NEW YORK--(BUSINESS WIRE)--PAVmed Inc. (Nasdaq: PAVM, PAVMZ) (the “Company” or “PAVmed”), a highly differentiated, multiproduct medical device company, today provided a business update following its recently closed, oversubscribed rights offering.
“During our recently completed rights offering we had the pleasure of meeting with many existing investors as well as new investors who were learning about PAVmed for the first time,” said Lishan Aklog, M.D., PAVmed’s Chairman and Chief Executive Officer. “A common theme during these interactions and subsequent inquiries from investors has been a strong interest in more frequent updates from the Company as we progress towards important milestones. We have always had a strong commitment to transparency and robust investor communications, and in that spirit we believe this is an opportune time to provide a detailed business update on our finances, capital markets status and key products in our pipeline.”
Financial and Corporate Update
On June 12, 2018 PAVmed completed an oversubscribed rights offering whereby stockholders exercised and the Company accepted equity subscription rights resulting in the issuance of the maximum 9 million units, with each unit consisting of one share of common stock (Nasdaq: PAVM) and one Series Z Warrant (Nasdaq: PAVMZ) at a subscription price of $1.15 per unit. This resulted in gross and net proceeds of $10.35 million and $9.44 million, respectively.
“We were very gratified by the vote of confidence in PAVmed shown by our shareholders through their strong participation in this rights offering, including several large long-term shareholders who have been with us since the founding of the company,” said Dr. Aklog. “The proceeds of the offering coupled with the $3.6 million in cash and equivalents we reported as of March 31, 2018 extends our cash runway significantly and through the expected commercial launch of two of our lead products. We do not anticipate needing to raise additional capital until well after achieving these value-infection milestones.”
The Company also believes the receipt of the proceeds from the rights offering will increase the Company’s stockholders’ equity in a sufficient amount to allow the Company to regain compliance with Nasdaq’s continued-listing requirements pursuant to Listing Rule 5550(b)(1). PAVmed has initiated discussions with Nasdaq and will promptly provide the requested documentation and file the necessary public report to regain compliance.
“CarpX™, our groundbreaking minimally invasive device to treat carpal tunnel syndrome and our most important lead product, is steadily moving through the U.S. Food and Drug Administration’s (FDA) 510(k) process,” said Dr. Aklog. “Several weeks ago, we filed a resubmission with the FDA including excellent results from an animal study the agency had requested, which documented that the device’s bipolar electrode design results in minimal spread of thermal energy, as we had expected. The pathologic specimens showed that the thermal injury was limited to less than one millimeter and thermal sensors showed no increase in tissue temperatures except directly over the cutting electrodes. We expect that there will be some delay in the review of our resubmission and, upon the advice of our regulatory consultant, we have elected to use that time to submit physician usability and design verification testing on the most current version of the device, which incorporates several performance-enhancing improvements. This development pushes the regulatory timeline back by about six weeks, with FDA review of the resubmission beginning in mid-to-late July and an expected FDA response in the late summer. We believe this strategy strengthens our submission and the prospects for clearance.
“In anticipation of receiving FDA clearance, we are accelerating preparations for the U.S. commercial launch of CarpX, which we estimate has an immediately addressable market opportunity of over $1 billion. We are recruiting a Chief Commercial Officer to oversee these activities and have held increasingly active discussions with several potential distribution partners. Our CarpX activities outside the United States have also progressed. We are on target for European CE Mark submission late in this year’s third quarter. We have pushed our anticipated first-in-man clinical series in New Zealand to the early fall to take advantage of the recently completed improvements in device, and are in active discussions with entities in Asia, Europe and South America seeking to commercially partner with us on CarpX in their regions.
“Our newest lead product, EsoCheck, is off to a strong start six weeks after our subsidiary Lucid Diagnostics Inc. completed a definitive licensing agreement with Case Western Reserve University to develop and commercialize this revolutionary technology. We believe EsoCheck will save many lives through the early detection of pre-cancerous conditions of the esophagus and has an immediately addressable market opportunity of at least $2 billion. Since the launch of Lucid, I have had many conversations with clinicians as well as potential strategic partners and the excitement and anticipation for EsoCheck, its clinical and commercial potential has been palpable.
“Lucid has completed all necessary transition work and has begun to aggressively pursue EsoCheck commercialization by seeking FDA 510(k) clearance of the cell sampling device and a Laboratory Developed Test (LDT) designation of the DNA biomarker test. The work required for regulatory submission of the device has begun and we are working closely with the reference laboratory performing the DNA biomarker test on the CLIA certification and lab validation testing required to achieve LDT designation. We are targeting the first quarter of 2019 for the launch of the first commercial product in the U.S. The ongoing multicenter National Institutes of Health (NIH)-funded clinical study of EsoCheck is also going well, with enrollment at six leading centers and several new centers coming online soon. As the clinical evidence from this study will be important in seeking a specific indication for widespread screening of Barrett’s Esophagus, Lucid is working closely with the investigators to provide support to accelerate enrollment and assure that the data is of the highest quality.
“With regard to our other lead products, PortIO™, our implantable intraosseous vascular access device is progressing along the FDA’s de novo pathway based on detailed guidance from the agency,” he added. “The next milestone is initiation of a GLP animal study this summer and preparation of an IDE application in anticipation of a formal request for a small clinical study. Consistent with our strategy for PortIO, we are actively pursuing potential acquirers or clinical trial partners prior to the IDE study. DisappEAR™, our resorbable, antimicrobial pediatric ear tube, reached an important developmental milestone with the successful machining of ear tubes from commercially-sourced silk monoblocks. The next step is to assess resorption rates in a small animal study.
“Lastly, we decided to use some of the proceeds from the rights offering to accelerate the development of NextFlo, our fixed-rate infusion set based on a proprietary, variable-flow resistor that we believe will permit hospitals to return to gravity-driven infusions and eliminate expensive and troublesome infusions pumps for most inpatient infusions. After some additional development work, we foresee NextFlo moving into the regulatory and commercial path as our fifth lead product,” he concluded.
PAVmed Inc. is a highly differentiated, multiproduct medical device company employing a unique business model designed to advance innovative products to commercialization much more rapidly and with significantly less capital than the typical medical device company. This proprietary model enables PAVmed to pursue an expanding pipeline strategy with a view to enhancing and accelerating value creation. PAVmed’s diversified pipeline of products address unmet clinical needs encompassing a broad spectrum of clinical areas with attractive regulatory pathways and market opportunities. Its three lead products provide groundbreaking approaches to carpal tunnel syndrome (CarpX™), precancerous conditions of the esophagus (EsoCheck), vascular access (PortIO™) and pediatric ear infections (DisappEAR™). The company is also developing innovative products in other areas, such as medical infusions and tissue ablation, while seeking to further expand its pipeline through engagements with clinician innovators and leading academic medical centers. For further information, please visit www.pavmed.com.
This press release includes forward-looking statements that involve risks and uncertainties. Forward-looking statements are statements that are not historical facts. Such forward-looking statements, based upon the current beliefs and expectations of PAVmed’s management, are subject to risks and uncertainties, which could cause actual results to differ from the forward-looking statements. Risks and uncertainties that may cause such differences include, among other things; volatility in the price of PAVmed’s common stock, Series W Warrants and Series Z Warrants; general economic and market conditions; the uncertainties inherent in research and development, including the cost and time required advance PAVmed’s products to regulatory submission; whether regulatory authorities will be satisfied with the design of and results from PAVmed’s preclinical studies; whether and when PAVmed’s products are cleared by regulatory authorities; market acceptance of PAVmed’s products once cleared and commercialized; our ability to raise additional funding and other competitive developments. PAVmed has not yet received clearance from the FDA or other regulatory body to market any of its products. New risks and uncertainties may arise from time to time and are difficult to predict. All of these factors are difficult or impossible to predict accurately and many of them are beyond PAVmed’s control. For a further list and description of these and other important risks and uncertainties that may affect PAVmed’s future operations, see Part I, Item IA, “Risk Factors,” in PAVmed’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission, as the same may be updated in Part II, Item 1A, “Risk Factors” in any Quarterly Reports on Form 10-Q filed by PAVmed after its most recent Annual Report. PAVmed disclaims any intention or obligation to publicly update or revise any forward-looking statement to reflect any change in its expectations or in events, conditions, or circumstances on which those expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forward-looking statements.