PAVmed Inc. (Nasdaq: PAVM, PAVMZ) (the “Company”
or “PAVmed”), a highly differentiated, multiproduct medical device
company, today reported preliminary financial results for the three
and 12 months ended December 31, 2019 and provided a business
update.
“The fourth quarter of 2019 and beginning of
2020 have been notable for many important accomplishments including
PAVmed’s successful transition into a commercial stage company,”
said Lishan Aklog, M.D., PAVmed’s Chairman and Chief Executive
Officer. “Although our industry, nation and world are facing
enormous challenges as a result of the Covid-19 pandemic, we are
fortunate that our corporate structure and culture are well suited
to address these challenges with minimal short-term and no
anticipated long-term disruptions to our strategic plan. We look
forward to building on our progress with important value-driving
activities and key milestones in the coming months.”
RECENT ACCOMPLISHMENTS
- The Company’s majority-owned
subsidiary Lucid Diagnostics (“Lucid”) launched its EsoGuard™
Esophageal DNA Test as a Laboratory Developed Test (LDT), after
completing CLIA/CAP certification of the test at Lucid’s commercial
diagnostic laboratory partner ResearchDx Inc. dba Pacific Dx,
headquartered in Irvine, CA. EsoGuard is the first such DNA test
designed to facilitate the diagnosis of Barrett’s Esophagus (BE)
and related precursors to highly lethal esophageal adenocarcinoma
(EAC).
- Lucid launched and enrolled its
first patient in a pair of international multi-center IVD clinical
trials (ESOGUARD-BE-1 and 2) with over 60 sites in the U.S. and
Europe. The screening study (BE-1) will enroll gastroesophageal
reflux disease (GERD) patients without a prior diagnosis of
Barrett’s Esophagus (BE) or esophageal adenocarcinoma (EAC) who
satisfy American College of Gastroenterology (ACG) BE screening
guidelines. The case control study (BE-2) will enroll patients with
a previous diagnosis of non-dysplastic BE, dysplastic BE (both low
and high-grade) or EAC. In both studies, EsoGuard/EsoCheck™ will be
compared to the gold standard of endoscopy with biopsies. Nicholas
J. Shaheen MD, MPH, Professor and Chief of the Division of
Gastroenterology and Hepatology at UNC HealthCare, and lead author
of the most recent ACG guidelines, serves as principal investigator
of both studies.
- The Company submitted and the U.S.
Food and Drug Administration (“FDA”) accepted for review its 510(k)
resubmission for our CarpX™ minimally invasive carpal tunnel device
incorporating data from our successful first-in-human CarpX
clinical safety study.
- The Company participated in a
successful pre-submission meeting with the FDA on its PortIO
product focused on the design of a clinical safety study in support
of a de novo application and the target population of its proposed
label.
- Announced a new product, Lucid’s
EsoCure Esophageal Ablation Device, which is a disposable
single-use thermal balloon ablation catheter designed to use our
patented Caldus Technology to treat dysplastic Barrett’s Esophagus
before it can progress to highly lethal esophageal cancer and to do
so without the need for complex and expensive capital
equipment.
- Lucid received Breakthrough Device
designation from the FDA for its EsoGuard Esophageal DNA Test on
esophageal samples collected using its EsoCheck Cell Collection
Device in a prevalent well-defined group of patients at elevated
risk for esophageal dysplasia due to chronic gastroesophageal
reflux disease (GERD), validating their potential life-saving
impact and providing priority expedited FDA assessment and review
and potentially accelerated CMS coverage.
- Lucid hired two regional sales
managers to cover the Eastern and Western United States and
completed training of its first cohort of twenty-four highly
experienced independent sales representatives with deep
relationships in the gastroenterology community covering a large
portion of the United States.
- Lucid launched an aggressive
marketing campaign in professional journals and social media,
targeting physicians and patients to strengthen EsoGuard and
EsoCheck brand recognition, generate awareness of the underlying
conditions and support the sales process.
- Lucid participated in two
successful meetings with Medicare contractor Palmetto GBA and its
molecular diagnostics program MolDx, one in February focused on
payment and another two weeks ago focused on coverage.
- Lucid entered into a sponsored
clinical research agreement with two major academic centers, the
Fred Hutchinson Cancer Research Center in Seattle, WA and the
University of Pennsylvania in Philadelphia, to evaluate our
EsoCheck in Barrett’s Esophagus progression and Eosinophilic
Esophagitis respectively.
- The Company received a firm date
for the stage 1 audit of its quality system by its EU notified
body, which will allow it to restart its efforts to pursue EU CE
Mark clearance of CarpX and PortIO after delays related to a
regulatory backlog in Europe due to systematic changes.
- The Company continued to expand and
advance its extensive intellectual property portfolio, which now
includes 129 issued and pending, owned, assigned or licensed
patents across PAVmed and its subsidiaries.
UPCOMING KEY ACTIVITIES AND
MILESTONES
- Await FDA response to the Company’s CarpX 510(k)
application.
- Accelerate and expand EsoGuard and
EsoCheck commercial activities including virtual sales and
profession education as well as aggressive marketing until clinical
procedures can resume from Covid-19 limitations.
- Resume ESOGUARD-BE-1 and 2 trials
and launch two additional clinical trials involving EsoCheck when
clinical activities can resume.
- Complete ongoing formal M&A
process seeking to secure a strategic partner or to license or
acquire the Company’s NextFlo™ technology for one or more clinical
applications while simultaneously advancing NextFlo toward an
initial FDA 510(k) submission later in 2020.
- Initiate a PortIO™ clinical safety
study to support its FDA de novo application and long-term clinical
study in Colombia, South America to demonstrate up to 60-day
maintenance free implant durations in humans.
- Launch clinical trial of EsoCheck
in Eosinophilic Esophagitis at the University of Pennsylvania and
the Fred Hutchinson Cancer Research Center in Seattle.
- Complete R&D project seeking to
achieve accuracy milestone based on established FDA and ISO 15197
standards for Solys Diagnostics’ NDIR laser based non-invasive
blood glucose diagnostic device licensed from technology pioneer
Dr. Jacob Wong companies.
PRELIMINARY FINANCIAL
RESULTS
For the three months ended December 31, 2019,
research and development expenses were $2.3 million and general and
administrative expenses were $2.3 million. GAAP net loss
attributable to common stockholders was $6.3 million, or $(0.19)
per common share. As illustrated below and for the purpose of
helping the reader understand the effect of derivative accounting
and other non-cash income and expenses on the Company’s financial
results, the Company reported a non-GAAP adjusted loss for the
three months ended December 31, 2019 of $3.9 million, or $(0.12)
per common share.
PAVmed had cash and cash equivalents of $6.2
million as of December 31, 2019, compared with $8.2 million as of
December 31, 2018. Subsequently, in late March 2020, the Company
received $6.3 million in new gross proceeds from the prepayment of
promissory notes issued in conjunction with a previously disclosed
November 2019 private placement.
Non-GAAP Measures
To supplement our unaudited financial results
presented in accordance with U.S. generally accepted accounting
principles (GAAP), management provides certain non-GAAP financial
measures of the Company’s financial results. These non-GAAP
financial measures include net loss before interest, taxes,
depreciation and amortization (EBITDA) and non-GAAP adjusted loss,
which further adjusts EBITDA for stock-based compensation expense,
loss on the issuance or modification of convertible securities, the
periodic change in fair value of convertible securities, and loss
on debt extinguishment. The foregoing non-GAAP financial measures
of EBITDA and non-GAAP adjusted loss are not recognized terms under
U.S. GAAP.
Non-GAAP financial measures are presented with
the intent of providing greater transparency to information used by
us in our financial performance analysis and operational
decision-making. We believe these non-GAAP financial measures
provide meaningful information to assist investors, shareholders
and other readers of our unaudited financial statements in making
comparisons to our historical financial results and analyzing the
underlying performance of our results of operations. These non-GAAP
financial measures are not intended to be, and should not be, a
substitute for, considered superior to, considered separately from
or as an alternative to, the most directly comparable GAAP
financial measures.
Non-GAAP financial measures are provided to
enhance readers’ overall understanding of our current financial
results and to provide further information for comparative
purposes. Management believes the non-GAAP financial measures
provide useful information to management and investors by isolating
certain expenses, gains and losses that may not be indicative of
our core operating results and business outlook. Specifically, the
non-GAAP financial measures include non-GAAP adjusted loss and its
presentation is intended to help the reader understand the effect
of the loss on the issuance or modification of convertible
securities, the periodic change in fair value of convertible
securities, the loss on debt extinguishment and the corresponding
accounting for non-cash charges on financial performance. In
addition, management believes non-GAAP financial measures enhance
the comparability of results against prior periods.
A reconciliation to the most directly comparable
GAAP measure of all non-GAAP financial measures included in this
press release for the three and 12 months ended December 31, 2019
and 2018 is as follows:
|
|
Three Months EndedDecember 31, |
|
|
For the year endedDecember 31, |
|
(ooo's except per share amounts) |
|
2019 |
|
|
2018 |
|
|
2019 |
|
|
2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
common share, basic and diluted |
|
$ |
(0.19 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.55 |
) |
|
$ |
(0.84 |
) |
Net loss attributable
to common stockholders |
|
|
(6,313 |
) |
|
|
(6,896 |
) |
|
|
(16,727 |
) |
|
|
(18,751 |
) |
Preferred Stock dividends and
deemed dividends |
|
|
69 |
|
|
|
64 |
|
|
|
270 |
|
|
|
255 |
|
Series B Preferred stock
issued upon exchange of Series A and Series A-1 Preferred
stock |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
527 |
|
Net income (loss) as reported |
|
|
(6,244 |
) |
|
|
(6,832 |
) |
|
|
(16,457 |
) |
|
|
(17,969 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation expense1 |
|
|
4 |
|
|
|
4 |
|
|
|
14 |
|
|
|
10 |
|
Interest expense, net3 |
|
|
33 |
|
|
|
684 |
|
|
|
33 |
|
|
|
2,392 |
|
EBITDA |
|
|
(6,207 |
) |
|
|
(6,144 |
) |
|
|
(16,410 |
) |
|
|
(15,567 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-cash
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense2 |
|
|
393 |
|
|
|
324 |
|
|
|
1,571 |
|
|
|
1,229 |
|
Change in fair value of Series A Warrant Liabiity3 |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
96 |
|
Change in fair value of Series A Preferred Stock conversion option
embedded derivative liabiity3 |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(65 |
) |
Debt extinguishment3 |
|
|
1,165 |
|
|
|
1,408 |
|
|
|
1,831 |
|
|
|
1,408 |
|
Change in FV convertible debt3 |
|
|
768 |
|
|
|
1,518 |
|
|
|
1,109 |
|
|
|
1,518 |
|
Exchange or Modification of securities3 |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,259 |
|
Non-GAAP adjusted
(loss) |
|
|
(3,881 |
) |
|
|
(2,893 |
) |
|
|
(11,900 |
) |
|
|
(9,121 |
) |
Basic and Diluted shares outstanding |
|
|
33,223 |
|
|
|
26,576 |
|
|
|
30,197 |
|
|
|
22,276 |
|
Non-GAAP adjusted (loss) income per share |
|
$ |
(0.12 |
) |
|
$ |
(0.11 |
) |
|
$ |
(0.39 |
) |
|
$ |
(0.41 |
) |
1 |
Included in general and administrative expenses in the financial
statements |
|
|
2 |
For the three and 12 months ended December 31, 2019 includes $310
and $1,162, respectively, of stock based compensation expense
reported as general and administrative expenses and $84 and $408,
respectively, reported as research and development expense. For the
three and 12 months ended December 31, 2018 includes $248 and $948,
respectively, of stock based compensation expense reported as
general and administrative expenses and $77 and $281 reported as
research and development expense. |
|
|
3 |
Included in other income and expenses |
Conference Call and Webcast
The Company will hold a conference call and
webcast today at 4:30 p.m. Eastern time. During the call, Lishan
Aklog, M.D., Chairman and Chief Executive Officer of the Company,
will provide a business update including an overview of the
Company’s near-term milestones and growth strategy. In addition,
Dennis McGrath, President and Chief Financial Officer, will review
preliminary fourth quarter 2019 financial results.
To access the conference call, U.S.-based
listeners should dial (877) 407-3982 and international listeners
should dial (201) 493-6780. All listeners should provide the
operator with the conference call name “PAVmed, Inc. Business
Update Conference Call” to join. Individuals interested in
listening to the live conference call via webcast may do so by
visiting the investor relations section of the Company’s website at
www.pavmed.com.
Following the conclusion of the conference call,
a replay will be available for one week and can be accessed by
dialing (844) 512-2921 from within the U.S. or (412) 317-6671 from
outside the U.S. To access the replay, all listeners should provide
the following pin number: 13700590. The webcast will be available
for replay on the investor relations section of the Company’s
website at www.pavmed.com.
About PAVmed
PAVmed Inc. is a highly differentiated,
multiproduct commercial stage medical device company employing a
unique business model designed to advance innovative products to
commercialization much more rapidly and with significantly less
capital than the typical medical device company. This proprietary
model enables PAVmed to pursue an expanding pipeline strategy with
a view to enhancing and accelerating value creation while seeking
to further expand its pipeline through relationships with its
network of clinician innovators at leading academic centers.
PAVmed’s diversified product pipeline addresses unmet clinical
needs encompassing a broad spectrum of clinical areas with
attractive regulatory pathways and market opportunities. Its four
operating divisions include GI Health (EsoGuard™ Esophageal DNA
Test, EsoCheck™ Esophageal Cell Collection Device, and EsoCure™
Esophageal Ablation Device with Caldus™ Technology), Minimally
Invasive Interventions (CarpX™ Minimally Invasive Device for Carpal
Tunnel Syndrome), Infusion Therapy (PortIO™ Implantable Intraosseus
Vascular Access Device and NextFlo™ Highly Accurate Disposable
Intravenous Infusion Set), and Emerging Innovations (non-invasive
laser-based glucose monitoring, NextCath™ self-anchoring catheters,
pediatric ear tubes and mechanical circulatory support). For more
information, please visit www.pavmed.com, follow us on
Twitter, connect with us on LinkedIn, and watch our videos on
YouTube. For more information on our majority owned subsidiary,
Lucid Diagnostics Inc., please visit www.luciddx.com, follow Lucid
on Twitter, and connect with Lucid on LinkedIn.
Forward-Looking Statements
This press release includes forward-looking
statements that involve risks and uncertainties. Forward-looking
statements are statements that are not historical facts. Such
forward-looking statements, based upon the current beliefs and
expectations of PAVmed’s management, are subject to risks and
uncertainties, which could cause actual results to differ from the
forward-looking statements. Risks and uncertainties that may cause
such differences include, among other things, volatility in the
price of PAVmed’s common stock, Series W Warrants and Series Z
Warrants; general economic and market conditions; the uncertainties
inherent in research and development, including the cost and time
required advance PAVmed’s products to regulatory submission;
whether regulatory authorities will be satisfied with the design of
and results from PAVmed’s preclinical studies; whether and when
PAVmed’s products are cleared by regulatory authorities; market
acceptance of PAVmed’s products once cleared and commercialized;
our ability to raise additional funding and other competitive
developments. PAVmed has not yet received clearance from the FDA or
other regulatory body to market many of its products. New risks and
uncertainties may arise from time to time and are difficult to
predict. All of these factors are difficult or impossible to
predict accurately and many of them are beyond PAVmed’s control.
For a further list and description of these and other important
risks and uncertainties that may affect PAVmed’s future operations,
see Part I, Item IA, “Risk Factors,” in PAVmed’s most recent Annual
Report on Form 10-K filed with the Securities and Exchange
Commission, as the same may be updated in Part II, Item 1A, “Risk
Factors” in any Quarterly Reports on Form 10-Q filed by PAVmed
after its most recent Annual Report. PAVmed disclaims any intention
or obligation to publicly update or revise any forward-looking
statement to reflect any change in its expectations or in events,
conditions, or circumstances on which those expectations may be
based, or that may affect the likelihood that actual results will
differ from those contained in the forward-looking statements.
Contacts:
InvestorsMike HavrillaDirector of Investor
Relations(814) 241-4138JMH@PAVmed.com
MediaShaun O’NeilChief Commercial Officer(518)
812-3087SMO@PAVmed.com
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