Conference call to be held on April 4, 2019 at
4:30 p.m. Eastern time
PAVmed Inc. (Nasdaq: PAVM, PAVMZ) (the
“Company” or “PAVmed”), a highly differentiated, multiproduct
medical device company, today reported financial results for the
three and 12 months ended December 31, 2018 and provided a business
update.
MANAGEMENT COMMENTARY
“I am very pleased with the progress PAVmed has
made during what has been a very active and productive fourth
quarter of 2018 and in recent months,” said Lishan Aklog, M.D.,
PAVmed’s Chairman and Chief Executive Officer. “We have achieved
several important milestones across our lead product pipeline and
are poised to complete several more in this quarter.”
Highlights
- Refinanced senior secured debt under favorable terms, including
a lower coupon rate and no attached warrants, strengthening our
balance sheet by removing the July 2019 debt maturity overhang and
increasing our working capital runway;
- Reached a consensus with the FDA on the parameters of the
CarpX™ minimally-invasive carpal tunnel device’s first-in-human
(FIH) safety study and completed the complex logistics necessary to
initiate and complete the treatment phase of the study in
Christchurch, New Zealand in the coming weeks;
- Completed the EsoGuard™ (formerly EsoCheck™ Dx) methylated DNA
biomarker diagnostic test’s Laboratory Developed Test (LDT)
validation process and filed for a Proprietary Laboratory Analysis
(PLA) diagnostic CPT billing code through the American Medical
Association, which is the first step in securing Medicare
reimbursement;
- Completed the EsoCheck™ esophageal cell collection device’s GLP
animal study as well as additional manufacturing verifications
requested by FDA to support its 510(k) pathway regulatory
clearance;
- Launched a world-class Lucid Diagnostics medical advisory board
consisting of internationally renowned experts in gastroesophageal
reflux disease (GERD), Barrett’s Esophagus (BE) and esophageal
cancer, with specific expertise and experience in developing the
current published society guidelines on the management of BE;
- Appointed a veteran life sciences industry executive with
extensive experience in the development and execution of clinical
and regulatory strategy, including sophisticated clinical trials,
as Lucid’s Chief Medical Officer;
- Completed the PortIO™ implantable intraosseous vascular access
device’s GLP animal study, requested by the FDA to support its de
novo pathway regulatory clearance;
- Completed a PortIO pilot animal study demonstrating an
unprecedented maintenance-free implant duration of over 60 days,
which a former president of the Society of Interventional Radiology
described as a “truly groundbreaking accomplishment” which would
represent “one of the most important advances in long-term vascular
access”;
- Completed a series of bench-top tests of the NextFlo™ Infusion
System demonstrating flow accuracy comparable to expensive
electronic infusion pumps, independent of intravenous (IV) bag
height, which a leading critical care physician described as a
breakthrough which would “revolutionize how we deliver infusions to
patients while significantly lowering costs”.
CarpX
CarpX is a minimally invasive device designed to
treat carpal tunnel syndrome, which PAVmed believes will
dramatically reduce recovery times compared to traditional open
surgery and target an estimated immediately addressable domestic
market opportunity of over $1 billion.
PAVmed has been working closely with the FDA to
secure its U.S. 510(k) regulatory clearance of CarpX. During a
pre-submission meeting earlier this year, the FDA recommended
clinical testing to definitively document procedural safety in
humans and indicated that data from a clinical study outside of the
U.S. would be acceptable, precluding the need to engage in the
FDA’s time-consuming IDE process required for U.S. studies. PAVmed
offered to amend its previously planned FIH clinical trial
(ClinicalTrials.gov Identifier: NCT03747510) in Christchurch, New
Zealand to meet this clinical testing recommendation and postponed
the initiation of the study until study parameters were finalized
with the FDA and local logistical matters could be finalized.
Following multiple discussions, PAVmed reached a
consensus with the FDA on the parameters of the study – a
single-arm, two-center, two-surgeon, 20-patient study of the CarpX
procedure in carpal tunnel syndrome patients, with a device safety
primary endpoint over a limited 90-day follow-up period. Final
logistical matters led to a brief delay in the initiation of the
study which was exacerbated by a temporary freeze on all elective
surgeries following the tragic events in Christchurch last month.
These logistical matters have now been addressed and the elective
surgery freeze has been lifted, allowing treatment to be initiated
and completed in the coming weeks.
EsoGuard/EsoCheck
The EsoGuard (formerly EsoCheck Dx) DNA
biomarker diagnostic test and the EsoCheck device, which collect
cells from a targeted region of the esophagus in a five-minute
office-based procedure, are revolutionary technologies licensed by
PAVmed’s majority-owned subsidiary, Lucid Diagnostics Inc.
(“Lucid”). Lucid decided to rename the diagnostic test EsoGuard to
better distinguish it from the EsoCheck cell collection device
since each technology has promising applications that are
independent of the other. This change will be formally introduced
at the major upcoming gastroenterology meeting, Digestive Diseases
Week (DDW), where Lucid will have a strong presence including
exhibits and presentations. Lucid is pursuing a two-phase
regulatory and commercialization strategy which seeks to maximize
the technologies’ long-term commercial opportunity while providing
near-term value-inflection commercial milestones.
EsoGuard is a methylated DNA biomarker
diagnostic test which has been shown in a published human study to
be highly accurate at detecting Barrett’s Esophagus (BE), a
pre-cursor to highly lethal esophageal cancer in patients with
chronic heart burn or acid reflux (GERD). Lucid believes that the
EsoGuard diagnostic test, when performed on samples collected by
EsoCheck, has the potential to save many lives through early BE
detection. The estimated immediately addressable domestic market
opportunity for EsoGuard is at least $2 billion based on tens of
millions of U.S. GERD patients who are BE screening candidates
according to published guidelines.
The EsoGuard Laboratory Developed Test (LDT)
validation process has been completed at the central reference
laboratory in Cleveland. This week the American Medical Association
(AMA) confirmed receipt of Lucid’s application for a Proprietary
Laboratory Analysis (PLA) diagnostic CPT billing code for EsoGuard.
This is the first step towards securing Medicare and subsequently
private payor reimbursement for the diagnostic test.
Lucid’s efforts to secure regulatory clearance
for EsoCheck through the FDA’s 510(k) pathway are progressing well.
The FDA requested some additional manufacturing verifications and a
small GLP animal study to document device effectiveness and safety
relative to a commercially available endoscopic brush. This work
has been completed with excellent results and will be submitted to
FDA as part of a formal response shortly, with final clearance
expected soon thereafter.
The second phase of Lucid’s strategy to secure a
specific indication, based on published guidelines, for widespread
BE screening using EsoGuard on samples collected with EsoCheck is
progressing at an accelerated pace. In addition to a full-time
Chief Medical Officer focused on planning and executing the
necessary Lucid-sponsored clinical studies, Lucid has secured
multiple other world-class resources for this effort including two
clinical operations consultants, a biostatistician and a team of
regulatory consultants consisting of former FDA officials. Draft
protocol synopses have been finalized and will be a central part of
a pre-submission package which will soon be filed with the FDA
along with a meeting request to discuss its clinical data
requirements for a de novo or Pre-Market Approval (PMA) pathway
submission.
Other Lead Products
The PortIO implantable intraosseous vascular
access device continues to advance through the FDA’s de novo
pathway as it seeks an initial 7-day implant duration indication
for use. The GLP animal study requested by the FDA has been
completed along with supplementary cadaver and acute animal
studies. A pre-submission package incorporating these data will be
submitted to FDA in the coming weeks. Groundbreaking data from a
recently completed pilot animal study demonstrated an unprecedented
maintenance-free implant duration of over 60 days. Based on these
results, PAVmed is planning to initiate a long-term (90-day implant
duration) FIH series in Colombia, South America this quarter. CE
Mark submission is scheduled for Q2-2019 and the Company continues
to explore potential strategic partnerships, including acquisition
of PortIO.
The NextFlo disposable intravenous (IV) infusion
set recently achieved a key milestone in its quest to eliminate the
need for complex and expensive electronic infusion pumps for most
of the estimated one million infusions of fluids, medications and
other substances delivered each day in hospitals and outpatient
settings in the United States. NextFlo is designed to deliver
highly-accurate gravity-driven infusions independent of the height
of the IV bag. It maintains constant flow by incorporating a
proprietary, passive, pressure-dependent variable flow-resistor
consisting entirely of inexpensive, easy-to-manufacture disposable
mechanical parts. NextFlo testing has demonstrated constant flow
rates across a wide range of IV bag heights, with accuracy rates
comparable to electronic infusion pumps. (NextFlo Demonstration
Video). This major technological breakthrough has generated
significant interest from potential strategic partners, as a
result, PAVmed is gearing up to initiate a formal M&A process
for NextFlo in the coming weeks.
Finally, a three-month animal study of the
DisappEAR™ resorbable, antimicrobial pediatric ear tube animal
study has been completed. The proprietary silk ear tubes performed
very well and demonstrated certain additional unanticipated
benefits which if replicated in humans could significantly enhance
their clinical value. The full data set is being analyzed and will
be reported shortly. Upon completion, data from this animal study
will be used to support a planned FDA 510(k) submission in
2019.
FINANCIAL RESULTS
For the three months ended December 31, 2018,
research and development expenses were $1,371,011 and general and
administrative expenses were $1,940,883. GAAP net loss attributable
to common stockholders was $6,896,010, or $(0.26) per common share.
As illustrated below and for the purpose of helping the reader
understand the effect of derivative accounting for 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, 2018 of $2,888,857, or $(0.11) per common share.
PAVmed had cash and cash equivalents of
$8,222,119 as of December 31, 2018, compared with $1,535,022 as of
December 31, 2017.
The audited financial results for the year ended
December 31, 2018 as reported to the SEC on Form 10-K can be
obtained at www.pavmed.com or www.sec.gov.
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 months and year ended December 31, 2018
and 2017 is as follows:
|
|
Three Months Ended Dec 31, |
|
|
For the Year Ended December 31, |
|
|
|
2018 |
|
|
2017 |
|
|
2018 |
|
|
2017 |
|
Net income
(loss) per common share, basic and diluted |
|
$ |
(0.26 |
) |
|
$ |
0.02 |
|
|
$ |
(0.84 |
) |
|
$ |
(0.77 |
) |
Net loss
attributable to common stockholders |
|
|
(6,896,010 |
) |
|
|
309,685 |
|
|
|
(18,750,798 |
) |
|
|
(10,398,134 |
) |
Preferred Stock
dividends and deemed dividends |
|
|
64,196 |
|
|
|
560,160 |
|
|
|
981,289 |
|
|
|
878,865 |
|
Series B Preferred
stock issued upon exchange of Series A and Series A-1 Preferred
stock |
|
|
— |
|
|
|
— |
|
|
|
(199,241 |
) |
|
|
— |
|
Net income (loss) as reported |
|
|
(6,831,814 |
) |
|
|
869,845 |
|
|
|
(17,968,750 |
) |
|
|
(9,519,269 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation expense1 |
|
|
3,546 |
|
|
|
1,803 |
|
|
|
9,790 |
|
|
|
7,110 |
|
Interest
expense, net1 |
|
|
684,125 |
|
|
|
362,542 |
|
|
|
2,392,447 |
|
|
|
724,684 |
|
EBITDA |
|
|
(6,144,143 |
) |
|
|
1,234,190 |
|
|
|
(15,566,513 |
) |
|
|
(8,787,475 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-cash
expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense2 |
|
|
329,050 |
|
|
|
248,846 |
|
|
|
1,228,699 |
|
|
|
1,048,127 |
|
Loss from
issuance of Preferred Stock3 |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
3,124,285 |
|
Change in
fair value of Series A Warrant Liabiity3 |
|
|
— |
|
|
|
(3,342,820 |
) |
|
|
96,480 |
|
|
|
(1,942,501 |
) |
Change in
fair value of Series A Preferred Stock conversion option embedded
derivative liabiity3 |
|
|
— |
|
|
|
— |
|
|
|
(64,913 |
) |
|
|
(643,318 |
) |
Debt
extinguishment3 |
|
|
1,408,296 |
|
|
|
— |
|
|
|
1,408,296 |
|
|
|
— |
|
Change in
FV convertible debt3 |
|
|
903,000 |
|
|
|
— |
|
|
|
903,000 |
|
|
|
— |
|
Offering
costs convertible debt3 |
|
|
614,940 |
|
|
|
— |
|
|
|
614,940 |
|
|
|
— |
|
Modification of warrant or UPO agreement3 |
|
|
— |
|
|
|
222,000 |
|
|
|
2,259,367 |
|
|
|
222,000 |
|
Non-GAAP
adjusted (loss) |
|
|
(2,888,857 |
) |
|
|
(1,637,784 |
) |
|
|
(9,120,644 |
) |
|
|
(6,978,882 |
) |
Basic and
Diluted shares outstanding |
|
|
26,575,588 |
|
|
|
13,983,689 |
|
|
|
22,276,347 |
|
|
|
13,495,951 |
|
Non-GAAP
adjusted (loss) income per share |
|
$ |
(0.11 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.41 |
) |
|
$ |
(0.52 |
) |
1 Included in general and administrative expenses
in the financial statements
2 For the three months ended December 31, 2018
includes $246,969 of stock based compensation expense reported as
general and administrative expenses and $82,081 reported as
research and development expense. For the three months ended
December 31, 2017 includes $217,946 of stock based compensation
expense reported as general and administrative expenses and $30,900
reported as research and development expense. For the year ended
December 31, 2018 includes $948,143 of stock based compensation
expense reported as general and administrative expenses and
$280,556 reported as research and development expense. For the year
ended December 31, 2017 includes $925,534 of stock based
compensation expense reported as general and administrative
expenses and $122,593 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 on Thursday, April 4, 2019 beginning 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, the Company’s Chief
Financial Officer, will discuss fourth quarter 2018 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: 13688196. 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 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. PAVmed’s diversified
pipeline of products address unmet clinical needs encompassing a
broad spectrum of clinical areas with attractive regulatory
pathways and market opportunities. Its five lead products provide
groundbreaking approaches to carpal tunnel syndrome (CarpX™),
precancerous conditions of the esophagus (EsoCheck™), vascular
access (PortIO™), pediatric ear infections (DisappEAR™) and medical
infusions (NextFlo™). The company is also developing innovative
products in other areas, such as catheters and tissue ablation,
while seeking to further expand its pipeline through engagements
with clinician innovators and leading academic medical centers. For
more information, please visit www.pavmed.com, follow us on
Twitter, connect with us on LinkedIn, and watch our videos on
YouTube.
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, factors affecting the
timing and effectiveness of the registration statement for our
proposed rights offering; 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 any 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
PAVmed (NASDAQ:PAVMZ)
Historical Stock Chart
From Mar 2024 to Apr 2024
PAVmed (NASDAQ:PAVMZ)
Historical Stock Chart
From Apr 2023 to Apr 2024