Q1 2025 PAVmed Inc Earnings Call
Okay.
Speaker Change: Good morning, and welcome to the pause mid first quarter 'twenty 25 minute update conference call. At this time all lines are in listen only mode.
Speaker Change: During the presentation when it comes out a question and answer session. If at any time journey just call you require assistance. Please press star zero for the operator. Please note. This event is being recorded.
Maserati: I would like to turn the conference over to Maserati.
Speaker Change: <unk> 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.
Dr. Shanghai: Joining me today on the call are Dr. Shanghai, Cogs, Chairman and Chief Executive Officer of Mad along with Dennis Mcgrath, Chief Financial Officer Padma.
Dr. Shanghai: The press release announcing our business update and financial results is available on <unk> website. Please take a moment to relieve the disclaimers about forward looking statements in the press release, the business update press release and the conference call. All include forward looking statements and these forward looking statements are subject to known known and unknown risks and uncertainties that may cause ACH.
Dr. Shanghai: Our results to differ materially from statements made.
Dr. Shanghai: Factors that could cause actual results to differ are described in the disclaimer and in our filings with the SEC.
Dr. Shanghai: For a list and a description of these and other important risks and uncertainties that may affect future operations see part one item one a entitled risk factors and have met its most recent annual report on forms 10-K filed with the FCC and any subsequent updates filed in quarterly reports on forms 10-Q, and subsequent forms 8-K.
Dr. Shanghai: Except as required by law, Padma 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 statements.
Speaker Change: I would now like to turn the call over to Dr. Felicia on alcoholic chairman and CEO, Pat Madden Vishal.
Speaker Change: Thank you, Matt and good morning, everyone and thank you all for joining our quarterly update call.
Speaker Change: As always I'd like to thank our long term shareholders for your ongoing support and commitment will be delving into some of our operational highlights, but just let's start with a few high level comments.
Speaker Change: Talked about before falling to a series of critical steps that we took to stabilize their corporate structure and balance sheet.
Speaker Change: Really now is very well positioned to operate as a diversified commercial life Sciences company with multiple independently financed subsidiaries that operate under a shared services model. So that's just overview for those of you who are not familiar pattern. This corporate structure portfolio.
Speaker Change: It's a fact that is structured to be a parent company that delivers innovative medical technologies and enter addresses unmet clinical needs.
Speaker Change: And as our subsidiaries such as listed succeed Cadillac will also succeed leased it of course is a publicly traded diagnostic company, it's our strongest and most advanced asset that's on the cusp of key milestones, including Medicare coverage, making commercial progress along certain sales channels and I'll talk about a little bit more and I, just really focused on securing.
Speaker Change: This brought coverage we have plenty of runway and are well positioned to accelerate our commercialization once we secure Medicare coverage.
Speaker Change: Paris is a privately held company that offers that cancer care platform that enhances personalized cancer care and we have financings now secure to restart development is critical.
Speaker Change: Critical implantable monitor and we're excited to update you on those development started shortly.
Speaker Change: <unk> is our.
Speaker Change: You better that has several promising technologies that we're seeking to advance and we're focused right now on the port I O. I went to that final electrolysis devices, we're getting traction with some strategic potential strategic partners as I'll discuss further.
Speaker Change: And then you know as I've talked about before we're always looking for other assets and other opportunities to diversified we have a history as a startup in medical devices and expanding into diagnostics and digital health and an area that we're actually quite focused on right now is expanding into the biopharma space and we have a.
Speaker Change: Our credibility as a partner here based on our track record of advancing our subsidiaries in performing clinical trials and we have a partnership with one of our directors are where we've been able to review some very attractive biopharma assets out there that I saw with it or that fit within our shared services business structure model that were looking for.
Speaker Change: Forward to see if we can concentrate in the near future.
Speaker Change: With regards to illicit of course, I encourage you to listen to Yesterdays inclusive business update call for greater detail on each of these areas I'll, probably just focus on some of the main takeaways.
Speaker Change: He sits right now are better positioned than ever to capitalize on E. Cigarette is a very large clinical and market opportunity. We reported revenue of $800000 just last quarter and the test volume of 3034, which is sort of at the upper end of our targeted range of 2500 to 3000 tests per quarter.
Speaker Change: A key key development. This quarter was that we significantly strengthened our balance sheet with our underwritten public offering of a netting 16 $41 million and this really bolstered our balance sheets, we shipped had $40 million in pro forma cash at the end of Q1 and it extends our runway well past well.
Speaker Change: Well into 2020 six surpassed a key upcoming milestones.
Speaker Change: As we discussed yesterday, we have seen continued momentum on.
Speaker Change: On the some of these are these new sales channels that we're pursuing particularly on the Cogs here, It's medicine side, which is a cash pay channel.
Speaker Change: And we're also making meaningful progress on executing acquire market contrast, all of us to complement our ongoing efforts that traditional seeking traditional coverage pathways and we do continue to expect these initiatives to concierge initiatives I mean part of market dimension is to have an impact on revenue in the second half of this year.
Speaker Change: We await a response from the multi X program regarding Medicare coverage for easy card, which we continue to believe is eminent so let's move on to our various health.
Speaker Change: We've had them having completed a financing recently, we've now successfully we started the development of the key implantable physiological monitor them and we've re engaged with FDA, we had a recent.
Speaker Change: And with that I'll be back so favorable that we do not have to follow up with an in person meeting we expect to work two to continue through this year with her to guy having re engaged with our.
Speaker Change: Development partners with an FDA filing are targeted for the first half of 2026.
Speaker Change: A pilot program with the OSU is complete and we are really very close to.
Speaker Change: Two are to finalizing our long term commercial and strategic partnership really imminent, it's been signed off all by tomorrow or it's just really awaiting signatures.
Speaker Change: The commercial agreement will start once we complete the process of integrating the various platform with the electronic health record and I wish you and once that launches, which again, we expect to be very soon the commercial agreement goes to enroll.
Speaker Change: At least 1000 patients in the first year and 300 ferrous implants once it's cleared.
Speaker Change: Looking forward to getting rolling on that.
Speaker Change: Incubator as I mentioned, we're focused on seeking out direct financing with CT and engaging the strategics that process is actually accelerating we've had continue to have discussions.
Speaker Change: Discussions with about a dozen strategics, who have expressed interest and are active.
Speaker Change: In this space and we look forward to.
Speaker Change: Hopefully consummating a strategic partnership that comes with.
Speaker Change: Our strategic investment to allow us to launch to realize port I O and done.
Dennis: This shaped the clinical trial to get it towards clearance so with that I'll pass the call over to Dennis.
Dennis: Thanks, John and good morning, everyone.
Speaker Change: Summary financial results for the first quarter were reported in our press release that has been <unk>.
Dennis: <unk>.
Dennis: On the next three slides I'll emphasize a few key highlights from the first quarter, but I encourage you to consider those remarks in the context of the full disclosures covered it in our quarterly report.
Dennis: One Form 10-Q as filed with the SEC.
Dennis: A couple of reminders as our financials, particularly the income statement with year over year comparisons will for the next couple of quarters illustrate periods before September 10 2024.
Dennis: With lucid operating results being consolidated into the presented pattern that results.
Dennis: Versus the 2025 periods will be without losing its operating results that's all related to that.
Dennis: <unk> deconsolidation about financials.
Dennis: We do present, some supplementary information in footnote four of the 10-Q.
Dennis: That should help with some of the comparisons.
Dennis: With regards to the balance sheet.
Dennis: You will recall from our last two calls in November of 2024 in March of this year.
Dennis: But the company has engaged in a multi step process to gain compliance with NASDAQ listing standards for a minimum equity, which you did in February.
Dennis: It also position the company for long term financial stability.
Dennis: There are two key components were the consolidating lucid from tablets consolidated financial statements and restructure our debt whereby we exchanged about 80% of our outstanding debt for New series C preferred equity.
Dennis: The slide reflects the balance sheets for both the first quarter and the fourth quarter.
Dennis: Both after deconsolidation, which occurred on September 10, 2020 for it but now.
Dennis: The first quarter shows the impact of the debt exchange, which occurred after December 31st notably.
Dennis: The liability reduction of about 25 million coming in part from a significant reduction in the convertible notes for about $23 million.
Dennis: And a $2 million reduction in accrued expenses in exchange for an increase of approximately 25 million in preferred stock.
Dennis: So a couple of key things to point out on each of these balance sheets cash does not include any lucid cash.
Dennis: The equity method investment balance of almost 47 million at March 31st reflects the $31 3 million lucid shares mark to market.
Dennis: $21 million gain since you ran representing an.
Dennis: And 82% increase in the lucid stock price between the periods.
Dennis: This amount was previously eliminated from <unk> balance sheet prior to deconsolidation.
Dennis: For a note that theres plenty.
Dennis: Any more information in 10-Q on both the debt exchange.
The series C preferred stock.
Dennis: And the equity method treatment of pad notes investment in lucid shares.
Dennis: At present.
Speaker Change: <unk> continues to be the single largest shareholder of lucid diagnostics with ownership of approximately 29% of the common shares outstanding.
Speaker Change: Although pad that no longer has voting control of lucid.
Speaker Change: Pat its board and management still have significant influence over lucid with more than 20%, 27% voting interest shares outstanding today, including Unvested restricted stock awards and pre funded warrants are approximately $18 4 million shares.
Speaker Change: The GAAP outstanding shares at the end of the quarter of $16 8 million are reflected on the slide as well as on the face of the balance sheet in the 10-Q.
Speaker Change: GAAP shares do not reflect unvested RSA amounts.
Speaker Change: Additionally, there are about 25000 series C preferred shares outstanding.
Speaker Change: And if.
Speaker Change: They were converted at its conversion price of $1 seven per share.
Speaker Change: Would represent an increase of approximately 23 million common shares.
Speaker Change: The Z warrants, having a conversion price of $24.
Speaker Change: After having been extended for one year beyond the initial five year term expired on April 30.
Speaker Change: Next slide please.
Speaker Change: Similar to the past presentation. This P&L slides provide some GAAP and non-GAAP year over year quarterly and annual comparisons.
Speaker Change: As cautioned that earlier in my comments.
Speaker Change: There are some significant differences of how the information is compiled between the comparative periods given the change in pattern Thats financial control lucid.
Speaker Change: Importantly, the.
Speaker Change: The GAAP construct for deconsolidation loosened on September 10th of last year somewhat blurs the historical understanding of inflammation Cabot as a standalone entity.
Speaker Change: GAAP does not allow the presentation for prior periods on the face of the financial statements to be similarly adjusted.
Speaker Change: Although as mentioned there is.
Speaker Change: Supplemental information in the footnotes of the financial statements in the 10-Q.
Speaker Change: On a pro forma basis in purely for illustrative purposes on this slide only.
Speaker Change: The various revenue.
Speaker Change: And the lucid management fee income, our combined collectively more than 3 million per quarter.
Essentially aligned tablets income sources versus is the operating expenses for SEC reporting purposes. The MSA income is up below the line items.
Speaker Change: Furthermore, for the first quarter, you see on the slide and in the 10-Q.
Speaker Change: A large GAAP net income of $18 6 million before NCI and preferred dividends.
Speaker Change: This results in GAAP positive primary EPS of $1 28 per share.
Speaker Change: Positive diluted EPS of <unk> 34 cents per share.
Speaker Change: <unk> ownership of $31 3 million lucid common shares are mark to market quarterly.
Speaker Change: And with an 82% increase in the stock price.
Speaker Change: Gain of 21 million is recognized in the P&L for the period.
Speaker Change: I'm happy to answer any detailed questions on slide in the Q&A.
Speaker Change: But I think it's more informative to look at the first quarter Standalone information presented in this slide.
Speaker Change: And the full first quarter information presented in our press release.
Speaker Change: That shows a company baseline bias of operating at cash flow breakeven.
Speaker Change: And incurring incremental <unk> expenses for development activities that are offset by dedicated funding.
Speaker Change: So in the first quarter, you see a non-GAAP loss of 910000.
Speaker Change: Which has been funded in part by the NIH Grant proceeds of 900000 in the fourth quarter and.
Speaker Change: In the past that various $2 $4 million financing during the quarter.
Speaker Change: Operating expenses for the first quarter.
Speaker Change: Were approximately $5 4 million.
Speaker Change: Which includes stock based compensation expenses of $1 million.
Speaker Change: And deal expenses of $200000.
Speaker Change: Next slide please.
Speaker Change: Okay.
Speaker Change: With regards to the non-GAAP operating expenses on this slide you see a graphic illustration of our operating expenses over time its present it in.
Speaker Change: More detail in the press release.
Speaker Change: Total non-GAAP Opex was $4 4 million for the first quarter of 'twenty, five which is almost the exact same amount incurred in the fourth quarter after accounting for $200000 deal expenses in the first quarter.
Speaker Change: The decrease is equally related to a the impact of the deconsolidation and B. The fact that the combined opex ignoring deconsolidation.
Speaker Change: Cabot had loosen would've been in line with the previous quarters anyway.
Speaker Change: With that operator, let's open it up for questions.
Speaker Change: Okay.
Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session.
Speaker Change: I have a question.
Speaker Change: First off I would say the number one on your Touchtone phone.
Speaker Change: Era calm the Turkey inquiries should you wish to decline from the polling process faster.
Speaker Change: Transtar, followed by just under two.
Speaker Change: If you are using a speaker phone please.
Speaker Change: Before questions.
Speaker Change: For the first question.
Speaker Change: Your first question comes from Sharon element of Maxim Group. Please go ahead.
Sharon: Hey, Jeremy taking my question how are you doing.
Speaker Change: So maybe now that the pilot program.
Speaker Change: Is complete is there is there any metrics or information feedback maybe you can share from the physicians and the patients and is that and is that any of that feedback.
Speaker Change: Influenced any changes youre going to make to the platform before you fully commercialize it.
Speaker Change: Oh, great Great question and the answer is yes, we've had excellent feedback and this is a formal pilot program.
It included pre specified metrics and performance metrics and patient satisfaction, demonstrating a clinical success and outcomes logging them sort of anecdotal clinical success stories, where the monitoring of the patient led to improved outcomes.
Speaker Change: And and all of those all of those.
Speaker Change: Pre specified performance metrics were met.
Speaker Change: And there's really a lot of enthusiasm I mean big academic medical centers can be heart can can move slowly there just big and.
Speaker Change: The b the.
Speaker Change: Speed with which.
Speaker Change: The.
Speaker Change: Desire and the demand for this technology across the cancer Center has been.
Speaker Change: Can't really really encouraging.
Speaker Change: It hasnt required any and we don't expect there to be any immediate.
Speaker Change: Changes in our Biopharma platform works and people are very excited and what's driving some of that increased enthusiasm.
Speaker Change: Is the.
Speaker Change: Opportunity to add the implantable monitor and they're not too different features that are worth looking forward to that and frankly, they're looking forward to being the first site to do the first implant in part of the proposed strategic partnership includes a registry for the compatible with share we're looking forward to them.
Speaker Change: We have learned some lessons on how to implement that's something that's obviously.
Speaker Change: Yeah that was our goal to really focus on one big.
Speaker Change: I wish you the James is the third biggest cancers, a hospital in the country and so.
Speaker Change: So one of the goals of focusing on them was to.
Speaker Change: You have to learn b to learn lessons on how to implement this more broadly and we learned some lessons on sort of how to utilize their call center.
Speaker Change: A very sophisticated process, where they are call centers and are able to triage calls on how to adjust alerts.
Speaker Change: <unk> alerts based on their individual needs and so forth. So process wise sure we've learned a lot and we're implementing it but the core a software platform.
Speaker Change: <unk> was very well received.
Speaker Change: And fulfills all of them all of the metrics.
Speaker Change: Okay, Great and then just is there a it makes I don't think there is that just to remind us. If there is do they have an exclusive right to the to the various platform where are you still in negotiations to talk with other large centers.
Speaker Change: Oh no yeah, Yeah, I mean, there's some local you know there are some local.
Speaker Change: Right.
Speaker Change: Advance it locally, but not in any way that limits, our broader a broader ability to move forward with this this is a.
Speaker Change: We expect this to be a commercial agreement that includes a registry for both patients enrolled on the platform as well as when they are planning starts.
Speaker Change: Yeah, we did commit to later to be the first.
Speaker Change: For example could be the implantable, but that would that's gonna be natural anyway, because they're going to have a.
Speaker Change: The other big head start.
Speaker Change: Expect a thousand minimum 1000 commercial patients in the first year and there'll be you know well into that by the time. The implantable is FDA cleared and ready to go but no were not where the broader vision here is to really as I said earlier too.
Speaker Change: Use them.
Speaker Change: As you know very what's now become a very strong relationship with them.
Speaker Change: Yeah, one of the top cancer centers in the country to get work out a complex kind of work out a model that can be replicated at.
Speaker Change: Dozens of other M C.
Speaker Change: Designated cancer centers across the country.
Speaker Change: Okay, Great and then just one last question shifting to the new you're mentioning your expansion.
Speaker Change: It goes into the Biopharma segment, just maybe a little bit more information around the rationale the strategic rationale why now I mean, you have it seems like you have a lot of progress in the fiery is lucid you have various wot Io So now and then.
Speaker Change: The financing for this will it be similar to the like the incubator style or you look for external financing before you move ahead with procuring.
Speaker Change: Procuring in a potential asset or will this be financed within pattern itself.
Speaker Change: This is a great question so look.
Speaker Change: The way I would like you to think of vessels that you know we spent a good amount of time.
Speaker Change: Just kind of getting our corporate structure right getting our balance sheet adjusted all of the moves that we made over the last thing I was coming on six to eight months. It really put us in a position to put kind of patent back to its roots with a twist right. So.
Speaker Change: It's always been.
Speaker Change: I am really from from its inception to be nimble and able to go look for shareholder value kind of wherever it might be and the reason we're in a position to.
Speaker Change: We have what we think is a substantial near term opportunity for our best for our shareholders with lucid is because we were willing to pounce on that opportunity and when it became available what at the time, we were focused on medical devices and that similarly true with various right we added.
Speaker Change: And digital health as an area that where we thought there were opportunities and.
Speaker Change: This is something that's been a bit on our radar for a while but it really accelerated when we add them.
Speaker Change:
Speaker Change: Joined forces.
Speaker Change: Caged with a longtime biotech investor who is now on our <unk>.
Speaker Change: Board Impoundments board darker Sandeep Agarwal.
Speaker Change: He has a ton of experience in this space over several decades and is either.
Speaker Change: They came to us with sort of a thesis that.
Speaker Change: Infrastructure management services structure it's.
Speaker Change: You know the history of having access to public capital and a history of doing a public public finance.
Speaker Change: Financings, ipos and otherwise and it's sort of model of independently.
Speaker Change: Finance subsidiaries is one that he felt within the.
Speaker Change: Ecosystem.
Speaker Change: Biopharma biotech could be really interesting and attractive because earlier stage assets were struggling to raise private capital under traditional means, particularly those that are really interesting assets.
Speaker Change: Sitting outside the U S and.
Speaker Change: When we thought about it further it's actually in some ways less of a less of a deviation from what we had to do to become a diagnostics.
Create a diagnostic subsidiary which required.
Speaker Change: Our lab.
Speaker Change: Or out how to run effectively and efficiently.
Speaker Change: High level.
Speaker Change: Diagnostic Robyn so forth. These assets are theres, just a large pipeline of assets of oncology cardio metabolic.
Speaker Change: Or in the early late preclinical phase or an early phase one are laid in phase one.
Speaker Change: Clinical stage, but just need to.
Speaker Change: So really just didn't quite have a research a week.
Speaker Change: We have that we have a clinical research team they've shown success of getting studies across across the finish line operating them successfully.
Speaker Change: And frankly, not much else from from our kind of internal resources. So.
Speaker Change: We don't yeah, we believe that we have infrastructure here that we can leverage we have a track record and there are assets out there that can use this to your point about about financing as I've said, we've said ever since we've kind of made some adjustments with how our patented operates that our model is that the.
Speaker Change: Digital subsidiaries raise their own capital.
Speaker Change: So that's been true at least it now going all the way back to the list.
Speaker Change: Oh.
Speaker Change: It's picture with various including this most recent financing and that would be the case with what's in the Biopharma space.
Speaker Change: Anyone who is following the life sciences sector broadly knows that there is a lot more capital available.
Speaker Change: Biotech assets a bit more of a you know kind of streamline straightforward pathway to value creation. If you if you could find a good asset so.
Speaker Change: We're just.
Speaker Change: There yet, but just just wanted to make it clear that that's something we think of that before that we're really actively pursuing and hope to to dive into the short term.
Speaker Change: No concerns about how it might impact.
Speaker Change: Our bandwidth or ability of the company to ticketing.
Speaker Change: To continue to push forward on these other structures because all these other assets like losing various because the way it's designed as they're.
Speaker Change: They're thinking that they operate effectively independently with what services from the parent company as needed.
Speaker Change: Okay, great. Thank you for all that information and I'll rejoin the queue and I say, okay. Thanks Jeremy.
Speaker Change: Your next question comes from Andrew Weisel sanction capital. Please go ahead.
Andrew Weisel: Hello, Ed.
Speaker Change: Okay.
Speaker Change: Yeah. Thanks for answering my questions has.
Speaker Change: It has the volatility in the market affected your ability to.
Speaker Change: To raise capital in terms of do you have wide fluctuations when you're trying to go out to the capital markets to raise money.
Speaker Change: Oh, Yeah, Dennis why don't you kind of answer that the answer is no.
Speaker Change: Courts that they have.
Speaker Change: Good luck for investors, who buy into our vision both for the parent company as well as the subsidiaries, but I'll, let Dennis provide a little bit more color.
Speaker Change: Yes, well said.
Speaker Change: As evidenced by that.
Speaker Change: We did in the first quarter, we did a combination with that have been in various equities.
Speaker Change: That is.
Speaker Change: As indicative was indicative of the implicit value.
Speaker Change: Cyrus was done at a $35 million pre market.
Speaker Change: Pre money value.
Speaker Change: And we.
Speaker Change: We have access to.
Investors that align with our vision and we believe that the additional charges needed for four of darice will be available when needed.
Speaker Change: And given the.
Speaker Change: The assets, we're looking at and narrowing down on the Biopharma side, we believe that we will.
Speaker Change: Also.
Speaker Change: We will also have access to both.
Speaker Change: Private capital and ultimately public capital as well.
Speaker Change:
Speaker Change: We think we're in pretty good shape to execute on both of them and the money will be available as needed.
Speaker Change: When the time is right to sign those agreements.
Speaker Change: Okay.
Speaker Change: Great well, thanks for answering my questions and I wish you guys. Good luck. Thanks Ed.
Speaker Change: Okay.
Speaker Change: Thank you ladies and gentlemen.
Speaker Change: A question and answer session.
Speaker Change: I'll now turn the conference back over to the alternative book.
Speaker Change: Please go ahead.
Great. Thank you operator, and thank you all for joining today and for the great questions.
Speaker Change: Pipeline is really well positioned as I just.
Speaker Change: Her articulated in some additional detail and we're going to aggressively execute on the strategic vision that I, just outlined and that lucid and Paris are now well capitalized through key upcoming milestones, we believe there'll be a value creators.
Speaker Change: Got it.
Speaker Change: Our near term and we're just excited to and ready to pursue the significant opportunities we have to leverage our model and our infrastructure and further diversify into a new sector and we hope to.
Speaker Change: It makes a progress on that under in the very near future.
Speaker Change: With that said again I do encourage you to stay connected with our progress through news releases. These calls and sign up for email alerts on our website and followers on social media. So thank you so much on them.
Speaker Change: Have a great day.
Speaker Change: This concludes today's conference. Thank you for attending you may now disconnect your lines.
Speaker Change: Okay.
Speaker Change: [music].