BIOCARDIA, INC. The following discussion of our financial condition and results of operations
should be read in conjunction with our financial statements and related notes
included elsewhere in this Quarterly Report on Form 10-Q. This discussion
contains certain forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Any and all statements contained in this
Annual Report that are not statements of historical fact may be deemed
forward-looking statements. Terms such as "may," "might," "would," "should,"
"could," "project," "estimate," "pro-forma," "predict," "potential," "strategy,"
"anticipate," "attempt," "develop," "plan," "help," "believe," "continue,"
"intend," "expect," "future" and terms of similar import (including the negative
of any of the foregoing) may be intended to identify forward-looking statements.
However, not all forward-looking statements may contain one or more of these
identifying terms. Forward-looking statements in this Quarterly Report may
include, without limitation, statements regarding (i) the plans and objectives
of management for future operations, including plans or objectives relating to
the development of our cell therapy systems and our clinical trials, (ii) a
projection of income (including income/loss), earnings (including earnings/loss)
per share, capital expenditures, dividends, capital structure or other financial
items, (iii) our ability to raise additional capital, (iv) our future financial
performance, including any such statement contained in a discussion and analysis
of financial condition by management or in the results of operations included
pursuant to the rules and regulations of the
Overview
We are a clinical-stage regenerative medicine company developing novel autologous and allogenic cell therapies for cardiovascular and pulmonary diseases with large unmet medical needs. We are committed to applying our expertise in the fields of autologous and allogenic cell-based therapies to improve the lives of patients with cardiovascular and pulmonary conditions. Our CardiAMP cell therapy platform provides an autologous bone marrow derived cell therapy (using a patient's own cells) for the treatment of two clinical indications: heart failure that develops after a heart attack (BCDA-01) and chronic myocardial ischemia (BCDA-02). Our allogenic cell therapy, derived from donor cells and provided "off the shelf", is also being advanced for two indications, heart failure (BCDA-03) and for the pulmonary indication of acute respiratory distress that has developed from COVID-19 (BCDA-04).
Our Helix™ Biotherapeutic Delivery System or "Helix" delivers therapeutics into
the heart muscle with a helical needle from within the heart. It enables local
delivery of cell and gene-based therapies, including CardiAMP and CardiALLO cell
therapies to treat cardiac indications. The Helix catheter is CE marked in
Our Morph catheter is designed to enable physicians to navigate through tortuous
anatomy, customize the shape of the catheter to the patient's anatomy and their
clinical needs during the procedure, and to have stellar backup support once
positioned. Morph catheters enable our cell therapy procedures and have been
commercially available to treat more than ten thousand patients. A number of
Morph guides and sheaths are approved for commercial sale in
To date, we have devoted substantially all our resources to research and development efforts relating to our therapeutic candidates and biotherapeutic delivery systems, including conducting clinical trials, developing manufacturing and sales capabilities, in-licensing related intellectual property, providing general and administrative support for these operations and protecting our intellectual property. We have also generated modest revenues from sales of our approved products. We have funded our operations primarily through the sales of equity and convertible debt securities, and certain government and private grants.
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We have incurred net losses in each year since our inception. Our net losses
were approximately
CardiAMP Cell Therapy for Heart Failure and Chronic Myocardial Ischemia
The Company's lead platform, CardiAMP cell therapy, is an autologous cell therapy being advanced for two indications in pivotal clinical trials: heart failure and chronic myocardial ischemia.
The CardiAMP Heart Failure Trial is a Phase III, multi-center, randomized,
double-blinded, sham-controlled study of up to 260 patients at 40 centers
nationwide, which includes a 10-patient roll-in cohort. The Phase III pivotal
trial is designed to provide the primary support for the safety and efficacy of
the CardiAMP Cell Therapy System for this indication (BCDA-01). The trial is
active at 23 clinical sites and 81 patients have been enrolled to date. The
independent Data Safety Monitoring Board (DSMB) completed a prespecified data
review in
The CardiAMP Chronic Myocardial Ischemia Trial is a Phase III, multi-center, randomized, double-blinded, controlled study of up to 343 patients at up to 40 clinical sites. The Phase III pivotal trial is designed to provide the primary support for the safety and efficacy of the CardiAMP Cell Therapy System for this indication (BCDA-02). This therapeutic approach uses many of the same novel aspects as the CardiAMP Heart Failure Trial and is expected to leverage our experience and investment in the heart failure trial. The trial has been activated and we are working towards initial patient enrollment in the fourth quarter of 2020.
We are continuing to assess the impact of COVID-19 on the enrollment in the CardiAMP trials. Some of our clinical centers stopped performing elective procedures and advised us that they would not be performing elective procedures until restrictions on elective procedures are lifted. Many centers also delayed patient follow-up visits out of concern for patient exposure to COVID-19. In alignment with recent FDA guidance on clinical trials, "FDA Guidance on Conduct of Clinical Trials of Medical Products during COVID-19 Pandemic Guidance for Industry, Investigators, and Institutional Review Boards", we have taken steps to address unavoidable protocol deviations due to COVID-19 illness and/or COVID-19 control measures. Clinical sites remain engaged and most are resuming elective procedures, including enrollment activities in our trial.
ALLOGENIC Cell Therapy for Cardiac and Pulmonary Disease
Our second therapeutic platform is our investigational culture expanded bone marrow derived allogenic, neurokinin 1 receptor positive selected mesenchymal stem cells (NK1R+ MSC). This "off the shelf" mesenchymal cell therapy is being advanced for cardiac and pulmonary disease.
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We are actively working to secure FDA acceptance of an Investigational New Drug ("IND") application for a Phase I/II trial for our allogenic cells for the treatment of ischemic systolic heart failure (BCDA-03). We are working to receive acceptance of the IND in the fourth quarter of 2020, a critical step to beginning the trial.
The Company also intends to submit an IND for the use of its allogenic cell therapy for Acute Respiratory Distress Syndrome (ARDS) caused by COVID-19. Based on preliminary clinical reports on COVID-19, respiratory failure complicated by ARDs is the leading cause of death for COVID-19 patients. ARDS is a type of respiratory failure characterized by rapid onset of widespread inflammation in the lungs. We are working towards FDA acceptance of the IND in the fourth quarter of 2020.
Financial Overview Revenue
We currently have a portfolio of enabling and delivery products, from which we have generated modest revenue. Net product revenues include commercial sales of our Morph vascular access system in the US and EU and collaboration agreement revenues include revenue from partnering agreements with corporate and academic institutions. Under these partnering agreements, we provide our Helix biotherapeutic delivery system and customer training and support for use in preclinical and clinical studies.
Cost of Goods Sold
Cost of goods sold includes the costs of raw materials and components, manufacturing personnel and facility costs and other indirect and overhead costs associated with manufacturing our commercial enabling and delivery products, which generate net product revenue.
Research and Development Expenses
Our research and development expenses consist primarily of:
• salaries and related overhead expenses, which include share-based compensation
and benefits for personnel in research and development functions;
• fees paid to consultants and contract research organizations, or CROs,
including in connection with our preclinical studies and clinical trials and
other related clinical trial fees, such as for investigator grants, patient
screening, laboratory work, clinical trial management and statistical
compilation and analysis;
• costs related to acquiring and manufacturing clinical trial materials;
• costs related to compliance with regulatory requirements; and
• payments related to licensed products and technologies.
We expense all research and development costs in the periods in which they are incurred. Costs for certain development activities are recognized based on an evaluation of the progress of completion of specific tasks using information and data provided to us by our vendors and clinical sites. Nonrefundable advance payments for goods or services to be received in future periods for use in research and development activities are deferred and capitalized. The capitalized amounts are then expensed as the related goods are delivered and the services are received.
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We plan to increase our research and development expenses for the foreseeable future as we continue the pivotal CardiAMP Heart Failure Trial, advance the pivotal CardiAMP Chronic Myocardial Ischemia Trial, further develop our autologous and allogenic cell therapy candidates. We typically use our employee and infrastructure resources across multiple research and development programs, and accordingly, we have not historically allocated resources specifically to our individual programs.
Selling, General and Administrative Expenses
Selling, general and administrative expenses consist primarily of salaries and related costs for employees in executive, finance and administration, sales, corporate development and administrative support functions, including share-based compensation expenses and benefits. Other selling, general and administrative expenses include sales commissions, rent, accounting and legal services, obtaining and maintaining patents, the cost of consultants, occupancy costs, insurance premiums and information systems costs.
Other Income (Expense)
Other income and expense consist primarily of interest income we earn on our cash, cash equivalents and investments, and interest charges we incurred in periods during 2019 when we had convertible debt outstanding.
Critical Accounting Policies and Estimates
Our management's discussion and analysis of our financial condition and results
of operations is based on our financial statements, which we have prepared in
accordance with generally accepted accounting principles in
We define our critical accounting policies as those that require us to make
subjective estimates and judgments about matters that are uncertain and are
likely to have a material impact on our financial condition and results of
operations as well as the specific manner in which we apply those principles.
Our critical accounting policies are described in Item 2 in our Annual Report on
Form 10-K for the year ended
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Results of Operations
Comparison of Three and Nine Months Ended
The following table summarizes our results of operations for the three and nine
months ended
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