Regions Financial Q1 2024 Earnings Call Transcript

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May 14, 2024

There are 7 speakers on the call.

Operator

Ladies and gentlemen, thank you for standing by. Good afternoon and welcome to the BioCardia First Quarter 2024 Financial Results and Business Update Conference Call. At this time, all participants are in a listen only mode. 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. 1 hour after the end of the call.

Operator

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

Speaker 1

Thank you, Debbie. 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 BioCardia'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 BioKardia's report on Form 10 ks filed with the SEC on March 27, 2024. The content of this call contains time sensitive information that is accurate only as of today, May 14, 2024. 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. It is now my pleasure to turn the call over to Doctor.

Speaker 1

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

Speaker 2

Thank you, Miranda, and good afternoon to everyone on the call. This has been a big quarter for BioCardia as our clinical investigators have presented positive results from each of our 3 ongoing autologous and allogeneic cell therapy clinical trials to treat ischemic heart failure and chronic myocardial ischemia. In this call, we will share an update on these product candidates in active clinical development. Our lead Cardiamp autologous cell therapy is targeted to treat ischemic heart failure of reduced ejection fraction, an enormous unmet clinical need. We now have results from 3 clinical trials, TAB ME, TAKHIFT and Cardiamp HF with the Cardiamp cells that support both the safety and therapeutic efficacy of these cells for patients having ischemic heart failure of reduced ejection fraction.

Speaker 2

Although we have seen positive signals of reduced mortality and reduced major adverse cardiac events in all patients treated in the most recent cardiac heart failure trial. The remarkable benefits in patients treated with elevated NT proBNP, a well established biomarker of active heart failure is where we are focused today. Results in these patients shared late in the Q1 show a remarkable 86% relative risk reduction in heart death equivalents and a 24% relative risk reduction in non fatal major adverse cardiac and cerebral vascular events. Heart death equivalents include all cause death, cardiac transplantation and implantation of a left ventricular cyst device to replace heart function. This is particularly exciting as therapies that are available today do not have a significant impact on mortality for these patients.

Speaker 2

And unfortunately, mortalities for these patients is still approximately 50% at 5 years. Further, the recent interim results in these patients show all clinical outcomes favored Cardiamp 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 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 demonstrated statistical significance favoring therapy in the patients with elevated NT proBNP. Our goal is to have final results available for both scientific presentation and for regulatory submission in the Q4 of 2024. There is an enormous ongoing activity by the BioKardia team to monitor patients enrolled in this study.

Speaker 2

As we already have more than 90% of patient follow-up data that we will ultimately have in the final analysis, we don't expect the results to change significantly. The final results are expected to be provided to Japan's Pharmaceutical and Medical Device Agency as a key element of a submission for approval. Our previous consultations with Japan's Pharmaceutical and Medical Device Agency supported that if the data remains as good as it currently appears to be at the final analysis, they are willing to consider approval based on this data without requiring an additional clinical trial in Japan. Subsequent interactions and consultations with Japan's pharmaceutical and medical device agency are expected. A post marketing study is already in active discussion with world class heart failure cardiology and interventional cardiology leaders in Japan, who attended our last consultation with the agency.

Speaker 2

We are thankful for their involvement. The confirmatory Cardiamp Heart Failure II trial in the United States is focused on the patients with elevated NT proBNP. The trial was approved by FDA in December, activated in February and approved for reimbursement by Medicare in March. We estimate that the Medicare reimbursement reduces the cost of doing this study by more than $5,000,000 as we record payments from centers as a reduction in our R and D expense as these dollars are then paid back to centers to cover research costs for patient follow-up. This confirmatory trial 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.

Speaker 2

Our world class executive steering committee and the distinguished cardiologist on our data safety monitoring board are continuing to support this program. We expect additional world class heart failure clinicians to join our executive steering committee soon. We are actively working with our heart failure network and leaders in cardiology to enable this study to be fully enrolled in 2 years from the first patient enrolled with results being available in 3 years. This is an aggressive goal, but we feel that the experience and data that we have will enable this to be achieved. We are actively on boarding sites and this effort will accelerate in the months ahead.

Speaker 2

Our CardiAmp cell therapy trial for chronic myocardial ischemia or BCDA-two is a Phase 3 multicenter randomized double blinded controlled study intended to include up to 343 patients at up to 40 sites. The company roll in cohort results were presented in a call last month showing patients with refractory angina demonstrating an average 107 second increase in exercise tolerance and an 82% reduction in angina episodes at the primary 6 month follow-up endpoint compared to before receiving the study treatment. Planning for the randomized phase continues based on these positive results. 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 cardialloallogeneic cell therapy for ischemic heart failure or BCDA-three is a Phase onetwo clinical trial program encompassing 69 patients.

Speaker 2

At the Technology and Heart Failure Therapeutics meeting in March, it was reported that there have been no adverse events and follow-up in the first low dose cohort patient enrolled. The Cardiallo Heart Failure study is intended to build on 3 previous trials of mesenchymal stem cells in ischemic heart failure that we have co sponsored at Biocardia. This is a precision medicine study as we are focusing this therapy for the first time on patients who have elevated NT proBNP and elevated high sensitivity C reactive protein, a marker of inflammation that has been correlated with responsiveness to immunomodulatory mesenchymal stem cells in a significant previous study. We intend the Phase 2 portion of the CARDIALLO 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. Our biotherapeutic delivery partnering business focuses on long term partnerships where BioCardia participates meaningfully in the value created.

Speaker 2

In March 2024, we announced a biotherapeutic delivery partnership with Stemcardia to advance Stemcardia's investigational pluripotent stem cell product candidate for the treatment of heart failure, initially through a Phase onetwo clinical study. In May of 2024, biotherapeutic delivery partner Cell ProThera announced that they would have results this week at the European Society of Cardiology Heart Failure meeting in Lisbon from their Phase onetwo cell therapy study in post myocardial infarction. Today, I am delighted to congratulate Cell ProThera on the positive clinical results they have just announced. In summary, with our 3 cardiovascular biotherapeutic clinical programs and biotherapeutic delivery partnering, we have multiple pathways to succeed as a business and provide significant shareholder returns on investment. We are aiming for approval of a first therapy based on our lead program in Japan as early as 2025, which could be followed in the USA soon thereafter.

Speaker 2

I will now pass the call to David McClung, our CFO, who will review our Q1 twenty twenty four financial results. David?

Speaker 3

Thank you, Peter, and good afternoon, everyone. Revenue was $55,000 for the 3 months ended March 2024, comparable to the $65,000 for the 3 months ended March 2023. Expenses quarter over quarter decreased by 35%. Research and development expenses decreased to $1,200,000 during the Q1 of 2024 compared to $2,400,000 for the Q1 of 2023, primarily due to completion of enrollment in the Cardiamp heart failure trial in the Q4 of 2023, coupled with related reductions in clinical and supporting function expenses. Selling, general and administrative expenses decreased modestly to $1,100,000 for the 3 months ended March 2024 from $1,200,000 for the 3 months ended March 2023.

Speaker 3

Biocardia's net loss decreased to $2,300,000 for the Q1 of 2024 from $3,500,000 for the prior year's Q1, primarily due to the reduction in expenses previously noted. We used $1,500,000 in cash for operations in the Q1 of 2024. That compares to 2 point $6,000,000 in the Q1 of 2023. While use of cash is expected to increase moderately as we advance our trials, our track record demonstrates BioKardia's ability to operate efficiently and accomplish goals in a very capital efficient fashion. This concludes management's prepared comments.

Speaker 3

We're happy to take questions from attendees.

Operator

We will now begin the question and answer session.

Speaker 2

The

Operator

first question comes from Joe Pat Guiness with H. C. Wainwright. Please go ahead.

Speaker 4

Hi, everyone. This is Lander on for Joe. Thanks for taking our question. So I wanted to ask about the CARB AM CMI program. Should we expect additional patients to be added to the rolling cohort?

Speaker 4

If I'm not wrong, there's one patient that has not completed the 6 months follow-up? Or do you think that the rolling data with 4 patients is enough to proceed to the randomized

Speaker 2

phase? Thank you, Landeron. I really appreciate the question. So for cardiac chronic myocardial ischemia and patients with refractory angina, you're correct that there is one other patient who has been consented that has not yet been treated and that patient is moving through the pipeline. What we've done is we have stopped enrollment for additional patients.

Speaker 2

We feel very comfortable with enrolling in the randomized cohort ahead. The trial results in the first patients enrolled have been excellent. And so we will be taking steps to initiate the randomized phase of the trial ahead. And this as I've shared historically, this is a pivotal trial. This trial is intended to have an adaptive readout after 100 patients have been randomized.

Speaker 2

The follow-up endpoint is a shorter end point. It's at 6 months follow-up. And I have to note that the safety data, which we've presented in our heart failure program will also support and buttress this program because we have essentially the same therapy in another clinical indication that actually precedes ischemic heart failure. So the answer to your question is yes, there is one more patient. We don't know whether or not that they will ultimately be part of the rolling cohort because there's a long process as these patients move through the trial.

Speaker 2

But we are going to honor that they've been enrolled and we are very comfortable moving to the randomized controlled trial ahead.

Speaker 4

Okay, perfect. Thanks for clarifying. And for the Cardiamp HF in Japan, besides the final results from the original Cardiamp HS program, is there any other discussion points that you think that are important that is still going on with the PMDA?

Speaker 2

So, yes. So, the status with PMDA is we last met with them in November. And in November, they made it clear to us that they would accept what is foreign data for them, data from the United States, in support of approval. They were very interested in seeing the data that we will have at the end of this year and because the trial is not yet completed, although as I've noted in my comments, we have 90% of the follow-up data on these patients. So we don't expect any significant changes.

Speaker 2

But that said, we still need to complete the follow-up and the quality assessment of the data as it's been entered and prepare for that submission. So there will be other dialogue with PMDA ahead following the normal course. And we feel pretty optimistic with respect to this submission. One nuance I'll share for folks is that they have approved a cell therapy for heart failure in Japan based on 7 patients treated. There's another therapy that's expected to apply for approval based on approximately 10 patients enrolled.

Speaker 2

Both of those therapies are therapies that have potential to trigger arrhythmias and require surgical intervention to provide those therapies, none of which we have. We have so much more data than any of those other therapies that there is a good potential for them to approve this and ultimately result in head to head studies of therapies in Japan. So, yes, we're pretty excited about taking this forward and we're honored to be working with some of the great luminaries in Japan on these conversations that we're having.

Speaker 4

Perfect. That's helpful. Thank you very much.

Speaker 2

I appreciate the question. Thank you so much.

Operator

The next question comes from Brent Pearson as a private investor. Please go ahead.

Speaker 5

Good afternoon, gentlemen. I wanted to wish you congratulations on both your partnership front and your trial front. The first question I had today was around the results from seltrothera's announcement today. It appears that they've announced some positive results around their Phase 1, 2b trial. And I seem to recall that there was potentially an ability with the EMA to apply for a conditional marketing approval based on this study.

Speaker 5

And I was wondering if you guys had color. I know it's early and that this is pretty new information. But any expectation around an advancement of that conditional approval?

Speaker 2

So Brent, I thank you for the question. And one of the nuances of our biotherapeutic partnering is we need to let our partners tell their stories. So there is potential in Europe for early access. That's something that cell ProThera looking at their business and their clinical trial efforts ahead will have to assess on their own. So we don't comment on that, but we are very encouraged by the results.

Speaker 2

We think what they have done with their therapy and their development strategy makes enormous sense. And in our own data that we've published on, we've shown that you can have approximately 18 times the efficiency of delivery of these types of cells when delivered intramyocardially. So in their clinical indication, all of the past data has been done with an intra coronary artery infusion, which has very low long term retention of these types of cells. So I think they've done a great job. They followed their Phase 1 work.

Speaker 2

They've got Phase 2 data that they've just presented today. And we're hopeful that the project and programs together will continue.

Speaker 5

Great. I completely understand and I appreciate your response there. And my follow-up question was simply we had heard that there were some potential developments on the partner front expected towards the end of Q2 and then potentially towards the end of 2024. Just wondered if there was any update on that front and that will be it for me. Thank you.

Speaker 2

No, these are great questions, Brent. So in partnering, so for the 2 partners we have, we are involved long term and we really transfer as much of our experience and knowledge to help them be successful. We typically attend every single procedure for a partner's clinical trials with very senior staff. And so there are right now quite a few folks developing different approaches for these significant unmet clinical needs that are earlier in their development efforts. Many of them already have, excellent data with Biokardia, as you can see in our corporate slide deck.

Speaker 2

And so much of it depends on their initiative to take the next steps and go forward. There's also many folks who have data with us that aren't on that slide deck, but we're partnering with folks is non trivial. And so we're coming in and we are a significant partner here and we are seeking value for our shareholders long term. We feel we've demonstrated the capabilities of our current delivery technologies. And if you look at our intellectual property estate, we have what we view as the fundamental technology for the whole future of biotherapeutic intervention in the heart.

Speaker 2

And so we're delighted to work with folks, but we have to be respectful of our shareholders. So I don't have any updates on business development discussions other than there are quite a few groups out there who are going to need a delivery solution and nobody else has a delivery solution that's in the clinic today and nobody else has the level of experience we have in preclinical and clinical models for all of the clinical indications we've talked about today. So we're hopeful that they will move forward. We do believe in our delivery programs and we do believe we're a good partner. But it's often hard for folks to tie their valuable assets to another company that's in the same space.

Speaker 2

So we'll see. Each day brings a new discussion. And so there are some that are at late stage discussion where term sheets have been exchanged and there's been lots of conversations and there's a lot of experience together, but getting to a final agreement does take time. And I'm sorry for the long winded answer, Brent. It's just it's the nature of these things.

Speaker 5

Completely understand. And again, it looks like there's a lot of positive developments out there. And I just I wanted to wish my congratulations and thank you for taking my questions.

Speaker 2

I appreciate it, Brent. Thank you so much.

Operator

Next in the queue is George Will, a Private Investor. Please go ahead.

Speaker 6

Hello. Good afternoon. Thank you for taking my call. Peter, can you provide a little, I guess, some commentary on if the BioCardiac Cardiamp treatment moves forward and let's say you are you do receive approval in Japan, what would be the strategy Biocardiozone? Would you look to partner with a larger firm?

Speaker 6

What would be the strategy there, if anything that you could share or if that's a stay tuned item?

Speaker 2

George, it's a great question and I'll share how we think about things. So right now, we've learned an enormous amount about the Japanese market and have been delighted with interacting with some fabulous physician luminaries in Japan. And so we've built a large number of relationships. Our first choice is to do a relationship where we have a partner that distributes Cardiamp for the heart failure indication, but also for the chronic myocardial ischemia indication in the future. And the reason for that is that they have experience in Japan with all of the nuances that we have not yet confronted.

Speaker 2

Even as we're working on the approval process, we've had a number of active conversations with a number of entities on getting involved in the study. And they're very interested in commenting and they know the very distinguished advisors that we have in Japan. But at the same time, they haven't yet stepped forward. And part of the reason for that is, this is a significant deal. This is a significant value proposition.

Speaker 2

So we are requesting that they have some significant skin in the game in order to be our partner and commit to carrying Cardiamp forward. That said, Cardiamp is actually quite remarkable as far as a new therapy. There's roughly a 1000000 patients in Japan with heart failure who could potentially benefit from Cardiamp cell therapy. Our reimbursement in the United States is a touch point for the Japanese reimbursement, But I know that the other cardiac cell therapy that's approved in Japan has an enormous price tag on it of around $124,000 U. S.

Speaker 2

For each treatment. I don't expect and we're not pursuing that level of reimbursement, but even on what we have in the United States, there is potential to have very significant margins. This is the type of therapy on which we could build a subsidiary that's profitable in Japan, in short order. That said, our first choice is to have a partner step up, put some skin in the game and really be involved in Cardiamp as it's advancing for both of the 2 re clinical indications we have.

Speaker 6

That's great. Thanks so much. That was all I had.

Speaker 2

No problem. Appreciate it and you have a great day. Thank you, George. You have a fabulous afternoon.

Operator

This concludes our question and answer session. I would like to turn the conference back over to Peter Altman for any closing remarks.

Speaker 2

Thank you, kindly, Debbie. 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 partner. 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 Biocardia and support you provide for our primary mission to develop and enhance therapies to treat heart disease.

Speaker 2

Have a great afternoon.

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