enVVeno Medical Corporation — Q3 2022 Form 10-Q
Reporting period: Three and nine months ended September 30, 2022. enVVeno is a late clinical-stage medical-device company developing VenoValve, a surgical replacement venous valve, and enVVe, a transcatheter valve. The company reported no revenue.
Financial results
| Metric | Q3 2022 | Q3 2021 | Nine months 2022 | Nine months 2021 |
|---|---|---|---|---|
| Revenue | $0 | $0 | $0 | $0 |
| Operating expenses | $6.151 million | $2.707 million | $18.472 million | $7.900 million |
| Net loss | $6.097 million | $2.389 million | $18.489 million | $7.540 million |
| Net loss per share | $0.54 | $0.26 | $1.65 | $0.96 |
At September 30, cash and cash equivalents were $2.895 million, short-term investments $37.432 million, and long-term investments $2.398 million—$42.725 million combined. Working capital was $39.4 million. Total assets were $45.456 million; total liabilities were $2.785 million, including $1.789 million of operating lease liabilities. The filing reports no debt balance. With no revenue, profit margins are not meaningful.
For the first nine months, operating cash use was $11.763 million, investing cash use was $40.070 million, and financing cash flow was zero. Investing activity primarily reflects $42.214 million of investment purchases, partly offset by maturities. Cash declined by $51.833 million from year-end 2021. Management cited an approximate $4 million quarterly cash burn and stated that resources should fund operations through the end of 2024 and into 2025; it also judged resources sufficient for obligations over the following year.
Changes and drivers
- Q3 net loss increased $3.7 million, or 154%, year over year; nine-month net loss rose $11.0 million, or 147%.
- Q3 selling, general and administrative expense increased $2.1 million to $3.659 million, mainly due to share-based compensation. Nine-month expense rose $7.3 million to $11.355 million; share-based compensation was $6.7 million for the period versus $0.7 million in 2021.
- Q3 research and development expense increased $1.3 million to $2.492 million, primarily for the SAVVE trial, lab work, and added personnel. Nine-month R&D increased $3.1 million to $7.117 million, driven mainly by SAVVE-related costs.
- Interest income increased, while investment holdings recorded a $134,000 unrealized loss for the nine-month period. The 2021 comparison included a $313,000 gain from forgiveness of a PPP loan.
- Cash and investments totaled $42.7 million at quarter-end versus cash of $54.7 million at December 31, 2021. The company raised no financing in the first nine months of 2022. Common shares outstanding at October 27 were 9,471,932; 8.008 million potentially dilutive warrant and option shares were excluded from diluted loss per share.
Outlook, developments, and risks
- VenoValve was being evaluated in the 75-patient U.S. SAVVE pivotal study, planned across up to 20 sites. The company said enrollment was slowed by COVID-related hospital staffing constraints, site disruptions, and patient concerns. The filing gives differing enrollment targets: one passage says full enrollment by the end of Q1 2023, while another says end of 2022 or beginning of 2023.
- In September 2022, the company announced enVVe. Preliminary bench and animal testing had been completed, and the company had applied to begin a 3-to-5-patient first-in-human study in Colombia, expecting approval by the end of 2022. This was an expectation, not a confirmed approval.
- Management expects continued losses and may need additional capital. The runway estimate depends on cash burn, clinical progress, development costs, and ability to raise financing; inability to obtain financing could materially harm operations.
- A former employee’s consolidated lawsuits allege employment, defamation, discrimination, and other claims. The company denies the allegations and asserts a counterclaim; trial was scheduled for June 12, 2023. The potential loss, if any, could not be reasonably estimated.
- Uninsured cash balances were $2.6 million at quarter-end. Management said investment unrealized losses primarily reflected interest-rate changes and did not consider them impairments.
- Disclosure controls were assessed as effective as of September 30, 2022; no material change in internal control over financial reporting was reported.
Most important facts to verify
- Current cash, investment balances, actual quarterly burn, and whether the projected runway remains achievable.
- SAVVE enrollment status, the applicable enrollment timeline, and subsequent trial safety and effectiveness results.
- Whether regulatory approval was obtained for the enVVe TAVVE first-in-human study and whether it began.
- Any material updates to the Rankin litigation, including potential exposure or outcome.
- Potential dilution from outstanding warrants and options and the future impact of unrecognized stock-based compensation.