PAVmed Inc. Q3 FY2024 earnings call

Management Statement and Operational Highlights

• Strategic Transformation: Completed critical steps like deconsolidation of Lucid Diagnostics to preserve ownership without absorbing losses, and restructuring convertible debt to preserve NASDAQ listing, positioning PAVmed as a diversified commercial life sciences company with independently financed subsidiaries.
• Lucid Updates: Record revenue growth, published clinical study for Medicare coverage, held productive meetings with CMS, and expanded direct contracting.
• Veris Updates: Pilot with Ohio State completed, received NIH grant, preparing to relaunch implantable monitor development.
• PMX Updates: Continuing process of seeking financing for PortIO device.

Segment Performance

• Lucid Diagnostics: Record revenue in the third quarter, with a 20% quarter-on-quarter increase. Published the ESOGUARD BE-1 clinical validation study accepted for peer review, completed clinical evidence package for Medicare coverage submission, held meetings with CMS Medicare contractors, and expanded direct contracting initiative. Revenue contribution is significant as it's PAVmed's strongest asset.
• Veris Health: Pilot with The Ohio State University, The James Cancer Center completed; received a $1.8 million NIH grant to optimize the Veris Cancer Care Platform for underserved patients; had initiated a capital raise for Veris but put on hold during restructuring, preparing to relaunch development of implantable monitor.
• PMX incubator: Continuing process of seeking direct financing to fund the PortIO implantable intraosseous device.

Guidance

• NASDAQ Listing: Convertible debt restructuring to exchange $25 million of obligations for Series C convertible preferred stock, subject to accounting review and shareholder approval, aiming to demonstrate sustainable compliance with NASDAQ listing standards.
• Veris Financing: Preparing to reinitiate capital raise for Veris after restructuring, with plans to relaunch implantable monitor development.
• PMX Financing: Entered term sheet with angel fund for PortIO device, seeking $4 million funding at $42 million pre-money valuation, with diligence process ongoing.

Risks

• Regulatory Uncertainty: Uncertainty in Medicare coverage submission and approval processes for Lucid's products.
• Financing Risks: Delays in completing debt conversion, capital raises for Veris and PMX, and potential impact on development timelines.
• Market Factors: Fluctuations in stock price and market conditions affecting financial performance and funding efforts.

Question and Answer

Q: Could you share any learnings from your work with The Ohio State?

A: Engaged with The Ohio State for a year, launched a pilot with The James Cancer Center enrolling 100 patients, which was successful and now in discussions for long-term partnerships.

Q: How should we think about OpEx in the coming quarters?

A: Normalized OpEx as baseline, with additional OpEx driven by direct financing for Veris and PMX, such as $2 million efforts over 6-8 months for Veris and $4 million over 12 months for PMX.

Q: Is Veris still on track for submission with the FDA on a 510(k) basis before the first half of '25?

A: Delayed by financing and restructuring, likely to leak into early second half of 2025.

Q: How much total funding for the PMX incubator?

A: Entered term sheet with angel fund for $4 million to cover PortIO development, at $42 million pre-money valuation, with diligence process nearing completion.

Q: What does the competitive slate look like for The Ohio State pilot?

A: The cancer center had not engaged with a digital health platform specific for cancer before, and during the pilot, Veris was the only product utilized.