Ladies and gentlemen, thank you for standing by. Good day and welcome to the BioCardia 2022 First Quarter Conference Call. At this time, all participants are in a listen-only mode. [Operator Instructions] After today's presentation, there will be an opportunity to ask questions. [Operator Instructions] Participants of this call are advised that the audio of this conference call is being broadcast live over the Internet and is also being recorded for playback purposes. A webcast replay of the call will be available approximately one hour after the end of the call through August 11, 2022. I would now like to turn the call over to Jules Abraham of CORE IR, the company's Investor Relations firm. Please go ahead sir.

Thank you, Roco. And good afternoon, everyone. Thank you for participating in today's conference call. Joining me today from BioCardia today is the leadership team Peter Altman Ph.D, President and Chief Executive Officer; and David McClung, the company's Chief Financial Officer. During this call, management will be making forward-looking statements, including statements that address BioCardia's expectations for future performance or operational results, references to management's intentions, beliefs, projections, outlook, analysis or current expectations. Such factors include among others, the inherent uncertainties associated with developing new products or technologies and obtaining regulatory approvals. Forward-looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in BioCardia's most recently filed periodic reports on Form 10-K, Form 10-Q and Form 8-K filed with the SEC, particularly the cautionary statements in them. The content of this call contains time sensitive information as accurate only as of today, May 11, 2022, and except as required by law BioCardia disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur after this call. It's now my pleasure to turn the call over to Peter Altman Ph.D, the company's President and CEO. Peter, please go ahead.

Thanks, Jules, and good afternoon to everyone on the call. It has been only six weeks since our last call with the 2021 year-end results, and BioCardia continues to execute in its efforts to advance its meaningful pipeline of cell and cell-derived therapeutics to treat significant cardiovascular and pulmonary disease. The first quarter was significant for BioCardia with progress in the development of both our autologous and allogeneic cell therapy platforms. Our primary focus is the enrollment in our clinical programs, which will be a continuing effort as the health care research systems across the United States recovers from COVID-19. Our efforts to complete the CardiAMP autologous cell therapy pivotal clinical trials for the indications of heart failure or BCDA-01 and chronic myocardial ischemia or BCDA-02 have had some nice milestones this quarter. We have already shared these in our last conference call, but it bears repeating that in this first quarter of 2022, our lead program in heart failure was granted FDA breakthrough designation, providing independent validation that our data to date is truly compelling. We had a successful data safety monitoring board review in our lead heart failure trial. We received Health Canada’s no Objection Letter to expand the heart failure trial in Canada. We received a new CMS reimbursement code to support both pivotal CardiAMP Cell Therapy clinical trials and we received a favorable opinion from the Office of the Inspector General of health and human services supporting our ability to cover patient co-payments in our heart failure trial. These were the result of efforts throughout 2021 and realized in the first quarter. For the first time, we have three cardiac heart failure trial procedures scheduled on the same day at three sites across the United States in the month ahead. We are working diligently to support…

Thank you, Peter. The company ended the quarter with cash totaling $9.9 million, which together with the $1.5 million in proceeds from the ATM in April provide runway into the first quarter of 2023. Our research and development expenses increased by 22% to $2.2 million in the first quarter of 2022, due to increased spending in support of the cardiac heart failure trial. SG&A expenses of $1.2 million in the first quarter of 2022 was unchanged from Q1 2021. The company's net loss for the first quarter was $3.3 million compared to $3 million in the prior year. And net cash used in operations was $2.9 million in Q1 2021 compared to $1.9 million during the prior year's first quarter. The increase is due to the timing of payments from collaboration partners, coupled with the increased research and development expenses during the quarter. We're now ready to take questions. Operator?

Thank you. We will now begin the question-and-answer session. [Operator Instructions] Today's first question comes from Kumaraguru Raja with Brookline Capital Markets. Please go ahead.

Thanks for taking my questions. So first, with regard to these four clinical sites in Canada, can you talk a little bit about where these are located? How much of potential target population that you're going to enroll in the trial are there in these areas?

Kumar, thank you for the question. I really appreciate you being on the call. We haven't yet identified the specific clinical sites were active in Canada. We will announce likely as we've done in the past, the national principal investigator and the efforts at the first site once we dose the first patient. But there are four sites. They are all moving forward well. The activities for site on-boarding began quite some time ago. If others on the call are experienced with on-boarding or securing Health Canada approval, you actually have to have IRB approvals at clinical sites before you can actually get a Health Canada approval. And so it's an interactive process. But yeah, we expect all four sites to come on board in the not-too-distant future, and there is some great folks involved. As far as the potential for enrollment, that's one of our primary challenges. I think, they're all in major – major areas. And I think the advantage that they have is that they're not – they don't have the burden associated with the billings that we have in the United States with the Medicare reimbursement. So that's one thing that will free them up – the other is there's not as many competitive activities in Canada. And so that's another advantage that enrollment will have from those sites. But they're all world-class sites with very experienced folks and we're both delighted and honored to be able to work with them and we'll identify them ahead.

And in the US, what are you seeing in terms of the challenges from COVID-19, where do you guys stand there? You see more patients being screened here. Whatever you can share with regard to that?

Absolutely. And this is something that we keep hoping will be tamped down. I think -- I'll give folks an example. We have one Florida site, where the patients who are offered to participate have literally said that they don't want to participate in any trials where they have to come to the hospital. And that's one element of this. Even though if anyone's been in Florida, you know that outside of the hospital, very few people are masked, there's close quarters everywhere. And yet in the hospital, everybody is masked with biosafety and the investigator at this particular hospital has said that it's actually safer relative to COVID-19 and infectious diseases in the hospital than it is outside the hospital. But that's one element. The second element, Kumar, is staffing. There are difficulties with the evolution of clinical research at major institutions through the COVID period. Many folks began working from home. Some folks positions were eliminated because research was stopped. And everybody is currently restaffing. So we have -- I'll give you an example. We have one center that's not enrolling any patients because they're currently recruiting a key person to need on their team. And without that person, they can't recruit, so that site is effectively stalled until they get a coordinator on board. And I'm aware of other folks in our space that are actively seeking to pay to higher coordinators for clinical sites to address this issue for their trials. So that's a potentially bigger issue and a longer issue, but it is being resolved. And there is progress in a number of centers that we've seen recently. So -- those are really the big ones. The other is, as we're looking at strategies to enroll, we have all of these things we've done in this first quarter are going to contribute. In addition, the COVID fears are being tamped down in many areas, and the staffing is going up. But there's also another strategy we're implementing in addition classic marketing efforts is tied into going after patients that have already been exposed to certain medical device therapy, so that the hurdle of having a interventional procedure, which is what our cell delivery requires is not seen as daunting. In fact, it's seen as trivial for some of these folks who may have permanent devices on board because this is a onetime catheterization procedure where we deliver their cells and they're their own cells. The only thing that's left behind are their own cells. So I think that's a compelling pathway. And we're going to be working on that as one of the enrollment initiatives ahead as well.

And maybe finally, with regard to the PMDA in Japan, how many more consultations do you think you need before you are able to move forward and move forward with the filing there? And also the time line.

Yes. So well, that's -- we're working on that pretty actively. The number of consultations, we will have at least two more consultations. And there's -- there's a couple of other elements to this that I think are interesting. So the time line, we can only predict what the time line for the next consultation and it's actually quite soon. I think as we lean into this, keep in mind that our cell processing platform is approved in Japan for other indications. And the delivery systems that we have are not only approved in Europe, but we've had conversations and actually preclinical collaborations with two partners in Japan who have interest in those delivery systems. And as related to this particular therapeutic strategy, I shared that it began in Japan. There's a physician named Dr. Takayuki Asahara. He was the first to isolate CD34 cells from the blood and thought it could provide neovascularization in ischemic hind-limb disease. And at the same time, he was doing that work. There was two physicians that published in the Japanese Journal of Cardiovascular surgery on revascularization and ischemic heart disease with autologous bone marrow transplantation. And that's really the earliest work in our space. So we're pretty excited, and there are some other follow-on breakthrough work by Dr. Asahara. So, there's a whole series of things that line up that may enable this. I mean, this is -- this is an effort that we think can be quite valuable. But the breakthrough designation provides support, the Medicare reimbursement code also provides a point of context, so all of these elements, the fact that part of the systems approved in Japan, part of the system is approved in Europe. These basic discoveries effectively originate in Japan. The fact that there's other partners interested in using the delivery systems in the clinic in Japan, many of these things line up, and I think will be helpful to us and as we go forward in these conversations. But at the end of the day, PMDA is a very sophisticated group and we are working with wonderful co-national principal investigators there, who we also have not identified publicly, that we think give us the best chance of being successful in this initiative.

Thanks, Peter. We look forward to the progress.

I appreciate Kumar. Thank you.

And our next question today comes from Emanuela Branchetti with H.C. Wainwright. Please go ahead.

Good afternoon everyone and thank you for taking then question. So regarding BCDA-04 and the Phase I to III trial expected to begin in the third quarter of 2022. I was wondering, if you can give us a sense of the opportunity in ARDS related to COVID with the pandemic evolving. But also beyond that, should we expect the proof of concept in COVID to be expanded to other forms of ARDS. And also, when thinking about the mechanism of actions, what advantages does BCDA-04 provide other strategies, perhaps other mesenchymal stem cell strategies or over, for example, NK-1 receptor inhibitors?

Wow, that's a big question. So I'll try and detail some of it. Emanuela, thank you for being on the call. I really appreciate it. We're pretty darn excited about having the IND accepted. And it’s said that the markets don't appreciate what this is. Our sense is we've just bolted on the value proposition of any of the other large leading mesenchymal cell companies that have not yet been successful in getting to market. We have peers that are going after acute respiratory distress with intravenous administration of their culture expanded mesenchymal stem cells. In fact, the NIH has a program that's actively enrolling and we'll soon complete enrollment in a 120-patient trial. So I don't know all the nuances with respect to the chemistry manufacturing controls and nature of the competitive mesenchymal stem cell programs. All of them, to my understanding, are allogeneic. There is potential for them to be approved in Japan, based on the HELIOS data with Athersys in the not-too-distant future. And so, we're watching and following the data of our peers, and we're wishing them every success. On our end, you asked what is the opportunity. We are going after this slightly differently. We are going after patients recovering from COVID-19, not necessarily those who are in the middle of severe ARDS and on a respirator. And we're not sharing a lot of details on that today, but I think the key takeaway is we're coming at it slightly differently initially. Our trial design is a Phase 1/2 trial. And your question on whether or not we will have proof-of-concept, from a efficacy perspective, I think right now, we're focused on the Phase 1 potion, which has a dose escalation element. And we're pretty confident that we'll get through that without any issues. On…

Yeah. Sure, you did. And I promise next one is the shorter, shorter question. So with regard to the strategy for potential partnership and deals you mentioned, could you provide a color around the overall strategy and perhaps how mature are the conversations you're having with potential partners?

Well, sure. So the first conversation with respect to CardiAMP internationally, I think one of our primary focus is in Japan because there is potential for a near path to market. And those conversations are going well. The strategy we have is this is a partnership. So it all depends upon the level of heavy lifting that the partner has that will really drive some of the economics here. And so I can't share any specifics, but it makes sense that BioCardia is a small company is not going to field a distribution organization in another part of the world, unless it becomes our primary focus on the other side. And I think right now, we need to stay focused on enrollment in our lead program. CardiAMP has potential to be a cell therapy literally everywhere in the world. The economics of it at volume and a procedure kit are more compelling probably than any other cell therapy that's out there. We really have dialed things in well from that perspective. On the strategy with respect to our biotherapeutic delivery partnering, we are moving closer to considering only significant relationships because each partnership does require our senior staff support and involvement. And we view them as partnerships. Underneath those, it would be similar to a standard licensing transaction in which we would receive upfront milestones as well as a small portion of the ultimate therapeutic value proposition. Those are significant deals and take time and it's somewhat tricky because we have -- there's some great folks working in this space, but we're in Phase 3. We're running at 26 sites across the United States and adding more in Canada. And nobody else is really yet in the clinic in the United States. There are some folks doing surgical delivery, adjunctive…

Got it. That's very helpful. Thank you. And I guess a follow-up to the like should we expect a possible monetization for the in 2022?

I would say at this juncture, predicting partnerships and predicting the market is pretty scary. I would say -- I'd say we're going to beat our revenues from last year. I mean, last year, we had the best revenue profile we've had as a public company. We're going to beat it in the year ahead. We might significantly beat it. But right now, we're just saying we're going to beat it. And we're going to get the enrollment dialed in for these trials. Those are our big efforts.

Great. Thank you very much.

Thank you, Emanuela.

And our next question today comes from Jim Molloy with Alliance Global Partners. Please go ahead.

Hey, guys. Thanks for taking my question. I had a question I want to clarify, that ’01, third quarter, the interim look is on track. It's great to see this year. And then as I heard correctly, you're going to complete enrollment in '23 for that, so we anticipate final data, which just a final data on ‘01 and then on '02 again, you clarified the interim role in safe in 2022, it's excellent. Relative to '01, how far behind in time or close in time - are those two trials to -- getting completed?

Well, Jim, we're working to try and line them up so they're almost simultaneous. So I note that ‘02 has a six-month follow-up for primary endpoint and ’01 has a one-year follow-up. So we're looking to enroll in those two programs, roughly 100 patients each, a little bit more than 100 patients each by the end of next year. And if they -- in doing that that would line us up for reporting out results from both in 2024.

Outstanding.

And again, the O2 program is not top-line data on the full trial designed. It's based on the adaptive readout of 100 patients. But I note for those listening that we had a p-value in our lead program in Phase II at 30 patients. The Phase III pivotal for our lead program is significantly overpowered with greater than 95% power. And that's reflected in the FDA's breakthrough designation. I mean the data is really good. For O2, we expect the data to also be good, but the adaptive readout will tell us essentially how large that trial needs to be. And it could conceivably result in the Data Safety Monitoring Board saying, we recommend you stopped the trial, because you're already looking at a p-value, but we won't know until we get to that point. And honestly, if the DSMB comes back to us at that 100-patient adaptive readout and says, you need to enroll 350 patients in the trial, that's still a success. That means that the trial has been self-powered at multi-centers. And so you're dealing with the same variability from site-to-site and patient-to-patient, because you're doing the adaptation of the size of the trial in the trial. But the big win would be, of course, if the results at 100 patients were you're good, you should stop the trial because of efficacy, but we can't guarantee that.

That was good, indeed. Looking at the bigger picture, I mean, obviously, the stocks been under pressure, new good company, because every stock has been under pressure of late. So there’s certainly nothing notable to BioCardia. How is that -- how would you be able to characterize the partnering environment currently given everyone's depressed stock prices or even an outright acquisition. Has that changed at all, or has there been more or less activity you've seen given across the board that increase valuations for biotech?

I don't think it's rolled through quite yet. I think it's starting to happen. I think there are parties that have reeling from some of the impact in the non-profitable biotech space. And so, yeah, that throws a monkey wrench into everything. But at the same time, suddenly, their cash becomes significantly more precious because nobody wants to go to market in this environment. At the same time, since everybody feels their equity is undervalued, equity can't become an element of a deal either. And so it does make things significantly more challenging in the non-profitable biotech space, the larger players, it's a real opportunity for them. If they have stabilized stock price and they can do some things in today's climate, it's going to be great for them. I'm envious. We won't benefit from that other than if we are party to a relationship or a partnership with one of those entities.

Got it. Thank you for taking the questions.

Appreciate the questions, Jim. Really appreciate you being on the call.

[Operator Instructions] Your next question comes from Carolyn Kenner [ph], a shareholder. Please go ahead.

Hello.

Yes. Is it Caroline Kenner?

It's Caroline Kenner, yes.

So Caroline, this is Peter Altman, the CEO of BioCardia. Do you have a question?

Oh, yes. Let me turn this other phone off. I had – I wasn't prepared to how this works, but I have several questions. One, can you give some idea of the benefits from your catheter and all the program going on there over the short term, medium term, long term? And secondly, I was wondering is the factory that you are – or I'm sorry, the new clinic set-up in California. Is that near completion, I don't think it would be because it's been up for such a short period of time up. When do you consider that to be finished? And when will you start manufacturing these products and developing the market? I'll tell you one thing. I'm also a patient of yours Dr. Roman. And I was in the phase 3 study in Tampa, Florida, with Dr. Leslie Miller, who is such a fine man. I had three heart attacks before somehow I got – I lost like 30% of my heart to this kind of stuff. I was unable to walk two blocks hardly without sitting down. I got involved somehow luckily in your program – and I am totally changed. After six months, I knew what was happening, and I have been buying your stock, and I will continue to buy it forever?

Mr. Kenner. So just two things, I just share you are – this is being recorded, and it's publicly being transmitted. So I'd ask you to be careful on sharing your disclosure information. We don't want to un-blind the trial. And it's great. It's absolutely great that you're feeling well. That's the number one for us here at BioCardia. If folks on the call look at our values, our number one priority is patients at BioCardia. So let me try and answer your questions, if I can. And so first on the Catheter Platform, so we have a number of catheters here at BioCardia. We have our therapeutic delivery catheters. The leading ones in that category are Helix transendocardial delivery catheter and our Morph DNA deflectable catheter, the robotics platform through which the Helix is used. Those are all fundamentally – the first, the Helix is approved in Europe, the Morph DNA is approved in the United States. And we use that system in all of our first three clinical programs for cardiac indications, and we partner that platform out. As regards to the AVANCE platform for transseptal procedures, it's – we have clinical FDA cleared -- clinical-grade FDA-cleared products here on BioCardia on the shelf. And so we are actively working to cell product to the electrophysiologists and the interventional cardiologists who are doing structural heart procedures, and they can benefit from that product today. It's a very competitive market. And so we've made the conscious decision based on where our cash is not to invest in sales expense, although we have signed up a number of 1099 commission-only sales reps, so we can staff and support any inbound inquiries. And your second question on the new facility, and where we're at with that. I'm standing in a new…

Thank you, sir. This concludes today's conference call. We thank you all for attending today's presentation. You may now disconnect your lines, and have a wonderful day.