BioCardia, Inc. — FY2017 Form 10-K
Reporting period: Fiscal year ended December 31, 2017. This is an annual filing; the supplied text does not provide standalone Q4 results. The company is a clinical-stage regenerative medicine business developing cardiovascular cell therapies, with modest sales from enabling and delivery products.
Financial performance and liquidity
| Metric | 2017 | 2016 |
|---|---|---|
| Total revenue | $0.479 million | $0.576 million |
| Cost of goods sold | $0.690 million | $0.746 million |
| Gross loss / gross margin | $(0.211) million / approximately -44% | $(0.170) million / approximately -30% |
| Research and development | $5.799 million | $3.330 million |
| Selling, general and administrative | $6.395 million | $4.108 million |
| Operating loss | $(12.405) million | $(7.608) million |
| Net loss | $(12.308) million | $(10.310) million |
| Net loss per share | $(0.32) | $(1.23) |
| Operating cash flow | $(8.671) million | $(5.522) million |
| Cash and cash equivalents at year-end | $12.689 million | $21.352 million |
Revenue declined about 17%, primarily from lower Morph product sales. R&D rose about $2.5 million as the pivotal CardiAMP heart-failure trial began and CardiALLO development advanced. SG&A rose about $2.3 million, reflecting trial support and public-company costs. Net loss increased about 19%; 2016 included $2.7 million of net other expense, chiefly debt interest and derivative revaluations, while 2017 reported $0.1 million of net other income.
At December 31, 2017, current assets were $13.315 million and current liabilities $2.332 million. Total liabilities were $2.413 million; the balance sheet lists no debt at year-end. Cash used in investing activities was $0.136 million and cash provided by financing activities was $0.144 million. The company reported an accumulated deficit of $72.450 million. Cash was held at one financial institution in excess of FDIC insurance limits.
Material developments and outlook
- CardiAMP heart failure: The FDA-accepted Phase III pivotal trial was enrolling at 10 sites. The DSMB completed its safety review of the first 10 roll-in patients in 2017, found no significant safety concerns and recommended continuation. Management anticipated enrollment completion in the first half of 2019 and top-line data in the first half of 2020.
- CardiAMP chronic myocardial ischemia: The FDA approved a separate IDE in January 2018 for a pivotal trial of up to 343 patients at up to 40 U.S. sites. CMS trial-coverage designation had been sought; potential activation in 2018 was contingent on coverage and additional funding.
- CardiALLO: The allogeneic cell therapy remained in development. The company anticipated preparing an IND for a Phase II heart-failure trial, with enrollment intended to follow completion of CardiAMP heart-failure enrollment.
- Funding and going concern: Management stated that year-end cash was not sufficient to fund planned operations beyond Q4 2018 and that additional capital was required to continue operations at the expected level and advance trials. The audited statements include a going-concern emphasis and state that substantial doubt existed about the company’s ability to continue as a going concern within one year after issuance. No assurance was given that financing would be available on acceptable terms; failure to raise funds could require spending cuts, program delays or reductions, licensing of rights, or cessation of operations.
- Existing products and unusual items: Morph products were cleared for sale in the U.S. and Europe; Helix was CE-marked in Europe. Morph and Helix sales were modest. A one-for-twelve reverse stock split took effect in November 2017. Share-based compensation was $2.707 million, up from $0.942 million in 2016. The company had received approximately $0.721 million under a TEDCO grant, of which $0.663 million remained recorded as a liability pending qualifying expenditures.
Risks, contingencies and governance
Both cell therapy systems remain investigational; trial authorization and encouraging earlier studies do not establish safety, efficacy or eventual approval. Key risks include trial outcomes and enrollment, regulatory requirements, dependence on additional financing, commercialization and reimbursement uncertainty, competition, supplier and partner dependence, and intellectual-property protection. The filing states there were no pending legal proceedings management believed likely to have a material effect. KPMG issued unqualified opinions on the financial statements and internal control over financial reporting; the prior material weakness was reported as remediated as of year-end 2017.
Most important facts for investors to verify
- Whether the company obtained financing after the filing, on what terms, and how the proceeds affected dilution and trial funding.
- Actual CardiAMP enrollment, safety findings, endpoint results and timing versus the stated trial milestones.
- Whether CMS coverage was granted for the chronic myocardial ischemia trial and whether that trial was activated.
- Changes in cash burn, revenue from existing products, and the resulting operating runway.
- Any subsequent regulatory, manufacturing, reimbursement or intellectual-property developments affecting CardiAMP or CardiALLO.