enVVeno Medical Corporation — Q1 2022 Form 10-Q
Business context and reporting period
Unaudited results cover the three months ended March 31, 2022, compared with Q1 2021. enVVeno is a pre-revenue medical-device company developing tissue-based treatments for chronic venous insufficiency. Its lead product, the VenoValve, is being evaluated in the U.S. SAVVE pivotal trial; the company reported no commercial revenue.
Financial highlights
| Metric | Q1 2022 | Q1 2021 / comparison |
|---|---|---|
| Revenue | None | None reported |
| Operating expenses | $5.335 million | $2.808 million; up 90% |
| Net loss | $5.330 million | $2.773 million; up 89% |
| Net loss per share | $0.47 | $0.48 |
| Operating cash used | $3.321 million | $3.842 million |
| Capital expenditures | $69,000 | $24,000 |
Gross margin and operating margin are not meaningful because the company reported no revenue. Selling, general and administrative expense rose to $3.783 million from $1.176 million, largely reflecting $2.243 million of stock-based compensation. Research and development expense declined 5% to $1.552 million, mainly because the company stopped Coreograft development, partly offset by higher VenoValve trial and lab costs.
Cash and cash equivalents were $51.338 million at March 31, down from $54.728 million at December 31, 2021. Working capital was $50.4 million. Total liabilities were $2.907 million, including operating lease liabilities of about $1.934 million; the filing reports no borrowings. The company had no financing cash inflows in Q1 2022. It reported $51.1 million of uninsured cash deposits.
Material changes and operating developments
- Net loss increased by $2.557 million year over year, primarily due to higher SG&A, including the increase in stock-based compensation.
- Operating cash use decreased by $521,000 year over year, despite the higher net loss, reflecting non-cash compensation and changes in working capital.
- The company said its strategic focus is VenoValve development. Its SAVVE trial is designed to enroll 75 patients at up to 20 U.S. sites. The first patient was implanted in October 2021, and the twentieth site became active in April 2022.
- For an 11-patient first-in-human study, the company reported one-year average improvements of 54% in reflux, 56% in VCSS, and 76% in pain scores, with no device-related safety incidents. These small-study results are not pivotal-trial results.
Outlook, risks, and contingencies
Management expects continued losses and says current resources should fund operations for at least one year after the report date. At an estimated cash burn of about $4 million per quarter, it projected funding through the end of 2024 and into 2025, while noting that future capital needs depend on clinical and development costs and commercialization prospects. Cash was reported at $50.5 million as of April 28, 2022.
Management aimed to complete SAVVE enrollment by the end of 2022 or early 2023. COVID-related hospital capacity constraints, paused elective procedures, screening restrictions, and patient reluctance had slowed site activation and enrollment. Trial timing and the cash runway are forward-looking estimates, not guarantees. The VenoValve remains investigational and requires FDA approval before commercialization.
A former employee’s consolidated lawsuits, which the company contests and for which it has filed a counterclaim, were set for trial on June 27, 2022. The company said any loss could not be reasonably estimated and recorded no accrual. Management stated that disclosure controls were effective as of March 31, 2022 and reported no material changes in internal control over financial reporting.
Important facts for investors to verify
- Check subsequent filings for SAVVE enrollment, trial timing, safety and effectiveness data, and any FDA interactions.
- Monitor cash use against management’s estimated $4 million quarterly burn and projected runway.
- Review the outcome and any financial impact of the Rankin litigation.
- Reconcile the reported 11.229 million weighted-average basic and diluted shares for Q1 2022 with 9.470 million shares outstanding at quarter-end; the filing text does not clearly explain this difference.
- Assess potential dilution: 9.766 million warrant and option equivalents were excluded from diluted loss per share, and $13.0 million of stock-based compensation remained unrecognized.