Q3 2023 HeartBeam Inc Earnings Call
Greetings and welcome to the Heartbeat third quarter 'twenty to 'twenty three 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'd like to remind everyone that statements made on the call and webcast may include predictions estimates and other information that may be considered forward looking.
While these forward looking statements represent our current judgment on what the future Pizza holds they are subject to risks and uncertainties that could cause actual results to differ materially.
Cautions 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 have picked up predictions.
You should put to rest and also review our most recent Form 10-K and Form 10-Q for a more complete discussion of these factors and other risks, particularly under the heading risk factors.
Yeah.
A press release detailing these results crossed the wires. This afternoon and it's available in the Investor Relations section of the company's website <unk> com.
Your hosts today, but any thoughts.
But each piece of it. So you can just officer and founder Rob <unk>, President and Rick Brownstein, Chief Financial Officer will present, the results of operations for the third quarter aimed at helping the 32.
23.
At this time I will turn the call over to Harbin Chiba seafood opposite punished my Buddy.
Uh huh.
Okay.
Thank you operator, and good afternoon, everyone I'm pleased to welcome you to todays third quarter 2020 financial results Conference call.
On today's call, we won't be making some very important updates about our business our products, including a landmark peer reviewed study publication and they significantly enhance.
Harbin scheme.
We continue to make steady progress towards I mean, clearly go yeah. They go three milestones.
I'd like to give you a brief overview of Harbin and our technology for those of you who.
Just joined for the first time and as a reminder, for those of you who are already familiar with us.
It's really important to understand how our <unk> technology is different from.
And that would be more powerful than most common pearsall ECB urology that are in the marketplace today.
There are many if you didn't get all of these offers to consumers and patients outside of a medical facility you can see a couple of examples on this slide.
These are knocked about <unk> instead, they are wildly three lead or seek fleet.
This is adequate or in many Oems, but is not sufficient to detect a heart attack or complex arrhythmias.
Well there are complex.
Right.
<unk>.
Well the ECG.
Yeah.
Oh I'm so sorry.
Basically what I would like to say is that Oh.
A couple of.
<unk> technologies that are out there today.
Does that indicate what it's called views, but a week.
We do not believe that these are adequate.
Four.
And easy to use for the consumer and the patients to adopt it.
We believe.
Our technology has the potential to solve the problem or heart attack detection outside the medical institution.
The key aim.
Technology is to quickly and accurately.
Clinicians Indentified a heart attack.
Heartbeat, Amy go ease of personal portable and easy to use system. The January <unk>.
The Amy go device, coupled with a smartphone app.
And cloud based diagnostic software.
Systems facilitate remote evaluation of cardiac symptoms by physicians.
In addition.
By collecting these signals of the highest electrical activity has been Amy go.
It has the potential to provide.
Data for the development of AI all of these steps.
And the creation of our reach.
Data set for AI.
We believe that Amy go could reduce that critical time to dimension for heart attack patients.
The average patient rates three to four hours before seeking care.
Future action.
Reduced complications and save lives.
In addition, more than 80% of the patients with chest pain. They go through they might be as you are not having a heart attack.
And the effective <unk> two in.
In the hands of the patients could reduce the number of unnecessary digital visits and thus reduce costs to the health care system.
The opportunity for our technology in the United States is six times larger than the ICL population AP market.
Approximately $3 million <unk> AP patients, representing eight 2 billion dollar market.
At the same time, they are approximately $20 million total coronary artery disease patients representing 812 billion dollar market.
These are escalating market numbers for the U S only.
Yeah.
We have the opportunity to unlock.
Conditions beyond their EPS.
As the Amy go technology will bring the power of standard of care globally ECG to physicians.
Deb patients.
And you bet.
Any time.
These diagnostic capabilities have the potential to go beyond the 12 liter <unk> standard of care capable of recording and processing Vectorcardiography BTG signals and using powerful CV vector base aggregates up to detect cockpit decks.
We have been working on our core technology, Amy go with a credit card or factor, but our deep product pipeline that is val protected with our AP.
<unk> presents us with a extra ordinary opportunity, we believe to form alliances with key strategic players and multiple industrial.
Players equals the variables and ambulatory monitoring.
Our rich pipeline of products includes our on demand cloud.
Extended wear a patch.
We recently ran.
<unk> is our third U S patents on this technology, which will be bringing <unk> technology to the established extended their patch segments, which.
Which is estimated to reach four 8 billion.
By 2030.
We also have extensive IP or continuous cardiac monitoring through our acquisition of LIBOR, which.
We used to develop the first FDA cleared prescription variable.
Continuous cardiac monitoring.
Monitoring.
Also in our pipeline is our integrated system, which combines the genius cardiac monitoring with our 12 lead patient ECG.
No.
We watch which combines a 12 ECG.
Our continuous cardiac monitor into a single form factor.
Lastly, we are.
Applying the latest deep learning blauer cardiac signals.
Forward to update you soon on these efforts.
I would now like to turn the call over to our president Rob <unk> to provide product and business updates drop.
Thank you Brenda and thanks to everyone joining us today.
Turning to recent milestones a landmark study based on our novel <unk> Technology was published in JAK advances, our German with the American College of Cardiology. This peer reviewed study demonstrated the ability of heart beams. The ECG technology platform to detect the presence of coronary artery occlusion.
This is a very interesting study design that use balloon inflation during a stent procedure also called a percutaneous coronary intervention or PCI to simulate coronary occlusions Rpms technology and a standard 12, BDC gene where both tested for their ability to detect coronary of cushions.
There are three main takeaways from this study.
First on the left part beams technology matched the performance of our standard in hospital 12, we'd ECG with similar accuracy. This in itself is important as heart beam technology is intended to be used by patients outside of a health care institution.
Second the study showed that both for heart teams technology, and just standard 12 beat ECG when assessing chest pain performance was much better when the reading was accompanied by a baseline ECG taken before the event the area under the curve or AUC, a measure of accuracy was <unk>, 9%.
Pfeiffer greater when including both the symptomatic and baselines recordings.
The AUC when only the symptomatic was included with much lower around <unk> seven another words assessing pairs of <unk> the patient's baseline plus one taken during an event can increase accuracy by more than 30% 12, plus 12 is better than just the 12 liter ECG.
And this is particularly important because heart teams technology by design always includes the patients asymptomatic baseline taken when he or she is on boarded.
And our final takeaway is that in practice the heart team technology could have a dramatic improvement in accuracy over a 12 week <unk> taken in an emergency room.
The Heartbeat technology will always have a patients asymptomatic V ECG and we'll be able to assess the Paris of readings when a patient CCG is assessed in an emergency room, there's often no baseline.
So a heartbeat 12, plus 12 reading could be almost 40% more accurate than a single 12 <unk> recording in the emergency room with the AUC increasing from six eight to <unk> 95.
So when all of this study demonstrates the potential that the aim ecosystem holds and we will be conducting additional studies focused on our 12 week synthesis and on the performance of the system as a whole. We believe these studies will be key to driving clinical and patient adoption.
During the quarter, we were privileged to add multiple new respected industry executives and physicians to our leadership team board of directors and scientific Advisory Board.
We strengthened our board of directors with the appointment of Dr. Michael <unk>, <unk>, Chief Medical Officer, and Vice President of clinical Affairs technology and innovation as the peripheral interventions divisions at Boston scientific Dr. Jeff is a rundown vascular physician and researcher, bringing a wealth of clinical and industry experience to the board.
This follows the recent additions of Ken Nelson and bark stroke.
We also made three key hires to our senior management team Richard Gujarati joined Harte Bemis Senior Vice President of product Richard has over 13 years of experience collecting market level insights and translating them into business needs for companies ranging from St. Jude and I rhythm to Apple her deep expertise and go to.
Market strategies for health sensing technologies will be instrumental as we ready the heartbeat may be go system for market release.
Debbie Castillo joined heart team as Vice President of regulatory Affairs, Debbie's, an experienced biomedical engineer with extensive knowledge of FDA EU and health, Canada regulations. She has experience.
As well and she is industry experience as well in various positions with the FTA. She is responsible for leading our regulatory affairs function and overseeing the company's interactions with regulatory agencies worldwide and.
And finally, we welcomed <unk> as vice President critical she brings over 15 years of extensive clinical leadership experience in the medical device industry. Most recently at Abbott and will oversee our clinical studies and related efforts.
We recently added five distinguished physicians to our scientific Advisory Board. This group brings expertise in interventional cardiology electrophysiology clinical research and new technologies. The new members are Charles Hal Brown, the third Tony Das Robert Harrington Campbell Rogers and garage pharma.
They joined our Chief Medical Officer, Peter Fitzgerald, and the previously announced chair of our scientific Advisory Board, Michael Gibson I encourage you to read our press release of the appointments to get a sense of the wealth of experience that they bring.
We continue to make steady progress toward our key product milestones as previously discussed we will have two five 10-K submission to the FDA. So first which we call version one is for clearance of the heart team Amy Cove ECG device. This application, which was submitted to the FDA in may.
The hardware clearance as a three lead ECG collection device. This submission is progressing well we have received questions from FDA and have submitted our responses.
The second submission planned for after we receive the clearance for version one is for the software, including the algorithms that generate a synthesize 12 lead ECG for physician review.
On this application, which we call version two we've held a successful pre submission meeting with the FDA. This meeting focused on the design of the critical study that will demonstrate the performance of our synthesize 12, we'd ECG in relation to our standard <unk>.
We're encouraged by our interactions with FDA and we continue to expect the product will be ready for a limited market release during the second half of 2024.
I will now turn the call over to Rick Brownstein, Chief Financial officer to discuss operational updates and financials.
Thank you Rob.
Turning to our financials I will now give a brief overview of our financial results.
Full breakdown is available in our regulatory filings and in the press release that crossed the wire after market close today.
General and administrative expenses for the third quarter of 2023 were $2 1 million compared to 2 million for the third quarter of 2022.
Although overall G&A expense is flat cash spending is actually down and looking at the 2023 compared to 2022 and.
In 2022, we were investing in our commercial team and due to our change in the near term focus in early 'twenty three are not currently emphasizing commercial activities.
The reduced sales and marketing expense was offset by increased noncash stock based compensation.
Of about $4 million, resulting primarily from the issuance of employee stock options. Following the May 2023 financings.
Research and development expenses for the third quarter of 2023 or $1 6 million approximately the same level of expense as compared to the third quarter of 2022.
In addition to the current development focus on arguing any go.
Both periods. We also invested in research costs in support of the future product pipeline coming from our patented <unk> platform technology, which is the basis for our patent portfolio of 11 issued patents.
With a current interest rates in the short term markets around 5%.
$267000 in interest income in the third quarter of 2023 compared to 28000 in the third quarter last year.
Net loss for the third quarter of 2023 was $3 5 million compared to a net loss of $3 6 million for the third quarter of 2022.
We ended the third quarter of 2023 ahead of plan with $19 2 million in cash and cash equivalents.
<unk> to $3 6 million as of December 31st Flash.
As mentioned in May we closed a common stock financings with gross proceeds of $26 5 million to cash is planned to last into early 2025, we expect to receive FDA clearance for hockey mainly go version, two which is our commercial product in the second half of 2024.
We remain confident confident that we have sufficient funds to deliver on these important milestones have to get prepared to move into the commercialization phase of her being anglogold.
Also of importance in the May 23, financings. The fact that they were common stock only financings and did not call them any warrants.
Balance sheet as a result has a very simple and straightforward capital structure was approximately 26 million shares outstanding now.
Finally, I would also like to share the results of our recent annual meeting of shareholders.
The event all proposals passed.
Quoted added adding 4 million authorized shares to the 2022 equity incentive plan.
I'll now turn the call back over to Rob Branislav for closing thoughts.
Okay.
Thank you Rick.
Let me just say that we remain incredibly optimistic for the future a heartbeat.
Now I would like to summarize the recent efforts in the following categories.
Continued validation and company momentum.
Progress towards key milestones.
And financial soundness.
First we have several allows smiths does demonstrate these external validation of the technology and continued momentum of the company.
Our landmark clinical study was published in Journal of American College of Cardiology advances.
We made several key additions to our board of directors, our senior management team and our.
Advisory Board.
And the U S that did the trademark office landscape.
And pass it on.
So that will lead to extended their patch.
Sure 11 assets overall.
Next is Rob has summarized.
We have made steady progress towards our key milestones.
Active discussions with FDA on our initial application our Amy go hardware.
Equally importantly, we had a successful pre submission meeting with the FDA on our second application, which will be on the algorithm that synthesizes. The 12, the ECG from our Amy go device.
Our expectation for a limited launch.
In the second half of 2024.
That remains unchanged.
We have a strong cash position.
We ended the quarter.
With significant.
Cash position of $19 2 million.
Well that's the plan.
And these $19 2 million in cash it goes also cash equivalents and short term investments.
Providing the runway very importantly, too early 2025.
Okay.
I would like to close by reiterating that we have.
Had positive interactions with the FDA in the past quarter.
And we remain on track for our key project milestones.
I look forward to providing our shareholders with further updates in the near term.
I. Thank you all for attending and now the <unk> team would like to answer your questions.
Operator.
Thank you Sir.
And gentlemen at this time, we will be conducting a question and answer session.
If you would like to ask a question. Please press star and then one on your telephone keypad.
A confirmation tone will indicate your line is an increase from two.
You May press Star and then two if you would like to remove your question from the queue.
All participants using speaker equipment, it might be necessary to pick up your handset before pressing the star.
We will pause a moment, while we skewed symbols.
Our first question is from being high yield of.
And I'll just go to market.
Okay.
Good afternoon, gentlemen, thanks for taking the questions.
First off for me you know congrats on all the progress just curious on the interactions with the FDA.
The questions on the first submission I mean, it sounds like it's been a productive dialogue, but.
Just knowing that you've answered the questions I presume there arent any things that looked like showstoppers in there or is that.
A fair assumption.
Yes, we definitely had laboratory interactions now with the FDA on our first submission that's under consideration.
As well as on our <unk> tool.
Future submission, which was subject of our.
Resubmission.
Meeting with the FDA.
Without going into details.
We definitely have.
Tackle the issues that the FDA.
Basically brought up but we really don't have anything on.
On our horizon that would be all.
Serious concern or.
As you transition towards software so all in all it's quite a bit of work no question about that but.
There are no.
It was our judgment.
B O negative nature in terms of not being able to achieve our goal.
Okay great.
Really helpful and sounds positive and then just on the pre sub meeting any any takeaways that you can.
Potentially share on the study design I mean does that.
Bigger than a bread box I mean is that something you can do in animals and humans.
Dozens or hundreds of thousands what what's kind of the.
Is there any sort of.
Guide rails, you can give us on the on what that might look like.
Yes, indeed that was a significant.
Coffee in our <unk>.
<unk> be the FDA the clinical studies, the nature of the endpoints and as far as of course, it's going to be in humans is going to be a fairly simple study.
Or what the proposal is out and what.
FDA appears to be Oh.
You know basically positive on in terms of how the study will be designed and executed and it does so you know of course and the number of subjects is always the range that we expected and it is not high so all in all.
All the study everything is looking as we have envisioned so far.
Okay. So it sounds like Everything's gone.
According to plan or as you put it earlier well ahead of play out on the the cashless nation.
And then just lastly for me and then I'll jump back in queue.
Big deal with the JAK publication can you share any reaction that you've gotten from folks on that I know there was the editorial though came away positive that was published but just any.
What kind of color there that you have from me at all the other folks that are.
Saw that in our.
<unk> by its findings.
So Rob would you please.
Yeah sure Yeah, no that's a good question.
Feedback has been really positive I think you know as I highlighted I think a lot of the physicians we spoke to wear.
Intrigued by the study's design using a balloon inflation is really an interesting way to look at this this problem and.
I think the themes really resonated the theme that.
This is a good way to show kind of apples to apples that were equivalent to.
To a standard 12 lead even though we're outside the hospital and then this insight, which I think was neutral a lot of people of the importance of the baseline, especially when assessing potential heart attack or potential occlusion and how much that adds to the accuracy. Both for a 12 week and for ours. So I think as I tried to it.
Two what was the feedback we're getting is that it's really interesting when you put those two together because not everybody who goes to the emergency room get set they.
<unk> has a baseline readily accessible that actually our baseline being accessible provides a potential advantage. So I think the physicians we talked to were very excited about it and see it as a really great first step to prove the feasibility of the study and looking forward to continue to work with us and provide more.
Data.
Okay, Great. That's helpful. Thanks for thanks for taking the questions guys.
Thank you.
Thank you very much.
Ladies and gentlemen, just a reminder, if you wish to ask a question you wouldn't be star and then one.
One.
We have no further questions on the conference call. This amendment does not.
Does it cost questions.
Yeah.
The first webcast question asks if you have a 12 week ECG with the patients at home, who will read or interpret the heart attack the patients AI or a cardiologist if the ladder how will they get the ECG.
Yeah, I can I can take this one as well.
Yeah, It's a great question and it's really it's an important thing.
We believe it's crucial for the ECG to be evaluated by a physician.
Don't want to be in a position that that that heartbeat algorithm is saying whether or not you had especially in the case of a heart attack. So at some point.
Yeah.
We'll be set up the idea is the patient will perform the use the Amy go device at home with the device and the App that gets sent up to the cloud where the signals are processed.
Chefs for quality and then the 12 liter synthesized and then that is sent to the reader service, which then analyze it and then the physician in that reader service will reply to the patient, giving them the interpretation and can even initiate a telehealth visit or a consultation if needed. So we think.
It's important, especially when we're dealing with with things like potential heart attacks that Theres a physician in the loop and are building the workflow to to incorporate that.
Our next question asks you mentioned the application of deep learning to your system do you have more details on that effort.
Yes, when it comes to deep learning in general AI.
It's always in the headlines.
In terms of its impact on various areas.
All of our society and the future.
Impact is really quite a quite relevant when it comes to medical.
Area. So all in all are looking at.
Impact AI, you'll have one.
Specific.
Elio ECG, we believe that it's going to be impactful.
And death.
Technology.
Combined with our unique advantages that equals a data rich dataset.
And very importantly, a longitudinal data set.
<unk> collected overtime frequently over time for that patient will provide we believe value that goes beyond what ace data set so additional dataset thoughts about <unk> get author.
We are keenly interested in in AI and AR.
We will be making some announcements in terms of our plans and our efforts in this area.
In the near future.
Our next question asked do you have enough capital for 2025 commercial launch.
So that sounds like a good question for the CFO.
Yeah.
Yes, so a couple a couple of points on that.
So we have enough.
Enough money to get through the second FDA clearance, which is a commercial product and get it ready for launch Hum that said.
We clearly plan too.
To do another round of financing to fully fund the commercialization, so a little bit of both but we have probably several months of.
Leeway between when we expected.
We expect to get.
Ready for commercialization and when we would need another round of really carry on so we're feeling very comfortable from the cash position today.
The next question asks.
What are your near term milestones.
We made the decision.
To approach our regulatory submissions in two steps.
The first one is what we called V. One system.
Hardware system to credit cards.
<unk> hardware system, that's very important foundational.
Our ability to synthesize that certainly synthesize that lead is.
Our second submission the V go clear, we'll be seeking what it's about lead and indeed it is.
Right now we expect both of these to be cleared.
In 2024.
Our next question asks can.
Can you talk about new business development opportunities.
Sure I can break even on that one.
Brent as I've touched on that.
His overview of the new technologies.
So our focus obviously right now is on the game ecosystem I'm getting that through FTA and commercializing that in and that's what we described we believe we're making really good progress on that side of some very much our company's focus at the same time, we have this rich pipeline of products that have strong IP associated with them, so that continuous monitor watch but.
We call the integrated system, which is the watch plus the card and also the.
12 lead ECG Heartbeat watch and we think some of those given the size of our company really lend themselves well to strategic partnerships, especially in the area of where wearables and an ambulatory monitoring so.
We will.
We're gonna be pursuing discussions in the coming months with where it was.
With companies and just for some of those future areas.
And maybe I'll just touch on another question that I had seen seen come through which is on the go to market strategy for the.
For the aim ecosystem and so we are planning to go forward, bringing that product to market ourselves, we're gonna be unveiling more about what our go to market plans are we're making good progress in developing those plans and in the coming months, we'll outline them in a lot more detail.
Our next question asks.
CMS guidelines for chest pain patients is to go to the emergency Department and therefore, how do you plan on becoming a CMS guidelines.
Yeah, I'll I'll take I can take that one as well.
Another really interesting question.
First of all the Reits the guidelines or if you have chest pain, you should go to the emergency room. The reality is patients often delay three to four hours before going we think that's really one of the fundamental issues that exist today.
The ultimate goal is for this technology to be accepted and.
Go down a path of unique reimbursement as well as getting into the guidelines and so that's the short answer is that will all be done with studies and evidence it's going to be really important for us to to generate evidence and data that show the clinical effectiveness and cost effectiveness and so it takes time ultimate.
But but with evidence showing the benefit when patients use this device. That's the kind of work that would ultimately help to get something like this into the guidelines.
Okay.
And our last question asks where do you see the three lead finding a market. There are several dozen companies in this market and what is the value of another really.
Yeah, I can take that one as well. It's now these are just touching on some really good points.
When we talk about our three lead collection device.
It is collecting three orthogonal leads X y and Z and that's the basis of Vectorcardiography VC Chi and when you're collecting those specific three axes.
Gives you all the data all the electrical data into heart and from that you can then synthesize the 12 lead.
Other three lead devices other reduce lead set devices are not using three orthogonal leads so they're not they're projections that arent getting the full signal. So our difference for the three lead is that we are three lead V. C. G. So we're collecting all the heart signals, but as we've laid out the strategy. It's just.
Stepwise approach getting the hardware cleared as of three lead collection device that allows us to move on to taking that those three orthogonal leads and then synthesizing. The 12 lead. We believe it is important for physicians who are involved as we mentioned earlier to be able to analyze to 12 lead together with the baseline because that's worth it used to.
So it's a stepping stone, having the three orthogonal needs to get to the 12 lead synthesis wishes are true differentiator.
Thank you Sir.
Ladies and gentlemen, we have reached the end of the question and answer session.
I'd like to turn the call back to talk to about it for some closing remarks.
Thank you operator.
I'd like to thank each of you for joining our earnings conference call today and look forward to update you on our ongoing progress and growth.
If you were not able to answer any of your questions. Here today. Please reach out to our IR firm MZ group, who would be more than happy to assist.
Good day.
Okay.
Thank you very much.
Ladies and gentlemen that then concludes today's conference. Thank you for joining and you may disconnect. Your lines at this time.
Okay.
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