopeful that the project and programs together will continue.

Unidentified Analyst, Analyst

Great. I completely understand and I appreciate your response there. And my follow-up question was simply, we had heard that there were some potential developments on the partner front expected towards the end of Q2 and then potentially, towards the end of 2024. Just wondered if there was any update on that front? And that will be it for me. Thank you.

Peter Altman, CEO

No, those are excellent questions, Brent. In terms of our partnerships, we are committed for the long term and work diligently to share our expertise and insights to ensure their success. We usually participate in every procedure for a partner's clinical trials with our senior team members. Currently, several groups are exploring various strategies to address substantial unmet clinical needs that are still in early development. Many of them have promising data with BioCardia, as shown in our corporate slide deck, and the next steps depend significantly on their initiative. We have additional collaborators who have data with us that may not be included in that slide deck, but our partnerships are meaningful. We play an important role and aim to create long-term value for our shareholders. We believe we’ve showcased the effectiveness of our current delivery technologies and possess fundamental intellectual property for future biotherapeutic interventions in the heart. While we're excited to collaborate, we must remain mindful of our shareholders' interests. I don’t have specific updates on business development discussions, but there are numerous organizations that will require a delivery solution, and currently, we are the only ones with a clinic-ready solution and extensive experience in preclinical and clinical models across all discussed indications. We are optimistic about progress, confident in our delivery programs, and believe we can be a fruitful partner, although it can be challenging for entities to align their valuable assets with another company in the same sector. Each day presents new opportunities for discussion. Some are currently in advanced negotiations with exchanged term sheets and ongoing conversations, which involve a lot of mutual experience, but finalizing agreements can take time. I apologize for my lengthy response, Brent; it’s just the way these matters unfold.

Unidentified Analyst, Analyst

I completely understand. There are many positive developments happening, and I wanted to extend my congratulations and thank you for answering my question.

Peter Altman, CEO

I appreciate it, Brent. Thank you so much.

Operator, Operator

Next in the queue is George Will, a Private Investor. Please go ahead.

Unidentified Analyst, Analyst

Hello, good afternoon. Thank you for taking my call. Peter, can you provide a little, I guess, some commentary if the BioCardia CardiAMP treatment moves forward? And let's say, you receive approval in Japan, what would be the strategy there for commercializing that there? Is it to move forward on BioCardia's own? Would you look to partner with a larger firm? What would be the strategy there? If anything that you could share or if that's a stay-tuned item?

Peter Altman, CEO

It's a great question and I'll share how we think about things. We've learned a lot about the Japanese market and have enjoyed engaging with some outstanding physician leaders in Japan. We've built numerous relationships. Our preference would be to partner with a distributor that can handle CardiAMP for the heart failure indication, and eventually for the chronic myocardial ischemia indication as well. The rationale for this is their expertise in Japan with the nuances we haven't yet experienced. While we work on the approval process, we've had ongoing discussions with various organizations about getting involved in the study. They are interested in contributing and are familiar with our esteemed advisers in Japan. However, they haven't yet taken the next step, partly because this is a significant deal and value proposition. We require them to have a substantial investment in order to be our partner and fully commit to advancing CardiAMP. On another note, CardiAMP is a remarkable new therapy. There are approximately 1 million patients in Japan with heart failure who could potentially benefit from it. Our reimbursement process in the United States offers a reference point for Japanese reimbursement, though I understand that another cardiac cell therapy approved in Japan is priced around $124,000 per treatment. We are not aiming for that reimbursement level, but based on our U.S. experience, there is potential for very significant margins. This therapy could support a profitable subsidiary in Japan relatively quickly. Still, our top choice is to have a partner step up, invest meaningfully, and actively engage in advancing CardiAMP for both of our primary clinical indications.

Unidentified Analyst, Analyst

That’s great. Thanks so much. That was all I had.

Peter Altman, CEO

You have a great day. Thank you, George. You have a fabulous afternoon.

Operator, Operator

This concludes our question-and-answer session. I would like to turn the conference back over to Peter Altman for any closing remarks.

Peter Altman, CEO

Thank you kindly, Debbie. Our therapeutic candidates and technologies have significant potential to help millions of patients with heart disease. We now have five cardiac biotherapeutic programs in development, including our biotherapeutic delivery partnering. Each of these programs has the potential to provide meaningful returns for our investors. I thank all of you for participating in today's call, for your interest in BioCardia, and the support you provide for our primary mission to develop and enhance therapies to treat heart disease. Have a great afternoon.

Operator, Operator

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.