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PAVmed (PAVM) Q2 Earnings call transcript Aug 13, 2024

AInvestWednesday, Aug 14, 2024 9:18 pm ET
2min read

In PAVmed's recent earnings call, the company's leadership shared insights into their strategic initiatives, financial performance, and future outlook. With a focus on key themes and trends, we can identify several critical takeaways that highlight the company's current position and potential growth opportunities.

Strategic Shifts and Subsidiary Progress

PAVmed has been working on strengthening its financial stability by positioning its subsidiaries for independent financing. Lucid Diagnostics, the company's publicly traded diagnostic company, has shown significant progress, with test volume increasing by 31% quarter-on-quarter and 44% year-on-year, despite a flat revenue. This growth is attributed to the successful launch of their CheckYourFoodTube events and the promising clinical studies, including the ENVET-BE clinical utility study and the EsoGuard-BE-1 clinical validation study, which are pending peer review publications.

Veris Health, a digital health company, has also made strides, launching a pilot program with the Ohio State University's James Cancer Center and onboarding 26 patients to date. The company is in the process of securing financing for its implantable monitoring technology and relaunching its development. Veris is also in discussions with other large academic cancer centers, aiming to expand its reach and impact.

The PMX incubator, PAVmed's shared services hub, is focusing on raising capital for PortIO, a direct long-term access to the bone marrow that aims to reduce complications and infection rates. The project has a clear path to FDA clearance and is actively seeking financing to complete its IDE study and second-generation version.

Financial Performance and Outlook

PAVmed reported a $25.5 million cash balance at the end of the second quarter, with an average quarterly burn rate of $11.6 million. The company's ability to fund operations beyond the next year depends on the ramping of revenues and the improvement of the reimbursement landscape for EsoGuard. Direct contracting efforts with employers and corporate finance activities, as well as the progress of the PMX incubator and Veris Health, will also contribute to meeting this threshold.

Lucid's revenue recognition is a significant aspect of PAVmed's financial performance, with the company experiencing a sixfold increase in revenue year-over-year. However, due to the early stages of the reimbursement process, revenue recognition is contingent on the collection of claims submitted to insurers. The company's focus on securing financing and advancing its initiatives, particularly with Veris Health, reflects its strategic commitment to leveraging its shared services model for growth.

Investor Questions and Insights

During the call, investors expressed interest in the scale and timeline of Veris Health's pilot launch, as well as its potential for future contracts with large academic cancer centers. PAVmed's leadership provided reassurance, highlighting the progress made in the pilot program and the company's strategic plans to expand its reach. Investors also inquired about the financing status for both Veris Health and the PMX incubator, with PAVmed expressing confidence in its ability to secure financing for these key projects.

Conclusion

PAVmed's second quarter 2024 business update reflects a strategic shift towards financial stability and independent financing for its subsidiaries. With promising progress in Lucid Diagnostics, Veris Health, and the PMX incubator, the company is well-positioned to leverage its shared services model for growth. As PAVmed continues to navigate the financial landscape and advance its innovative technologies, investors will closely monitor its progress and the impact on its future prospects.

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