CES Energy Solutions Q1 2023 Earnings Call Transcript

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May 10, 2023

There are 7 speakers on the call.

Operator

Good afternoon and welcome to the BioCardia 2023 First Quarter Conference Call. By pressing the star key followed by 0. After today's presentation, there will be an opportunity to ask questions. 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 1 hour after the end of the call through August 10, 2023.

Operator

I would now like to turn the call over to Miranda Peto of BioCardia Investor Relations. Please go ahead, Miranda.

Speaker 1

Good afternoon, and thank you for participating in today's conference call. Joining me from Biocardia's leadership team are Peter Ullman, Ph. D, President and Chief Executive Officer and David Mekong, 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. Reference to management's intentions, belief, projections, outlook, analyses and current expectations.

Speaker 1

Such factors include, among others, Forward looking statements involve risks and other factors that may cause actual results to differ materially from these statements. For more information about these risks, please refer to the risk factors and cautionary statements described in Biocardia's reports on Form 10 ks filed on March 29, 2023. The content of this call contains time sensitive information is accurate only as of today, May 10, 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. Call.

Speaker 1

It is now my pleasure to turn the call over to Doctor. Peter Allman, PhD, BioKardia's President and CEO. Peter, please go ahead.

Speaker 2

Thank you, Miranda, and good afternoon to everybody on the call. It has only been 6 weeks since our last call at the end of March. And BioKardia is steady as she goes. We have some near term catalysts that we can detail progress towards as well as the broader opportunities for success ahead. Biocardia's current efforts are focused on advancing its autologous and its allogeneic cell therapy platforms to treat significant unmet cardiovascular and pulmonary diseases, specifically ischemic heart failure, chronic myocardial ischemia and acute respiratory distress syndrome.

Speaker 2

All of our cell based therapies involve local delivery of the therapeutic to the heart or long list where we intend them to act locally. Heart failure is an enormous unmet need that affects more than 26,000,000 people worldwide. The latest blockbuster drugs in ischemic heart failure, a 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 7% and an all cause mortality of 10% per year, Our autologous mononuclear cell therapy platform, which we call Cardiamp cell therapy is being advanced in 2 cardiac clinical indications. In preclinical studies, cardiac mononuclear cell therapy has been shown to release proteins locally within the tissues to facilitate cardiac recovery after heart damage with improvements in heart perfusion and contractile function.

Speaker 2

All known previous clinical studies similar to the approach we are taking in our 2 lead cardiac 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 of reduced ejection fraction. Advancing this and our other 3 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-one and chronic myocardial ischemia or BCD AO2 are furthest along clinically.

Speaker 2

The Cardiamp cell therapy heart failure trial or BCD-one is a Phase 3, 260 patient randomized controlled clinical study intended to provide the primary data to support safety and efficacy in pursuit of marketing clearance. Clinical investigators at 20 active partner sites across the United States and Canada have enrolled 20 patients to date, with 10 additional control patients having crossed over to receive therapy. We feel there is clearly increased momentum here, Potentially driven by the clinical data presented at the American College of Cardiology in March, showing 100% survival and patient benefits across many endpoints at 2 years, including a 35% increase in the heart left ventricular ejection fraction. As many know, we have been working on implementing an adaptive statistical analysis plan to the trial with distinguished consultants, including former FDA leaders and a respected statistical consulting group. In our last March 29 call, We were headed into a meeting scheduled to discuss the FDA's comments on March 31.

Speaker 2

That meeting went well. The discussion of the adaptive statistical analysis plan as provided was well received by the agency's statisticians. The FDA's primary concern was whether we would have enough safety data to support approval in an indication as large as ischemic heart failure with reduced ejection fraction, if the trial was stopped early for efficacy. The agency's primary concern with safety was with respect to the safety of the delivery of the cells. We shared with the FDA that we feel we do have sufficient data already with 353 interventions with our delivery system in the clinical indication of ischemic heart failure reduced ejection fraction to date and 129 patients treated so far with the cells being advanced in the CardiAmp trial.

Speaker 2

The FDA was unaware of this more expensive data set and we agreed to detail it for them. We also work with them on creative ideas to further enhance the safety experience ahead. After summarizing minutes from our perspective and acceptance of the FDA minutes provided, We submitted a revised supplement for the Adaptive Statistical Analysis Plan incorporating all of the comments from the agency on April 26. We now anticipate a response from the agency on May 26. The next pre specified Formal Data Safety Monitoring Board review is anticipated at the end of June 2023.

Speaker 2

We still believe it is likely we will be able to have the ADAPTIS 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 this next and subsequent Data Safety Monitoring Board reviews. As the Cardiamp cell therapy heart failure trial was over 90% powered for success with a range of 86 to 126 patients, There is potential that the trial could beat its primary efficacy endpoint on the patients that have been enrolled to date. Although the next data review event has potential to be a great success if the trial is stopped early for efficacy. The review will also be a success should the trial continue as planned.

Speaker 2

Our second therapeutic program is with the same autologous cell therapy for the treatment of chronic myocardial ischemia with refractory angina or BCDAO2. The CardiAmp chronic myocardial ischemia trial is a Phase 3 multicenter, randomized, double blinded, controlled study of up to 343 patients at up to 40 clinical sites. A sufficient number of patients to complete the open label rolling cohort have already been consented. It is anticipated this trial report out the open label rolling cohort results in 2023. As we have shared previously, in July, we had our 2nd consultation with Japan's Pharmaceutical and Medical Device Agency regarding registration of Cardiamp cell therapy for ischemic heart failure.

Speaker 2

Biocardia still expects to complete a formal submission towards Japanese approval in the Q2 of 2023. In Japan, another autologous cell therapy has received conditional approval for heart failure based on 7 patients treated and these treatments require open heart surgery to access the heart. Although our clinical data is from overseas, we have treated far more patients in rigorous controlled trials and have a minimally invasive procedure with our Helix biotherapeutic delivery system. Our cell processing platform is approved in Japan already for therapeutic applications for non cardiac indications by our partner Zimmer Biomet. And our minimally invasive Helix biotherapeutic delivery system is approved in the European Union.

Speaker 2

Our feeling is that there are many reasons that Japan PMDA should be inclined to approve Cardiamp cell therapy for the benefit of patients and to continue to advance Japan's leadership in regenerative medicine therapies. Now I'd like to move to our 2 allogeneic cell therapy product candidates based on our allogeneic neurokinin 1 receptor positive mesenchymal stem cell platform. These are off the shelf cells from young healthy donors intended to be expanded produced many doses for many patients. The neurokinin 1 receptor positive mesenchymal stem cells are particularly interesting as neurokinin 1 is 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.

Speaker 2

Our allogeneic mesenchymal stem cell program in ischemic ideology heart failure of reduced ejection fraction is designated as BCDO3. 3. This is a Phase onetwo multi center randomized double blinded controlled study of up to 69 patients designed to assess the safety and efficacy of therapeutic candidate. The investigational new drug application was approved by the FDA in December 2022. And the trial is designed for patients ineligible for the company's Phase 3 cardiac heart failure trial, studying autologous cell therapy.

Speaker 2

Clinical grade allogeneic cells have been manufactured in our Sunnyvale facility and are ready for use. These cells will be delivered under the protocol with minimally invasive biotherapeutic delivery system. We still expect to begin enrolling patients in the Q2 of 2023, which has 7 weeks remaining. Our allogeneic mesenchymal stem cell program in patients recovering from acute respiratory stress syndrome, which we have designated BCA04 was approved by the FDA in April 2022 to treat patients. The trial is a Phase 1 multicenter open label study of up to 9 patients.

Speaker 2

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 be initially evaluated and then the optimal dose will be taken to Phase 2 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 has taken off respiratory support. With the goals of accelerating recovery, enhancing survival and reducing both relapse and rehospitalization.

Speaker 2

Clinical grade cells are also ready for use in this study. The ARDS trial is expected to commence following the initiation of BCD-three studying these allogeneic mesenchymal stem cells for heart failure. In summary, we are advancing 4 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 4 active business development initiatives. 1st is partnering our Cardium cell therapy platform internationally.

Speaker 2

2nd is licensing out our clinical stage neurokinin 1 receptor positive mesenchymal stem cell platform for other clinical indications, which has shown promise with other mesenchymal stem cell preparations. 3rd is licensing our catheter based biotherapeutic delivery systems for cell, gene and protein therapy candidates to the heart such as in the Blue Lock relationship we began last year. And 4th is monetizing our Avance transseptal introducer sheath product. We are looking forward to announcing an additional patent issuance related to our Helix biotherapeutic delivery platform and feel very good about our broader intellectual I will now pass the call to David McClung, our CFO, who will review our Q1 2023 financial results. David?

Speaker 3

Thank you, Peter, and good afternoon, everyone. Revenues were approximately $64,000 for the 3 months ended March 31, 2023, comparable to the $60,000 for the 3 months ended March 31, 2022. Research and development expenses increased to approximately 2,400,000 dollars in the Q1 of 2023 compared to approximately $2,200,000 in the Q1 of 2022, primarily due to expected increases in support of the Cardiac Heart Failure trial. SG and A expenses remained $1,200,000 in the Q1 of 2023, comparable to the same amount in the Q1 of 2022. Our net loss was approximately $3,600,000 in Q1 2023 as compared to $3,300,000 in the Q1 of 2022.

Speaker 3

And net cash used in operations during the quarter was approximately $2,600,000 as compared to approximately $2,900,000 in the Q1 of 20 22. Biokardia ended the quarter with approximately $4,900,000 in cash and cash equivalents, providing runway into Q3 without additional capital or funding from business development activities that Peter touched on in his remarks. This concludes management's prepared comments. We're ready to take questions.

Operator

Our first question comes from Joe Pantginis with H. C. Wainwright. Please go ahead.

Speaker 4

Hey, guys. Good afternoon. Thanks for taking the question. 2 primary questions, Peter. So first, with regard to BCDA-one, nice to hear you're making progress with your FDA discussions.

Speaker 4

So for the current patients enrolled, you said you had 10 control patients that had crossed over. So can you remind us The criteria for crossover and then following crossover, what could be the potential impact of new or concomitant meds?

Speaker 2

Okay. So that's so thank you, Joe. I was waiting for a second question there and I think I've got the breakdown. So first on the so appreciate the question and I really appreciate you being on the call. So on BCD-one, The 10 crossover patients crossed over after they met their 2 year follow-up endpoint in the trial and essentially Exited the trial.

Speaker 2

The requirement for those patients is substantially What it is to be included in the trial, I think the workup is a little bit less because some of them may have deteriorated. There is actually a patient that you can see who has crossed over on our patient facing website, which is cardiamp.com. And so, yes, we've had 10 patients cross over. The FDA approved this Last year, I think, or maybe it was the year before, because of the safety profile they're seeing in the trial, in the sense that these patients enrolled in the trial Should be given the option if they and their physicians think it makes sense for them to proceed.

Speaker 4

Got it.

Speaker 2

Got it. The patients

Speaker 4

sorry, sorry.

Speaker 2

Just to let that no, sorry, the last piece is these patients are then followed for another year. And so for the trial, they provide additional safety data for us, which as you Heard on my FDA comments is valuable for the FDA. And I actually may use that to note that If you consider the FDA comments I shared, those comments were all around Stopping the trial early, they want to have sufficient safety, but that's fundamentally to provide support for approving the therapy. So that's Actually a really nice conversation to be having.

Speaker 4

No, that's good. Thanks. And then the second question really is around those FDA discussions. Obviously, I know you can't Too specific right now since it's ongoing and it's iterative, but just curious if you could take some broad strokes about, I guess, your prepared comment surrounding ideas to enhance the safety package since you can increase patient numbers?

Speaker 2

Well, I guess, yes, I can share that. So, well, actually, it's probably best to wait until we have the final details from the agency. It is only a few weeks out and we can share it then. But the key is patient numbers For approving the therapy. And I'll share with folks when we designed this trial, that was one of the primary considerations because of the Power we had going into it is that we wanted to have enough patients to enroll in the trial to enable the agency to have comfort to approve the therapy.

Speaker 2

Again, this is our goal here at Biokardia is not just to deliver a positive trial. Our goal is to deliver a product for these patients and the physicians who care for them. And at that point in time, The dialogue was around what number would be acceptable for the agency and they wouldn't provide us with a specific number. But as we've gone downstream, it's our safety profile in this program and in our second program that also help us. So I guess let me detail the results of the adaptive statistical analysis plan when we have the FDA's blessing for it.

Speaker 2

And I'm hopeful that that will be in just a few short weeks here.

Speaker 4

Fair enough. Appreciate the feedback.

Speaker 2

Thank you, Joe. Appreciate the questions.

Operator

The next question comes from Kumar Raja with Roth Capital. Please go ahead.

Speaker 5

Thanks for taking my questions and congratulations, Peter, on all the progress. So With respect to the feedback that is expected from the FDA at the end of the June, the expectation is that You have taken care of whatever the questions they had and the feedback they have given before. And we are pretty much close to the final stretch in terms of getting agreement with FDA With regard to the adaptive statistical plan?

Speaker 2

So, thank you, Kumar, They ask more questions than they provide real clear guidance on where to go next. But we have a pretty sophisticated team that's This conversation, we are working with literally a world class regulatory group, our own internal regulatory team, which is Nothing short of phenomenal. And perhaps the most respective statistical analysis plan developers With respect to an adaptive design that from the agency's perspective. So, my sense is we went into this Very seriously. And I think the agency recognized The agency, they're trying to do their best by all the folks in the United States.

Speaker 2

And If they do come back to us with follow on questions, we will address them. But our hope is that they will come back to us And bless the statistical analysis plan and then we will roll it into the next Data Safety Monitoring Board review, which is currently being scheduled for The end of June.

Speaker 5

Okay. So the expectation is that by that meeting you will have more clarity. And also with regard to the PMDA submission, maybe you can just provide us a little bit with regard to once you submit it, what is the expectation and the timelines there? And also in that context, you mentioned about 2 out licensing or product distribution opportunities. Maybe you can talk a little bit about that.

Speaker 5

Thanks so much.

Speaker 2

Appreciate the questions, Kumar. So on PMDA submission, so we've had 2 separate consultations with this is the pharmaceutical medical device agency in plan. And this is around securing an approval for the Cardiamp cell therapy platform for the treatment of ischemic ideology heart failure of reduced ejection fraction, which is our lead program. And the conversations we've had with the agency so far have been all focused on really the same question is we are keen on securing approval based on the data that we already have in hand, Not waiting to complete the pivotal trial in the United States, but rather based on the quite significant data sets and experience and the number of approvals we already have. And so all of the questions from PMDA and our two consultations have And I'm focused around clarity of certain issues, certain procedural elements.

Speaker 2

We've been impressed by them and they've been Rather sophisticated. But the submission process we're in the midst of does have some challenges with to translation delays, because the rather large document will be provided to them containing substantially the information which they've already seen in different formats in Japanese for them to consider. Our expectation is After we submit this to them that we will have them come back to us with a series of questions, which we'll have to respond to in short order. And our hope is that At the end of the day, the key issue is, will they approve this without pre approval data in Japan? And the four words we are aiming for are your proposal is acceptable.

Speaker 2

And so that's really where we're headed for on this. And we think we've got all of the support we need. But again, it's a we're working with Regulators that complicates it. So and that's about all I can share at this point in time. Again, as is investigators in Japan that we're hoping to be working with on a post marketing study after we have approval, in addition to just incredibly distinguished folks on the regulatory and processes in Japan.

Speaker 2

So It's been a delight. On out licensing, I detailed the various categories of out licensing We have a lot of activity currently. And our sense is we have capital to get through A couple of deals as well as all of these milestones we're detailing for BCDO 1, 2 and 3. I'd say stay tuned on the out licensing. Unfortunately, they're similar to the FDA that we can't be Guaranteed what their timelines are, what their response is going to be.

Speaker 2

But by being buttoned up, it helps. And I think we are a buttoned up organization. So again, I'll have to say stay tuned for those discussions. They do involve out licensing products and distribution deals around product candidates that we have that don't Really reduce the value of anything we're currently doing in the United States. They're all additional value propositions.

Speaker 5

Very helpful. Thanks so much.

Speaker 2

Appreciate the questions, Kumar. Have a great afternoon.

Operator

Our next question comes from Laura Suriel with Alliance Global Partners. Please go ahead.

Speaker 6

Hello. This is Laura calling in for Jim Molloy from AGP. Thank you for taking our questions. So for the BCDA-two trial, It was mentioned in the previous call that trial design modifications were being planned in order to speed up enrollment. So what's the overall status on any of these changes

Speaker 2

20? Good questions, Laura. Appreciate you being on the call. So The answers I have easy answers, but I'll give you more color. So BCD-two zero two, we're not going to engage the FDA on changing the trial design until we complete The initial rolling cohort, which is imminent.

Speaker 2

And that trial design is going to involve substantial structural changes In the inclusion, exclusion as well as the primary endpoint. This trial, I guess, I would say for folks on the call is substantially equivalent to the trial that Baxter Healthcare advanced in this indication focused solely on CD34 cells. And everybody criticized Baxter Healthcare for how long the trial took for them to enroll 90 Patients and then they ultimately just stopped the trial and walked away from it, even though they had great efficacy signals that ultimately were published. We now understand the difficulties Baxter was having. And so unlike Baxter Healthcare walking away from it, we're going to drill into it and solve it.

Speaker 2

And we're eminently confident that we can do that because we're working with some of the world experts in this space. So that's ongoing working with our KOLs and physicians And pursuing the realm of what's possible. And my sense today is we're going to go after an endpoint that's primarily Image and self assessment driven, I. E. Probably using PET and using Seattle angina questionnaire versus using the cardiopulmonary exercise time.

Speaker 2

And the good thing for investors is Eliminating the cardiopulmonary exercise time criteria, which we may still measure at baseline and follow-up, but making it less important will greatly reduce the cost of this trial. And that's another nice advantage. So the trial will go faster. We'll have data that's more objective for physicians. And we expect that on every front it will be advantageous to us.

Speaker 2

So that's on the BCDO2. On BCDO4, the dynamic there is really easy. That's a quick supplement to the agency. And I do not expect any agency pushback whatsoever. Essentially, when we launched that program, we were going after patients who had acute respiratory distress syndrome secondary to having COVID.

Speaker 2

Since then, As we all know, there's not a whole lot of patients with COVID who are winding up on ventilator with acute respiratory And so by eliminating the requirement to have had COVID before, we'll be going after a classic ARDS population. We're also awaiting this very large NIH study coming out shortly in this space, being led by the University of California in San Francisco. And so, as we make that supplement, we're also awaiting that data. So just because of bandwidth issues, we haven't pulled the trigger on that modification, But that's a very easy modification to the trial, for the agency. And I'd be literally shocked if there was any concerns on the agency's part.

Speaker 2

We just haven't gotten around to submitting it in part because we see that program as after The BCD03 trial getting started.

Speaker 6

Got it. Thank you for taking the questions.

Speaker 2

No, I appreciate it, Laura.

Operator

As we have no further questions, I would now like to turn the conference back over to Peter Altman for any closing remarks.

Speaker 2

I want to thank All of you for participating in today's call and for your interest in Biocardia. We do look forward to sharing our continued progress. Stay healthy, be kind and have a wonderful

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