BioCardia, Inc. — Q2 2021 Form 10-Q
Reporting period: Quarter and six months ended June 30, 2021. Financial statements are unaudited; amounts below are in U.S. dollars unless stated otherwise.
Business context
BioCardia is a clinical-stage regenerative medicine company focused on cardiovascular and pulmonary diseases. Its lead CardiAMP autologous cell therapy is in Phase III trials for heart failure following a heart attack and chronic myocardial ischemia. Its investigational allogeneic cell therapy is being developed for heart failure and COVID-19-related acute respiratory distress syndrome. The company also has biotherapeutic delivery and vascular access products, but reported only modest revenue.
Financial results and position
| Metric | Q2 2021 | Q2 2020 | Six months 2021 | Six months 2020 |
|---|---|---|---|---|
| Revenue | $69,000 | $27,000 | $115,000 | $65,000 |
| Research and development | $2.362 million | $2.224 million | $4.203 million | $5.010 million |
| Selling, general and administrative | $1.196 million | $1.377 million | $2.373 million | $3.234 million |
| Operating loss | $3.489 million | $3.574 million | $6.461 million | $8.183 million |
| Net loss | $3.487 million | $3.573 million | $6.456 million | $8.167 million |
| Net loss per share | $0.20 | $0.46 | $0.38 | $1.07 |
- Revenue and margins: No product revenue was reported in Q2 2021; revenue was from collaboration agreements. Cost of goods sold was zero in Q2 2021. Gross margin is not meaningfully comparable given the very small revenue base.
- Cash flow: Six-month operating cash use was $4.748 million, investing cash use $55,000, and financing cash provided $1.939 million. Cash and cash equivalents declined $2.864 million from year-end to $18.543 million.
- Liquidity: Current assets were $19.741 million and current liabilities $4.545 million at June 30, 2021. Accumulated deficit was $122.530 million.
- Debt and obligations: The balance sheet reports total liabilities of $4.545 million, principally current operating, accrued, payable and deferred-revenue obligations. No debt balance is separately presented at June 30, 2021.
- Equity: Common shares outstanding rose from 16.297 million at year-end to 16.871 million at June 30. The company reported $2 million gross proceeds from a March stock sale to Lincoln Park, net of issuance costs in cash flow reporting.
Material changes versus prior comparable periods
- Q2 net loss narrowed slightly year over year, while six-month net loss improved by $1.711 million. Six-month R&D and SG&A expenses fell, primarily due to lower compensation expense following the prior-year stock-option repricing and lower clinical service and professional fees.
- Q2 R&D expense increased $138,000 year over year as CardiAMP Heart Failure Trial activity resumed at sites affected by COVID-19 disruptions.
- Six-month operating cash use improved by $588,000 year over year. Financing cash provided fell from $10.846 million in 2020 to $1.939 million in 2021, reflecting lower equity proceeds and no 2021 PPP loan proceeds.
- Cash decreased from $21.407 million at December 31, 2020 to $18.543 million at June 30, 2021; deferred revenue increased from $683,000 to $1.417 million.
Outlook, developments and risks
- Management expects continued operating losses and negative operating cash flows for several years, with rising costs as trials and development advance. It stated that June 30 cash was expected to fund planned expenditures and obligations for at least 12 months following the filing. The company anticipates needing additional funding.
- The CardiAMP Heart Failure Phase III trial was active at 24 sites with 104 patients enrolled. After reviewing available data for 97 patients, the independent DSMB reported no safety concerns and recommended continuation as planned.
- The CardiAMP Chronic Myocardial Ischemia Phase III trial had been activated, with the first patient consented; management was working toward initial enrollment in Q3 2021. CMS coverage applies to both pivotal CardiAMP trials for specified screening, procedure and follow-up costs.
- Management was working toward FDA acceptance in 2021 of IND applications for the allogeneic heart failure and COVID-19-related ARDS programs. These are forward-looking targets, not reported approvals.
- COVID-19 had caused delays in development programs and regulatory and commercialization timelines. Further disruption to operations, suppliers, clinical studies, workforce capacity, capital access and liquidity remained possible.
- A confidential settlement resolved the Boston Scientific-related litigation; all claims were dismissed, and the settlement had no material financial benefit or liability. A related-party litigation funding agreement with an entity controlled by the board chair was expected to conclude after remaining matters were addressed.
- The company has a 36-month agreement giving it discretion to sell up to $20 million of stock to Lincoln Park, subject to limits and conditions. Only the initial $2 million purchase had occurred by June 30. Further equity financing could dilute existing shareholders.
Most important facts for investors to verify
- Trial enrollment, site activity, follow-up and future DSMB reviews for both CardiAMP Phase III programs.
- Actual FDA IND acceptance and subsequent milestones for the allogeneic candidates; the filing described 2021 goals, not completed acceptance.
- Cash consumption, financing needs and any additional Lincoln Park stock sales, including resulting dilution.
- Whether collaboration revenue and any product commercialization develop beyond the filing’s modest revenue base.
- Ongoing COVID-19 effects on clinical timelines, operations and capital availability, and completion of remaining matters under the litigation funding agreement.