PAVmed Inc. (Nasdaq: PAVM, PAVMZ) (the “Company”
or “PAVmed”), a highly differentiated, multi-product,
commercial-stage medical device company, today provided a business
update for the Company and its subsidiaries, Lucid Diagnostics Inc.
(“Lucid”) and Solys Diagnostics Inc. (“Solys”), discussed
preliminary financial results for the three and 12 months ended
December 31, 2020 and made two strategic announcements regarding
Lucid and its EsoGuard® product.
“Following a strong fourth quarter of 2020 and
start of 2021, including raising over $30 million from
institutional investors, we find ourselves in the strongest
financial position in our history and with the confidence and
determination necessary to rapidly and effectively advance and
expand our mission,” said Lishan Aklog, M.D., PAVmed’s Chairman and
Chief Executive Officer. “In addition to providing an update on all
areas of our business, we are making two important announcements
regarding Lucid and EsoGuard consistent with that sentiment.”
Conference Call and Webcast
A conference call and webcast on today’s
Business Update and Preliminary Fourth Quarter Financial Results
will take place at 8:30 AM EST. To access the conference call,
U.S.-based listeners should dial (877) 407-3982 and international
listeners should dial (201) 493-6780. All listeners should provide
the operator with the conference call name “PAVmed, Inc. Business
Update Conference Call” to join. Individuals interested in
listening to the live conference call via webcast may do so by
visiting the investor relations section of the Company’s website at
www.pavmed.com.
Lucid Diagnostics Spin-Off
The Company announced that its majority-owned
subsidiary Lucid Diagnostics intends to spin off into a separate
public company if favorable market conditions continue to hold,
either through an initial public offering (“IPO”) or a business
combination with a healthcare special purpose acquisition
corporation (“SPAC”). The Lucid board of directors determined that
this long-contemplated step is necessary for Lucid to fulfill its
long-term potential, unlock its present value, and execute on a
major new commercial initiative. The Company believes that a Lucid
spin-off that accomplishes the foregoing would also be in the best
interests of PAVmed and its shareholders. PAVmed will remain
Lucid’s largest shareholder following any spin-off transaction.
Multi-Channel EsoGuard Commercialization
Initiative
The Company also announced that Lucid is
launching a major new commercial initiative which seeks to
accelerate EsoGuard commercialization by simultaneously targeting
multiple sales and marketing channels and building Lucid’s own
network of EsoCheck® operators to assure sufficient testing
capacity and geographic coverage to accommodate demand.
Lucid plans to retain and train a network of
full-time nurses or other clinical personnel to serve as EsoCheck
operators deployed at different types of venues, including leased
space in physician practices, and potentially at free-standing
EsoGuard testing centers in locales where testing volume and
economics can support them. Lucid also intends to seek
joint-ventures with laboratory testing companies as well as
pharmacy mini-clinic networks to establish EsoGuard testing
capacity at their facilities.
Once sufficient EsoGuard testing capacity and
geographic coverage has been established in a specific locale,
Lucid plans to initiate multiple new sales and marketing channels,
while continuing to aggressively drive adoption by
gastroenterologists. These new channels include direct-to-consumer
marketing, as well as sales and marketing directly targeting
primary care physicians.
A pilot program in one major metropolitan area
is planned for the second quarter.
Business Update Highlights
- PAVmed raised $30.4 million in gross proceeds from three common
stock registered direct offerings with institutional investors in
December and January, including a $13.4 million priced
at-the-market offering in early January.
- Lucid initiated claims submission and billing for its EsoGuard
Esophageal DNA Test after CMS payment of $1938.01 for EsoGuard CPT
code 0114U became effective on January 1, 2021. Continues to await
EsoGuard local coverage determination from Medicare Administrative
Contractor, Palmetto GBA. Engaged two leading consulting firms to
help secure private payor payment and coverage. Completed
preliminary insurance plan medical director interviews.
- Lucid expanded full-time sales team from four to seven regional
business managers overseeing, over 50 independent sales
representatives. Recruiting a team of clinical specialists who will
train clinicians and support existing accounts while freeing up
other sales personnel to focus on opening new accounts.
- Lucid launched consumer marketing campaign introducing an
animated EsoGuard “mascot” to educate consumers on the link between
chronic heartburn and esophageal cancer and to create EsoGuard
visibility and awareness as a foundation for future
direct-to-consumer marketing.
- EsoGuard testing volume rebounded following winter slowdowns
related to Covid-19 surge and facility limitations during period of
mass workforce vaccination. Anticipate return to accelerating
EsoGuard testing volume growth in the coming quarter.
- ESOGUARD BE-1 and 2 studies in support of future PMA submission
and FDA IVD registration now have 40 of 60 study sites active and
have enrolled approximately 70 patients total at U.S. sites.
European site initiation postponed until second quarter due to
travel restrictions. Target completion date adjusted to early 2022
due to cumulative Covid-related enrollment slowdowns.
- Lucid introduced an improved EsoGuard preservative buffer and
received special 510(k) clearance to market a more user-friendly
and precise EsoCheck accessory.
- PAVmed and Lucid successfully completed all EU-notified-body
audits. Expect EsoCheck CE Mark approval and completion of EsoGuard
EU IVDD self-certification in second quarter. Limited commercial
launch in select EU countries planned for later this year.
- First U.S. carpal tunnel syndrome patient underwent successful
CarpX® minimally invasive carpal tunnel release and returned to
work within one week of the procedure, significantly shorter than
recovery times following conventional surgery. Continuing steady
and deliberate commercialization plan with a small team of
world-class hand surgeons focused on optimizing the procedural
steps and safety prior to broader commercialization effort later
this year. Expect CarpX CE Mark approval in second quarter.
Evaluating potential European distributors for future European
commercial launch.
- PAVmed completed in-person site initiation visits for PortIO
study at four Colombia, South America medical centers. Awaiting IRB
approval and expect to begin enrollment next quarter. Remain
engaged with FDA regarding US PortIO IDE study.
- PAVmed advancing NextFlo Intravenous Infusion system through
design-controlled development and testing with FDA submission
targeted for the third quarter. Ongoing M&A discussions and
technologic diligence engagement with large strategic partner to
license the NextFlo technology for disposable infusion pumps.
- PAVmed executed manufacturing services agreement for DisappEAR
resorbable silk pediatric ear tubes with Canon Inc.’s United States
manufacturing and technology center in Virginia. Received
Canon-produced prototypes for upcoming animal testing pursuant to
previously executed research and development agreement.
- Solys advanced research and development work on licensed
non-invasive glucose monitoring technology, producing data in human
volunteers and a diabetic rat model consistent with milestone
accuracy parameters. In addition, developed and advanced its own
proprietary non-invasive glucose monitoring technology which is not
subject to the license agreement. Determined that it would be in
PAVmed’s best interests to focus future efforts on its own
proprietary technology, terminate the license agreement, and seek a
mutually agreeable unwinding of the relationship, which is
currently being negotiated.
PRELIMINARY FINANCIAL
RESULTS
For the three months ended December 31, 2020,
research and development expenses were $3.6 million and general and
administrative expenses were $3.9 million. GAAP net loss
attributable to common stockholders was $8.8 million, or $(0.17)
per common share. As illustrated below and for the purpose of
helping the reader understand the effect of derivative accounting
and other non-cash income and expenses on the Company’s financial
results, the Company reported a non-GAAP adjusted loss for the
three months ended December 31, 2020 of $6.4 million or $(0.12) per
common share.
PAVmed had cash and cash equivalents of $17.3
million as of December 31, 2020, compared with $6.2 million as of
December 31, 2019. Subsequently, in early January 2021, the Company
closed on its $13.4 million registered direct offering for the sale
of 6.0 million shares of common stock at $2.24 per share which was
priced at-the-market under Nasdaq rules.
The audited financial results for the year ended
December 31, 2020 on Form 10-K will be filed with the SEC in the
coming days and will be available
at www.pavmed.com or www.sec.gov.
Non-GAAP Measures
To supplement our unaudited financial results
presented in accordance with U.S. generally accepted accounting
principles (GAAP), management provides certain non-GAAP financial
measures of the Company’s financial results. These non-GAAP
financial measures include net loss before interest, taxes,
depreciation and amortization (EBITDA) and non-GAAP adjusted loss,
which further adjusts EBITDA for stock-based compensation expense,
loss on the issuance or modification of convertible securities, the
periodic change in fair value of convertible securities, and loss
on debt extinguishment. The foregoing non-GAAP financial measures
of EBITDA and non-GAAP adjusted loss are not recognized terms under
U.S. GAAP.
Non-GAAP financial measures are presented with
the intent of providing greater transparency to information used by
us in our financial performance analysis and operational
decision-making. We believe these non-GAAP financial measures
provide meaningful information to assist investors, shareholders
and other readers of our unaudited financial statements in making
comparisons to our historical financial results and analyzing the
underlying performance of our results of operations. These non-GAAP
financial measures are not intended to be, and should not be, a
substitute for, considered superior to, considered separately from
or as an alternative to, the most directly comparable GAAP
financial measures.
Non-GAAP financial measures are provided to
enhance readers’ overall understanding of our current financial
results and to provide further information for comparative
purposes. Management believes the non-GAAP financial measures
provide useful information to management and investors by isolating
certain expenses, gains and losses that may not be indicative of
our core operating results and business outlook. Specifically, the
non-GAAP financial measures include non-GAAP adjusted loss and its
presentation is intended to help the reader understand the effect
of the loss on the issuance or modification of convertible
securities, the periodic change in fair value of convertible
securities, the loss on debt extinguishment and the corresponding
accounting for non-cash charges on financial performance. In
addition, management believes non-GAAP financial measures enhance
the comparability of results against prior periods.
A reconciliation to the most directly comparable
GAAP measure of all non-GAAP financial measures included in this
press release for the three and 12 months ended December 31, 2020
and 2019 is as follows:
|
|
For the three months ended December 31, |
|
|
For the year ended December 31, |
|
(ooo's except per-share amounts) |
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss) per common share, basic and diluted |
|
$ |
(0.17 |
) |
|
$ |
(0.19 |
) |
|
$ |
(0.73 |
) |
|
$ |
(0.55 |
) |
Net loss attributable
to common stockholders |
|
|
(8,813 |
) |
|
|
(6,313 |
) |
|
|
(34,563 |
) |
|
|
(16,727 |
) |
Preferred Stock dividends and
deemed dividends |
|
|
73 |
|
|
|
69 |
|
|
|
287 |
|
|
|
270 |
|
Net income (loss) as reported |
|
|
(8,740 |
) |
|
|
(6,244 |
) |
|
|
(34,276 |
) |
|
|
(16,457 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation expense1 |
|
|
7 |
|
|
|
4 |
|
|
|
23 |
|
|
|
14 |
|
Interest expense, net3 |
|
|
- |
|
|
|
33 |
|
|
|
52 |
|
|
|
33 |
|
EBITDA |
|
|
(8,733 |
) |
|
|
(6,207 |
) |
|
|
(34,201 |
) |
|
|
(16,410 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other non-cash or
financing related expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense2 |
|
|
585 |
|
|
|
393 |
|
|
|
2,044 |
|
|
|
1,571 |
|
Debt extinguishment3 |
|
|
1,897 |
|
|
|
1,165 |
|
|
|
6,497 |
|
|
|
666 |
|
Change in FV convertible debt3 |
|
|
(194 |
) |
|
|
(482 |
) |
|
|
3,467 |
|
|
|
341 |
|
Offering costs convertible debt3 |
|
|
- |
|
|
|
1,250 |
|
|
|
2,520 |
|
|
|
- |
|
Non-GAAP adjusted
(loss) |
|
|
(6,445 |
) |
|
|
(3,881 |
) |
|
|
(19,673 |
) |
|
|
(13,832 |
) |
Basic and Diluted shares outstanding |
|
|
52,487 |
|
|
|
33,223 |
|
|
|
45,564 |
|
|
|
29,212 |
|
Non-GAAP adjusted (loss) income per share |
|
|
($0.12 |
) |
|
|
($0.12 |
) |
|
|
($0.43 |
) |
|
|
($0.47 |
) |
1 Included in general and administrative
expenses in the financial statements
2 For the three months ended December 31, 2020
includes $450 of stock based compensation expense reported as
general and administrative expenses and $136 reported as research
and development expense. For the three months ended
December 31, 2019 includes $310 of stock based compensation expense
reported as general and administrative expenses and $84 reported as
research and development expense. For the year ended
December 31, 2020 includes $1,581 of stock based compensation
expense reported as general and administrative expenses and $462
reported as research and development expense. For the
year ended December 31, 2019 includes $1,162 of stock based
compensation expense reported as general and administrative
expenses and $408 reported as research and development expense.
3 Included in other
income and expenses
Conference Call and Webcast
As announced last week, the Company changed the
time for today’s conference call and webcast to 8:30 AM EST to
accommodate the schedule of Lucid’s Strategic Advisor, medical
diagnostics pioneer Stanley Lapidus. Mr. Lapidus will join PAVmed
Chairman and Chief Executive Officer Lishan Aklog, M.D., and
President and Chief Financial Officer Dennis McGrath on the
call.
Mr. McGrath will provide a financial update on
the Company. Dr. Aklog will provide a business update and discuss
Lucid’s growth strategy with Mr. Lapidus, who will provide his
perspective on Lucid’s EsoGuard commercial opportunity, based on
his similar experiences bringing early cancer detection
technologies to market, including as the founder and former
Chairman and CEO of Exact Sciences.
To access the conference call, U.S.-based
listeners should dial (877) 407-3982 and international listeners
should dial (201) 493-6780. All listeners should provide the
operator with the conference call name “PAVmed, Inc. Business
Update Conference Call” to join. Individuals interested in
listening to the live conference call via webcast may do so by
visiting the investor relations section of the Company’s website at
www.pavmed.com.
Following the conclusion of the conference call,
a replay will be available for one week and can be accessed by
dialing (844) 512-2921 from within the U.S. or (412) 317-6671 from
outside the U.S. To access the replay, all listeners should provide
the following pin number: 13715663. The webcast will be available
for replay on the investor relations section of the Company’s
website at www.pavmed.com.
About PAVmed
PAVmed Inc. is a highly differentiated,
multi-product, commercial-stage medical device company employing a
unique business model designed to advance innovative products to
commercialization rapidly and with less capital than the typical
medical device company. This proprietary model enables PAVmed to
pursue an expanding pipeline strategy with a view to enhancing and
accelerating value creation while seeking to further expand its
pipeline through relationships with its network of clinician
innovators at leading academic centers. PAVmed’s diversified
product pipeline addresses unmet clinical needs encompassing a
broad spectrum of clinical areas with attractive regulatory
pathways and market opportunities. Its four operating divisions
include GI Health (EsoGuard® Esophageal DNA Test, EsoCheck®
Esophageal Cell Collection Device, and EsoCure™ Esophageal Ablation
Device with Caldus™ Technology), Minimally Invasive Interventions
(CarpX® Minimally Invasive Device for Carpal Tunnel Syndrome),
Infusion Therapy (PortIO™ Implantable Intraosseus Vascular Access
Device and NextFlo™ Highly Accurate Disposable Intravenous Infusion
Set), and Emerging Innovations (non-invasive laser-based glucose
monitoring, pediatric ear tubes, and mechanical circulatory
support). For more information, please visit www.pavmed.com,
follow us on Twitter, connect with us on LinkedIn, and watch our
videos on YouTube. For more information on our majority owned
subsidiary, Lucid Diagnostics Inc., please visit www.luciddx.com,
follow Lucid on Twitter, and connect with Lucid on LinkedIn. For
detailed information on EsoGuard, please visit www.EsoGuard.com and
follow us on Twitter, Facebook and Instagram.
Forward-Looking Statements
This press release includes forward-looking
statements that involve risks and uncertainties. Forward-looking
statements are statements that are not historical facts. Such
forward-looking statements, based upon the current beliefs and
expectations of PAVmed’s management, are subject to risks and
uncertainties, which could cause actual results to differ from the
forward-looking statements. Risks and uncertainties that may cause
such differences include, among other things, our ability to
complete our strategic initiatives, volatility in the price of
PAVmed’s common stock, Series W Warrants and Series Z Warrants;
general economic and market conditions; the uncertainties inherent
in research and development, including the cost and time required
advance PAVmed’s products to regulatory submission; whether
regulatory authorities will be satisfied with the design of and
results from PAVmed’s preclinical studies; whether and when
PAVmed’s products are cleared by regulatory authorities; the
effectiveness of our marketing initiatives; the establishment of
government and private payment insurance coverage; market
acceptance of PAVmed’s products once cleared and commercialized;
our ability to raise additional funding and other competitive
developments. PAVmed has not yet received clearance from the FDA or
other regulatory body to market many of its products. The Company
has been monitoring the COVID-19 pandemic and its impact on our
business. The Company expects the significance of the COVID-19
pandemic, including the extent of its effect on the Company’s
financial and operational results, to be dictated by, among other
things, the success of efforts to contain it and the impact of
actions taken in response. New risks and uncertainties may arise
from time to time and are difficult to predict. All of these
factors are difficult or impossible to predict accurately and many
of them are beyond PAVmed’s control. For a further list and
description of these and other important risks and uncertainties
that may affect PAVmed’s future operations, see Part I, Item IA,
“Risk Factors,” in PAVmed’s most recent Annual Report on Form 10-K
filed with the Securities and Exchange Commission, as the same may
be updated in Part II, Item 1A, “Risk Factors” in any Quarterly
Report on Form 10-Q filed by PAVmed after its most recent Annual
Report. PAVmed disclaims any intention or obligation to publicly
update or revise any forward-looking statement to reflect any
change in its expectations or in events, conditions, or
circumstances on which those expectations may be based, or that may
affect the likelihood that actual results will differ from those
contained in the forward-looking statements.
Contacts:
InvestorsMike HavrillaDirector of Investor
Relations(814) 241-4138JMH@PAVmed.com
MediaShaun O’NeilChief Commercial Officer(518)
812-3087SMO@PAVmed.com
Katie GallagherLaVoieHealthScience(617)
792-3937PAVmed@lavoiehealthscience.com
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