Q3 2024 HeartBeam Inc Earnings Call - Q&A
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Greetings and welcome to the HeartBeam 3rd Quarter 2024 Financial Results Conference Call. At this time, all participants are in a listen-only mode.
Speaker Change: A question and answer session will follow the formal presentation. As a reminder, this conference call is being recorded.
Speaker Change: Before we begin the formal presentation, I would like to remind everyone that statements made on the call-in webcast may include predictions, estimates, or other information that might be considered forward-looking.
Speaker Change: You are cautioned not to place undue reliance on these forward-looking statements, which reflect our opinions only as of the date of this presentation.
Speaker Change: Throughout today's discussion, we will attempt to present some important factors relating to our business that may affect our predictions.
Speaker Change: You should 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.
Your host today, Rob Eno, Chief Executive Officer, Branislav Vajdic.
Speaker Change: President and Finder, Tim Cruikshank, Chief Financial Officer, will present results of operations for the third quarter ended September 30, 2024.
Speaker Change: At this time, I will turn the call over to HeartBeam Chief Executive Officer, Mr. Rob Eno.
Speaker Change: Thank you, Operator. The topics we'll cover in today's call are listed on the slide.
Speaker Change: I'll provide a brief overview of the company's vision, and then quickly get into providing an update on the status of our FDA submission, which is top of mind for everyone.
Speaker Change: We'll then walk you through our management and company updates, financial results and upcoming milestones before turning it over to Q&A.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: HeartBeam has developed core technology that enables a new paradigm in cardiac care. HeartBeams developed the first ever cable free 12 lead ECG that patients can use wherever they are.
Speaker Change: We do this by using a vector-based approach, capturing the heart's electrical signals from three dimensions and then synthesizing a 12 lead ECG.
Speaker Change: This allows users to capture the highest resolution data possible in a patient-carried device far greater than with existing wearables.
Speaker Change: On top of this, applying AI algorithms to this high-resolution data opens up a world of possibilities, driving personalized insights.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: We believe that there are multiple large markets where our technology is applicable. And together, these addressable markets are worth more than $100 billion per year in the U.S. alone.
Speaker Change: HeartBeam is well positioned to disrupt these markets with a strategy that starts with symptom-driven diagnosis, moves to monitoring and screening, and ultimately to replacing traditional 12 lead ECGs in hospitals and beyond as a new standard of care.
Speaker Change: In an upcoming slide, we'll provide you with an update on our FDA submission. We believe this clearance is a foundational clearance for our technology and opens multiple product paths.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Over the past few months, we've put significant effort into further refining our go-to-market strategy. Our initial plan is focused on direct patient pay, targeting concierge and preventive cardiology practices.
Speaker Change: Beyond this, we'll gather evidence of the clinical and cost-effectiveness benefits of our system in specific use cases, which we believe will be the basis for payment by insurers, hospitals, and integrated delivery networks.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: There are three fundamental advances which form the core of our IP and enable our approach. First, we use a vector-based approach.
Speaker Change: Vector cardiography has been an alternative to 12-Weed ECG for decades. It captures the heart's electrical signals from three axes, X, Y, and Z. Ambulatory ECG devices that are available today do not use this vector approach.
Speaker Change: And finally, we take the 3D vector signals and synthesize the 12-lead ECG.
Speaker Change: There are established ways to make this conversion, but they're population-based.
Speaker Change: In order to create an even more accurate 12EDCG, we use a personalized transformation matrix.
Speaker Change: When the patient's onboarded, we take a single 12-lead ECG and combine this with a heartbeam reading. This creates the patient's personalized transformation matrix, which is saved and used going forward.
Speaker Change: These three fundamental advances enable the breakthrough application, and we have a total of 17 issued patents worldwide.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Now, let's get into our update on our FDA submission.
Speaker Change: Our 510k submission continues to progress through active review by the FDA.
Speaker Change: Since our last update, we've responded to the questions asked by the FDA and are working through clarifications.
Speaker Change: We continue to be confident in the FDA clearance. The FDA is engaged and fully responsive and we continue to work interactively with them. While we can't predict timelines or results related to FDA submissions, we remain optimistic that we will achieve our foundational FDA clearance and we will update the market as soon as it's achieved.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Over the past quarter, we've evolved our management team as we prepare for commercialization. I'm honored to lead the organization at such a pivotal time. My career over the past 30 years has focused on creating go-to-market strategies for multiple breakthrough products.
Speaker Change: The HeartBeam technology is truly transformative and will have a huge impact on how cardiac care is managed. I look forward to leveraging my commercial expertise to ensure the company is set up for success.
Speaker Change: I'm also thrilled to partner with Tim Cruikshank as our new CFO. He brings an incredible wealth of knowledge to growing businesses with disruptive technologies, and I know we'll benefit from that. Additionally, I look forward to working with Lance Myers, who leveraged his prior experience from Google to guide the company in how we apply AI to our core technology.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Of course, none of this would have been possible without our founder, Branislav Vajdic.
Richard Brounstein: Thanks, Rob. Since we started working together, Rob and I have always had a great synergy and I knew he would be the right leader for HeartBeam when we reach the point of commercialization.
Richard Brounstein: This transition is part of a long-planned evolution for the company, and Rob is the right person to lead the company with his keen understanding of sales, strategic marketing, and go-to-market strategies.
Speaker Change: I'm thrilled to be able to continue working with him in a new capacity as I turn my focus on innovating on our vector-based technology, driving research and development efforts, and working with Lance on advancing our artificial intelligence applications.
Speaker Change: Please join me in congratulating Rob in his new role as CEO.
Speaker Change: I want to thank all of you for the support you have given me as CEO and ask that you give the same support to Rob moving forward as he drives the growth of the company.
Bob.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Thanks so much Branislav. Let's now turn our attention to some key updates.
Speaker Change: We have a significant and growing body of clinical evidence on heartbeams technology.
Speaker Change: We have nine peer-reviewed publications and presentations on studies that have collectively enrolled more than 500 patients demonstrating the technology's potential in advancing cardiac care. These include the fundamentals of the technology as well as studies on the use of the technology in both arrhythmia and ischemia.
Speaker Change: For both those clinical areas, we've studied the similarity of our signals to simultaneously recorded 12 EDCGs.
Speaker Change: At the American Heart Association conference later this month, results will be presented from a pilot study comparing our synthesized 12-lead ECG to a standard 12-lead ECG for the detection of arrhythmias.
Speaker Change: The pilot study is a precursor to our pivotal U.S. study, which will be submitted as part of our package for FDA clearance for the 12-lead ECG synthesis.
Speaker Change: In addition, two studies were presented earlier this year on our AI algorithm and the classification of arrhythmias.
Speaker Change: For ischemia, our study on coronary occlusions was published last year in Jack Advances, and at this month's AHA, data will be presented on a novel algorithm used in conjunction with our ECG technology in detecting heart attacks.
Speaker Change: Beyond these clinical studies we have more than 13,000 recordings for more than 250 people providing meaningful insights as we learn about the performance and usability of the system.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: In addition to our significant body of clinical data, we continue to receive validation from our peers.
Speaker Change: During the renowned Global Healthcare Conference in October, HeartBeam was chosen from thousands of companies and named Rising Star at the 6th Annual Digital Health Hub Foundation Awards in the Home Health Diagnostic category. This comes months after we received a MedTech Breakthrough Award for Best New ECG Technology Solution.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: One of the main challenges in cardiac care is helping patients get the care they need in a timelier manner to prevent worse outcomes or an increased risk of death. These awards are a validation of our dedicated teams' hard work to deliver a simple way for patients to capture high-fidelity ECG signals wherever they are when symptoms occur to minimize any delays in care.
Speaker Change: And with that, I'll turn it over to Tim to take us through the financials for the quarter.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Thanks, Rob.
Speaker Change: The company remains focused on financial discipline and delivering on milestones while minimizing cash burn. I began with Heartbeam in September and in my short time here, I've been really impressed with not only the quality of the team, but also in the team's resourcefulness and maximizing resources across functions.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Net loss for the third quarter ending 30 September 2024 was just under $5 million, $4.979 million. When adjusted for non-cash items such as share-based compensation and timing differences, the net cash used in operating activities was just $3.3 million.
Speaker Change: which is more heavily weighted to our R&D and clinical initiatives than to G&A.
The cash balance at 30 September, 2024 was 5.8 million.
Speaker Change: In coming on board with the company, the initiative I was given was twofold. Utilize my past experience in leading and building strong teams to be a partner to Rob.
Speaker Change: and the board beyond the traditional CFO role and also to help provide the company with the resources and structure necessary to execute on its goals.
Speaker Change: So, I've spent the last month working with the team to further refine our strategy as well as engaging with all the key stakeholders from investors to employees. And I'm happy to say we have strong support from existing shareholders that are committed to groundbreaking technology like Heartbeams.
Speaker Change: Here at Heartbeam, we're focused on maintaining and adding value-add investors, and we'll finance the company opportunistically to manage dilution.
Speaker Change: With our upcoming milestones, which Rob's going to walk you through on the next slide, we're confident we have all the pieces in place to strategically capitalize the business, and we'll continue to align our cash burn to the achievement of our key milestones in advance of commercialization.
Back over to you, Rob.
Rob Eno: Thanks, Tim. We have a number of important value creation milestones, which we anticipate achieving in the coming months.
Rob Eno: First, is our foundational FDA clearance. As we've mentioned, we continue to have productive discussions with FDA, have responded to the latest set of questions, and are working through clarifications.
Rob Eno: and we continue to be confident about receiving that clearance. As we discussed previously, this foundational clearance is a major milestone for the company, as it's the basis of all future submissions.
Rob Eno: Our second planned FDA 510K submission is for the algorithms that synthesize a 12-lead ECG from our 360-degree vector signals.
Rob Eno: The basis of this submission is our VALID ECG study, a hundred and ninety-eight patient study conducted at five U.S. centers. The VALID ECG study evaluated HeartBeam's synthesized 12-lead ECG alongside simultaneously recorded standard 12-lead ECGs for arrhythmia detection.
Rob Eno: We've completed enrollment in valid ECG and will be submitting those results to the FDA as part of our planned second submission. We held two pre-submission meetings with FDA to discuss the study and the endpoints.
Rob Eno: As mentioned earlier, results of an 80-patient pilot study measuring the same endpoints will be presented at the AHA this month.
Rob Eno: We are anticipating submitting the second 510k application soon after we receive the initial FDA clearance. We can't predict the timing of the second clearance, but we are estimating it will occur next year.
Rob Eno: Upon the initial 510k clearance, we're prepared to start an early access program to provide us with important feedback on the use of the system by patients, prescribing physicians, and a cardiologist reader service.
Rob Eno: Upon the 510k clearance for the 12-lead synthesis software, we expect to begin a limited commercial launch.
Rob Eno: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Rob Eno: Next is our AI effort, which initially will focus on the classification of arrhythmias. As mentioned previously, we've presented clinical data on the algorithm. We're planning a clinical study called RAISE-ECG to demonstrate the performance of the AI algorithm in the classification of the signal as sinus rhythm or other arrhythmias.
Rob Eno: After Roman is complete, we plan to submit these results to the FDA.
Rob Eno: And in the coming months, we anticipate beginning interactions with FDA on the expansion of our clinical indication from arrhythmia to ischemic events.
Rob Eno: And finally, we have the two clinical studies to be presented at AHA this month, and we expect to have several additional data releases next year.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: So in closing, we continue to be engaged in productive discussions with the FDA and continue to be optimistic we will achieve our foundational FDA clearance. Upon the initial 510K clearance, we're prepared to start an early access program to provide us with important feedback on the use of the system by patients, prescribing physicians, and a cardiologist reader service.
Speaker Change: Over the last quarter, we've updated the management team to better position ourselves for the upcoming commercialization. In addition, adding Lance Myers as our chief AI officer and bringing Branislav's incredible capabilities to lead our technical effort will position us extremely well to continue leading in this fast moving field.
Speaker Change: The body of clinical evidence supporting our technology continues to grow, and we're excited to have a presence at the upcoming American Heart Association Scientific Conference next week, where data on two studies on HeartBeam's technology will be presented.
Speaker Change: While we're preparing for commercialization and strengthening our evidence base. We have a clear focus on delivering value
Speaker Change: We have line of sight to the upcoming clinical and regulatory milestones that will help put the company in position for commercial launch in 2025. The company remains focused on financial discipline and minimizing cash burn while delivering on milestones.
Speaker Change: I look forward to providing our shareholders with further updates in the near term.
Speaker Change: We thank you all for attending and now I'd like to open it up to Q&A. Operator?
Speaker Change: Thank you, Rob. Ladies and gentlemen, we will now begin the Q&A session. Should you have a question, please press star followed by one on your touchtone phone. You will hear a prompt that your hand has been raised.
Speaker Change: If you wish to remove your hand from the queue, please press star followed by two. If you're using a speakerphone, please lift the handset before pressing any keys.
One moment, please, for your first question.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: It looks like we have no phone questions at this time. We will now take questions from the web.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Our first webcast question asks.
Speaker Change: Can you provide more detail on the timing of the FDA clearance and what are the outstanding items?
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Yeah, I'll take that one.
Speaker Change: And then beyond that, as we've discussed in preparation for the commercialization, we've evolved the management team, and we're currently preparing for this early access program, which will begin after the initial FDA clearance.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Our next webcast question asks, given your cash burn, what are your plans for raising capital?
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Jim, do you want to take that one?
Thanks.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Yeah, important question. We're managing our cash burn really closely and but this quarter's operating cash flow at just 3.3 million. I believe doing an effective job had count just around 20. So keeping a lot of cost variable related to clinical and
R&D milestones.
Speaker Change: And Rob walked you through the milestone slide where we've got really good line of sight to what we're going to be achieving over the next coming quarters.
Speaker Change: As we stated on the call, we've got strong support from existing shareholders committed to this groundbreaking technology.
Speaker Change: and our focus is on maintaining and adding value at investors, which we believe will allow us to finance the company opportunistically while managing dilution here in the short term. So.
Speaker Change: With our upcoming milestones, we're really confident we've got the pieces in place to capitalize the business in a strategic manner in alignment with cash requirements in advance of commercialization.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Our next webcast question asks, congratulations to Rob on his appointment to CEO and thank you to Branislav for providing a strong succession plan.
Speaker Change: That said, can you provide more context on the timing and the reason for the change in CEO from Branislav to Rob?
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Rob Eno: Sure, I'll take that one. First, thank you for that. You know, as we mentioned, the transition has been planned for a long time. Branislav and I have worked very closely together since I joined the company, which was January of 2023. And even before then, when I served as a consultant, Branislav is, I think he's a true visionary, but also a hands-on leader, and really took the company from founding to where we are now. We have strong clinical data, the strong pipeline of products, and we believe we're close to the first FDA clearance.
So by being at the commercial stage now.
Rob Eno: Branislav's long thought this is the right time for a transition and having this company led by someone with more of a commercial background.
Speaker Change: I've been fortunate to have worked with a number of groundbreaking technologies, you know, from one of the first drug-eliminating stents to pioneering lasers for cataract surgery, to FFRCT that noninvasively measures blood flow. And I think what I learned from those, you know, developing and executing those go-to-market strategies really has prepared me well for the stage that HeartBeam's at in our upcoming introduction into the market. So I just I guess I want to finish by just emphasizing that Branislav is going to stay deeply involved.
Speaker Change: with the company, he's going to lead all of the technical efforts. So advanced R&D, our development projects and the AI efforts.
Speaker Change: So the company is going to continue to benefit from his skills and his energy as we go forward. Branislav and I have had a close partnership and that's definitely going to continue going forward.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Our next question asks, can you provide an update on how the timing and results of the valid ECG study?
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Sure, happy to take that one as well.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: So, the valid ECG study, just as a quick reminder, this is the 198 patient study at five U.S. centers, and it had simultaneously recorded heart beam signals and standard 12 EDCGs.
Speaker Change: And we, as we mentioned before, we've completed enrollment, we have analyzed the data and it will be the basis of this upcoming second FDA submission on the 12-week synthesis.
Speaker Change: Unfortunately, we can't talk about the results because the data have not yet been peer-reviewed
Speaker Change: It is the basis of that submission. But I did want to draw everyone's attention to the upcoming data at the American Heart Association. It's going to be in about 10 days. That presentation is on the results of the 80 patient pilot study that measures the same endpoints as Valid ECG.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: And our last webcast question asks, if everything goes right with the FDA, what could 2025 revenues look like for Harfine?
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Yeah, Tim, why don't you take that one? Sure.
Tim Cruikshank: And this is a question I can't wait to answer in more detail in future quarters. That's it for now.
Tim Cruikshank: I think the company stated in previous quarters, we don't anticipate significant revenue in 2025.
Tim Cruikshank: But of course, we're going to be working to bring forward timelines and expectations wherever possible. And of course, updating the market on our progress throughout 2025. You saw the slide where we give a real solid roadmap of the milestones that we're laser focused on. And on the back of our upcoming FDA clearance, I think it's critical we take the time now
Tim Cruikshank: to market the HeartBeam system through this early access program. You know, it's kind of our initial beta, if you will.
Speaker Change: commercial launch. So getting the critical user feedback for our go to market strategy, refining our pricing models, we're going to be gaining all of that information, that critical information in the coming quarters. And that'll give us the biggest impact on our commercial launch when it comes. Unknown Speaker
That concludes our webcast questions.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: I would now like to turn the call back over to Mr. Rob Eno for his closing remarks.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: We look forward to continuing to update you on our ongoing progress and growth as we close out the 2024 year. If we were unable to answer any of your questions today, please reach out to our IR firm, MZ Group, who would be more than happy to assist.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,
Speaker Change: Ladies and gentlemen, this concludes today's conference call and webcast. Thank you for your participation. You may now disconnect.
Speaker Change: Unknown Executive, Robert Eno, Richard Brounstein, Unknown Executive, Robert Eno, Richard Brounstein,