BioCardia, Inc. — Q1 2022 Form 10-Q
Reporting period: Three months ended March 31, 2022. Unaudited results. BioCardia is a clinical-stage developer of cell therapies and biotherapeutic delivery systems; revenue remains modest and the company is funding clinical development.
Financial results and liquidity
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| Revenue | $60,000 | $46,000; up $14,000 |
| Research and development expense | $2.186 million | $1.841 million; up $345,000 |
| Selling, general and administrative expense | $1.201 million | $1.177 million; up $24,000 |
| Operating loss | $3.327 million | $2.972 million |
| Net loss | $3.325 million | $2.969 million |
| Basic and diluted loss per share | $0.19 | $0.18 |
| Cash used in operating activities | $2.913 million | $1.883 million |
| Cash and cash equivalents, quarter-end | $9.930 million | $12.872 million at December 31, 2021 |
Product revenue was $1,000; collaboration revenue was $59,000 and depends on partners’ clinical activity. The filing does not provide a gross margin measure. Operating expenses substantially exceeded revenue.
Current assets were $10.661 million and current liabilities were $3.913 million, for working capital of approximately $6.748 million. Total liabilities were $5.471 million, including $1.839 million of operating lease liabilities. The balance sheet lists no conventional borrowings. Cash declined by $2.942 million during the quarter; there were no financing proceeds in Q1 2022. The accumulated deficit was $132.0 million.
Changes versus the prior comparable period
- Revenue increased by $14,000, primarily from collaboration agreement revenue.
- R&D expense rose 19% to $2.186 million, mainly due to higher clinical service provider and site costs for the CardiAMP Heart Failure Trial. SG&A remained relatively stable.
- Net loss widened by $356,000, and operating cash use increased by approximately $1.030 million. Management attributed higher operating cash use primarily to timing of collaboration-partner advance payments and increased R&D spending.
- Cash fell from $12.872 million at year-end 2021 to $9.930 million at March 31, 2022. Q1 2021 cash flow included $2.005 million of financing inflows.
Outlook, developments and risks
- Going concern and funding: Management expects losses and negative operating cash flows for several years. It says March 31 cash, together with approximately $1.5 million raised in April, is insufficient to fund planned expenditures and obligations beyond Q1 2023. The filing states substantial doubt about the company’s ability to continue as a going concern within one year after issuance of the financial statements. Additional capital is required; management’s fundraising plans are not assured. If funding is unavailable, the company may cut or delay programs, seek arrangements involving rights to its technology, or cease operations.
- April ATM financing: On April 12, 2022, BioCardia established an at-the-market offering of up to $10.5 million through Cantor Fitzgerald, with a 3% sales commission. It sold 575,000 shares for approximately $1.5 million gross proceeds in April. The filing does not state net proceeds.
- Other financing capacity: The company had a Lincoln Park purchase agreement allowing eligible stock sales, but had made no sales under it beyond the initial 2021 purchase as of March 31, 2022. Equity financing may dilute shareholders; debt or collaboration financing may impose restrictions or require rights to be granted.
- Clinical progress: The Phase III CardiAMP Heart Failure Trial was active at 26 sites, with 111 patients enrolled and seven control patients having crossed over to receive therapy. The DSMB recommended continuing the study as designed after its February review. FDA granted Breakthrough Device Designation in January, and Health Canada issued a No Objection Letter in February. The Phase III chronic myocardial ischemia trial had treated one patient. Management identified enrollment as its primary focus and expected improvement, citing site expansion, reimbursement developments and outreach.
- Allogeneic program: In April 2022, FDA approved the company’s IND for a Phase I/II trial of its cell therapy for COVID-19-related ARDS; trial initiation was expected in Q3 2022. The heart-failure IND was still in preparation, with preclinical toxicology work underway.
- Risks and contingencies: COVID-19 had disrupted clinical-site operations and could continue to affect enrollment, supply chains, regulatory timelines and access to capital. Management reported no current legal proceedings it believed likely to have a material adverse effect. No off-balance-sheet arrangements were reported.
- Operating controls: Management concluded disclosure controls were effective at a reasonable assurance level as of March 31, 2022; no material change in internal control over financial reporting was reported.
Important facts for investors to verify
- Cash runway and the timing, amount and terms of additional financing; reconcile the going-concern disclosure with subsequent ATM proceeds and any later capital raises.
- Clinical trial enrollment, site activation, safety reviews, regulatory milestones and whether expected timelines were achieved.
- ATM shares sold, net proceeds after commissions and expenses, remaining capacity, and resulting dilution; also monitor potential use of the Lincoln Park facility.
- Future R&D spending and operating cash use, including the effects of trial expansion and collaboration-payment timing.
- Potential continuing effects of COVID-19 and other operational or financing risks disclosed in the company’s filings.