BioCardia, Inc. — Q2 2022 Form 10-Q
Reporting period: Three and six months ended June 30, 2022. Financial statements are unaudited; amounts below are in U.S. dollars unless noted.
Business context
BioCardia is a clinical-stage company developing cell-based therapies for cardiovascular and pulmonary diseases. Its lead CardiAMP program is in Phase III trials for heart failure and chronic myocardial ischemia. The company also has an allogeneic cell therapy program, delivery systems and early commercialization activity for its AVANCE product.
Financial performance and position
| Metric | Q2 2022 | Q2 2021 | Six months 2022 | Six months 2021 |
|---|---|---|---|---|
| Revenue | $0.974m | $0.069m | $1.034m | $0.115m |
| Research and development | $2.304m | $2.362m | $4.490m | $4.203m |
| Selling, general and administrative | $1.166m | $1.196m | $2.367m | $2.373m |
| Operating loss | $2.496m | $3.489m | $5.823m | $6.461m |
| Net loss | $2.497m | $3.487m | $5.822m | $6.456m |
- Revenue was predominantly collaboration revenue; management attributed the increase to completion of collaboration deliverables over time and cautioned that partner activity can make quarterly revenue uneven. Product revenue was negligible.
- Gross margin is not separately reported, and is not a useful comparison given the small revenue base. Operating expenses totaled $3.470m in Q2 and $6.857m for the first six months.
- Net cash used in operating activities was $5.558m for the first six months, versus $4.748m in 2021. Investing used $0.054m; financing provided $1.354m. Cash declined $4.258m during the period.
- Cash and cash equivalents were $8.614m at June 30, down from $12.872m at December 31, 2021. Current assets were $9.152m and current liabilities $3.054m.
- No conventional borrowings are reported on the balance sheet. Operating lease liabilities totaled $1.770m, including $0.292m current and $1.478m noncurrent.
Material changes versus prior comparable periods
- Q2 revenue rose $0.905m year over year; first-half revenue rose $0.919m. The increase reflected collaboration revenue recognition, rather than material product sales.
- Q2 net loss narrowed by $0.990m year over year, while first-half net loss narrowed by $0.634m. First-half R&D spending increased $0.287m, primarily to support the CardiAMP Heart Failure Trial.
- Operating cash use increased $0.810m year over year for the first half, which management attributed primarily to the timing of payments from collaboration partners.
- In April, BioCardia sold 575,000 shares through its Cantor Fitzgerald at-the-market program for approximately $1.5m gross proceeds, with $0.232m of issuance costs. The program permits up to $10.5m of additional aggregate offerings, subject to the agreement.
Outlook, developments and risks
- Going concern and funding: Management says the $8.6m cash balance is not sufficient to fund planned spending and obligations beyond Q1 2023. The filing identifies substantial doubt about the company’s ability to continue as a going concern within one year after issuance of the financial statements. Additional capital is required; planned sources may include equity, debt, collaborations or licensing. Funding is not assured and could involve dilution, restrictive terms or surrender of rights. Without adequate funds, the company may reduce or delay programs or cease operations.
- Clinical programs: The CardiAMP Heart Failure Phase III trial was active at 26 sites, with 114 patients enrolled and 10 control patients having crossed over to therapy. A February safety review recommended continuation; the next scheduled review, including safety and futility, was August 30, 2022. The Chronic Myocardial Ischemia Phase III trial had treated one patient.
- Regulatory and reimbursement: FDA granted Breakthrough Device Designation for CardiAMP heart failure in January 2022, and Health Canada permitted trial expansion. CMS assigned procedure code C9782 with an ambulatory payment level of up to $20,000. FDA approved the IND for the COVID-19-related ARDS allogeneic-cell trial in April; initiation was expected in 2022. The heart-failure allogeneic IND remained dependent on pending formal preclinical study results.
- Management expects losses and negative operating cash flows to continue for several years and R&D costs to rise as trials advance. Trial enrollment, clinical results, regulatory outcomes, manufacturing and the ability to raise capital are significant uncertainties.
- COVID-19 had not materially affected reported financial position or results for the periods shown, but could continue to disrupt enrollment, sites, supply chains, regulatory timelines and access to capital. The company reported no current legal proceedings management believed likely to have a material adverse effect.
Most important facts for investors to verify
- Whether BioCardia raised sufficient capital after June 30, 2022 to address the disclosed funding shortfall and going-concern uncertainty.
- Subsequent cash burn, ATM usage, share-count changes and the resulting dilution.
- Enrollment, safety and futility review outcomes for the CardiAMP Heart Failure trial, and progress in the ischemia trial.
- Whether the COVID-19 ARDS trial began as expected and whether pending preclinical results supported the heart-failure allogeneic IND.
- Whether collaboration revenue is recurring; Q2’s increase was tied to deliverable completion and may not indicate sustained revenue growth.