Q4 2024 PAVmed Inc Earnings Call
Operator: Good morning, and welcome to PAVmed fourth quarter 2024 Business Update conference call. At this time, all lines are in a listen only mode.
Good morning, and welcome to pad late fourth quarter 'twenty 'twenty for a business update conference call. At this time all lines are in a listen only mode. Following the presentation you will conduct a question and answer session.
Operator: Following the presentation, we will conduct a question and answer session. If at any time during this call, you require immediate assistance, please press star zero for the operator. Please note this event is being recorded.
At any time during this call you acquire immediate assistance. Please press star zero for operator.
Please note this event is being recorded.
Matt Riley: I would now like to turn the conference over to Matt Riley, PAVmed's Senior Director of Investor Relations. Please go ahead. Thank you, operator. And good morning, everyone. Thank you for participating in today's business update call.
Speaker Change: I would now like to starting to countries, where too much Wiley had met senior director of Investor Relations. Please go ahead.
Speaker Change: Thank you operator, and good morning, everyone. Thank you for participating in today's business update call. Joining me today on the call our Doctor Alicia Eclogues, Chairman and Chief Executive Officer of five Mad along with Dennis Mcgrath, Chief Financial Officer of five minutes.
Matt Riley: Joining me today on the call are Dr. Lishan Aklog, Chairman and Chief Executive Officer of PAVmed, along with Dennis McGrath, Chief Financial Officer. The press release announcing our business update and financial results is available on PAVmed's website. Please take a moment to read the disclosures, thought-forwarding statements, and the press The Business Update, Press Release, and the Conference Call all include forward-looking statements, and these forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from the statements made. Factors that could cause actual results to differ are described in the disclaimer and in our filings with the SEO.
Speaker Change: The press release announcing our business update and financial results is available on its website. Please take a moment to read the disclosure about forward looking statements in the press release the business update press release and the conference call include forward looking statements and these forward looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially.
Speaker Change: Some statements made.
Speaker Change: Factors that could cause actual results to differ are described in the disclaimer and our filings with the SEC.
Matt Riley: For a list and a description of these and other important risks and uncertainties that may affect future operations, see Part 1, Item 1A, entitled Risk Factors in PAVmed's most recent annual report on Forms 10-K, filed at the SEC, and any subsequent updates filed in quarterly reports on Forms 10-Q and subsequent Forms 8-K.
Speaker Change: For less than a description of these and other important risks and uncertainties that may affect future operations see part one item one a entitled risk factors in <unk>. Most recent annual report on forms 10-K filed with the SEC and any subsequent updates filed in quarterly reports on forms 10-Q, and subsequent forms 8-K.
Matt Riley: Except as required by law, PAVmed disclaims any intentions or obligations to publicly update or revise any forward-looking statements to reflect changes in expectations or in events, conditions, or circumstances on which the expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statement.
Speaker Change: Except as required by law passed med disclaims any intentions or obligations to publicly update where revise any forward looking statements to reflect changes and expectations or events conditions or circumstances on which the expectations may be based or that may affect the likelihood that actual results will differ from those contained in the affordable statements.
Lishan Aklog: I would now like to turn the call over to Dr. Lishan Aklog, Chairman and CEO of PAVmed. Take it away, Lishan. Thank you, Matt, and good morning, everyone. Thank you for joining our quarterly update call. I'd like to thank our long-term shareholders for your ongoing support.
Speaker Change: I would now like to turn the call over to Dr. <unk>, <unk>, chairman and CEO of five men.
Lisa: Hey, Lisa.
Lisa: Thank you, Matt and good morning, everyone and thank you for joining our quarterly update calls I'd like to thank our long term shareholders for your ongoing support and commitment before we delve into our recent operational highlights I just want to reiterate some of the critical steps that we've taken to stabilize patents corporate structure and balance sheet.
Lishan Aklog: Before we delve into our recent operational highlights, I just want to reiterate some of the critical steps that we've taken to stabilize PAVmed's corporate structure and balance. Those changes are not complete and PAVmed is now in a strong position to perform. As you know, PAVmed is a parent company. It has subsidiaries, including Lucid Diagnostics and Avaris Health, and last year spun out an incubator PM. As our subsidiaries succeed, particularly Lucid, it's important to understand that we expect PAVmed will follow suit.
Lisa: Those changes are now complete as a pattern that is now in a strong position to fulfill our mission.
Lisa: I think I've had met him at the parent company has subsidiaries, including lucid diagnostics and breast health and last year's spun out an incubator P. M X.
Lisa: However, subsidiaries succeed, particularly loose that it's important to understand that we expect to have not having that well will follow suit and succeed as well.
Lishan Aklog: At the beginning of this year, we successfully completed what was a carefully designed strategic transformation to solidify PADMED as a sustainable vehicle. As you recall, last year, we completed the deconsolidation of Lucid Diagnostics and restructured our convertible debt. This accomplished two things, one, it preserved PADMED's ownership in Lucid without having to absorb Lucid's operating losses on its balance sheet, and it allowed us to satisfy the NASDAQ Minimum Equity Listing requirement.
Lisa: Beginning of this year, we successfully completed what was a carefully designed strategic transformation before the fire department as a sustainable vehicle as you recall last year, we completed the deconsolidation of lucid diagnostics and restructured our convertible debt. This accomplished two things wanted preserve partners' ownership and lucid without having to absorb lucid to operate.
Lisa: Losses on its balance sheet and it allowed us to satisfy the NASDAQ minimum equity listing requirement satellite is now well positioned to operate as designed as a diversified commercial life Sciences company with multiple independently finance subsidiaries operating under a shared services model.
Lishan Aklog: PAVmed is now well positioned to operate as designed as a diversified commercial life sciences company with multiple independently financed subsidiaries operating under a shared So now on to highlights from the fourth quarter.
Lisa: So now onto our highlights from the fourth quarter and recent weeks.
Lishan Aklog: Let me start with Lucid Diagnostics, however, I do encourage you to listen to the Lucid Business Update call from yesterday for greater detail on these programs, but here's some of the main takeaways. Lucid generated $1.2 million in revenue and a test volume of just over 4,000 tests, which represented a 45% growth quarter-on-quarter. In the fourth quarter, ESAGuard revenue was approximately $1.2 million, and we booked record test volume of 4,042 tests, about a 45% quarter-on-quarter growth.
Lisa: Let me start with lucid diagnostics, however, I do encourage you to listen to the elusive business update call that from yesterday was for greater detail on these programs, but here are some of the main takeaways.
Lisa: Melissa generated $1 2 million in revenue and test volume of just over 4000, pets, which represented a 45% growth quarter on quarter.
Lisa: In the fourth quarter East regard, our revenue was approximately $1 $2 million.
Lisa: We booked record volume of 4042 test for about 45% quarter on quarter growth.
Lishan Aklog: Above are targeted 2,500 to 3,000 tests per quarter that are necessary for us to achieve critical mass with our revenue cycle management and medical policy efforts while protecting our cash. Highmark Blue Cross Blue Shield in New York established our first positive commercial insurance coverage policy for e-cigar, so exciting development there. Another exciting development was the update to the National Comprehensive Cancer Network Clinical Practice Guideline, which now includes esophageal pre-cancer screening consistent with the ACG gastroenterology guidelines. It's an important step. The NCCN is widely regarded as a key indicator of standardization.
Lisa: Our target of 2500 to 3000 tests per quarter that are necessary for us to achieve critical mass with our revenue cycle management and medical policy efforts wild.
Lisa: While protecting our cash burn.
Lisa: Hi, Highmark Blue Cross Blue Shield in New York established our first positive commercial insurance coverage policy for Easter Garden, So exciting development there.
Lisa: Another exciting development with the update to the National comprehensive cancer network clinical practice guidelines, which now includes esophageal pre cancer screening consistent with the ACG Gastroenterology guidelines as an important step in MCC and is widely regarded as a key indicator of standards of excellence and we.
Lishan Aklog: And we think this will help us drive positive commercial insurance coverage decisions in the coming quarters.
Lisa: This will help us drive positive commercial insurance coverage decisions in the coming quarters.
Lishan Aklog: Our concierge medicine cash pay program is off to a great start. We've executed over 20 concierge medicine contracts in just a few weeks since we started this program.
Lisa: Our first medicine pathway program is off to a great start we've executed over 20 countries medicine contracts in just a few weeks since we started this program.
Lishan Aklog: We also strengthened our balance sheet with long-term debt refinancing and registered direct common stock offering, extending our cash runway past the key upcoming reimbursement mark. We're also waiting for a response to our submission to the Moldex group for reconsideration of Visa Guard for Medicare coverage under the Local Coverage Determination, that was submitted in November and we Page PAGE of NUMPAGES www.verbalink.com Also, lots of great progress with Veris Health.
Lisa: We also strengthened our balance sheet with a long term debt refinancing and registered.
Lisa: A registered direct common stock offerings, extending our cash runway past the key upcoming reimbursement milestones.
Lisa: We also are waiting for a response to our submission to the multi X group, where we consideration of visa guard for Medicare coverage under the existing local coverage determination that was submitted in November and we expect some action on that I remain optimistic for action within the first half of this year.
Lisa: Although lots of great progress with various health.
Lishan Aklog: We were excited to complete a private placement financing with gross proceeds of $2.4 million at a $35 million pre-money valuation. These were accredited investors who purchased PavMed Securities at the market, as well as shares of Veris Common Stock. This financing supplements a recently-secured $1.8 million non-dilutive two-year NIH grant. This financing allows us to advance our strategy. We're focusing on the completion of the regulatory process for the implantable physiologic monitor and a regulatory clearance, regulatory submission by the end of this year or into the first quarter. We believe that this VARIS pre-mine evaluation really reflects strong investor confidence in VARIS' long-term commercial potential, and we expect that once cleared, the employment monitor will significantly improve.
Lisa: We were excited to complete.
Lisa: Placement financing with gross proceeds of $2 $4 million.
Lisa: At a $35 million pre money valuation at least credit investors, who purchase private securities.
Lisa: The market as well as our shares of <unk> common stock.
Lisa: This financing supplements.
Lisa: Our recently secured $1 $8 million non dilutive to your NIH grant.
Lisa: This financing allows us to advance our strategy.
Lisa: We're focusing on the.
Lisa: On the completion of the regulatory process for the implantable physiological monitor and a.
Lisa: Regulatory clearance.
Sorry submission by the end of this year or the first quarter of next year.
Lisa: We believe that this various pre money valuation of really reflect strong investor confidence in various with long term commercial potential and we expect that once cleared there kind of a monitor will significantly enhance the commercial potential. We also continue to have a strong engagement with our partners at the Ohio State University that James Cancer Center, we extended our pilot program with them.
Lishan Aklog: We also continue to have a strong engagement with our partners at The Ohio State University, the James Cancer Center.
Lishan Aklog: We extended our pilot program with them to the end of April to give us time to close on a long-term commercial strategic partnership, which we believe is imminent.
Lisa: Through the end of April.
Lisa: Give us time to close on a long term commercial strategic partnership, which we believe is imminent on the incubator side, we're continuing to seek a direct financing to fund our report in Ireland have had contact with them.
Lishan Aklog: On the incubator side, we're continuing to seek direct financing to fund the important IOU and have had contact with angel investors as well as with several strategics, and those conversations remain active.
Lisa: With Angel investors as well as with several strategic conversations remain active.
Lishan Aklog: With that, I'll pass the call on.
Das: With that I'll pass the call onto Das.
Dennis McGrath: Thanks Lishan and good morning everyone. Our summary financial results for the fourth quarter in the year were reported in our press release that has been distributed. On the next three slides, we'll emphasize a few key highlights from the fourth quarter, but I encourage you to consider those remarks in the context of the full disclosures covered in our annual report on Form 10-K as filed with With regards to the balance You will recall from our last. call in November. The company was engaged in a multi-step process to regain compliance with NASDAQ's listing standard for minimum equity and also position the company for long-term financial stability.
Das: Thanks, Lee and good morning, everyone. Our summary financial results for the fourth quarter and year were reported in our press release that has been distributed.
Das: On the next three slides I'll emphasize a few key highlights from the fourth quarter by encourage you to consider those remarks in the context of the full disclosures probably in our annual report on Form 10-K as filed with the SEC.
With regard to the balance sheet.
Das: You will recall from our last.
Das: Call in November the company was engaged in a multi step process to regain compliance with NASDAQ listing standards for minimum equity and also position the company for long term financial stability.
Dennis McGrath: Among the strategic endeavors that Lishan spoke about, there were three immediate tactical financial targets we were intent on accomplishing. Namely, one, deconsolidating LUCID from PAVmed's consolidated financial statements. Two, restructuring our debt. And three, focusing on financing VERUS and Porn.io. This slide reflects the balance sheets for the 3rd quarter and 4th quarter after deconsolidation, which occurred on September 10th. prior to the effect of the debt exchange. which became effective on January 17th, 2025, right after the shareholders approved the exchange. And two, prior to NASDAQ's notice of listing compliance on February 14th, and three, prior to the PAVmed Veris financing that occurred on February.
Speaker Change: Among the strategic endeavors that Lee Sean spoke about there were three immediate tactical financial targets. We are intent on accomplishing, namely one the consolidating lucid from <unk> consolidated financial statements to restructuring our debt from three focusing on financing various in port II.
Das: <unk>.
Das: This slide reflects the balance sheets for the third quarter and fourth quarter after deconsolidation, which occurred on September 10th but.
Das: Prior to the effect of the debt exchange, which became effective on January 17, 2025, right. After the shareholders approve the exchange and two prior to NASDAQ notice of listing compliance on February 14th and three prior to the patent that various financing that occurred on February 20 <unk>.
Dennis McGrath: So, a couple of key things to point out on each of these balance sheets. Cash does not include any lucid cash. to the equity method investment balances reflect the 31.3 million lucid shares marked to market on each balance sheet date, which is December 31st. The date of the balance sheet was $0.82 per share. This amount was previously eliminated from PAVmed's balance sheet prior to deconsolidation. The stock price between September 30th and December 31st was relatively flat, hence the balance did not change much between the beginning and ending dates of the fourth quarter. However, the lucid stock price is way up since year end, and so the impact of a rising stock price can have a dramatic impact on PAVmed's first quarter results.
Das: So a couple of key things to point out on each of these balance sheets.
Das: Cash does not include any lucid cash.
Das: To the equity method investment balances reflect the $31 3 million lucid shares mark to market on each balance sheet date, which ended December 31.
Das: The date of the balance sheet was 82 per share.
Das: This amount was previously eliminated from the pack from tablets balance sheet prior to deconsolidation.
Das: The stock price between September 30, and December 31.
Das: Was relatively flat.
Das: Hence the balance did not change much between the beginning and ending dates of the fourth quarter.
Das: However, the lucid stock prices way up since year end, so the impact of a rising stock price could have a dramatic impact on cabinets first quarter results.
Dennis McGrath: Way to think about that impact of this line item and how it affects the building financial stability of PAVmed is as follows. For every 3.2 cents of lucid price change from a base of 82 cents. The balance sheet amount will change by $1 million in total. as an example, just in the last couple of weeks. This amount has increased to just under $50 million. Note, there is plenty more information in 10k on this topic, particularly note four to the financial. The Senior Secured Note balances are before the debt exchange that occurred after year-end on January 17.
Das: Way to think about that impact of this line item and how it affects the building financial stability.
Das: <unk> is as follows.
Das: For every three two cents of lucid price change from a base of 82 cents.
Das: The balance sheet amount will change by $1 million in total.
Das: As an example, just in the last couple of weeks.
Das: This amount is increased to just under $50 million.
Das: No there is plenty more information in the 10-K on this topic, particularly note for to the financial statements.
Das: Rig senior secured note balances are before the debt exchange that occurred after year end on January 17th.
Dennis McGrath: General way to think about how the balance sheet amount changes as a result of the January debt exchange. is to decrease the debt by $25 million and increase preferred equity by $25 million. PAVmed continues to be the single largest shareholder of the common stock, however, the controlling voting interest dropped from more than 50% to about 32%. as a result of these intentional actions by management and the board clearing the pathway to deconsolidate Lucid from PAV. Some additional tactical steps have been taken by management and the board. One, the incurrence of future R&D expenses to advance the next development stages of various cancer care platform and PortIO technology will be largely dependent upon obtaining funding for those entities to cover the incremental development.
Das: The general way to think about how the balance sheet amount changes as a result of the January debt exchange.
Das: Is to decrease the gap by $25 million.
Das: And increased preferred equity by $25 million.
Das: Avnet continues to be the single largest shareholder of the common stock. However.
Das: The controlling voting interest dropped from more than 50%.
Das: About 32%.
Das: As a result of these intentional actions by management and the board clearing the pathway to deconsolidation lucid from past that.
Das: Some additional tactical steps.
Das: Been taken by management and the board.
One the encourage the future R&D expenses to advance the next development stages of various various cancer care platform and <unk> technology will be largely dependent upon obtaining funding for those entities to cover the incremental development costs.
Dennis McGrath: Hence, any increased burn rate from those endeavors will be offset. from the incremental signing. As a good start in that direction, we previously announced being awarded an NIH grant of $1.8 million for VERIS, it's payable over two years, for which we collected 50% of the award in December, which covered VERIS expenses in the fourth quarter. The additional funding efforts were paused pending the outcome of the NASDAQ hearings panel. with the NASDAQ approval in hand on February 14. The PAVmed Veris financing was then later completed on February 21st. The various components of the financing was negotiated at a $35 million pre-money value.
Das: Any increased burn rate from those endeavors will be offset.
Das: From the incremental financing.
Das: As a good start in that direction, we previously announced being awarded NIH Grant of $1 8 million for various it's payable over two years for which we.
Das: It's 50% of the award in December which covered various expenses in the fourth quarter.
Das: The additional funding efforts have been paused pending the outcome of that.
Das: I've got hearings panel.
Das: With the NASDAQ approval in hand on February 14th.
Das: The patent adverse financing was then later completed on February 21.
Das: The various components of the financial was negotiated a $35 million pre money value.
Dennis McGrath: Port IO Corp. has ongoing discussions with both financial and strategic investors for direct investment into Port IO Corp. at a pre-money valuation of $42 million to cover the final development. Chairs outstanding today include Unvested RSA's at approximately 17 and a half million shares of. The gap year-end outstanding shares of $11.2 million are reflected on the slide, as well as on the face of the balance sheet in the 10-year chart. Gap shares do not reflect unvested RSA amounts. Similar to past presentations. P&L slide provides some GAAP and non-GAAP year-over-year, quarterly, and annual comparisons. However, there are some significant differences in how the information is compiled between the comparative periods, given the changes in PAVmed's financial control loopholes.
Das: Port I O Corp has ongoing discussions with both financial and strategic investors for a direct investment in the Port I O Corp at pre money valuation of $42 million to cover the final development costs.
Das: Shares outstanding today include.
Unvested RSA.
Das: At approximately 17 5 million shares outstanding.
Das: The gap year and outstanding shares of $11 2 million are reflected on the slide as well as on the face of the balance sheet in the 10-K.
Das: GAAP shares do not reflect unvested RSA events.
Das: Next slide please.
Das: Similar to past presentations. This P&L slide provides some GAAP and non-GAAP year over year quarterly and annual comparisons.
Das: However, there are some significant differences in how the information is compiled between the comparative periods given the changes in <unk> financial controls lucid.
Dennis McGrath: Importantly, the gap construct for deconsolidating Lucid on September 10th. somewhat blurs the historical understanding of the information for PAVmed as a standalone entity. And GAP does not allow the presentation for prior periods to be similarly. The gap annual results as presented reflect inclusion or consolidation of Lucid's results through September 10th, and then differently after that date, namely without Lucid. Furthermore, you will see a large net income of $28.4 million on the GAAP P&L before non-controlling And the 10-K shows a gap-positive primary EPS. $3.30 per share and a positive diluted EPS of $0.50. This is all the result of eliminating LUCID from PAVMed's balance sheet and extracting the impact of LUCID's cumulative historical loss.
Das: Importantly, the gap construct for deconsolidation lucid on September 10th.
Das: What blurs the historical understanding of the information for cabinet as a standalone entity.
Das: And GAAP does not allow the presentation for prior periods to be similarly adjusted.
Das: The GAAP annual results as presented reflect inclusion or consolidation of lucid results through September 10th and then differently. After that date, mainly without loosing the results.
Das: Furthermore, you will see a large net income of $28 4 million on a GAAP P&L before noncontrolling interest and the 10-K shows a GAAP positive primary EPS.
Das: $3 30 per share at a positive dilutive.
Das: So <unk> 50 per share.
Das: This is all the result of eliminating lucid from tablets balance sheet and extracting the impact of loose its cumulative historical losses.
Dennis McGrath: The net adjustments to the balance sheet create a $72 million gain that then flows through the P&L to obtain the net equity impact of all the deconsolidation adjustments. Happy to answer any detailed questions on the slide in the Q&A. But I think it's more informative to look at the fourth quarter stand-alone information presented in this slide and the full fourth quarter information presented in our press release that shows a company baseline bias of operating at cash flow break-even and incurring incremental PAVmed expenses for development activities that are offset by dedicated funding. So in the fourth quarter, you see a non-GAP loss.
Das: The net adjustments to the balance sheet create a $72 million gain that then flows through the P&L to obtain the net equity impact of all that consult deconsolidation adjustments.
Das: Happy to answer any detailed questions on the slide in the Q&A.
Das: But I think it's more informative to look at the fourth quarter Standalone information presented in this slide and the full fourth quarter information presented in our press release. It shows a company baseline bias of operating at cash flow breakeven and incurring incremental <unk> expenses for development activities that are often.
Das: Set by dedicated funding.
Das: So in the fourth quarter, you see a non-GAAP loss of 688000, which has been offset by the NIH NIH grant proceeds of $900000.
Dennis McGrath: The award goes to Welcome to Washington By Ron Allen. The initial grant fund for this issue was $688,000. That amount is offset by the NIH grant proceeds of $900,000. where that three months ended December 31st, 2024. PAVmed revenues reflect approximately 125 patients on the VAERS cancer care platform, largely in connection with the expanded pilot program with OSPI. ESA Guard-related revenues are no longer consolidated with PAVmed results with a deconsolidation that became effective. PAVVEDS Management Service Income from LUCID Diagnostics. of 3.2 million for the quarter is reflected in other income. Operating expenses were approximately $5.2 million, which includes stock-based compensation expenses of $700,000.
Das: For the three months ended December 31 2024.
Das: GAAP net revenues reflect approximately 125 patients on the various cancer care platform largely in connection with the expanded pilot program with OSU.
Das: Eastern Garden related revenues are no longer consolidated with patented results with a deconsolidation that became effective in September.
Das: Tablets management service income from lucid diagnostics of.
Das: A $3 2 million for the quarter is reflected in other income.
Das: Operating expenses were approximately $5 2 million, which includes stock based compensation expenses of 700000.
Dennis McGrath: Gap net income attributable to common stockholders was approximately $1.3 million, or approximately $0.12 per common share on a diluted basis for the With regard to the non-GAAP operating expenses, on this slide you'll see a graphic illustration of our operating expenses over time as presented in more detail in our press. Total non-GAAP OPEX is $4.2 million for the fourth quarter. The decrease is equally related to the impact of deconsolidation and the fact that the combined op-eds ignoring deconsolidation of PAVMed and LUCID would have been in line with the previous.
Das: GAAP net income attributable to common stockholders was approximately $1 3 million or approximately <unk> 12 per common share on a diluted basis for the quarter.
Das: Next slide please.
Das: With regards to the non-GAAP operating expenses on this slide you will see a graphic illustration of our operating expenses overtime as presented in more detail in our press release.
Das: Total non-GAAP Opex is $4 2 million for the fourth quarter of 2000 and for the.
Das: The decreases equally related to the impact of deconsolidation.
Das: And the fact that the combined opex, ignoring deconsolidation of patent and lucid would've been in line with previous quarters.
Operator: With that, Operator, let's open it up. Thank you.
Das: With that operator, let's open it up for questions.
Operator: And ladies and gentlemen, we will now begin the question and answer session. To ask a question, you may press star followed by the number one on your telephone keypad. If you're using a speakerphone, please pick up your handset before pressing any keys. To withdraw your question, you may press star followed by the number two. One moment please for your first question. And once again, if you would like to ask a question, simply press star followed by the number one on your telephone keypad.
Das: Thank you and ladies and gentlemen, we will now begin the question and answer session to ask a question you May press star followed by the number one on your telephone keypad, if youre using a speakerphone. Please pick up your handset before pressing any keys do we do all your a question you May Press Star followed by then and Brett you one moment. Please for your firm.
Das: Next question.
Das: Yes.
Das: And once again, if you would like to ask a question simply press star followed by the number one on your telephone keypad.
Jeremy Furman: Your first question comes from the line of Jeremy Furman with Maxim Group. Please go ahead. Good morning. Yeah. Thank you for taking my question.
Speaker Change: Your first question comes from the line of Jeremy <unk> with Maxim Group. Please go ahead.
Jeremy: Good morning. Good morning. Good morning. Thank you for taking my question just quickly on the the various health care cancer platform with the Ohio State that pilot program. So it seems like it was extended through April.
Lishan Aklog: Just so quickly, on the health care cancer platform with the Ohio State, that pilot program, it seems like it was extended through April. You know, it seems like the finalizing a contract is imminent. What is, based on your conversations you're having with them, what does that contract you think look like? How's it going to, you know, play out? Yeah, it's really exciting because it's not only a commercial engagement and our first major commercial engagement, it'll be our first major commercial engagement with the third largest cancer center in the country. It's also a strategic partnership, and that's been part of the nature of our engagement with Ohio State, with the James Cancer Center, going back to the very beginning and the contemplation of the memorandum of understanding, the design and the launch of the pilot program, the sort of joint assessment of the successes of the pilot program with regard to the various key performance indicators, KPIs, as well as clinical success, fine tuning of how the platform works within the construct of their workflow.
Jeremy: It seems like the finalizing a contract what is based on your conversations you're having with them what does that what does that contract do you think look like how's it going.
Jeremy: Yes.
Jeremy: It's really exciting because it's not only a commercial.
Jeremy: Engagement in our first.
Jeremy: First major commercial engagement that will be our first major commercial engagement with the third largest.
Jeremy: Cancer Center in the country.
Jeremy: It is also a strategic partnership and that's been part of the nature of our engagement with them.
Jeremy: Staying with the James Cancer Center going back to the very beginning and the contemplation of the memorandum of understanding the design and the launch of the pilot program the sort of joint assessment of the success of the pilot program.
Jeremy: With regard to various keep key performance indicators kpis as well as clinical success fine tuning to how.
The platform works within the construct of there.
Jeremy: Their workflow so all of that's been great. So the reason we extended the pilot was frankly, because as we were working through the details of what the.
Lishan Aklog: So all of that's been great. So the reason we extended the pilot was, frankly, because as we were working through the details of what the agreement would look like, there was just demand from the clinical sites to continue enrolling patients. And so we just agreed to continue it while we were ironing out the final details. There will be a commitment from Ohio State to enroll a substantial portion of patients over the first year. These will be commercial patients, but also patients enrolled in a registry, so we'll be able to use that data, collect that data for ongoing improvements, but also for a pathway towards data analytics and development of clinical decision support tools using AI.
Jeremy: The agreement would look like.
Jeremy: There was just demand from the clinical sites to continue enrolling patients and so we just agreed to continue.
Jeremy: While we are ironing out the final details.
Jeremy: Okay.
Jeremy: There will be a commitment.
Jeremy: From Ohio States too.
Jeremy: Enrol a substantial portion of patients over the first year.
Jeremy: <unk>.
Jeremy: These will be commercial patients, but also patients enrolled.
Jeremy: Registry, so we will be able not to use that data and collect that data for ongoing improvements, but also for a pathway towards.
Jeremy: Data analytics and.
Jeremy: And development of clinical decision support tools using using AI.
Lishan Aklog: They've also committed to being the first site for, once the agreement is consummated, for them to be the first site for the initial implantation of the implantable device. FDA cleared and to do a separate registry for that to help us document its role and its use. So it's really a comprehensive commercial as well as a strategic partnership. What it does during this interval of time where the primary focus for VERUS is going to be on advancing the implantable and launching the agreement with Ohio State, what it will do for us as we culminate that process and we end up crossing the threshold with FDA clearance is it will really be a poster child, a standard bearer for our ability to engage with other large cancer centers and the James is very committed to helping us do that and for them to be at the forefront of using a dedicated cancer care platform to enhance care.
Jeremy: They are also committed to being the first site for.
Jeremy: Once the agreement is consummated for that going to be the first site.
Jeremy: Sure.
Jeremy: Initial implantation of the implantable device.
Jeremy: Sure.
Jeremy: After you cleared and to do a separate registry for that to help us document it's.
Jeremy: It's rolling in to us so it's really a comprehensive commercial as well.
Jeremy: Our strategic.
Jeremy: Apartment partnerships what it does during this interval of time Warner are where the primary focus for various is going to be on advancing the implantable and launching.
Jeremy: Yeah.
Jeremy: The agreement.
Jeremy: With a with Ohio state what it will do for us as we culminate that process then we end up.
Jeremy: Crossing the threshold with FDA clearance is it'll really be a poster child of a standard bearer for our ability to engage with other large cancer centers.
Jeremy: James is very committed to helping us do that and for them to be at the forefront of using a dedicated cancer care platform to enhance the care of their patients.
Unknown Attendee: Understood. Thank you.
Jeremy: Understood. Thank you and then just one follow up question you mentioned the implantable device now that you have funding for that and do you have any more clarity how that timeline would look take till you hopefully get potential FDA approval for that.
Lishan Aklog: And then just one follow-up question. You mentioned the implantable device. Now that you have funding for that, do you have any more clarity how that timeline would look to hopefully get potential FDA approval for that? Yeah, sure. So we're getting the manufacturing partners with us back online and getting all the, you know, as you may recall, we were pretty far along with that process. And so that's just, that's all getting rebooted. Right now, it looks like that process will be completed and we'll be ready for submission in the very end of this year or the early part of 2026.
Jeremy: Yes, sure. So we are getting.
Jeremy: The.
Jeremy: The manufacturing partners with us.
Jeremy: Back on back online and getting getting although yeah.
Jeremy: You may recall, we are pretty far along with that process.
Jeremy: Thats just thats, all getting rebooted right now it looks like that process will be completed and we'll be ready for <unk>.
Jeremy: Submission in.
Jeremy: End of this year or the early part of 2026.
Lishan Aklog: The, I just want to maybe use this opportunity to note that we've had numerous engagements, pre-submission meetings with the FDA. We have a very clear idea, they have a very clear idea of what we intend to do and we have a very clear idea of what they're going to ask us to do. It's been a very successful engagement in that it looks like we'll be able to avoid having to do any kind of sort of meaningful human clinical trial of the implantable where it's actually implanted. And we're in the final stages of kind of just checking one last box with them around the way to validate a skin study where the device is just put on the skin and used to monitor patients for short periods of time to demonstrate that, to demonstrate its efficacy without having to do a full-blown clinical study.
Jeremy:
Jeremy: I just wanted to just maybe use this opportunity to note that we've had numerous <unk>.
Jeremy: <unk> has grown its pre submission meetings with the FDA, we have a very clear idea. They have a very clear idea of what we intend to do and we have a very clear idea of what theyre going to ask us to do.
Jeremy: It's been a very successful engagement and that it looks like we will be able to avoid having to do any any kind of sort of meaningful human clinical trial of the implantable, where it's actually implanted and we're in the final stages of kind of what we're just checking one last box with them around.
Jeremy: The way to validate a skin study, where the devices just put on the skin and used to monitor patients for short periods of time to demonstrate that that to demonstrate its efficacy without having to do a full blown clinical study so.
Lishan Aklog: So really intense engagement with FDA that's really borne fruit with regard to what we'll have to do to get this thing cleared.
Jeremy: Go ahead and get engaged with the FDA, that's really borne fruit with regard to what we'll have to do.
Jeremy: To get this thing cleared.
Unknown Attendee: Okay, great. Thank you for that information, and I'll hop back in the queue. Great. Thanks, Jim.
Jeremy: Okay, great. Thank you for that information and I'll hop back in the queue.
Speaker Change: Great. Thanks Darren.
Ross Osborn: And your next question comes from the line of Ross Osborn with Canterburch Drill. Please go ahead. Hey Ross, how are you?
Speaker Change: And your next question comes from the line of Ross, Our spring with Cantor Fitzgerald. Please go ahead.
Speaker Change: Hi, Ross how are you.
Matthew Park: Hey guys, this is Matthew Park on for us today. Thanks for taking the time.
Speaker Change: Hey, guys. This is Matthew Clark on for Ross today, Thanks for taking my call.
Lishan Aklog: I guess this one for me, can you give us some color on discussions you're having with other institutions on Verus to initiate pilot launches and any learnings you can take from what you're doing at OSU when going into other centers? Yeah, so we. We had a pretty comprehensive process of screening, you know, the sort of hundreds of cancer centers in this country, screening for targets that are, that have NCI designation, that have, that are large, have significant number of patients getting advanced therapies. And I would say of that group, we've had meaningful conversations with about a dozen or so, and more advanced conversations with a handful, say four or five.
Speaker Change: This is John I guess, just one for me can you give us some color on the discussions youre, having with other institutions on Paris to initiate pilot launches and any learnings from what youre doing at OFC or when going into other centers.
Speaker Change: Yes, so we.
Speaker Change: We have a pretty comprehensive.
Speaker Change: <unk> of screening.
Speaker Change: Sort of a 100.
Speaker Change: Cancer centers in this country screening for.
Speaker Change: <unk> targets that are that have been.
Speaker Change: <unk> designation.
Speaker Change: But our large have significant number of patients getting advanced therapies.
Speaker Change: And I would say of that group we've had.
Speaker Change: Meaningful conversations with about a dozen or so and more advanced conversations with.
Speaker Change: A handful of say four or five of those were not pushing real hard on advancing new pilots because we want to take the sort of limited resources right now and make sure that we're advancing the implied that we're applying those to the implantable.
Lishan Aklog: We're not pushing real hard on advancing new pilots because we want to take the sort of limited resources right now and make sure that we're advancing, that we're applying those to the implantable. We really believe from the pilot engagement with OSU that, although we've had really great success with the software platform in conjunction with the various box of connected devices, that the real differentiator here over the medium and long term is with the implantable. So we continue to have dialogues with a handful of other major centers. There's been positive feedback with regard to our experience to date with Ohio State and the opportunity to enhance care.
Speaker Change: We really believe from the pilot engagement with OSU.
Speaker Change: Although we've had really great success with the software platform in conjunction with the <unk>.
Speaker Change: Ferrous box connect.
Speaker Change: Connected devices that.
Speaker Change: Real differentiator here over the medium and long term is with as with the implantable. So we continue to have dialogues with a handful of other.
Speaker Change: Our major centers there is good positive feedback with regard to <unk>.
Speaker Change: Our experience to date with Ohio state and the opportunity to enhance to enhance care. So those relationships are being kept warm it's certainly possible we'll add.
Lishan Aklog: So those relationships are being kept warm.
Lishan Aklog: It's certainly possible we'll add a pilot or two during this period where we're focused primarily on the OSU engagement and the advancement of the implantable. But we don't expect to make a major push to expand the number of sites until after the implantable is clear. And we believe that that's the best utilization of our resources. And frankly, by then we'll have a meaningful amount of data from the more formal post-pilot commercial engagement with OSU that we'll be able to leverage.
Speaker Change: Our two during this period.
Speaker Change: We're focused primarily on the OSU engagement and fans.
Speaker Change: No.
Speaker Change: Implantable, but we don't expect to make a major push to expand the number of sites.
Speaker Change: Until after the <unk>.
Speaker Change: Implantable is clear and we believe that that's the that's the best utilization of our resources and frankly by then we'll have a meeting.
Speaker Change: A meaningful amount of data from the more formal.
Speaker Change: Post pilot commercial engagement with only a few that will be able to leverage there are also a variety of other things that we're going to be working on it over during this period of time, where we're looking to work with that with you.
Lishan Aklog: There are also a variety of other things that we're going to be working on during this period of time. We're looking to work with OSU on helping us develop a clinical support offering. So we can offer sites the ability for various personnel to provide some clinical support, to triage alerts and so forth to help them maximally utilize the platform itself. So that's something that's in progress as well as developing tools beyond the baseline remote patient monitoring functionality that already exists. So AI-based tools for clinical decision support. So all of those are really things that will enhance the product, both the implantable as well as the software element, which will put us in a strong position to expand beyond a handful of centers once the implantable is clear.
Speaker Change: Uh huh.
Speaker Change: Helping us develop our clinical support.
Speaker Change: Offering so we can offer sites.
Speaker Change: The ability for.
Speaker Change: Various personnel to provide some clinical support to triage alerts and so forth to help them.
Speaker Change: Maximally utilize.
Speaker Change: The platform itself, so thats something thats in progress as well as.
Speaker Change: Developing tools beyond the baseline remote patient monitoring functionality that already exists. So AI based tools for a clinical social support. So all of those are really things that will enhance the product both the implantable as well as a software element.
Speaker Change: Which will put us in a store.
Speaker Change: Wrong position to expand beyond a handful of centers once the implantables quicker.
Unknown Attendee: Got it. Super helpful. Makes sense.
Speaker Change: Got it Super helpful and makes sense and then I guess one more for me on part I. So pending any incremental financing can you just walk us through what's the path to FDA approval would look like here and any additional studies you need to go through.
Lishan Aklog: And then I guess one more for me on Port IO. So pending any incremental financing, can you just walk us through what the path to FDA approval would look like here and any additional studies you need to go through? Sure, sure.
Lishan Aklog: We don't get a chance to talk too much, but just maybe on PortIO, so just a reminder of what PortIO actually is. PortIO is the first, excuse me, the first implantable long-term vascular access device that uses the bone marrow. As a site, that's the intraosseous, or IO, portion of... of the name Port IO. And it's using it, it provides a really an opportunity to provide long-term after access for patients who have poor veins, for patients who need their veins for future dialysis and a variety of other. Very large market opportunities that total about $2 billion.
Speaker Change: Sure sure.
Speaker Change: Makes sense to talk too much but just maybe.
Speaker Change: What I guess I was just a reminder of what port II acts.
Speaker Change: <unk> <unk> is the first.
Speaker Change: Excuse me the first.
Speaker Change: <unk>.
Speaker Change: Ooh implantable long term vascular access device that uses the bone marrow.
Speaker Change: At the site, that's the interosseous or Io portion of.
Speaker Change: The name <unk>.
Speaker Change: And excuse me and it provides a.
Speaker Change: It's really an opportunity to provide long term voucher access for patients who have <unk>.
Speaker Change: <unk> for patients who need their feelings for future dialysis and a variety of owner.
Speaker Change: Very large market opportunity if that total about $2 billion.
Lishan Aklog: So to get more directly to your question, the pathway is quite straightforward. PAVmed has already invested a substantial amount in getting the device through the first, the Gen 1 device, through verification and validation testing. And if you recall, we completed a successful first in human study in Columbia, South America. That went perfectly. Excellent results in all nine patients. It worked exactly as intended. And that's the basis for discussions with FDA on what a IDE would look like. The regulatory path here is a de novo, but a fairly straightforward de novo. It's a de novo because this is a new category of device.
Speaker Change: So to get more directly to your question.
Speaker Change: The pathway is quite straightforward pattern. It has already invested a substantial amount in getting the <unk>.
Speaker Change: Getting the device through.
Speaker Change: Through the first Gen one device through verification and validation testing and if you recall, we completed a successful first in human study in Colombia, South America that went perfectly.
Speaker Change: Excellent results and all nine patients that worked exactly as intended and thats the basis for our discussions with FDA on what.
It looked like the regulatory path here as a de novo, but a fairly straightforward to novo.
Speaker Change: Because this is a new category of.
Lishan Aklog: There's never ever been a device that can use the intraosseous route for long-term use. The plan upon securing the financing, either through investors or through what are fairly active discussions right now with the strategics in the space, would be to launch the IDE study. We estimate the number of patients in that study on the low end of the sort of 50 to 80 patient range. And so that, we believe we could enroll somewhere in the 18-month period, perhaps less, perhaps a bit longer, depending on the sites that we secure. So that will get us through FDA, completing that study will allow us to submit and secure clearance with FDA.
Speaker Change: There's never ever been a device that can use interosseous around for a long term use.
Speaker Change: The plan upon securing.
The financing either through investors or through what are fairly active discussions right now with.
Speaker Change: With the strategics in this space.
Speaker Change: It would be to launch the IV study.
Speaker Change: We estimate the number of patients in that study on the low end of it as sort of a $50 to 80 patient range.
Speaker Change: And so that we.
Speaker Change: We believe we can enroll somewhere in the 18 month period, perhaps less perhaps a bit longer depending on the site that we secure.
Speaker Change: So that will get us through FDA.
Speaker Change: Completing that study will allow us to submit.
Speaker Change: And secure clearance with FDA.
Lishan Aklog: Certainly our goal would be within two years of the launch of the clinical study, hopefully or possibly less than that. In parallel, we've made significant progress on a Gen 2 device that has the same basic core elements. It has some improvements with regard to. Silicon Septum, and some of the ergonomics of the delivery device. We will also use a portion of the capital raised to advance the Gen 2 device in parallel and frankly just swap it out in the middle of the study using the appropriate mechanisms that FD allows for that so that the commercial launch would be with the Gen 2 device.
Speaker Change: Certainly our goal would be within two years of the line show the clinical.
Speaker Change: Study.
Speaker Change: Hopefully you are possibly less than that in parallel we've made significant progress on the gen. Two device that has the same basic core element improvements with regard to the.
Speaker Change: Silicon accept them and some of the ergonomics of the delivery device.
Speaker Change: We will also use a portion of the capital raised to advance the Gen. Two device in parallel and frankly, just swap it out in the middle of a study using appropriate.
Speaker Change: It is something that FDA allows for that so that the commercial launch would be with the gen. Two device.
Unknown Attendee: Got it. That makes sense. Thanks for taking the questions, guys. Yeah, great. Thanks a lot. Appreciate it.
Speaker Change: Got it that makes sense, thanks for taking the questions guys.
Speaker Change: Yeah, great. Thanks, a lot I appreciate it.
Ed Woo: And your next question comes from the line of Ed Woo with Ascendian Capital, please go ahead. Yeah, congratulations on all the progress. My question is on VAERS.
Speaker Change: And your next question comes from the line of Adam really the Symbion capital. Please go ahead.
Adam: Hi, Congratulations on all the progress my question on various as you're possibly talking to other cancer centers have you run into any competing products or competition out there.
Lishan Aklog: As you're, you know, possibly talking to other cancer centers, have you run into any competing products or, you know, competition out there? There is a software platform, and it's designed from the bottom up by oncologists to be very specific to patients undergoing systemic therapy, chemotherapy, immunotherapy for cancer. What does that actually mean in practice? It means that the patient, um, um, The part that interfaces with patients and asks them about their symptoms and so forth is very highly tuned to what cancer patients are undergoing. So that's one differentiating factor compared to just traditional remote patient monitoring, RPM technologies that are used sort of across the board, across patients with chronic disease, acute disease.
Speaker Change: Yes, great question.
Speaker Change: So the competitive landscape here is very.
Speaker Change: We're active in a variety of ways. So lets just start at the highest level, yes. There is.
Speaker Change: A fair a fair number of companies that offer rather generic remote patient monitoring suffered tool Scott just allow you to track patients and a very generic way. So it gives me an opportunity to remind you and others that gray.
Speaker Change: Great about the software platform.
Speaker Change: Our software platform is designed from the bottom up by oncologists to be very specific to patients.
Speaker Change: Undergoing systemic therapy chemotherapy immunotherapy for cancer.
Speaker Change: What does that actually mean in practice it means that the patient.
Speaker Change: Yes.
Speaker Change: The part that interfaces with patients and ask them about their symptoms and so forth is very.
Speaker Change: Highly tuned to what cancer patients are undergoing.
Speaker Change: So thats one one differentiating factor compared to just traditional remote patient monitoring rpms technologies that are you sort of across the board across patients with chronic disease acute disease.
Lishan Aklog: and so forth. So there's really nothing out there that is competitive with regard to its targeting cancer.
Speaker Change: And so forth so there's really nothing.
Speaker Change: Out there that is competitive with regard to its targeting cancer patients.
Lishan Aklog: Perhaps even more important over the long term, or not even that much of a long term, because we're not that far from having the implantable, is the implantable. That's a proprietary technology, patent protected, that will be a barrier to entry for others trying to get in this space. So we believe certainly right now we have the only, you know, dedicated product that's really of interest. I'll note that I'm not just saying that.
Speaker Change: <unk> is even more important over the long term or not even that much of a long term because we're not that far from having the implantable is the implantable that's a proprietary <unk>.
Speaker Change: Technology.
Speaker Change: Patent protected that wall.
Speaker Change: Be a barrier to entry for others trying to get in this space. So we believe certainly right now we have the only dedicated product thats really.
Speaker Change: First I'll note that im not just saying that we.
Lishan Aklog: We participated in a, VAERS participated in a medical center wide RFP, or request for proposals, with OSU. And we were able to secure approval for the VAERS platform to be the dedicated platform for their cancer center. There really wasn't any meaningful competition in that exercise.
Speaker Change: Painted in a.
Speaker Change: <unk> participated in a.
Speaker Change: Medical Center wide.
Speaker Change: RFP a request for proposals.
Speaker Change: And we were able.
Speaker Change: To secure.
Speaker Change: Approval for the for the various platform could be the dedicated platform for their cancer Center.
Speaker Change: There really wasn't any meaningful competition in that in that in that exercise, but once we have the implantable that really is the moat.
Unknown Attendee: But once we have the implantable, that really is the moat. That's the significant value added, and it's a barrier to entry for others. Great. Well, thanks for answering my questions. I wish you guys good luck. Thank you. Yeah, thanks a lot.
Speaker Change: That's the significant value added added.
Speaker Change: It's a barrier to entry for others trying to get into the space.
Speaker Change: Great well, thanks for answering my questions and I wish you guys. Good luck. Thank you.
Ed: Thanks, a lot Ed.
Operator: And I'm showing no further questions at this time.
Speaker Change: And I'm showing no further questions at this time I would like to turn it back to Dr. Nisha in Aqua Park closing remarks.
Lishan Aklog: I would like to turn it back to Dr. Lishan Aklog for closing remarks. Great. Thank you, operator. And thank you all for joining us today. Hopefully, it's clear from our comments here that, you know, with the various challenges over the past year now really squarely behind us and PAVmed on a very strong footing, our team is really looking forward to a very strong remainder of 2025. You know, Lucid is making really strong progress on multiple fronts. We believe we're on the cusp of some major inflection milestones that will drive shareholder value. And the work we've done over the last six months on the PAVmed restructure will really allow PAVmed to directly benefit from the Lucid value creation side.
Dr. Nisha: Great. Thank you operator, and thank you all for joining us today.
Speaker Change: Hopefully, it's clear from from our comments here that with the various challenges.
Speaker Change: Over the past year, now really squarely behind us and patent on a very strong footing. Our team is really looking forward to a very strong remainder of 2025 loose.
Speaker Change: Lucid is making really strong progress on multiple fronts. We believe we're on the cusp of a major inflection milestones that will drive shareholder value and the work we've done over the last six months on the patent restructured will really allow pad meant to directly benefit.
Speaker Change: Lisa value creation side, and as you've heard including during them during the Q&A period here. Various is also in a much stronger position.
Lishan Aklog: And as you've heard, including during the Q&A period here, Veris is also in a much stronger position. We've demonstrated that it's financeable. It's been able to raise sufficient capital to advance its key asset, which is the implantable monitor. And we're on the verge of launching our first strategic and engagement with a major academic center, which really bodes well for the long-term commercial success.
Speaker Change: We've demonstrated that as Financeable, it's really it's been able to raise sufficient capital to implant to advance its key.
Speaker Change: Acid, which is the in Panama monitor and we're on the verge of launching our first strategic and commercial engagement with a major academic center, which really bodes well for the long term commercial success.
Lishan Aklog: The stability, we haven't really talked about it much today. We've touched on it before. Also allows PAVmed to continue to pursue other assets in the broader lifestyle. sector to drive value and that's an active process that we're continuing. So with that said, I do encourage you to stay connected with our progress or news releases, these calls, as well as signing up for our email alerts from our website. And you can also.
Speaker Change: This stability, we haven't really talked about it much today, we've touched on it before also allows <unk> to continue to pursue other assets in the broader life sciences sector to drive value and that's an active process that we are continuing.
Speaker Change: So with that said I do encourage you to stay connected with our progress of our news releases. These calls as well as signing up for our E Mail alerts from our website you can also follow us on Twitter and Linkedin.
Lishan Aklog: So thank you, everybody, and have a great day.
Speaker Change: Thank you everybody and have a great day.
Operator: Thank you, and ladies and gentlemen, this concludes today's conference call. Thank you all for joining. You may now disconnect.
Speaker Change: Thank you and ladies and gentlemen. This concludes today's conference call. Thank you all for joining you may now disconnect.
Speaker Change: Yes.
Speaker Change: Yeah.
Speaker Change: [music].