Release Date: August 13, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Lucid Diagnostics, a subsidiary of PAVmed Inc (PAVM, Financial), achieved a record quarter with a 31% increase in test volume quarter-on-quarter and 44% year-on-year.
- PAVmed Inc (PAVM) successfully held its first large 'Check Your Food Tube' event, securing upfront contracted payments.
- Veris Health, another subsidiary, is close to securing independent financing and has successfully onboarded patients in its pilot program with Ohio State James Cancer Center.
- PAVmed Inc (PAVM) has a clear path to FDA clearance for its implantable monitor, with multiple successful pre-submission meetings.
- The company has a strong cash position with $25.5 million at the end of Q2 2024, bolstered by an additional $11.6 million from Lucid financing.
Negative Points
- Second-quarter revenue for PAVmed Inc (PAVM) remained flat, reflecting challenges in revenue growth.
- The company faces delays in reimbursement turnaround times, with an increase in claims being designated as medically not necessary.
- Revenue recognition is limited due to the early stages of the reimbursement process, affecting the amount of billable revenue that can be recognized.
- The average quarterly burn rate is high at $11.6 million, raising concerns about long-term financial sustainability.
- The market conditions are not favorable for IPOs or public market financing for early-stage assets, limiting funding options.
Q & A Highlights
Highlights from PAVmed Inc (PAVM) Q2 2024 Earnings Call
Q: Can you provide more color on the scale of the pilot launch and the timeline to full launch and revenue realization?
A: The pilot is progressing well, with about a third of the 100 patients enrolled. The purpose is to align logistics with the large medical center, the third largest cancer center in the country. We expect the pilot to wrap up in several months, transitioning to a full commercial engagement and strategic partnerships with other large academic cancer centers.
Q: Can you walk us through your pipeline of additional contracts and conversations with large centers?
A: We have a pipeline of a dozen or so large centers and active conversations with several. We expect these to move forward and accelerate upon completion of the pilot. Our strategy is working, and we are close to securing additional financing, which will help secure more accounts.
Q: Have you provided longer-term guidance on when you expect to submit the monitor for approval and the steps to get there?
A: The timeline for submission and clearance path is well worked out. We aim for an FDA submission by mid-2025, assuming we secure financing soon. The clearance path is straightforward, and we are in good shape for a predictable path.
Q: Is the financing you mentioned for Veris or the incubator?
A: The financing is for both. Veris is furthest along, and we are also raising capital for the incubator and individual assets like PortIO. The goal is to advance these technologies by leveraging PAVmed's shared services model.
Q: Are you planning a spinoff into an IPO like Lucid?
A: No, the current market conditions are not amenable to that. We are focusing on raising capital privately to advance these early-stage assets.
Q: Do you expect to have funding for Veris in place before the end of the year and submit to the FDA by mid-2025?
A: Yes, that is the plan. We are hopeful to close on an initial tranche of financing soon, which will allow us to get things off the ground.
Q: Have valuations changed significantly when raising funding for the incubator and Veris?
A: Valuations depend on the individual asset. Both Veris and PortIO are strong assets, and we have been pleasantly surprised by the interest and valuations we believe we can achieve.
Q: What are the key financial highlights from the second quarter?
A: Cash at quarter-end was $25.5 million, with an average quarterly burn rate of $11.6 million. Revenue was approximately $1 million, reflecting a sixfold increase over the prior year. The non-GAAP loss for the second quarter was $7.7 million, showing improvement both sequentially and year-over-year.
Q: Can you elaborate on the reimbursement landscape and its impact on revenue?
A: Revenue recognition is dependent on the probability of customer payment. Due to early stages in the reimbursement process, revenue is recognized when claims are collected. We are seeing increased turnaround times and denials, but our revenue cycle manager has a mitigation plan in place.
Q: What are the strategic accomplishments for Lucid Diagnostics?
A: Lucid's test volume grew to a record level, and we held over 50 high-volume health fair events. Key studies have new data pending peer review, and we had a productive meeting with the MolDX program to secure Medicare coverage for EsoGuard.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
