BioCardia, Inc. — Q1 2021 Form 10-Q
Reporting period: Three months ended March 31, 2021. Financial statements are unaudited. BioCardia is a clinical-stage regenerative medicine company developing cardiovascular and pulmonary cell therapies and biotherapeutic delivery systems. Amounts below are in U.S. dollars; financial statement figures are generally in millions unless noted.
Financial performance and position
- Revenue: $46,000, up from $38,000 in Q1 2020. Collaboration revenue was $46,000 versus $33,000; product revenue was nil versus $5,000.
- Expenses and loss: R&D expense was $1.841 million, down from $2.786 million; SG&A was $1.177 million, down from $1.857 million. Operating loss narrowed to $2.972 million from $4.609 million, and net loss narrowed to $2.969 million from $4.594 million. Basic and diluted loss per share was $0.18 versus $0.67.
- Margins: The company reported an operating loss and negligible revenue; the filing does not present a meaningful positive operating margin.
- Cash flow: Cash used in operations was $1.883 million, compared with $2.993 million in Q1 2020. Investing used $27,000. Financing provided $2.005 million, primarily from the March stock sale. Cash increased by $95,000 to $21.502 million.
- Liquidity and balance sheet: Current assets were $22.659 million and total liabilities were $4.746 million at March 31. The company reported $1.180 million in deferred revenue and an accumulated deficit of $119.043 million. No interest-bearing debt balance is reported in the provided financial statements.
Changes versus Q1 2020
- Net loss decreased by $1.625 million, with lower R&D and SG&A costs the main drivers. Management attributed much of the expense reduction to lower compensation expense following the 2020 stock-option repricing; reduced clinical-provider and professional-service costs also contributed.
- Operating cash use declined by $1.110 million, which management attributed primarily to timing of collaboration-partner advance payments and lower payments to third parties for professional fees.
- Weighted-average shares increased to 16.57 million from 6.83 million. The company sold shares in March 2021 and had 16.79 million common shares outstanding at March 31.
Outlook, risks and notable items
- Management expects the $21.5 million cash balance to fund planned operations for at least 12 months from the filing date, but expects continuing losses and negative operating cash flows for several years and anticipates needing additional funding.
- Management expects R&D expense to increase moderately in 2021 as clinical and development activity advances; SG&A is expected to decrease modestly. Collaboration and product revenue are expected to increase, but may vary with partner activity, customer demand, production resources and regulatory clearances. These are forward-looking expectations, not guarantees.
- The Phase III CardiAMP heart-failure trial had enrolled 94 patients at 24 sites. Its safety board recommended continuing the trial after review and reported no safety concerns. The chronic myocardial ischemia Phase III trial was activated, with initial enrollment targeted for Q2 2021. FDA acceptance of INDs for allogeneic cardiac and pulmonary programs was being pursued in 2021.
- The company has a 36-month Lincoln Park equity purchase agreement for up to $20 million, subject to conditions and share limits; it received $2 million gross in the initial purchase. Further sales could dilute existing shareholders. Common shares outstanding were 16.79 million at March 31, and 2.425 million warrants were outstanding.
- COVID-19 had disrupted development programs and could continue to affect trials, suppliers, operations, financing access and timelines. Management cautioned that actual funding needs may exceed estimates.
- A litigation funding arrangement with an entity controlled by the board chair covers legal costs on a non-recourse basis, with repayment and a share of any litigation proceeds if received. The related-party receivable was $623,000 at March 31. The filing reports settlement and dismissal of the litigation, but gives inconsistent dates: April 12 in the subsequent-events note and March 12 in the legal-proceedings section. The settlement reportedly produced no material benefit or liability.
- After quarter-end, the company announced a Japanese biotechnology partnership involving Helix delivery candidates. The agreement provides $500,000, partly creditable toward products and support, and includes an option to negotiate a non-exclusive worldwide license for certain cardiac cell-delivery applications.
- Management stated that disclosure controls and procedures were effective at a reasonable assurance level as of March 31, 2021. No material change in internal control over financial reporting was identified during the quarter.
Key facts for investors to verify
- Cash runway assumptions and the pace of clinical-trial spending relative to the stated 12-month funding horizon.
- Enrollment, timing, regulatory progress and results for the CardiAMP trials and allogeneic programs.
- Terms, availability and potential dilution from further Lincoln Park share sales, alongside other financing needs.
- The litigation settlement date and final resolution of obligations under the related-party litigation funding agreement.
- Whether anticipated partnership and product revenue materializes, given the company’s very low reported quarterly revenue.