enVVeno Medical Corporation — Q3 2023 Form 10-Q
Reporting period: Quarter and nine months ended September 30, 2023. Financial statements are unaudited; amounts below are in millions of dollars unless stated otherwise. enVVeno is a late clinical-stage medical-device company developing replacement venous valves. Its lead product, surgical VenoValve, was in a U.S. pivotal study; the transcatheter enVVe was in preclinical development. The company reported no revenue.
Financial results and position
| Metric | Q3 2023 | Q3 2022 | Nine months 2023 | Nine months 2022 |
|---|---|---|---|---|
| Revenue | None | None | None | None |
| Selling, general and administrative expense | $2.6 | $3.7 | $8.4 | $11.4 |
| Research and development expense | $2.8 | $2.5 | $10.6 | $7.1 |
| Operating loss | $(5.3) | $(6.2) | $(19.0) | $(18.5) |
| Net loss | $(5.0) | $(6.1) | $(17.9) | $(18.5) |
| Basic and diluted loss per share | $(0.45) | $(0.54) | $(1.59) | $(1.65) |
- At September 30, cash and cash equivalents were $4.9 million and short-term investments were $20.8 million, for $25.7 million combined, down from $39.0 million at December 31, 2022. Investments consisted of U.S. government securities.
- For the first nine months, operating cash use was $13.9 million, compared with $11.8 million a year earlier. Investing activities provided $14.3 million, primarily reflecting investment maturities; cash increased $0.4 million to $4.9 million.
- Total liabilities were $3.2 million, including $1.5 million in operating lease liabilities. The filing reports no debt borrowing. Current assets were $26.2 million versus current liabilities of $2.0 million.
- Gross margin and other revenue-based margins are not applicable because the company had no revenue. Share-based compensation was about $4.1 million for the nine months, versus $6.6 million in 2022.
Changes versus prior comparable periods
- Q3 net loss narrowed by $1.1 million, or 18%, as SG&A fell $1.1 million, partly offset by $0.3 million higher R&D. Other income improved by about $0.3 million, mainly from investment gains and interest.
- Nine-month net loss narrowed by $0.6 million, or 3%. SG&A declined $3.0 million, mainly because of lower share-based compensation and lower patent and insurance costs. R&D rose $3.5 million, principally from SAVVE trial costs and increased staffing.
- Nine-month operating cash use increased by $2.1 million. The company attributed its spending to administration, product development and clinical trials.
Outlook, financing and notable items
- On October 11, 2023, after quarter-end, the company closed a securities offering with approximately $25.7 million in net proceeds. As of October 23, it reported $1.9 million of cash and $48.6 million of investments. Management said resources, including the offering, should fund obligations for at least one year and operations past anticipated VenoValve approval and the start of the enVVe pivotal trial; these are forward-looking expectations, not assurances.
- The offering included 3.845 million common shares and 978,000 pre-funded warrants, as well as 4.823 million each of Tranche A and Tranche B warrants. Exercise could result in substantial additional shares; exercise prices and expiration triggers vary by warrant class. A placement agent also received warrants for 241,000 shares.
- The SAVVE pivotal study reached full enrollment of 75 patients on October 6, 2023. Management expected initial topline safety data in Q4 2023 and initial topline rVCSS efficacy data in Q2 2024. With one-year data for all patients required before a PMA application, the company anticipated eligibility to file in Q4 2024.
- For enVVe, management expected to begin a six-month GLP animal study in Q1 2024 and to be ready to seek IDE approval for a pivotal trial by the end of 2024. These milestones depend on development and regulatory progress.
- Management expects continuing losses and cash outflows, no significant revenue until commercialization, and rising quarterly cash burn as it pursues clinical and regulatory milestones. VenoValve and enVVe are investigational; FDA approval is not assured.
- The company is defending two consolidated complaints brought by a former employee and has asserted counterclaims. It denied the claims, said the potential loss could not be reasonably estimated, and recorded no accrual. The filing said trial was set for October 30, 2023; it does not report the outcome.
- Management concluded disclosure controls were effective as of September 30, 2023 and reported no material changes to internal control over financial reporting. The filing identifies uninsured bank cash of $4.7 million at quarter-end.
Important facts for investors to verify
- Subsequent SAVVE safety and efficacy results, the completeness and timing of one-year follow-up, and progress toward a PMA filing.
- Actual cash burn, remaining runway and whether the October financing proceeds support the stated milestones; assess warrant exercise terms and potential dilution.
- Progress and costs for enVVe’s planned animal study and IDE preparation, and any changes to development timelines.
- Outcome and potential financial exposure from the former employee litigation, which was scheduled for trial after quarter-end.
- Reconcile share counts: the balance sheet reports 9.472 million shares outstanding at September 30, while the cover reports 13.317 million as of October 23, following the post-quarter offering.