BioTelemetry Q1 2023 Earnings Call Transcript

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May 11, 2023

There are 5 speakers on the call.

Operator

Greetings, and welcome to the Heartbeam First Quarter 2023 Financial Results Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. Before we begin the formal presentation, I would like to remind everyone that statements made on the call and webcast may include predictions, estimates or other information that might be considered forward looking.

Operator

While these forward looking statements represent our current judgment on what the future holds, they are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward looking statements, which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not obligating ourselves to revise or publicly release the results of any revision to these forward looking statements in light of new information or future events. Throughout today's discussion, we will attempt to present some important factors relating to our business that may affect our predictions. You should also review our most recent Form 10 ks and Form 10 Q for a more complete discussion of these factors and other risks, particularly under the heading Risk Factors.

Operator

A press release detailing these results crossed the wires this afternoon at 4:0:1 p. M. Eastern Time and is available in the Investor Relations section of our company's website, heartsbeam.com. Your host today, Renoslav Vadich, Chief Executive Officer and Founder Rob Eno, President and Rick Braunstein, Chief Financial Officer, will present results of operations for the Q1 ended March 31, 2023. At this time, I will turn the call over to HeartBEAM Chief Executive Officer, Brandislav Vadich.

Speaker 1

Thank you, operator, and good afternoon, everyone. I'm pleased to welcome you to today's Q1 2023 financial results conference call. On today's call, we will be speaking with you about some very important updates concerning our recent fundraising efforts and adjustments to our strategic focus. Recently, we completed a $25,000,000 secondary offering and a $1,500,000 registered direct offering. This $26,500,000 will enable us To execute on upcoming product development, clinical and regulatory milestones and extends our cash run rate into late 2024.

Speaker 1

With the addition of this funding, we took the opportunity to adjust our strategic focus To enable timely delivery of our ambulatory vector electrocardiogram or VECG products, our key future value drivers. Going forward, our immediate focus is on obtaining an FDA 510 clearance for the hardening Amigo credit card size VCG device followed by a second FDA clearance on the system's ability to synthesize atrial lead electrocardiogram or ECG. Rob will focus on that The topic and discuss in more detail our strategic focus and product time lines in a moment. Recently, we announced the acquisition of substantially all assets from Limor, A digital health solution company, LIVMOR Halo plus APHU detection system is world's 1st FDA cleared Prescription variable for continuous cardiac rhythm monitoring. This acquisition extends our reach In remote monitoring and detection, we had full ownership of an FDA cleared product.

Speaker 1

On May 3 this year, we closed A secondary offering of $45,000,000 followed by a registered direct offering of $1,500,000 For a total of $26,500,000 worth of the Public Ventures, the offering was oversubscribed From the initial R15 $1,000,000 raise, even at the R25 $1,000,000 level, We did not meet the demand. I believe this speaks to the quality of our company and the Public Venture Communities' understanding of our future. So who is Public Ventures? They are 40 owned subsidiary of MDB Capital Holdings. MDB and Public Ventures have proven to be a tremendous strategic partner to RB.

Speaker 1

Public Ventures is a member driven investor community with a mission of backing visionary public companies that have the potential to become market leaders in their technology category. We are pleased that After extensive due diligence, MTB and Public Ventures strongly supported Cardi and themselves actually invested In our financing, we believe that we are the leader in the mobile VECG space, and we are encouraged The Public Ventures built their investment thesis around this position. I would like now to turn the call over to our President, Rob Eno, to further discuss our Strategic focus and provide product updates. Rob?

Speaker 2

Thank you, Branislav, and thanks to everyone joining us today. Expanding on Branaslov's mention of our strategic focus, we're now primarily focused on obtaining an initial 510 clearance from for the HeartBeam AmiGo vECG device, followed by a second clearance on the system's ability to synthesize a 12 lead ECG. Together, these 2 HeartbeatAmyGo FDA clearances, the hardware and the system's ability to synthesize a 12 lead ECG will enable physicians to remotely monitor patients and immediately interpret any concerning cardiac events. We see this as an important value creation path. In addition, we'll be undertaking clinical trials in 2023 and beyond to demonstrate Formants of the HeartBeam AIMI Go platform, which we believe is the most advanced ambulatory cardiac detection platform available.

Speaker 2

These initial studies will focus on the 12 lead synthesis and on the performance of the system as a whole. We believe these studies will be key to driving clinical and patient adoption. We also plan to add world leading key opinion leaders to our Medical Advisory Board. These KOLs will help guide our clinical and regulatory development will be announced in the near future. Our initial commercial launch activities will be for the 2nd version of HeartBEAM AIMIGO after we obtain the FDA clearance for the 12 lead equivalents.

Speaker 2

We are not currently emphasizing commercial activities for either the HeartBEAM AIMI software product or the HeartBEAM AIMI GO V1 system. This year, we will be undertaking an aggressive pre commercial effort. We'll be defining the initial market segments for the HeartBEAM AMY Go system and identifying potential business partners both for HeartbeatamAmy Go and other technologies in our portfolio. And finally, we'll continue aggressive development of our intellectual property through our partnership with Patentvest, a unified technology development and patent law firm focused on creating IP leadership for development stage technology companies. The partnership is focused on the goal of creating Clear leadership in the area of ambulatory VECG cardiac detection.

Speaker 2

Now turning to our product timelines and updates. We expect to file for FDA 510 clearance for version 1 of the HeartBEAM Amigo VECG device in the coming days. This submission is focused on the HeartBEAM Amigo hardware as a 3 lead collection device. Our current estimate is for clearance by the 4th Quarter of 2023. Following this first clearance, we're planning a second FDA submission for version 2, which includes generation of a synthesized 12 lead ECG from the same device.

Speaker 2

Once we have both clearances in hand, we'll focus on a limited market release in pursuit of initial commercialization. I'll now turn the call over to Rick Braunstein, Chief Financial Officer to discuss operational updates and financials.

Speaker 3

Thank you, Rob. Turning to our financials, I'll now give a brief review of our financial results. A full breakdown is available in our regulatory filings, 10 Q was just issued and in the press release that crossed the wire after the market closed today. General and administrative expenses for the Q1 of 2023 were $2,500,000 compared to $1,400,000 for the Q1 of This reflects the growth in our team and other costs in support of being a public company. Research and development expenses for the Q1 of 2023 were $1,700,000 compared to $700,000 for the Q1 of Our focus on R and D consisted largely of product development and regulatory costs for both our products and specifically for Heartbeaten Aimigo Hardware, where we have utilized our professional services agreement with Triple Ring Technologies.

Speaker 3

Triple Ring represented about 30% of our investment in R and D this quarter. Additionally, on the regulatory side, there are the costs of Supporting our current upcoming FDA submissions of our products, we also invest in research costs and support a future product pipeline coming from our patented VECG platform technology. And this is the basis for our patent portfolio, which now includes 10 issued patents. Net loss for the Q1 of 2023 was $4,100,000 compared to $2,100,000 for the Q1 of 2022. We ended the Q1 of 2023 with just under $1,000,000 in cash and cash equivalents compared to $3,600,000 as of December 31, 2022, having invested the proceeds from the November IPO And in 2021 to accelerate our product development path.

Speaker 3

This cash balance does not include the net proceeds of approximately 20.4 In the recent financings is the fact that the 17,700,000 shares offered did not include any warrants And our balance sheet as a result has a very simple and straightforward capital structure with approximately 20,000,000 shares now outstanding. Regarding our capital raise, we intend to use these proceeds to achieve several important upcoming milestones. As a result of our new strategic goals in our commercialization plan, we've reduced our budgeted cash expenses to approximately $15,000,000 for the next 12 months to focus on clinical and product development and FDA appearances. We will not undertake commercial efforts in this period. The balance of proceeds is expected to fund operations into late 2024, We expect no material commercial revenue for 2023, but believe we have raised sufficient funds To get us to this important inflection point, the FDA clearance of the second version of Heartbeat Imigo.

Speaker 3

To reemphasize this important point, with the capital just raised, we believe we have sufficient capital through late 2024. I'll now turn the call back over to Brandon Sloane for his closing thoughts.

Speaker 1

Thank you, Rick. We are incredibly optimistic for the future of Heartbeat. After this capital raise, we are highly focused on executing on our product development, Clinical and regulatory milestones and our cash runway is now extended into late 2024. We also are adjusting our strategic focus to enable timely delivery of our hard beam breakthrough ambulatory VECG products, The company's key future value drivers. The key element of this focus is the hard beam Amy Go credit card size VCG Device, beyond that, looking at the product pipeline, we think that the application of our artificial intelligence method We will be of great value to us.

Speaker 1

We will have a unique data set from patients who have actually recorded their ECG On a periodic basis, monthly, weekly or even more frequently, that longitudinal data For our patient population, there will be of tremendous lag. Applying artificial intelligence to this data set This is extremely data rich, richer than the standard family, the ECG, will yield, we strongly believe, Additional insight into cardiovascular disease and further help cardiovascular patients. On the right hand side of this slide, we show the 12 impacts. As we reported last quarter, we have received a patent on that technology, which is disruptive and has The potential to make a significant impact on the patch industry projected to be at $4,800,000,000 by 2030. We are currently evaluating how and when to best take advantage of this Looking ahead, we remain confident in our product milestones.

Speaker 1

Our next milestones On the commercialization path includes 510 submission for the hard beam Aimigo VCG Version 1 product, followed by the FDA clearance. I'd like to share one final thought. We are all very excited about Our partnership with Public Ventures and our refined strategic focus. We believe we are closer to our goal We're making our VCG technology a new standard of care, which in turn will help millions of cardiovascular patients around the world. I look forward to providing our shareholders with further updates in the near term.

Speaker 1

I thank you all for your attention and would like at this point to answer any questions that you have. Operator?

Operator

We will now begin the question and answer session. Okay. Seeing that there are no audio questions, I would like to mention that we will now take questions from webcast viewers.

Speaker 4

First question for our webcast viewers ask, You described an adjustment to your strategic focus. What exactly has changed from your previous strategy to now With the new strategy focus and what are you not doing?

Speaker 1

Rob, would you like to comment?

Speaker 2

Sure. I'll take this one. So as we mentioned, the primary focus now is the HeartBEAM device and in particular obtaining the 2 FDA clearances that we need, the first for the device and the second for the 12 week synthesis. The biggest change in this strategy is deemphasizing the commercialization of the Heartbeat MAME software product as well as Urgent 1 of Heartbeat Meimei Gal, which is the 3 lead device before we add the 12 lead synthesis. In other words, the first product that we'll be commercializing is Heartbeat Amigo V2 system.

Speaker 2

However, this year, we will be preparing efforts by defining the initial market segments for HeartbeatAmy Go and identifying potential business partners both for Amy Go and other technologies in the portfolio.

Speaker 4

Our next question asked, what is PatentVest? How will you work with them? And what does this say about your IP position?

Speaker 1

Let me answer that question. As we described in the call, PatentVest, Actually, a subsidiary of MDB is a unified technology development as well as a patent law firm Focused on creating IP leadership for companies like ours. The partnership with PatentVest is focused on the goal of creating clear leadership in the area of ambulatory VECG Object Detection. And we believe that we have a very strong and growing actually IP position And that we are the leaders in this emerging field of ambulatory VECG. In our interactions with due diligence with MDP and Public Ventures, we know Today, we fully subscribe to that you will share our view as well.

Speaker 1

Patent Vest is one of the Attractive elements of Public Ventures, and we believe will add Significant value to our IP portfolio. And At this point, we are confident that their strategic contributions to our IP The strategy will actually strengthen our IP position significantly.

Speaker 4

Our next question asks, is the decision to deemphasize the AIMI product Related to any difficulties with the FDA.

Speaker 1

Laurent, please go ahead.

Speaker 2

Great. Thank you. And it looks like we had a couple other similar questions on this. So hopefully this addresses it. So no difficulties in the FDA Process, in fact, it's the regulatory process for HeartBeam AMI is well underway and we've had very positive discussions with FDA.

Speaker 2

We are still pursuing the Heartbeam AIMI clearance for a couple of reasons. First, the AIMI algorithm is a key part of our future AIMIGO product roadmap, it uses the VECG technology to provide additional information on top of the 12 lead for patients with potential heart attacks and that's going to be an important differentiator for us. In addition, while our current focus is Clearly on the development and regulatory clearances for HeartbeatAmy Go, we do continue to think that the Amy product can make a big impact in the hospital in the emergency room environment. So we're going to be exploring various options around this commercialization, both in terms of timing and approach.

Speaker 4

Our next question asks, what are you doing with the other products you discussed in the presentation such as the Watch and AI?

Speaker 1

Let me just say that the priority is very much With the AIM ecosystem and the upcoming FDA clearances. At the same time, we continue to have advanced development efforts on these other products. In particular, we are developing our artificial intelligence AI strategy We have continued to believe this is a very compelling area and source of differentiation in the future. This is all driven by the Valtor Bridge data our system The same goes for the watch. We believe that in the future, this will make for a very compelling Product Offering.

Speaker 4

Our next question asked, Can you outline the next upcoming milestones that we should look forward to tracking your new direction?

Speaker 1

Yes. In full alignment with our refined focus here, we remain Focused on the major event of FDA submission and actual clearance for our Aimigo product. We will submit the initial FDA 510 application for the first Version of this product in the coming days. The other upcoming milestones include 510 clearance of the first version of the device and submission of the 2nd version of the device and this will clear the SYMTHESYTE 12 lead ECG. We will continue, of course, to update you on our plans, but I would like to Conclude by saying that we plan to announce a new key members of the management team As well as the Medical Advisory Board.

Speaker 4

Our next question Would you consider

Speaker 1

it?

Speaker 2

I can take that and feel free to add on. As we've talked about business development is the really important part of our focus. We realize that we have we're a small company With a lot of great technologies and IP in our portfolio. So, we will be certainly open to talking with All potential partners about involvement throughout the portfolio. It's too early to say specifically about licensing for any particular technology, But wanted to emphasize that business development discussions with a range of partners is a really key part of our strategy going forward.

Speaker 4

And our last webcast question asks, how dependent

Speaker 2

in this product of the first and second product. So I apologize if I don't answer this question correctly, as intended when it was asked. The first product that we've discussed in the past is the AAMI software product. We are planning to go through as we say with the FDA clearance for that, which is underway, and we do not have current plans to commercialize that. As I mentioned, we will be focusing on Placing that algorithm into our Aimigo platform going forward as well as looking at all options Talked about is the Aimigo V1, which we are close to submitting that FDA application as we've said.

Speaker 2

And that one again will not be commercialized on its own. That is the hardware, the 3 lead device and we're going to use that as the basis of Our second clearance where we do the 12 lead synthesis on top of that, that's Aimigo V2, which we will be commercializing. So Aimigo V2 is the 1st product we're commercializing. Aimigo V1 are still key parts of the strategy as building blocks.

Operator

Okay. And now I'd like to just ask again if anyone has an audio question. Seeing no audio questions, I would now like to turn the call back over to Doctor. Vadich for his closing remarks.

Speaker 1

Thank you, operator. I would like to thank each of you for joining our earnings conference call today And look forward to continuing to update you on our ongoing progress and growth. If we were unable to answer any of your questions, please reach out to our IR firm, MZ Group, We will be more than happy to assist. Thank you and have a good day.

Operator

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

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BioTelemetry Q1 2023
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