Business context and reporting period
enVVeno Medical Corporation filed this Form 10-K for the fiscal year ended December 31, 2022. It is a pre-revenue, late-stage clinical medical-device company developing replacement valves for severe chronic venous insufficiency (CVI). Its lead product, the surgical VenoValve, was under evaluation in the U.S. SAVVE pivotal study; the non-surgical, transcatheter enVVe was in development. Neither product had FDA marketing approval.
Financial and operating performance
| Metric | 2022 | 2021 |
|---|---|---|
| Revenue | None | None |
| SG&A expense | $15.0 million | $11.2 million |
| R&D expense | $9.9 million | $5.7 million |
| Operating loss | $24.9 million | $16.9 million |
| Net loss | $24.7 million | $16.5 million |
| Basic and diluted loss per share | $2.20 | $1.90 |
| Net cash used in operating activities | $15.6 million | $11.8 million |
Margins are not meaningful because the company had no revenue. The 50% increase in net loss principally reflected higher operating expenses, including SAVVE trial and enVVe development costs, laboratory testing, and share-based compensation. SG&A included $9.0 million of share-based compensation in 2022, versus $6.0 million in 2021.
At year-end, cash and cash equivalents were $4.6 million and short-term U.S. Treasury investments were $34.5 million, totaling $39.1 million. Working capital was $37.9 million. Total liabilities were $2.9 million, primarily operating lease liabilities; the filing reports no material borrowings outstanding. Operating lease liabilities totaled $1.7 million, with the facility lease running through September 2027. The company reported no off-balance-sheet arrangements.
Management estimated quarterly cash burn of approximately $4–5 million and said available cash should fund operations through the end of 2024 and into 2025. It also stated that resources were sufficient to meet obligations for at least one year after the report date. These are management estimates, not a guarantee; the company expects continuing losses and may need additional capital.
Material changes and business progress
- Net loss increased by $8.2 million year over year, while operating cash use rose by $3.8 million.
- R&D expense increased 74%, largely due to the SAVVE study, enVVe preparation, and testing; SG&A rose 34%, including increased share-based compensation.
- The company had 20 SAVVE sites activated and reported 43 successful surgeries as of the report date. It had passed the FDA’s preliminary safety review of the first 20 enrolled patients, allowing the study to continue without modification or interruption.
- Management’s guidance was to complete SAVVE enrollment by the end of the second quarter of 2023; it cautioned that enrollment remained inconsistent and was affected by hospital staffing constraints.
- For the 11-patient VenoValve first-in-human study, the company reported one-year improvements in reflux, VCSS, and pain scores. Three-year follow-up for a cohort of eight reported sustained improvements and no recurrence of severe CVI; one DVT was associated with non-compliance with anticoagulation. These small-study results are not the pivotal-trial outcome.
- For enVVe, the company said it had submitted an application to begin a 3–5-patient first-in-human study in Colombia and expected approval by the end of Q1 2023. This was a forecast in the filing, not confirmation of approval.
Outlook, risks, contingencies, and unusual items
The company expects VenoValve to be eligible for FDA approval before enVVe, which management anticipated could follow two to three years later. Both are Class III device candidates expected to require substantial clinical evidence and FDA premarket approval. Timing and approval are uncertain, and no product revenue was expected in the near term.
Key risks include clinical enrollment delays, trial results that do not support approval, regulatory review delays or additional study requirements, manufacturing scale-up and quality requirements, reliance on two domestic porcine-tissue suppliers, lack of a sales and marketing infrastructure, reimbursement and hospital adoption, and the need for additional financing. Future equity or equity-linked financing could dilute shareholders. At year-end, 6.35 million warrants and 3.79 million options were outstanding, in addition to 400,000 unvested restricted stock units.
The company reported a former-employee lawsuit and counterclaim, with trial scheduled for June 12, 2023. It said it could not reasonably estimate any potential loss and recorded no accrual. A $0.3 million PPP-loan forgiveness gain was recorded in 2021 and did not recur in 2022. The 2022 financial statements received an unqualified independent auditor opinion; the auditor did not attest to internal-control effectiveness. Management concluded internal control over financial reporting was effective, although the filing’s controls discussion contains an apparent reference to a 2021 evaluation date that investors may wish to clarify.
Important facts for investors to verify
- Current SAVVE enrollment, completion timing, endpoint results, and any subsequent FDA feedback or required changes.
- Whether the anticipated Colombian enVVe study authorization was obtained and whether the first-in-human study began.
- Actual cash burn, Treasury investment liquidity, subsequent financing, and whether management’s runway estimate remains valid.
- Potential dilution from outstanding warrants, options, restricted stock units, and any subsequent securities issuances.
- Developments and potential exposure in the Rankin litigation, for which no loss estimate or accrual was provided.
- Clarification of the controls-discussion date reference and review of the full audited financial statements and notes.