Q4 2022 bioAffinity Technologies Inc Earnings Call
[music].
Good morning, and welcome to the bio affinity technologies fourth quarter 2022 financial results Conference call.
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Martha can accomplish Julianna O'brien director of corporate Communications. Please go ahead.
Thank you operator.
Everyone and welcome to today's conference call to discuss bio affinity technology fourth quarter and full year 2022 financial results and our recent business progress.
Please note that certain information discussed during today's call is covered under the safe Harbor provision of the private Securities Litigation Reform Act.
We caution listeners that bio affinity technologies management will be making forward looking statements and that actual results may differ materially from those stated or implied by these forward looking statements due to risks and uncertainties associated with the company's business.
These risks and uncertainties are detailed in and are qualified by the cautionary statements contained in bio weapon of T technology press releases and SEC filings.
This conference call contains time sensitive information that is accurate only as of the date of the live broadcast today April 32023.
<unk> technologies undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances. After the date of this.
Conference call.
As required by law.
I would like to now turn the call over to Maria Zhang President and Chief Executive Officer of Bio affinity technology Maria.
Thank you Julianne and thank you to our listeners for joining us today.
In terms of structure for today's call first I will provide an overview of the market opportunity. We are targeting the side pass along and the urgency of addressing the unmet medical need for the detection of lung cancer.
Early stage.
I will map out our commercial growth strategy, which begins with the limited launch of Si path London, Texas.
Designed to build it and evaluate our marketing program and helped us ensure each step in the care pathway it's efficient.
That's it before expanding our foot print beyond Texas and potentially beyond lung cancer.
We also will be seeking FDA clearance for assai pass along as a class two I V D medical device.
And it's the innovation has led to invention, we will be strengthening our patent portfolio.
And third Michael Edwards, our Chief Financial Officer will provide an update on the company's financial position and capital strategy.
We will then conclude with Michael Julian and be available to answer your questions.
But first let me address the need for early lung cancer diagnosis.
Our mission at site.
Oh affinity technology is to detect cancer at an early stage because simply put earlier diagnosis leads to better clinical outcomes and increases of patient's long term survival.
The need for early lung cancer detection is crucial.
Lung cancer is the leading cause of cancer related deaths worldwide and this is largely due to the fact that people often show no symptoms of lung cancer until the disease has progressed to advanced stages.
Stage, four at which 0.5 year survival is only around 5%.
However, when lung cancer is detected early the prospects for successful treatment and even cure are significantly higher.
Finding lung cancer at stage, one for example, and treating it can result in a 10 year survival rate of greater than 90%.
This differential is worse ipass lung takes aim and intends to make an impact. Moreover.
Moreover, early lung cancer detection also reduces the cost of treatment and the need for additional test.
<unk> lung cancer and advanced stages requires more aggressive treatments and hospitalization both of which can significantly increase the cost of patient care.
Our first diagnostic test is called side path long. The test is sold as a laboratory developed test by our partner precision pathology services.
Well established cap CLIA clinical laboratory.
As long as cost effective noninvasive patient friendly with at home sample collection, but enables physicians to more confidently distinguish between patients who will likely benefit from timely intervention from those who should continue oak continue annual screening.
By low dose C T.
Hotel C T as the standard of care for screening patients at high risk for lung cancer screening.
Screening can significantly increase survival by finding early stage cancer.
The screening as a central to lower the death rate of lung cancer.
But the process can be improved.
Screening has a low positive predictor of rate of 3.8% then that means that only four out of 100 people who get a positive result from screening actually have lung cancer.
By using surpassed lung in conjunction with screening we improve that positive predictive value, resulting in fewer unnecessary diagnostic procedure earlier cancer detection and a reduction in health care costs.
We bring confidence and certainty to the diagnostic process.
After a positive screening result bypass lung efficiently stratify patients into one of two risk groups.
<unk> likely to have lung cancer can proceed to more invasive and costly follow up well those deemed unlikely would continue imaging surveillance and according with the standard of care.
The physician received actionable results informing him or her they strike that long is detected the presence of lung cancer.
Or that's not.
Results also include a numerical score so physicians have more information in addition to the binary yes or no answer.
We are beginning to test market side to have one in Texas, and we are creating our brand Baidu affinity technologies is based in San Antonio and so we started our commercial rollout close to home, making sure we had everything right before expanding our footprint.
A limited launch in Texas is designed to build and evaluate our marketing program and helped us ensure each step in the care pathway is efficient and effective.
From the initial order by physicians to.
The patient sputum collection and processing to generating and delivering the patient report.
We will build upon feedback from this test market find future positioning and develop our strategic insights for.
Or are some path lung test.
We are very pleased to be working with Havas health <unk>, you and Trinity Life Sciences, two global leaders in health care marketing.
They are developing our brand our messaging and our strategic marketing plan to optimize commercial success.
In addition to building our path to a staged nationwide U S expansion, we have begun work towards commercializing side passed along in the European Union, where there are an estimated 34 million smokers at high risk.
One of the most impactful accelerant for driving sales can be F. D. A clearance upside pass along as an in vitro diagnostic we are finalizing the design and preparing a pre submission package to F. D. A.
H M C approval, if and when received would enable us to directly market to position.
And their patients.
And we are finalizing the design of our planned 1800 patient pivotal trial. So that we can submit a pre submission package and watch the trial this year.
On other measures of accuracy. This longitudinal clinical diagnostic study will establish the sensitivity.
The city positive predictive value and negative predictive value upside papillon and will likely require three years.
It's ambitious as it sounds.
Our mission is even more then becoming a leader in the early stage lung cancer diagnostic market.
We have begun research to expand beyond that and see significant potential in the development of automated analysis to be used with flow cytometry technology.
We are working to design noninvasive diagnostic tests for detecting and monitoring additional lung diseases. The first of which is chronic obstructive pulmonary disease or COPD.
T O P. D is the fourth leading cause of death, representing another multibillion dollar market opportunity or our growing platform.
Innovation is a hallmark of bio affinity technologies, our R&D efforts brought cycas lung to market and our ongoing research continues to reduce cost and improve accuracy.
In the past year, our discoveries have led to significant publications and scientific journals last week, we announced publication in the peer reviewed journal of visualized experiment of an article describing compensation beads, we engineered and improve precision lower the cost.
And accelerate sample processing in our AI developed flow cytometry platform.
In January we published results of our clinical trial precise path lung reporting that our test achieved 92% sensitivity and 87% specificity and detecting lung cancer and people at high risk with small lung nodules less than 20 millimeters.
Building awareness of our company and our technologies within the scientific and medical communities.
Helps us to set the stage for our future plans in diagnostics as well as our longer term plan for developing therapeutics.
We are still in the early innings of establishing the value of bio affinity technologies inside pets, a lot for the early detection of lung cancer.
And in establishing our company as a leader in flow cytometry based diagnostics.
I am proud of our company's many accomplishments, including during these first few months as a public company.
And theres so much potential for our team to address in the massive unmet medical need of early diagnosis.
Estimated 18 million Americans at high risk for lung cancer.
I look forward to continuing to share further updates with you.
But for now I'll turn the presentation over to Michael Edwards, Our Chief Financial Officer to review, our financial results for the quarter and the year.
Michael.
Thank you Maria and good morning, everyone.
I'll review the key financial results for the fourth quarter and full year 2022, and touch base on our cash position starting with our fourth quarter revenue for the fourth quarter of 2022 was approximately $2500 compared with no revenue for the prior period.
As a reminder, our revenue is derived exclusively from the royalties for Saipem lung currently being sold through our partner and licensee precision pathology services research and development expenses were $429000 for the fourth quarter.
Of 2022, compared with 318000 for the comparable period in 2021.
General and administrative expenses were $1 2 million for the fourth quarter of 'twenty, two compared with 290000 for the comparable period in 2021.
Net loss for the fourth quarter of 2022 was $1.7 million compared with a net loss of $5 6 million for the comparable period. In 2021. The difference is primarily attributed to a decrease in interest expense and the change in the fair value of our convertible notes.
Moving to our full year financial results revenue for 2022 was approximately $5000 compared with no revenue in 2021 research and development expenses were $1 $1 million in 2022, compared with $1 million in 2020 one the increase was primarily due.
Due to higher personnel legal and research called <unk>.
Really upset by lower stock based compensation expense.
General and administrative expenses were $2 $7 million in 2022, compared with $1 $1 million in 2020 one.
The increase was primarily due to higher consulting legal patent and professional fees as we prepared for our IPO.
Reporting requirements of a public company.
The increase was also attributed to higher stock based compensation expense as well as hiring related expenses to support the commercial launch effect that long.
Net loss for 2022 was $8 $2 million or 1.81.
Dollars per share compared with a net loss for 2021 of $6 $3 million or 2.36.
Dollars per share.
Cash and cash equivalents as of December 31, 2022.
$11 $4 million.
On September six by Oct entity technologies raised net proceeds of approximately $6 million from an IPO of one 3 million units.
Each unit consisting of one share of common stock one tradable warrants to purchase one share of common stock and one non tradable warrants.
An additional $7 $8 million was raised from the exercise of warrants and options.
As a growth stage company, we intend to be opportunistic regarding potential financing activities, but we believe that funds available today provides sufficient capital to support planned operating activities through at least the next 12 months with that I'll turn it back to Maria.
Thank you Michael.
I look forward to a busy 2023 with many milestones for our shareholders to look forward to including the launch of our site pass lung pivotal trial, the commercial expansion of our test and continued investments in R&D.
With a strong balance sheet following our recent IPO and warrant exercised along with key leadership appointments such as the expansion of our scientific and medical Advisory Board in R&D hires bio affinity technologies is well positioned to execute on its milestones and advance our mission and to <unk>.
Liver more valuable diagnostic utility.
As a final comment I'd like to let you know that this Wednesday April 5th my colleagues and I will be ringing the NASDAQ closing bell.
Commemorate our recent IPO and listing on NASDAQ I encourage all our listeners to tune in just before four P. M. Eastern on April 5th to celebrate this milestone with us.
Thank you again for joining today's call operator, we're now ready to take questions.
We will now begin the question and answer session.
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At this time, we will pause momentarily to assemble our roster.
Our first question will come from Steve Stover with Argus.
You May now go ahead.
Good morning, and thanks for taking my question and congratulations on a very productive 2022, and some very challenging market conditions. Our Maria you had mentioned in the prepared remarks that the company is gaining valuable insights into the initial launch of the side pass along and I was just hoping to get a little bit more color.
Of any findings are that the launches providing whether everything is going as you expected maybe just looking for potential refinements, but if there's anything that.
We really did not expect and that maybe the companies.
Really adjusting more than you might've expected to the early launch.
Well first thank you and thanks for listening today.
I think there is nothing new in the sense of something any surprise at how physicians have reacted and what we're hearing but there are there is emphasis that we find very interesting as we move forward and we are learning quite a bit.
We do see that physicians like very much the ease of use of this test and Ah patients do as well. So you'll remember that this is a test that is where a sputum, where the where the sample is collected at home and we use a patient coach someone who spent time over there.
Phone largely with the patient to help them collect this has resulted in very very good student collection.
Other words, our samples that are coming in.
Excuse me very well.
It's also something that physicians like because they have an initial discussion with them with a patient they provide them with the test kit patient goes home comes back.
With an answer but the other thing I think that the physicians have like very much is the actionable results in other words. They get a result that is helpful for them to know what to do in and in moving forward. So.
I think we're learning a lot more about the benefits of this test and what moves the needle as far as the acceptance and the adoption of this test and that all of that work goes into the work that we're doing with the loss and with Trinity and knowing in hone.
And on the brand and the messaging.
Great. Thanks for the color and congratulations again.
Thank you very much we're very happy.
Okay and if you have a question. Please press Star then one.
Okay, and if you are a <unk>.
Please press Star then one.
Our next question from Erin Thomas Sun with a.
A private investor.
Oh go ahead.
Oh, thank you.
I was curious about the.
<unk> therapeutics that youre pursuing I know.
You publish them.
Research and done some presentations regarding an S. I RNA I was wondering if you could speak more where you're going with that.
Yes, certainly thank you and thank you for being an investor in bio affinity to.
The company itself bio affinity is very science, and medically driven and doing so or would that focus.
The company started to we've looked our research into the use of.
Poor friends.
Which is a marker for our test a diagnostic test that gives us as way of background in our research with regards to the poor friend we found that.
Certainly knocked down a certain alteration to cells could affect a killing of cancer cells without any harm to normal cells and that primarily is the.
Focus of our research right now, which is continuing DSI RNA that you mentioned is a there's a.
Number of SA RNA that we believe and we have patent applications for could be used to knock down the.
Cell surface markers and in doing so kill cancer without.
Harm to normal cells, it's very promising but it's very early research and I want to stress that we are moving forward and intend to do animal studies with this and we'll have more information as that work is done but thank you for asking.
Okay. Thank you.
Uh huh.
Again, if you have a question. Please press Star then one.
It appears there are no further questions. This concludes our question and answer session I would like to turn the conference Oh pardon me it looks like Aaron common sometimes a phone will follow.
Your line is open.
Okay, I'm, sorry, I did have one more question about Hum.
About the expansion in Europe , I know that one of the documents you put out mentioned that you're working closely in the Netherlands to try to expand South pass on wondering if you could provide.
More information on where that is in the stage.
Sure.
So we chose the Netherlands as the initial stage of entry for a number of reasons. One is it's a country that has a car.
We've seen early adoption.
New technologies.
Our Chief Science, and Medical Officer, Dr. Rebel received both her M D and her ph D in the Netherlands, She's Dutch from the for University in Amsterdam. So that also is obviously a benefit for us with CE marking.
New test has become more difficult than prior years with new regulations and so we are stepping through a.
The requirement in order to pursue CE Mark the test in the EU and our entry into the Netherlands. We think is a good first step. This is not something that will be done. This year I look to next year E as far as the CE marking process.
But we have begun to do that we have strong patent.
Wrong patent portfolio in the U one that we see growing and strengthening over the next couple of years. So it becomes a very important market the.
The EU also.
Most of the IMU I should say does not have the requirements for early screening or recommendations I should say for early screening as the U S. Does so it is possible that our test is used more early.
Earlier in the process of diagnosis.
As a first screen for lung cancer. This is because to cite that as long as shown very balanced accuracy, meaning that it has high sensitivity.
And the ability to find cancer and it has high specificity and the ability to tell a patient that they do not have cancer. So it has the potential to be a very good screening test and then you may be the first entry into that pathway.
Thank you.
You're welcome thank you.
As it appears there are no further questions.
This concludes the question and answer session I would like to turn the comes back over to management for any closing remarks.
Yeah.
Thank you I want to thank everyone for being part of our Oh are.
First call as a public company, we have many many milestones that we look to complete this year and we hope to share with you.
Thank you.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.