BioTelemetry Q3 2023 Earnings Call Transcript

Quartr
Provided by Quartr
November 14, 2023

There are 6 speakers on the call.

Operator

Greetings, and welcome to the HeartBEAM Third Quarter 2023 Financial Results Conference Call. At this time, all participants are in a listen only mode. A question and answer session will follow the formal presentation. As a reminder, this conference is being recorded. Before we begin the formal presentation, I would like to remind everyone that statements made on the call and webcast may include predictions, estimates and other information that may be considered forward looking.

Operator

While these forward these statements represent our current judgment on what the future holds. They are subject to risks and uncertainties that could cause actual results to differ materially. You are cautioned not to place undue reliance on these forward looking statements, which reflect our opinions only as of the date of this presentation. Please keep in mind that we are not publicating ourselves to revise or publicly release the results of any revision to these forward looking statements in light of new information or future events. Throughout today's discussion, we will attempt to present some important factors relating to our business that may affect our predictions.

Operator

You should also review our most recent Form 10 ks and Form 10 Q for a more complete discussion of these factors and other risks, particularly under the heading Risk Factors. A press release detailing these results Crossed Away is this afternoon and is available in the Investor Relations section of our company's website, heartburnbeam.com. Your host today, Vadish, Chief Executive Officer and Founder Rob Eno, President Rick Brownstein, Chief Financial Officer, will present results of operations for the Q3 ended September 30, 2023. At this time, I will turn the call over to Harbin Chief Executive Officer, Panislav Balish. Please go ahead, sir.

Speaker 1

Thank you, operator, and good afternoon, everyone. I'm pleased to welcome you to today's Q3 20 on today's call, we will be relating some very important updates we will discuss our business, our products, including our landmark peer reviewed study publication and a significant enhanced we continue to make steady progress towards upcoming clinical and regulatory milestones. I'd like to give you a brief overview of Heartbeams and our technology for those of you we just joined for the first time. And as a reminder, for those of you who are already familiar with us, it's really important to understand how our VECG technology is different from and that the more powerful, the most common personal ECG Technologies that are in the marketplace today. There are many key technologies offered to consumers and patients outside of a medical facility.

Speaker 1

You can see a couple there are 1 lead, 3 leads or 6 leads. This is adequate for detecting many arrhythmias, but is not sufficient To detect a heart attack or complex arrhythmias, while there are complex I'm sorry, while there are many basically, what I'd like to say is that a couple of ECG technologies that are out there today as I indicated for at home use, but we do not believe that these are adequate we believe our technology has the potential to solve the problem of heart attack detection outside of our medical institution. The key aim of Harbin Technology is to quickly and accurately clinicians identify a heart attack. HeartbeatAmyGo is a personal, portable an easy to use system that generates a 12 lead ECG. The Aimigo device coupled with a smartphone app and cloud based diagnostic software system facilitate remote evaluation of cardiac symptoms by physicians.

Speaker 1

In addition, by collecting 3 d signals of the heart electrical activity, Heartbeam Aimigo has the potential to provide unparalleled data for the development of AI algorithms and the creation of a rich data set for AI. We believe that Aimigo could reduce the critical time to intervention for heart attack patients. The average patient waits 3 to 4 hours before seeking care. Future action would reduce complications and save lives. In addition, more than 80% of the patients with chest pain that go to the emergency room are not having a heart attack.

Speaker 1

An effective triage tool in the hands of the patient could reduce the number of unnecessary emergency room visits the opportunity for our technology in the United States is 6x larger the DASIO fibrillation of AP market is approximately 3,000,000 AP patients representing a $2,000,000,000 market. At the same time, there are approximately 20,000,000 total coronary artery disease patients representing a $12,000,000,000 market. These are estimated market numbers for the U. S. Only.

Speaker 1

We have the opportunity to unlock conditions beyond arrhythmia as the Aimigo technology will bring the power of standard of care to have lead ECG to physicians from their patients that are anywhere and at any time. These diagnostic capabilities we have the potential to go beyond the 12 lead ECG standard of care capable of recording and we are focused on vector cardiography, VETG signals and using powerful 3 d vector based algorithms to detect heart attacks. We have been working on our core technology, Amigo, with a credit card our deep product pipeline that is well protected with our AP presents us with an extraordinary opportunity, we believe to form alliances with key strategic players and multiple industrial players, including wearables and ambulatory monitoring. Our rich pipeline of products includes our on demand 12 lead extended wear patch. We recently were granted our 3rd U.

Speaker 1

S. Patent on this technology, which will be bringing 12 lead technology we are committed to the established ExtendedVerb Patch segment, which is estimated to reach RMB 4,800,000,000 by 2030, we also have extensive IP on continuous cardiac monitoring through our acquisition of Limor, which developed the 1st FDA cleared prescription wearable for continuous cardiac Also in our pipeline is our integrated system, which combines the continuous cardiac monitoring with our 12 lead patient carried ECG, the heartbeat watch, which combines a 12 VDCG, a continuous cardiac monitor we are applying the latest in deep learning to our cardiac signals. We look forward to updating you soon on these efforts. I would now like to turn the call over to our President, Robino, to provide product and business updates. Rob?

Speaker 2

Thank you, Bratislav, and thanks to everyone joining us today. Turning to recent milestones, a landmark study based on our novel VECG technology was published in JACC Advances, a journal of the American College of Cardiology. This peer reviewed study demonstrated the ability of HeartBEAM's VECG technology platform to detect the presence of coronary artery occlusions. This is a very interesting study design that use balloon inflation during a stent procedure, also called a percutaneous coronary intervention or PCI to simulate coronary occlusions. HeartBeam's technology and a standard 12 lead ECG were both we are currently testing for their ability to detect coronary occlusions.

Speaker 2

There are 3 main takeaways from the study. First, on the left, This in itself is important as Heartbeams technology is intended to be used by patients outside of a healthcare institution. 2nd, the study showed that both for Heartbeams technology and a standard 12 lead ECG, when assessing chest pain, performance was much better when the reading was accompanied by a baseline ECG taken before the event. The area under the curve or AUC, a measure of accuracy was 0.95 or greater when including both the symptomatic and baseline recordings. The AUC when only the symptomatic was included was much lower around 0.7.

Speaker 2

In other words, assessing payers of ECGs or VECGs, the patient's baseline plus one taken during an event can increase accuracy by more than 30%. 12 plus 12 is better than just a 12 lead ECG. And this is particularly important because Heartbeams technology by design always includes the patient's asymptomatic baseline taken when he or she is onboarded. And a final takeaway is that in practice, the HeartBEAM technology could have a dramatic improvement in accuracy over a 12 lead ECG taken in an emergency room. While the HeartBEAM technology will always have a patient's asymptomatic VECG and will be able to assess the pairs of readings, when a patient's ECG is assessed in the emergency room, there's often no baseline.

Speaker 2

So a HeartBEAM 12 plus 12 reading could be almost 40% more accurate than a single 12 lead ECG recording in the emergency room with the AUC increasing from 0.68 to 0.95. So in all this study demonstrates the potential that the Aimigo system holds and we'll be conducting additional studies focused on our 12 lead synthesis during the quarter, we were privileged to add multiple new respected industry executives and physicians to our leadership team, Board of Directors and Scientific Advisory Board. We strengthened our Board of Directors with the appointment of Doctor. Michael Arjaff, Chief Medical Officer and Vice President of Clinical Affairs, Technology and Innovation of the Peripheral Interventions Division at Boston Scientific. Doctor.

Speaker 2

Jaffe is a renowned vascular physician and researcher, bringing a wealth of clinical and industry experience to the Board. This follows the recent additions of Ken Nelson and Mark Strom. We also made 3 key hires to our senior management team. Richa Gujjarati joined Heartbeam as Senior Vice President of Product. Richa has over 13 years of experience collecting market level insights And translating them into business needs for companies ranging from St.

Speaker 2

Jude and iRhythm to Apple. Her deep expertise in go to market strategies for health sensing the company's will be instrumental as we ready the HeartBEAM IME GO system for market release. Debbie Castillo joined HeartBEAM as Vice President of Regulatory Affairs. Debbie is an experienced biomedical engineer with extensive knowledge of FDA, EU and Health Canada regulations. She has experience as well in she has industry experience as well in various positions with the FDA.

Speaker 2

She is responsible for leading our regulatory affairs function and overseeing the company's interactions And finally, we welcome to Pooja Chatterjee as Vice President Clinical. She brings over 15 years of extensive clinical leadership experience in the medical device industry, most recently at Abbott and we'll oversee our clinical studies and related efforts. We recently added 5 distinguished physicians to our scientific advisory board. This group brings expertise in interventional cardiology, electrophysiology, clinical research and new technologies. The new members are Charles L.

Speaker 2

Brown III, Tony Doss, Robert Harrington Campbell Rogers and Neeraj Varma. They join our Chief Medical Officer, Peter Fitzgerald and the previously announced Chair of the Scientific Advisory Board, Michael Gibson. I encourage you to read our press release of the appointments to get a sense of the wealth of experience that they bring. We continue to make steady progress toward our key product milestones. As previously discussed, we will have 2 510 submissions to the FDA.

Speaker 2

The first, which we call version 1 is for clearance of the HeartBEAM AIMICO VECG device. This application which was submitted to the FDA in May is for the hardware. Clearance is a 3 lead VECG collection device. This submission is progressing well. We've received questions from FDA and have submitted our responses.

Speaker 2

The second submission plan for Aptu to receive the clearance for version 1 is for the software, including the algorithms that generate a synthesized 12 lead ECG for physician review. On this application, which we call version 2, we've held a successful pre submission meeting with the FDA. This meeting focused on the design of the clinical we will demonstrate the performance of our synthesized 12 lead ECG in relation to a standard 12 lead ECG. We're encouraged by our interactions with FDA and we continue to expect the product will be ready for limited market release during the second half of twenty twenty four. I'll now turn the call over to Rick Brownstein, Chief Financial Officer, to discuss operational updates and financials.

Speaker 3

Thank you, Rob. Turning to our financials, I will now give a brief overview of our financial results. A full breakdown is available in our regulatory filings and in the press release that crossed the wire after market close today. General and administrative expenses for the Q3 of 2023 were $2,100,000 compared to $2,000,000 for the Q3 of 2022. Although overall G and A expense is flat, cash spending is actually down And looking at 2023 compared to 2022.

Speaker 3

In 2022, we were invested in the commercial team and due to our change in the near term focus in early 2023, we're not currently emphasizing commercial activities. The reduced sales and marketing expense was offset by increased non cash stock based compensation of about $400,000 resulting primarily from the issuance of employee stock options following the May 2023 financings. Research and development expenses for the Q3 of 2023 were 1,600,000 approximately the same level of expense as compared to the Q3 of 2022. In addition to the current development focus on the Harbin Aimigo, in both periods, we also invested in research costs in support of the future product pipeline coming from our patented VECG platform technology, which is the basis for our patent portfolio of 11 issued patents. With current interest rates in the short term markets around 5%, we earned $267,000 we expect gross income in the Q3 of 2023 compared to $28,000 in the Q3 last year.

Speaker 3

Net loss for the Q3 of 2023 was $3,500,000 compared to a net loss of $3,600,000 for the Q3 of 2022. We ended the Q3 of 2023 ahead of plan with $19,200,000 in cash and cash equivalents compared to $3,600,000 as of December 31 last year. As mentioned in May, we closed the common stock financings we have gross proceeds of $26,500,000 the cash is planned to last into early 2025. We expect to receive FDA clearance Farharpie mainly go version 2, which is our commercial product in the second half of twenty twenty four. We remain we're confident that we have sufficient funds to deliver on these important milestones and to get prepared to move into the commercialization phase of also of importance in the May 23 financings the fact that they were common stock only financings, they did not include any warrants and our balance sheet as a result has a very simple and straightforward capital structure we're pleased with approximately 26,000,000 shares outstanding now.

Speaker 3

Finally, I would also like to share the results of our recent annual meeting of shareholders at the event all proposals passed, which included adding 4,000,000 authorized shares to the 20 2022 Equity incentive plan. I'll now turn the call back over to Branislav for closing thoughts.

Speaker 1

Thank you, Rick. Let me just say that we remain incredibly optimistic for the future of Heartbeat. Now I would like to summarize the recent efforts in the following categories: continued validation and company momentum, progress toward key milestones we have several announcements the demonstrated external validation of the technology and continued momentum of the company. Our landmark clinical study was published in Journal of American College of Cardiology Advances. We made several key additions to our Board of Directors, our senior management team and our Scientific Advisory Board.

Speaker 1

And the U. S. Patent and Trademark Office granted the 3rd patent on Sverdleve extended wear patch, our 11th patent overall. Next, as Rob has summarized, we have made steady progress we will continue to execute our key milestones with productive discussions with FDA on our initial application, our Aimigo, Hardware. Equally importantly, we had a successful pre submission meeting with the FDA on our second application, which will be on the algorithm that synthesizes the 12 lead ECG from our our expectation for a limited launch in the second half of 2024 remains unchanged.

Speaker 1

We have a strong cash position. We ended the quarter with significant cash position of 19,200,000 well ahead of the plan. And this $19,200,000 in cash includes also cash equivalents and short term investments, providing the runway very importantly to early 2025. I would like to close by reiterating that we have had positive interactions with the FDA in the past quarter, and we remain on track for our key product milestones. I look forward to providing our shareholders with further updates in the near term.

Speaker 1

I thank you all for attending. And now the Heartbeat team would like to answer your questions. Operator?

Operator

Thank you, sir. Ladies and gentlemen, at this time, we will be conducting a question and answer session. Our first question is from Ben Hayeo of Alliance Global Markets. Please go ahead.

Speaker 4

Good afternoon, gentlemen. Thanks for taking the questions. First off for me, congrats on all the progress. Just curious on the interactions with the FDA, the questions on the first submission, I mean, it sounds like it's been a productive dialogue, but just knowing that you've answered the questions, I presume there aren't any things that look like showstoppers in there. Is that A fair assumption.

Speaker 1

Yes. We definitely had a number of interactions now with the FDA on our first submission that's under consideration as well as on our E2 future submission, which was subject of our pre submission meeting with the FDA, without going into details, we definitely have tackle the issues that FDA basically brought up, but we don't have anything on our horizon this would be of serious concern or as you turn this show stopper. So all in all, it's quite a bit of work, no question about that. But there are no points that would, in our judgment, we are of negative nature in terms of not being able to achieve our goal.

Speaker 4

Okay, great. That's definitely helpful and sounds positive. And then just on the pre sub meeting, any takeaways that you can Potentially share on the study design. I mean is it bigger than a bread box? I mean is it You can do in animals, is it in humans, is it dozens, is it 100, is it 1,000?

Speaker 4

What's kind of Is there any sort of guide rails you can give us on what that might look like?

Speaker 1

Yes, indeed. That was a significant topic in our pre sub meeting with the FDA, the clinical study, the nature of the endpoints and as far as, of course, it's going to be in humans, it's going to be a fairly simple study for what we are proposing now and what FDA appears to be basically positive on in terms of how the study will be designed and executed. And in terms of cost and the number of subjects, it's all in the range that we expected and it is not high. So all in all, on the study, everything is looking as we have envisioned so far.

Speaker 3

Okay.

Speaker 4

So it sounds like everything is going according to plan or as you put it earlier, well ahead of plan on the cash utilization. And then just lastly for me and then I'll jump back in queue. Big deal with the JAK publication. Can you share any reaction you've gotten some folks on that. I know there was the editorial that came away positive that was published.

Speaker 4

But just any kind of color that you have from other folks that are saw it and are intrigued by its findings?

Speaker 1

Rob, would you please add?

Speaker 2

Yes, sure. Yes, no, good question. The feedback has been really positive. I think as I highlighted, I think a lot of the physicians we spoke to were Intrigued by the study design using balloon inflation as a really interesting way to look at this problem. And I think the themes really resonated, the theme that this is a good way to show kind of apples to apples that were equivalent To a standard 12 lead, even though we're outside the hospital.

Speaker 2

And then this insight, which I think was new to a lot of people of the importance of the baseline, Especially when assessing potential heart attack or potential occlusion and how much that adds to the accuracy Both for a 12 lead and for ours. So I think as I tried to allude to what the feedback we're getting is that it's really interesting when you put those 2 together Because not everybody who goes to the emergency room gets a has a baseline readily accessible That actually our baseline being accessible provides a potential advantage. So, I think the physicians we talked to were very excited about it and see it as a really great first step to prove the feasibility of the study and looking forward to continue to work with us And provide more data.

Speaker 4

Okay, great. That's helpful. Thanks for taking the questions, guys.

Speaker 1

Thank you.

Operator

Thank you very much. We have no further questions on the conference call at the moment, and I would now like to take the webcast questions.

Speaker 5

The first webcast question asks, if you have a 12 lead ECG with a patient at home who will read or interpret the heart attack, the patient, AI or a cardiologist? If the latter, how will they get the ECG?

Speaker 2

Yes, I can take this one as well. I think that's Please. Yes, it's a great question. And it's really it's an important thing. We believe it's crucial for the ECG to be evaluated by a physician.

Speaker 2

We don't want to be in a position that Heartbeam's algorithm is saying whether or not you have especially in the case of we'll be set up. The idea is the patient will perform the use the Aimigo device at home with the device in the app that gets sent up to the cloud where the signals are processed, Chesh for quality and then the 12 lead is synthesized. And then that is sent to the reader service, which then analyzes it. And then the physician in that reader service will reply to the patient giving them the interpretation and can even initiate a telehealth visit or consultation if needed. So we think it's important, especially when we're dealing with things like potential heart attacks that there's a physician in the loop And are building the workflow to incorporate that.

Speaker 5

Our next question asks, you mentioned the application of deep learning to your system. Do you have more details on that effort?

Speaker 1

Yes. When it comes to deep learning and in general AI, it's always it's in the headlines in terms of its impact on various areas of our society and in the future Impact is really quite relevant when it comes to medical area. So all in all, looking at the impact AI will have on specific area of ECG, we believe that it's going to be impactful. And that technology combined with our unique advantages that we call that data rich data set and very importantly, the longitudinal data set collected over time frequently over time for that patient, we will provide, we believe, value that goes beyond what a data set, the additional data set of 12 lead ECGs can offer. So we are keenly interested in AI, and we will be making some announcements in terms of our plans and efforts in this area in the near future.

Speaker 5

Our next question asked, do you have enough capital for 2025 commercial launch?

Speaker 3

So that sounds like a good question for the CFO. Yes. So a couple of points on that. Yes, we have enough money to get through the second FDA clearance, which is a commercial product and get it ready for launch. That said, we clearly plan to do another round of financing to fully fund the commercialization.

Speaker 3

So a little bit of both, but we have probably several months of leeway between when we expect to get we're ready for commercialization and when we would need another round to really carry on. So we're feeling very comfortable from the cash position today.

Speaker 5

The next question asks, what are your near term milestones?

Speaker 1

We made a decision to approach our regulatory submissions in 2 the first one is what we call V1 system, the hardware system, the credit card size hardware system it's very important foundational to our ability to synthesize the 12 lead. Synthesized 12 lead Is our second submission to be too clear as it will be seeking for the 12 leads? And indeed as it stands right now, we expect both of these to be cleared in 2024.

Speaker 5

Our next question asks, can you talk about new business development opportunities?

Speaker 2

Sure. I can handle that one. Branaslov touched on that in his overview of the new technologies. So our focus obviously right now is on the Aimigo system, Getting that through FDA and commercializing that. And as we described, we believe we're making really good progress on that.

Speaker 2

That is very much our company's focus. At the same time, we have this rich pipeline of products, with that have strong IP associated with them. So the continuous monitor watch, What we call the integrated system, which is the watch plus the card and also the 12 lead ECG heart beam watch. And we think some of those, given the size of our company really lend themselves well to strategic partnerships, Especially in the area of wearables and ambulatory monitoring. So we will we're going to be pursuing discussions in the coming months with companies for some of those future areas.

Speaker 2

And maybe I'll just I touch on another question that I had Seeing come through, which is on the go to market strategy for the Aimigo system. And so we are planning to go forward bringing that product to market We're going to be unveiling more about what our go to market plans are. We're making good progress in developing those plans and in the coming months we'll outline them in a

Speaker 5

a lot more detail. Our next question asks,

Speaker 2

Yes, I'll take I can take that one as well. And so another really interesting question. First of all, the guidelines are if you have chest pain, you should go to the emergency room. The reality is patients often delay 3 to 4 hours Before going, we think that's really one of the fundamental issues that exist today. The ultimate goal is for this technology to be accepted and go down a path of unique reimbursement as well as getting into the guidelines.

Speaker 2

And so the short answer is that will all be done with studies And evidence, it's going to be really important for us to generate evidence and data that show the clinical effectiveness and the cost effectiveness. And so it takes time ultimately, but with evidence showing the benefit when patients use this device, that's the kind of work that would ultimately help to get something like this into the guidelines.

Speaker 5

And our last question asks, where do you see the 3 lead finding a market? There are several dozen companies in this market and what is the value of another 3 lead?

Speaker 2

Yes, I can take that one as well. Now these are touching on some really good points. When we talk about our 3 lead collection device, it is collecting 3 orthogonal leads, X, Y and Z, And that's the basis of vector cardiography, VCG. And when you're collecting those specific three axes, That gives you all the data, all the electrical data in the heart. And from that you can then synthesize the 12 lead.

Speaker 2

Other 3 lead devices, other reduced lead devices are not using 3 orthogonal leads. So they're not they're projections that aren't getting the full signal. So our difference for the 3 lead is that we are 3 lead VCG. So we're collecting all the heart signals. But as we've laid out the strategy, it's a stepwise approach getting the hardware cleared as a 3 lead collection device that allows us to move on to taking that those 3 orthogonal leads And then synthesizing the 12 lead, we believe it's important for physicians who are involved, as we mentioned earlier, to be able to analyze 12 lead together with the baseline because that's what they're used to seeing.

Speaker 2

So it's a stepping stone having the 3 orthogonal leads to get the 12 lead synthesis, which is our true differentiator.

Operator

Thank you, sir. Ladies and gentlemen, we have reached the end of the question and answer session. And I would like to turn the call back to Doctor. Badrij Vasilkar Zuma.

Speaker 1

Thank you, operator. I would like to thank each of you for joining our earnings conference call today we look forward to continuing to update you on our ongoing progress and growth. If you were not able to answer any of your questions here today, please reach out to our IR firm, MZ Group, we would be more than happy to assist. Good day.

Operator

Thank you very much, sir. Ladies and gentlemen, that concludes today's conference. Thank you for joining and you may disconnect your lines at this time.

Powered by Quartr

Key Takeaways

  • Landmark peer-reviewed study: Published in JACC Advances, the Aimigo VECG platform detected coronary occlusions with an AUC ≥0.95 when combining baseline and event recordings, potentially outperforming standalone ER-based ECGs by ~40%.
  • FDA regulatory progress: The 3-lead hardware submission (V1) is under active review with no showstoppers identified, and the software algorithms for synthesized 12-lead ECG (V2) follow a successful pre-submission, targeting limited market release in H2 2024.
  • Strong cash runway: HeartBeam ended Q3’23 with $19.2 million in cash and equivalents, bolstered by $26.5 million raised in May financings, funding operations into early 2025 ahead of commercialization.
  • Growing IP protection: The company secured its third U.S. patent for the extended-wear 12-lead patch, expanding its portfolio to 11 issued patents and safeguarding future products like continuous monitors and integrated systems.
  • Large U.S. market opportunity: With ~3 million AF patients (~$2 billion) and ~20 million CAD patients (~$12 billion) in the U.S., Aimigo aims to streamline triage, reduce unnecessary ER visits, and accelerate heart attack intervention.
AI Generated. May Contain Errors.
Earnings Conference Call
BioTelemetry Q3 2023
00:00 / 00:00