BioCardia Q4 2023 Earnings Call Transcript

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March 27, 2024

There are 7 speakers on the call.

Operator

Ladies and gentlemen, thank you for standing by. Good afternoon, and welcome to the BioKardia 2023 Year End Financial Results and Business Update Conference Call. At this time, all participants are in a listen only mode. After today's presentation, there will be an opportunity to ask questions. Participants on 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.

Operator

A webcast replay of the call will be available approximately 1 hour after the end of the call. I would now like to turn the call over to Miranda Pitot of Vital Cardia Investor Relations. Please go ahead, Miranda.

Speaker 1

Thank you, Rocco. Good afternoon, and thank you for participating in today's conference call. Joining me from BioKardia'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 BioKardia'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.

Speaker 1

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 BioCartney's report on Form 10 ks filed with the SEC this morning. The content of this call contains time sensitive information that is accurate only as of today, March 27, 2024. Except as required by law, the company events occur after this call. It is now my pleasure to turn the call over to Peter Hoffman, B.

Speaker 1

H. D, BioKardia's President and CEO. Peter, please go ahead.

Speaker 2

Thank you, Miranda, and good afternoon to everyone on the call. BioKardia's current efforts are focused on advancing its autologous and its allogeneic cell therapy platforms to treat significant unmet cardiovascular diseases, specifically ischemic heart failure and chronic myocardial ischemia. All of our cell based therapies involve local delivery of the therapeutic to the heart where we intend them to act locally. Our lead Cardiamp autologous cell therapy is targeted to treat ischemic heart failure of reduced ejection fraction. Today, heart failure of reduced ejection fraction remains a significant unmet clinical need as none of the recently approved therapies reduce mortality, which remains at approximately 10% per year.

Speaker 2

To put this into context, it has been reported that heart failure is as malignant as some common cancers. Men with heart failure have a worse 5 year survival than do men with either prostate or bladder cancer. Women with heart failure have been shown to have a worse 5 year survival than women with breast cancer. Heart failure also impacts more than 5,000,000 patients in the United States and is growing. In our lead Cardiamp cell therapy, the patient has cells taken from their bone marrow, processed at point of care in our disposable cell processing kit and delivered through our minimally invasive steerable catheter system to 10 targeted regions around damage in the heart.

Speaker 2

We now have 3 clinical trials in the treatment for heart failure with the Cardiamp cell therapy that lends support for both its safety and therapeutic efficacy for patients having ischemic heart failure of reduced ejection fraction. Our recent experience in missing the primary pre specified endpoint in our Cardiac Heart Failure clinical trial, while not our chosen path, is not a unique experience for those developing therapies for this disease. Our world class executive steering committee and the distinguished cardiologists on our data safety monitoring board see that the results just presented from the cardiac heart failure trial are compelling, as evidenced by our investigators and our data safety monitoring board continuing to support and be involved in the program. The interim data presentation from the Cardiamp heart failure trial presented scientifically earlier this month shows 37% relative risk reduction in heart death equivalents, 9.2% relative risk reduction in non fatal major adverse cardiac and cerebrovascular events, reduced cardiac arrhythmias and enhanced heart function in treated patients relative to the control patients. In addition, the available interim data show that for an important subset of patients who presented at the screening baseline visit with higher levels of NT proBNP, a well established biomarker of active heart failure and stress to the heart, the reduction in heart death equivalents were even greater.

Speaker 2

Of note, all current leading heart failure trials where we have looked require elevated NT proBNP for patients to be eligible to participate in these trials. In these patients, an analysis of all available data up to 2 years in the Cardiac Heart Failure trial with a mean of 20 months follow-up shows improvements over controls, including an 86% relative risk reduction in mortality and a 24% relative risk reduction of non fatal major adverse cardiac and cerebrovascular events. Further, all clinical outcomes included in this subset analysis favored cell therapy, including improved quality of life as measured using the Minnesota Living with Heart Failure questionnaire, reduction of NT proBNP levels, greater 6 minute walk test distance and improved echocardiography parameters of left ventricular ejection fraction, left ventricular and systolic volume and left ventricular and diastolic volume. Both the reduced heart death equivalents and improved quality of life outcomes demonstrate statistical significance favoring therapy in this subset analysis. This is the subgroup we have designed the Cardiamp Heart Failure 2 confirmatory trial around, which was approved by FDA in December, activated in February and approved for reimbursement by Medicare in March.

Speaker 2

We continue to monitor patients enrolled in the cardiac heart failure clinical study in which both patients and evaluating physicians are blinded to the treatment group and we expect to complete follow-up in this study in October 2024. As we already have more than 90% of the patient follow-up data that we will ultimately have in the final analysis, patients already treated is expected to be provided to Japan's Pharmaceutical and Medical Device Agency toward approval for the indication of ischemic heart failure. Our formal consultation in November 2023 has suggested that if the data remains as good as it currently appears to be at the final analysis, they are inclined to support approval based on this data without requiring a trial in Japan. Subsequent interactions and consultations with Japan's Pharmaceutical and Medical Device Agency are expected. The confirmatory, hardymp heart failure 2 study approved by FDA in December 2023 is a Phase 3 multicenterrandomizeddouble blind controlled study of up to 250 patients with NT proBNP levels greater than 500 picograms per milliliter at up to 40 centers in the United States.

Speaker 2

The primary endpoint is an outcomes composite score based on a 3 tiered Finkelstein Schoenfeld hierarchical analysis. The tiers starting with the most serious events would be Tier 1 all cause death, including cardiac death equivalents such as heart transplant or left ventricular assist device placement ordered by time to event. Tier 2, non fatal major adverse coronary and cerebrovascular events and Tier 3, change from baseline and quality of life at a minimum of 12 months and a maximum of 24 months. The trial as designed 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. We are actively working with our heart failure network and leaders cardiology to enroll and complete this study as soon as possible.

Speaker 2

We expect additional news throughout the year on this study. Our cardiac cell therapy trial for chronic myocardial ischemia or BCD02 is a Phase 3 multicenterrandomized double blinded controlled study intended to include up to 3 43 patients at up to 40 clinical sites. The company expects to complete enrollment in the rolling cohort soon and begin the randomized phase of the trial. A number of leading investigators, including both principal investigators in this trial, believe this to be the most compelling indication for the Cardium autologous cell therapy. Planning for the randomization phase continues based on promising experience in the patients treated to date.

Speaker 2

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 or allogeneic cell therapy for ischemic heart failure or BCD-three is a Phase III clinical program encompassing 69 patients. We have reported 1st patient enrolled in the Q4 of 2024. At the Technology and Heart Failure Therapeutics meeting earlier this month, it was also reported that there have been no adverse events in follow-up. The CARDIALLO heart failure study is intended to build on 3 previous trials of mesenchymal stem cells in ischemic heart failure using the company's proprietary HELIX delivery system, encompassing 93 patients treated with no treatment emergent serious adverse events and compelling early signals for benefit.

Speaker 2

This is a precision medicine study as we are focusing this therapy for the first times on patients who have elevated NT proBNP and elevated high sensitivity C reactive protein, a marker of inflammation that has been reported for patients with heart failure most responsive to immunomodulatory mesenchymal stem cells. Our strategy to advance our Cardialo HF program is to seek partnerships and grant funding as it will not have the benefit of Medicare reimbursement in the United States. We intend the Phase 2 portion of the 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. In 2023, we evolved our Helix Biotherapeutic Delivery partnering business to focus on long term partnerships where BioCardia shareholders participate meaningfully in the value created. Our Helix Transcendo Cardio biotherapeutic delivery system is a therapeutic enabling platform for minimally invasive targeted delivery of biologic agents to the heart.

Speaker 2

This platform enables all of our therapeutic development efforts and it empowers a seamless transition from bench to commercialization for partners. Our biotherapeutic delivery partnerships are expected to enhance future treatment options for millions of patients suffering from heart disease, offset the cost of biotherapeutic delivery for our own therapeutic programs and provide our shareholders with meaningful revenue sharing should our partnering efforts contribute to successful therapeutic development. In September 2023, our biotherapeutic delivery partner Cell ProThera announced completion of enrollment in their Phase III cell therapy study and post myocardial infarction and results are expected soon. In March of 2024, we announced a biotherapeutic delivery partnership with Stem Cardia for a long term investigational pluripotent stem cell product candidate for the treatment of heart failure, initially through a Phase III clinical study. 2 additional premier biotherapeutic delivery partnerships are expected in 2024.

Speaker 2

Our Morph Access Innovations business is based on the steerable catheter systems through which we perform all of our HELIX procedures for biotherapeutic intervention. We are working to obtain FDA approval in Q3 2024 for a product family of MorphDNA steerable sheath introducers in a variety of sizes and lengths with clinical indications for use in the heart and peripheral vascular. IoCard is actively exploring pathways for commercializing these products in the second half of the year. In summary, we have increased confidence in the potential of our autologous cardiac cell therapy program in both ischemic heart failure and in chronic myocardial ischemia based on the data we have before us. We are focused strategically on advancing these 2 clinical programs in a cash neutral fashion with the benefit of the Medicare reimbursement we already have in place.

Speaker 2

Similarly, we are working on securing grants and partnerships around our allogeneic programs to support their continued clinical development and implementing a recurring revenue biotherapeutic delivery partnering model that includes revenue sharing with our experienced world class team and our Helix biotherapeutic delivery system. In the coming weeks, we anticipate enrollment of patients in our Cardiamp Heart Failure 2 confirmatory study and we will be working on a number of business development activities, which have potential to be impactful in our plans for staying listed on NASDAQ. I will now pass the call to David McClung, our CFO, who will review our Q3 Q4 2023 financial results.

Speaker 3

Thank you, Peter, and good afternoon, everyone. Revenues were $500,000 in 2023 compared to $1,400,000 in 20 22, primarily due to the timing of revenue earned from new and existing collaborative partners, coupled with the fulfillment of performance obligations in 2022. Expenses year over year decreased by 9%. Research and development expenses decreased to $7,700,000 in 2023 compared to $8,800,000 in 2022, primarily due to the completion of enrollment in the Cardiac Heart Failure trial, coupled with reduced expenses in clinical and related supporting functions. Selling, general and administrative expenses were unchanged $4,400,000 in both 2023 and in 2022.

Speaker 3

Our net loss in 2023 was $11,600,000 compared to $11,900,000 in cash for operations in 2023 compared to $10,600,000 in 2022. And BioKardia ended the year with $1,100,000 in cash and cash equivalents, which together with financing proceeds in the Q1 of 2024 provide runway into the Q2 of 2024. As disclosed in our recent SEC filings, the company has received a determination letter from NASDAQ advising us that the company is not in compliance with listing standards and is subject to delisting. Biocardia intends to remain listed in NASDAQ Capital Markets. Accordingly, BioCardia is appealing the decision and has requested a hearing where the company will submit its plan to regain compliance.

Speaker 3

The appeal has a state any delisting or suspension of the company's securities pending the hearing. This concludes management's prepared comments and we're happy to take questions from attendees.

Operator

Thank you. At this time, we will open the call today's first question comes from Joe Smith at Alpha Street. Please go ahead. Hello, Mr. Smith.

Operator

Your line is open, sir. And it appears we lost Mr. Smith's connection. Our next question today comes from Brent Pearson, a Private Investor. Please go ahead.

Speaker 4

Good afternoon, gentlemen. I saw that in Q4 you filed a $50,000,000 prospectus. Is that planned to get funding through your BCD-one and O2 trials for the next few years? Is part of that to be put into a ramp up if devices get approved or if you get approval in Japan and you need to ramp up production. Could you give us any commentary that would help us understand the intention for that $50,000,000

Speaker 5

You want to take

Speaker 2

it, David?

Speaker 3

Well, this is we have our an S3 we had on file that expired in October. This is simply just refreshing our S3 again, so we have another one on file. It's a typical resource that we want to have available to us. We'll use for ATMs and other things as we need.

Speaker 4

Understood. Okay. Well, I appreciate the color there. So it's just it's more along the lines of bumping along an existing prospectus that you want to keep open. In terms of your capital needs throughout the rest of the year, I assume you're going to look at the market financings as things are come apparent.

Speaker 4

And I assume that you don't expect to have a much different capital usage than you had through 2023. Is that something that we can count on?

Speaker 2

Joe, these are great questions. And as where we are right now, this is actually this is sort of the eye of the storm. Our ongoing business development activities, as we've shared, interweave with this. And so we are proceeding with really all options on the table, and things will evolve in the coming months as we have our discussions with NASDAQ. So I think that's probably the best way to describe it.

Speaker 2

As far as your second follow-up question, our cash needs, I would actually say that our cash needs today are modest. We have publicly disclosed that our burn rate has been significantly reduced as we turn down the spend on the clinical trial that we're now doing follow-up on. The spend could go back up as we accelerate in the cardiac heart failure 2 to be closer to what it was last year. And the variety of partnerships that are coming together could actually result in non dilutive reduction in our burn rate. So these are the forces that are playing here right now.

Speaker 2

I don't expect a significant increase in the burn rate, even if we had no revenues, primarily because of the Medicare reimbursement and the stage of the 3 programs we're advancing. The first two have significantly non dilutive financing for that. And Brent, forgive me, I referred to you as Joe earlier. My apologies.

Speaker 4

No worries. I appreciate the color there. I guess my last question was, we had seen that there were some partner developments mentioned in Q2 and Q3. Does the horizon look about the same? Is there any color that you can provide on that front?

Speaker 2

Yes. So I did share that we expect to have 2 additional biotherapeutic partnerships this year. And I even believe we have one targeted to be completed this next quarter. But I have you think about it in this fashion. When we do work with a partner, oftentimes we create a very significant data set that takes a period of a year or 2 to develop.

Speaker 2

And then they think about how to take that forward into the clinic or they are in a clinic already and they think about how to take that to the next stage of development. And so each time we partner, we receive revenues, but the amount of resources being spent on the program is far more significant by our partners. One of the things that we're choosing to do is we're focused completely on long term partnerships. We do not sell delivery systems. We partner.

Speaker 2

And that means that if there is value created from the collaboration, then we, meaning the BioKardia shareholders will ultimately benefit from that, even if BioKardia does not actually wind up commercializing alongside our partners in the future, which if we do, the value for our shareholders would be quite significant. And that's really our goal at the end of the day. But we don't if we're going to do the work with a partner, enable them access to our technology and know how and experienced team, we not only need to get paid for the work we do along the way and the products we provide, but the value creation on the therapeutic side, we also need to participate in. And so that's a new structure that we're having going forward. And it makes sense.

Speaker 2

It doesn't cause it's a little different, but it doesn't cause anyone any undue concerns.

Speaker 4

Understood. Thank you so much.

Speaker 2

Appreciate the questions, Brad.

Operator

Thank you. And our next question today comes from George Woah with no company given. Please go ahead.

Speaker 5

Hello. Yes. Thank you for taking my questions. Peter, I just had actually you just answered most of most of the you just provided most of the information I have for regarding partnerships. But I guess it looks like you picked up an additional partner this year per the press release this afternoon.

Speaker 5

There were 2 at the end of last year and it looks like you have and then in the press release, stem cardia came out, but then you have 2 additional partners, chips that are lined up for this year. Is that accurate?

Speaker 2

Right now, we have so just a broad brush stroke, we have our 3 programs that we're advancing and we have 2 partners under this structure that we've been public about. There's other folks we do work with that we're not public about. And the other 2 players are Cell ProThera and Stem Cardia. But we have said in the press release, in the targeted milestones that we expect to enter into 2 additional biotherapeutic delivery partnerships in the year ahead. And I think we've also said that the first one of those we expect to close in Q2 of this year.

Speaker 2

Now so that's and the idea is to create this long term value and everything that we do is trying to we have these platforms and the challenge is always how do you create all the value that it goes into a number of indications or advancing 2 of those. For our allogeneic platform, it goes in many directions and we're focused in on the one where we have the most experience in data. But we've had discussions around taking that into a number of indications already. And the 3rd platform we have is our Helix biotherapeutic delivery platform and this is this biotherapeutic partnering business. And what's nice is the data I shared with our lead program utilizes our Helix platform.

Speaker 2

And so that safety data is really compelling for folks developing their own L gene or protein based therapy for the heart. And these clinical indications we're going after are so enormous that it's in our investors' interest and it's in our ethical interest as a group trying to help these patients to enable these partners. I like to say that at the end of the day, if there's 2 therapeutics competing for the same patient, I think that the market penetration will accelerate because the clinical consideration will be not should I treat or should I not treat, but which should I treat with when and how often will become the new mindset. So that's sort of the nature on the partnering. And then the last piece, because as we're talking partnering and getting value from platforms, our Helix system uses our state of the art MorphDNA steerable introducer platform for all of its procedures.

Speaker 2

So every helix procedure and every cell therapy procedure we're advancing uses our more FDA cleared product. And so we are going to be securing this year a product family based on that design for broad indications in cardiac and peripheral vascular disease. And although it doesn't have the same value proposition as our biotherapeutic development efforts, it's a way we can take our existing product because it's already FDA cleared and expanded that platform design into other indications where it can have value. And I share with you, with a previous version of this, we've done more than 10,000 procedures with our Morph platform. And we had a great relationship with the customer that just didn't make sense financially.

Speaker 2

But today, we've done some things that this has potential to have some really nice legs on it. So it shows you that even though our cash is extremely tight, we are getting enormously valuable things done for shareholders.

Speaker 5

Thank you. I appreciate that information. That clears up a lot. I just had one other question regarding BCDA 1 with the interim data that was presented at the Heart Conference this month. There was a reduction in the arrhythmias for the treated group.

Speaker 5

And I was curious, is there any thought of why that reduction? Where those results came from? I know that was something like the University of Washington had worked on years ago to try to reduce that with the stem cells. Any thoughts there or that you can provide?

Speaker 2

I do. So George, the and by the way, great question. The arrhythmia signal is actually a pretty strong signal in our data and it's remarkable. We presented a safety data, but one of the in this field where people are putting things, cells, genes and proteins into the heart, one of the greatest concern from a safety issue is the arrhythmias. And if you trigger a cardiac arrhythmia, it actually can be life threatening.

Speaker 2

That's basically what a heart attack is. It's a cardiac arrhythmia that's caused by an obstruction in a blood vessel that once your heart starts fibrillating, you have basically 2 minutes to live because you're not pumping blood anymore. So that arrhythmia data is compelling data. Our investigators have been quite excited about it. Reduction in cardiac arrhythmias will be a pre specified secondary endpoint in the Cardiac Heart Failure II trial because that's an efficacy claim in its own right.

Speaker 2

And you mentioned the group in Seattle. Interesting enough, that's the same group I expect that's behind stem cardia. The idea with some of those other cell types, the great concern has been arrhythmias because when you and our cells don't become heart cells, but when you put a cell into the heart and it becomes a heart cell, all heart cells have what they call automaticity. And that means it can create what's called an ectopic foci and trigger an arrhythmia. And so the fact that we can go into the heart with our cells in Cardiamp or VCD-one and deliver at 10 different locations, I think we've shared, let's just say, 100 of millions of cells and we don't have any issues with arrhythmias, but rather we're seeing a great reduction in arrhythmias, suggests that perhaps, and I'm just I'm going to hypothesize here because you asked, perhaps what's happening is the enhanced microvascular impacts of what we're delivering increases the healthiness of the cells locally, so that we're reducing the number of ectopic be supporting why we have reduced mortality and reduced major adverse cardiac events in these studies.

Speaker 2

All of these things are linked together. But I'm sort of going out on a limb here and one of the difficulties in medicine is always proving why something is happening in one way. I guess the end result of that signal is it's a nice signal. It has excited our investigators and we think it's quite valuable for these patients.

Speaker 5

That's great.

Operator

Our next question is from Joe Smith with Alpha Street. Please go ahead.

Speaker 6

Hi, good afternoon, everyone. Can you hear me?

Speaker 2

Yes, we can, Joe.

Speaker 6

Hi, this is Lanjeron for Joe Pantginis from A2 Wainwright. Thanks for taking our questions. So I wanted to ask if you can provide some color on the estimated time lines from data readouts, especially from Cardiamp HF2 trial, which has a minimum follow-up period of 12 months. Is there any chance that we may have an interim data readout or preliminary data readout before those time points during 2024?

Speaker 2

So there's always possibility. Right now, we're focused on enrolling in that trial. My sense is it is a great question, when will everything be done? I think I would say in 2024, we're going to have the primary readout on BCD-one, the trial we've just completed. And we're aiming to take that to Japan.

Speaker 2

I think that's the biggest near term news. And we'll keep folks posted how we're doing in enrollment in the Cardium Heart Failure II confirmatory study. As I'm sure you can appreciate, we have 20 centers around the United States that have great experience. They can see that they helped their patients in the last trial. That's very helpful to us in enrollment.

Speaker 2

We also expect that we've done some things in the trial design to eliminate interim visits that we don't see as necessary now that we have such a great safety data set. So the trial will be easier to perform. And we also have the advantages that COVID is not omnipresent these days. So we also think that's going to significantly enhance our enrollment activities. I can share an anecdote that at some of the centers, one of the biggest lead times in contracting a center on a clinical trial is actually the contract.

Speaker 2

And our contract for this study at the centers where we've just been active, has potential to be as short as a half a page. That's a much easier contract to get done. And so we'll be advancing Cardiac Heart Failure 2 and we'll be sharing as we enroll patients and we add sites. Whether or not we introduce an interim analysis is TBD, I'd have for now, I'd have you assume that we will not, because I think we've got some pretty good clarity on the direction to go with respect to this. And we've got a lot going on.

Speaker 2

And implementing that adaptive design review last year was a huge effort. And it was a huge accomplishment by our team, even though it did not result in great victory, but it did provide us with the value proposition that we have today that we have a very large data set that we're using and we're on target. And we have hypotheses as to why some of the study design issues did not go our way. But I think that we can't we're not trying to prove why things went wrong. We're trying to prove why this therapy is right.

Speaker 2

And that's where we're going ahead.

Speaker 6

Perfect. That's helpful. Thanks for the update.

Speaker 2

I appreciate the question. Please pass along my warm regards.

Operator

Thank you. And our next question is a follow-up from George Woah. Please go ahead.

Speaker 5

Hi, Peter. I'm sorry. I forgot if you already mentioned this and maybe I just didn't hear it. Is BioCardia still on track to have a consultation with Japan the 2nd or Q3 of this year?

Speaker 2

We have said that we will have additional consultations with Japan PMDA. I haven't I'm not currently tracking exactly when it's going to happen. My focus today has been around the completion of the data. But as we get closer to mid Q2, we will be assessing when we're going to be meeting with them. And it's a process where you need to submit the requisite information and then they will schedule it a few weeks out.

Speaker 2

So we don't exactly have perfect control on when that occurs, but they've been very sophisticated in all our interactions with PMDA. We've been very impressed by them.

Speaker 5

Okay, great. All right, thanks. Sorry about that.

Speaker 2

No worries, George.

Operator

Thank you. And that concludes our question and answer session. I'd like to turn the conference back over to Doctor. Peter Altman for closing remarks.

Speaker 2

Thank you, Rocco. Our therapeutic candidates and technologies have significant potential to help millions of patients with heart disease. We now have 5 cardiac biotherapeutic programs in development, including our biotherapeutic delivery partners. 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 BioKardia and support you provide for our primary mission to treat heart disease.

Speaker 2

Have a great afternoon.

Operator

Thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines and have a wonderful day.

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