BioCardia, Inc. — FY2020 Form 10-K
Reporting period: Fiscal year ended December 31, 2020; filed March 29, 2021. This is an annual report, not a standalone fourth-quarter report. Unless stated otherwise, amounts below are U.S. dollars.
Business context
BioCardia is a clinical-stage regenerative medicine company developing cell therapies for cardiovascular and pulmonary diseases. Its lead autologous CardiAMP program was in Phase III trials for heart failure following a heart attack and chronic myocardial ischemia. The company also develops allogeneic cell therapies and sells enabling catheter and delivery products, which generated modest revenue.
Financial results and liquidity
| Metric | FY2020 | FY2019 |
|---|---|---|
| Total revenue | $145,000 | $710,000 |
| Operating loss | $15.529 million | $14.213 million |
| Net loss | $15.004 million | $14.709 million |
| Net loss per share, basic and diluted | $1.48 | $2.61 |
| Cash used in operating activities | $12.357 million | $9.445 million |
| Cash and cash equivalents at year-end | $21.407 million | $5.585 million |
- FY2020 revenue comprised $13,000 of product revenue and $132,000 of collaboration revenue. Cost of goods sold was $4,000; the resulting gross profit was $141,000, but revenue was very small and not representative of a scaled commercial business.
- Research and development expense was $9.809 million, up 14% year over year. Selling, general and administrative expense was $5.861 million, down about 2%.
- Total assets were $23.424 million and total liabilities were $4.248 million at December 31, 2020. Current assets were $22.658 million versus current liabilities of $4.248 million. Stockholders’ equity was $19.176 million.
- Operating cash outflow increased by $2.912 million year over year. Financing activities provided $28.211 million, primarily from 2020 common-stock offerings; investing activities used $32,000.
- The $506,000 Paycheck Protection Program loan, plus accrued interest, was forgiven in November 2020; the company recorded a $509,000 gain. The balance sheet reports lease liabilities, including $614,000 current, but no outstanding borrowing debt at year-end.
- Management said year-end cash was expected to fund operations for at least 12 months from issuance of the financial statements, while also anticipating continuing losses and a need for additional funding. The 2019 auditor’s report had cited substantial doubt about going concern; the 2020 auditor issued an unqualified opinion and did not repeat that going-concern section.
Material changes and developments
- Revenue fell $565,000, or about 80%, primarily because of lower collaboration activity and reduced catheter sales amid a transition in commercial offerings.
- Net loss widened by $295,000, while loss per share improved because weighted-average shares increased substantially. Shares outstanding rose from 6.83 million at year-end 2019 to 16.30 million at year-end 2020, reflecting equity financing and other share issuances.
- The CardiAMP heart-failure Phase III trial had enrolled 91 patients at 24 sites. In December 2020, the independent safety monitoring board reported no safety concerns and recommended continuing the trial; 60 randomized patients had reached one-year follow-up for the described interim review.
- The chronic myocardial ischemia Phase III trial was activated, with initial enrollment targeted for early 2021. The allogeneic CardiALLO and ARDS programs were being advanced toward FDA IND acceptance, targeted for 2021.
- After year-end, BioCardia reported a $500,000 upfront payment under a Helix preclinical assessment agreement and entered a Lincoln Park equity purchase agreement for up to $20 million, subject to limitations. The initial $2 million purchase was completed in March 2021.
Outlook, risks and unusual items
- Management expected collaboration revenue to increase in 2021 depending on program progress and new partnerships; product revenue was expected to remain modest. R&D expense was expected to rise moderately and SG&A to decrease modestly. Operating cash use was expected to remain relatively consistent, but forecasts are subject to substantial uncertainty.
- COVID-19 disrupted elective procedures and follow-up visits at clinical sites, delaying enrollment and development timelines. The company said many sites were resuming activity, but the continuing impact remained uncertain.
- A 2020 FDA review did not resolve a clinical hold on the CardiALLO program, citing chemistry, manufacturing and controls issues. The company’s lead CardiAMP program remains dependent on trial completion, successful endpoints and regulatory approval; FDA acceptance of a pivotal trial does not guarantee approval.
- The company depends on further capital, and future equity sales may dilute existing shareholders. The Lincoln Park facility has share-volume and ownership limits and may not provide all required funding.
- Other material risks include clinical enrollment and efficacy, regulatory uncertainty for novel cardiac cell therapies, manufacturing and supplier reliance, commercialization and reimbursement, and intellectual-property protection. The company also disclosed customer concentration: two customers generated approximately 70% and 16% of 2020 revenue.
- Three related patent and trade-secret proceedings were pending during 2020. The company agreed to settle them in March 2021, pending final documentation and dismissal, and expected no material benefit or liability.
- A previously identified material weakness in internal control over financial reporting was reported as remediated by December 31, 2020. The independent auditor was not engaged to attest to internal-control effectiveness.
Important facts for investors to verify
- Confirm current cash, operating runway and subsequent financing proceeds, including the limits and dilution implications of the Lincoln Park agreement.
- Track CardiAMP trial enrollment, follow-up, primary endpoint results and any FDA requirements beyond the planned pivotal studies.
- Check whether the CardiALLO manufacturing issues and clinical hold have been resolved and whether planned IND submissions proceeded.
- Assess whether partnership revenue and commercial catheter sales recover, and monitor customer concentration and deferred revenue.
- Review final documentation and dismissal of the litigation settlement, and monitor internal-control remediation and future financing needs.