Business context and reporting period
enVVeno Medical Corporation filed this unaudited Form 10-Q for the quarter and six months ended June 30, 2023. The late clinical-stage medical-device company is developing replacement venous valves for severe chronic venous insufficiency (CVI). Its lead product, the surgical VenoValve, is in the U.S. pivotal SAVVE study; the non-surgical transcatheter enVVe is awaiting regulatory authorization to begin an early-feasibility study. The company reported no revenue and does not expect significant revenue before commercialization.
Financial results and position
Amounts below are in millions of dollars, except per-share data and where noted.
| Metric | Three months ended June 30, 2023 | Three months ended June 30, 2022 | Six months ended June 30, 2023 | Six months ended June 30, 2022 |
|---|---|---|---|---|
| Revenue | None | None | None | None |
| SG&A expense | $2.6 | $3.9 | $5.8 | $7.7 |
| Research and development expense | $4.2 | $3.1 | $7.8 | $4.6 |
| Operating loss | $(6.8) | $(7.0) | $(13.6) | $(12.3) |
| Net loss | $(6.5) | $(7.1) | $(12.9) | $(12.4) |
| Basic and diluted loss per share | $(0.58) | $(0.63) | $(1.15) | $(1.10) |
Gross margin and operating margin are not meaningful because the company has no revenue. For the six months, operating cash use was $9.7 million, compared with $7.3 million in 2022. Investing activities provided $9.8 million, primarily from Treasury maturities, versus $38.4 million used in 2022, largely for investment purchases. Cash increased by $0.2 million to $4.7 million during the first half of 2023.
At June 30, 2023, cash was $4.7 million, short-term investments were $25.0 million, working capital was $28.0 million, total assets were $32.1 million, and total liabilities were $3.3 million. Liabilities include operating lease obligations; the filing reports no material conventional debt. Cash and investments totaled approximately $29.8 million. As of July 27, the company reported cash of $3.5 million and investments of $25.1 million.
Material changes versus the prior comparable period
- Second-quarter net loss narrowed by $0.6 million, or 8%, as SG&A fell by $1.3 million and investment-related other income improved; higher R&D partly offset those benefits.
- First-half net loss increased by $0.5 million, or 4%, as the $3.2 million increase in R&D outweighed lower SG&A and higher investment-related income.
- First-half R&D rose 66%, mainly from $2.7 million of SAVVE study costs and higher personnel costs. SG&A fell 25%, primarily because of lower share-based compensation.
- Cash used in operations increased by $2.4 million year over year. Short-term investments declined from $34.5 million at December 31, 2022 to $25.0 million at June 30, 2023.
Outlook, risks, contingencies and unusual items
- Management estimates a quarterly cash burn of approximately $4–5 million and believes available capital can fund operations through the end of 2024 and into 2025. It also states that resources are sufficient to meet obligations for at least one year after the report date. The company expects continuing losses and may need additional capital; inability to raise financing could materially adversely affect it.
- On July 5, 2023, the company announced 57 SAVVE enrollees and expected full enrollment of 75 by year-end 2023. Management cites hospital staffing shortages and clinical research capacity as factors that may delay enrollment; it hired four clinical technologists to support sites. Primary endpoints are 30-day safety and six-month effectiveness after full enrollment.
- The enVVe early-feasibility study remains subject to regulatory authorization. The filing provides no assurance that either product will receive FDA approval.
- Two consolidated former-employee lawsuits remain pending, with trial scheduled for October 30, 2023. The company denies the claims and has filed a counterclaim. Potential loss, if any, could not be reasonably estimated, and no amount was accrued.
- Investment gains and losses reflect changes in the fair value of U.S. Treasury securities. First-half 2023 included $0.3 million of realized gains and interest income; the company notes that market values may fluctuate. Share-based compensation was $2.9 million for the first half, with $5.6 million of unrecognized option compensation remaining.
Important facts for investors to verify
- Subsequent SAVVE enrollment, trial timing, safety results and effectiveness data, and any regulatory updates for enVVe.
- Cash and investment balances, quarterly cash burn, and whether management’s projected runway remains achievable.
- Any financing needs, dilution, or changes in the securities outstanding; the filing lists 9.472 million common shares outstanding and 8.782 million potentially dilutive warrant and option equivalents excluded from diluted loss per share.
- Developments in the consolidated Rankin litigation and any resulting financial exposure.