PAVmed Inc (PAVM) 2025 Q3 法說會逐字稿

Good morning and welcome to the PadMed's 3rd quarter 2025 business day conference call. At this time, all lines are in listen-only mode, and following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press 0 for the operator. This call is being recorded on Thursday, November 13, 2025.

I will now turn the call over to Mr. Matt Riley, Padmed senior director of investor relations. Please go ahead.

Thank you, operator, and good morning, everyone.

Thank you for participating in today's business update call. Joining me today on the call are Doctor Lishaw Ayo, Chairman and Chief Executive Officer of PathMed, along with Dennis McGrath, Chief Financial Officer of PathMed.

The press release announcing our business update and financial results is available on PathMed's website. Please take a moment to read the disclaimers about forward-looking statements in the press release. The business update, press release, and the conference call all include forward-looking statements, and these forward-looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from statements made. Factors that could cause actual results to differ are described in the disclaimer and our filings with the SEC.

For a list and a description of these and other important risks and uncertainties that may affect future operations, see Part One, Item 1A entitled Risk factors in PathMed's most recent annual report on forms 10k filed SEC.

And any subsequent updates filed in the quarter reports on forms 10q and subsequent forms 8k.

Except as required by law, PathMed disclaims any intentions or obligations to publicly update or revise any forwardlooking statements to reflect changes in expectations or in events, conditions, or circumstances on which the expectations may be based, or that may affect the likelihood that actual results will differ from those contained in the forwardlooking statements. I would now like to turn the call over to Dr. Alicia Aog, Chairman and CEO of Pat.

Thank you, Matt, and good morning everyone.

Thank you for joining our quarterly update call. As always, I'd like to thank our long-term shareholders for your ongoing support and commitment. Before we delve into our recent operational highlights, as I've done in the last couple of calls, I want to just remind you that over the past 18 months, we've been taking some really critical steps to stabilize Patna's corporate structure and balance sheet. We've did a restructuring of debt.

In the early part of this year and we've been working on that, but there's still work to be done on that front. We have a couple of additional steps that we think we're going to be able to consummate in the very near future, whereby following that we think PatMed will be fixed and we'll be back to. The original proposition where we'll Patm will be really well positioned to operate per our vision as a diversified commercial life sciences company with multiple independently financed subsidiaries operating on their shared services model, and it'll give us the opportunity to start building that portfolio beyond our two major main commercial subsidiaries right now.

So let me just talk about that briefly, and provide a brief overview of PatMed's portfolio.

PatMed is a vehicle to deliver innovative medical technologies, and we operate, continue to operate under a shared services model and, as our subsidiaries succeed, particularly Lucid, Patmed should also succeed. So let me just start with Lucid. Lucid's obviously our main asset. It's a publicly traded diagnostic company, and it's on the cusp of a transformative milestone, particularly Medicare coverage. It continues to succeed at raising its own capital, including this past quarter, and in that it has sufficient runway to accelerate its commercialization once Medicare coverage is secured.

Talk more about Veris in much more detail later, but, Veris is our digital health company that offers a cancer care platform to enhance personalized care for cancer patients who are initiating and undergoing, a systemic treatment with chemotherapy and immunotherapy. We made a big, some progress earlier in this year where we're able to secure financing that's allowed us to bring, our project plan forward, to develop the key implantable device and the. Submission is planned for next year as we talked about on previous calls, we have started to make some effort to bring other technologies within our portfolio as well as others that we have access to, and we are in the process of organizing around that and seeking to raise capital around that and this sort of final steps of our restructuring that I mentioned earlier we think will put us in a very strong position to. To be able to continue to build these subsidiaries, to finance them, and to pursue very promising assets across the life sciences sector that we're actively pursuing.

One of those technologies which we mentioned in a press release earlier this year was an exciting technology that that involves a licensing agreement, a partnership with both Duke University and the University of North Carolina, and it's been a breakthrough endoscopic imaging technology for oesophageal precancer that can provide real-time detection of dysplasia. For advanced precancer with the potential to completely transform the way that's treated and to do so at the same time as a diagnostic procedure, we're partnering with Dr. Adam Wax at Duke who pioneered this technology and Dr. Nick Shaheen from UNC who is working with him closely.

This fits with In our partnership model, the same one that we launched, Lucid and Veris, we have, we're at the last stages of finalizing the license agreement and looking for, building a team around, this technology and a pathway towards, the, early stages of product development, finalizing regulatory strategy, and really just sort of getting this project, that's what we're really excited about off the ground.

Let's get into the operational side of things. I do encourage you to, as always, to listen to yesterday's lucid business update call for greater detail on some of these areas, but the main takeaway for Lucid is that we are now better positioned than ever to to capitalize on e-cigard's, a large market opportunity, a large clinical opportunity, and their near term milestones which we believe will ultimately positively impact PavMed as PavMed remains the largest shareholder of Lucid. E-cigar revenue is $1.2 million for the quarter and the test volume is 28, just over 2,800. Both of those are in line with last quarter and our volume is consistent, has been consistent with the target range of 22,500 to 3,000 tests that we've articulated. That we are seeking to maintain to facilitate our engagement with commercial payers while we await Medicare coverage. The big highlight, as we talk about in our elusive call, was the Medicare contractor meeting that was held.

In September, it was wildly successful. The experts unanimously endorsed Medicare coverage, for e-cigard, and this is really the final step towards what we believe is a, near term Medicare coverage for that, for that test.

We also, raise capital, strengthened the balance sheet for Lucid with an underwritten public offering of 20 just under $27 million in proceeds, and so as I mentioned earlier, the extends lucid runway through 2026, was a very, shows very strong investor interest and confidence, including institutional investors and insiders, and, bodes well for, Lucid's ability to execute on a strategic plan.

So let's move on to Veris.

So the most important development in this past quarter was that we launched the commercial phase of our strategic partnership with OSU.

If you may recall, we've had a long-standing working relationship with OSU where we completed a pilot study.

That study was very successful. It was found to be the technology was found to be valuable to their patients by all objective measures and predefined performance criteria. And so we are. In the commercial phase we are finalizing EHR integration, but we've already started to proceed with building the commercial side of things with the initial 3 departments within within OSU's James Cancer Center now launching this in a broader patient population beyond the pilot, and the agreement targets 1,000 patients in the 1st year that will be enrolled in a registry.

We've also, finally, after completing our financing, have fully relaunched the development work on the implantable physiologic monitor and to work towards the 2026 FDA submission.

We've.

Locked down the or restarted or locked down new vendors for that product development and it's actually going quite well and there's sufficiently capitalized to fund that development all the way through FDA clearance and subsequent commercial launch so that's going really extremely well and we're looking forward to getting that wrapped up in 2026.

So beyond that, now that Veris is stabilized, it's well capitalized, the implantable is on its way. We've gotten our really a very solid proof of concept with regard to our commercial partnership with with OSU. We do, we are working on executing an expanded vision for Veris, and we're not necessarily going to wait for the implantable to do so. So we have an opportunity to now that we have the template from OSU to expand our commerci. Offering to include other academic medical centers and as part of that we're incorporating the lessons that we've learned from our engagement with OSU to as we as we launch engaging with other centers to provide value-added to these centers an offering that goes beyond simply remote patient monitoring and the economics and the business model around that. So one of the things that we've learned.

Over the past year is that clinical support services are really important. Ohio State has a call center and we've learned how to interface with them so that the alerts that come from the platform are processed in an efficient way. But many centers don't have that, don't have call centers, and any type of digital health tool can actually be somewhat overwhelming to the personnel with regard to. Alerts and so forth. So we've hired our first full-time physician assistant, and we're looking to build a clinical support team around that to provide such clinical support services as a value-added service to our commercial partners whereby our team will be able to provide varying levels. We have a menu of varying levels of clinical support to triage alerts that come through the system. And to make the process of incorporating our platform much more efficient and consistent with the with the personnel needs that these centers have so that's a really important additional value-added offering that we're we're we're looking to provide. Another one is really we're seeking to transform Lucid sorry Veris beyond just remote patient monitoring to actually be a. Become a modern day AI based company where we can provide AI-based clinical decision tools that help the physicians just manage their patients better, manage them more cost effectively, improve outcomes, improve the economics of healthcare delivery, and so forth, and we've had a very intense internal process where we've have mapped out what we intend to. And we are looking to build, risk stratification tools, that will provide such input, AI based input to the, practitioners, and we're looking to partner with OSU to, build and train such a decision tool that will be, ultimately fully integrated within the platform and again, provide value to the center beyond, the simple billing around remote patient monitoring. So with that, I'll hand, the call over to Dennis for an update on our financials.

Thanks, Leesh and good morning everyone. Our summary financial results for the 3rd quarter were reported in our press release that has been distribute it.

On the next 3 slides, I'll emphasize a few key highlights from the 3rd quarter, but I encourage you to consider those remarks in the context of full disclosures covered in our quarterly report on Form 10-Q as filed with the SEC.

As a couple of reminders, as our, financials, particularly the income statement with year over year comparisons, will for this last quarter, illustrate periods before September 10, 2024 with Lucid's operating results being consolidated into the PadMed results.

First, the, presentation of the 2025 periods they are without Lucid's operating results being consolidated into the PavMed financials.

We do present some supplementary information in footnote 4 of the 10-Q that will help with some of those comparisons. So with regard to the balance sheet.

You'll recall from our investor update call since this time last year that the company was engaged in a multi-step process to regain compliance with NASDAQ listing standard for minimum equity, which it did in February, and also positioned the company for longer-term financial stability. The two key components were deconsolidating lucid from Pavnet's consolidated financial statements and restructuring our debt, whereby we exchanged about 80% of our outstanding debt for a new Series C preferred equity.

The slide reflects the balance sheets for the 3rd quarter and second quarter of this year, both after the consolidation, which again occurred in the 3rd quarter of 2024.

So a couple key things to point out each of these balance sheets. First, the cash burn rate of 900,000 for the third quarter reflects the various operating costs, including approximately $500,000 of outside contractor development costs associated with the implantable device, which had been funded by the two various related financings, namely $2.4 million in the first quarter and $2.5 million in the second quarter to support the development and FDA submission of V's, implantable device.

Secondly, The equity method investment balance of $32 million in September 30th reflects the $31.3 million lucid shares mark to market and reflects a $4.4 million sequential reduction consistent with the change in lucid stock price.

This amount was previously eliminated from PavMed's balance sheet prior to the deconsolidation for most of the quarterly periods of 2024.

Note, there's plenty of information in the 100 and 10k on both the debt exchange, Series C preferred stock, and the equity method treatment of PavMed's investment in lucid shares.

At present, Admed continues to be the single largest shareholder of Lucid Diagnostics with ownership of approximately 23% of the common shares outstanding.

Although PavMed no longer has voting control of Lucid, PavMed, its board, and its management still have significant influence over Lucid, with approximately a 28% voting interest.

Shares outstanding today, including unvested restricted stock awards are approximately $29.7 million shares. The GAAP quarter ending outstanding shares of $23.1 million are reflected in on the slide as well as on the face of the balance sheet and the 100.

GAAP shares do not reflect unvested RSA amounts.

Additionally, we issued 25,000 Series C preferred shares as part of the debt restructure at the beginning of the year.

To date, approximately 4,300 Series C have been converted to approximately 11 million common shares. If the balance were converted at the contractual $1.07 conversion price, an additional 20.5 million common shares would be issued.

Next slide please.

Similar to the past presentations, this P&L slide provides some GAAP and non-GAAP year over year, quarterly and annual comparisons.

As cautioned earlier in my comments, there are some significant differences in how the information is compiled between the comparative periods given the changes in PadMed's financial control of Lucid. Importantly, the GAAP construct for deconsolidating Lucid on September 10th of last year. Somewhat blurs the historical understanding of the information for Patmet as a stand-alone entity, and GAAP does not allow the presentation for prior periods on the face of the financial statements to be similarly adjusted. Although, as mentioned, there is some supplemental information in the footnotes.

On a pro forma basis and purely for illustrative purposes on the slide only, the various revenue and the lucid management fee income are combined collectively more than $3 million per quarter to visually align Pavmet's income sources versus its operating expenses. For SEC reporting purposes, the MSA income is a below the line item.

Furthermore, for the third quarter, you see on the slide and in the 10 a GAAP net loss of $6 million before NCI and before preferred dividends. This includes a non-cash loss of $4.4 million for the change in the fair value of the equity investment. And together with the preferred dividend stock-based comp reconciles to a non-get loss of $446,000. Basically, the equivalent to the incremental contractor development costs for the Vlatoff device.

Happy to answer any detailed questions on the slide in the Q&A, but I think it's more informative to look at the 3rd quarter standalone information presented in this slide and in, and the full 3rd quarter information presented in our press release that shows the company baseline bias of operating at cash flow break even and incurring incremental pavMed expenses for development activities that are offset by dedicated funding. So in the third quarter, you see a non-GAAP loss of 446,000, which has been funded in part by the NIH grant proceeds of $1.1 million since the end of last year and $4.9 million of PadMed Vus financing earlier this year.

Non-GAAP operating expenses for the last four quarters have averaged approximately $4.4 million with very small variation from quarter to quarter.

Slide please.

With regard to non-GAAP operating expenses, on the slide, you see a graphic illustration of our operating expenses over time is presented in more detail in our press release.

The non-GAAP OpEx since the lucid deconsolidation last year has been nearly flat for the last 4 quarters.

OpEx increases moving forward are likely to be tied directly to the R&D efforts to get the various implantable device submitted and cleared by the FDA for which the recent V related financings are supported.

With that operator, let's open it up for questions.

(Operator instruction)

For At this time there are no questions. I will now turn the call over to Mr. Doctor Lee Shaw Akla. Please go ahead.

Great, thank you, operator, and thank you all for joining today. Let me just restate something that I stated earlier that Dennis, highlighted, Patmed was founded to be an engine of innovation that's capable of ingesting groundbreaking technologies and advancing them. And although Lucid is, really in a great position and ri s is progressing well. Our ability to consummate this broader vision has been constrained by capital markets and structural challenges. It's taken a series of steps which Dennis has outlined over a period of time to address these challenges, and we really feel like we are now poised to complete that work so we can reignite the broader vision and continue to pursue. The next lucid, the next Veriss, and we really have some excellent prospects, some of which we've talked about the Duke technology, and others and the waiting in the wings for us to finally transition back to the original vision of PathMed. So we look forward, we look forward to that, and we look forward to continually continuing to address those opportunities and finalize, this restructuring that has put us in a position to expand those horizons. So, with that.

Oh, actually it looks like we have somebody back in the Q&A. Should we bring him, yeah, let's, so let me go back to the operator. I believe we have one question on the Q&A that we'd like to.

Anthony Vendetti from Axim Group.

Okay, thank you. Hi Anthony, good morning.

Hi Dennis.

Lehaw, I was wondering if you could just talk about where you exactly are with the implantable monitor. Are there any other clinical steps necessary other than, completing.

The, OSU.

Trials and so forth or.

Yeah, let's, let me just jump in if that's okay, Anthony. So, the, this, the development of the implantable, remember the implantable is a, is an implantable device that allows, the physician to, implant an intracardiac, a cardiac implantable cardiac monitor in conjunction with a, port at the time of, beginning of therapy, although. So we have part of our strategic partnership with OSU involves them being the first site and then doing the initial pilot work once the plantable is cleared. The development work actually is unrelated to our relationship with OSU.

So we, with the finan financing that we secured earlier this year, we have relaunched the work that had been on pause when we were awaiting. Access to capital to do so and that relaunch actually included us transitioning to a new development and manufacturing partner who has extensive experience with making such implantable implantable devices such as stimulators and others and so we've transitioned, we've launched that product development work with this. Partner, going extremely well and, there's a variety of, just bread and butter engineering work that's required to get us to a final to complete the, that part of the development work and get us into a position to submit with FDA to FDA. You had mentioned you had asked about the, any clinical trials. So 11 of the things that we had been doing.

Was we had, we've had an ongoing engagement with FDA over many meetings to establish first our pre-clinical requirements of animal studies that have been ongoing and will continue to be ongoing as part of this work, and that was already previously locked down. The final step, which I think we talked about in our last call, was to get a final sign off from FDA on any clinical work we would need to do since the predicate. This is a 5 10k. So since the predicate here is an existing implantable cardiac monitor, the clinical requirements were actually quite modest, and we did eventually work with the FDA to establish that the only clinical work, clinical data we'd need is a what we refer to as a skin study. So instead of having to implant the device to perform this study, it's, you can, we can actually just stick it on. Skin and measure its ability to detect primarily the cardiac rhythm and show that it's equivalent to the predicates. It's a pretty straightforward, simple, small study that'll be required as part of that. That's not the rate limiting factor, frankly, the rate limiting factor between us and a submission is all of the development work, the traditional biocom packaging, things like that that are, that are that that are things that typically.

Use up that, use up the clock.

Okay great so so it should, it sounds like with the predicate, it should be, I'm not saying anything with the FDA's routine but should be relatively routine versus if you were using.

Oh yeah, it was the, I think it's fair to say that the path is very clear. The requirements are clear, it's just, we just need to execute on it. I think there's very little uncertainty as to what's required. There's really good guidance from FDA on what they expect for these kinds of devices. So, we have a very. Carefully, tuned regulatory strategy that's designed to really, leverage this predicate, carefully, and there's always opportunities in the future to seek additional, indications, expanded language and things like that. So, we're pretty happy, we're extremely happy, frankly, with the path that we have ahead of us and, expect it to be straightforward.

And I know the focus is on that and OSU, but is it too early, to, start having, commercialization conversations with other cancer centers, or you're going to wait.

A little bit longer until, even though you know like you said it should be relatively straightforward with the FDA, are you going to start having those.

Conversations so that.

That was what I was trying, yeah, that was sorry to interrupt Anthony, that was what I was, hinting at, earlier. So let me just kind of restate it a little bit more directly. So the answer to your question is yes, when.

Earlier in this year, as we were able to finally secure some capital to develop this, our strategy had been one of just sort of, sticking to the OSU, partnership, getting, a bunch of commercial experience there and waiting until the implantable to broaden our, commercial activity. We've shifted that strategy, so that's no longer, we really do believe, given how well things have gone with OSU. That we are in a position likely starting in the 1st quarter after we've had some some volume at OSU to start looking to to expand at other centers and the key factor there, it's not like we hadn't had. Ongoing conversations and and solicited other centers we just didn't do it very aggressively because we we knew that we had limited capital to, for commercial expansion over the last couple of years but one of the things that we learned will be key in that is is one of the things I mentioned which is to offer not just the software platform ultimately not. As the implantable, which is, economically a very attractive thing for them, but to offer some additional value-added, I have a bit of an expanded vision for them, the offering from from Veris, and one of those things includes offering clinical support services, as I mentioned earlier, to. Really streamline and make more efficient the process of using our platform.

Hospitals, cancer centers, including cancer centers, are pretty overwhelmed.

The clinicians are pretty overwhelmed. They're understaffed, and although there's clear clinical value in the data and having this continuous data that is sent to them to monitor their patients, often they're strapped for.

Personnel time to be able to interpret these alerts and so forth and you know within while we were soliciting other accounts, it became clear that us being able to centralize that and offer clinical support services and it's essentially to be able to triage alerts. So if there's an alert on our system that says, the patient's temperature is rising or they're reporting certain symptoms that may be consistent with a complication of chemotherapy to have to be able to offer the account. Value-added service that they can kind of select from a menu to have a clinician, our clinician, be the front line to check in with the patient and sort of sort it out and then pass it, pass the baton on to the clinical team. Lots of interest in that, the, and so we're going to start building that. We have our first PA who's going to be working closely with OSU on that, and we think there's a real opportunity and a real revenue. Around that as well. And then the other thing which we're going to not wait for the implantable on and we're going to start working on our AI-based tools that can provide value-added both from a clinical point of view and an economic point of view for the client that we do expect to work closely with ASU OSU on because those products, as I assume require, clinical data to train models and so forth. So for us to build a risk strat. Tool that can predict which patients on which on a particular, therapy chemotherapy or immunotherapy are at risk for re-hospitalization or for complications, that's extremely valuable, but that will require training with data that we would expect that we'd be able to partner with, that we're planning on trying to partner with OSU on that. So all those activities are going to start gearing up in the first quarter, even before we have the implant ready.

Okay, great, no that's that's great clarity. I appreciate that and then lastly is the letter letter of intent for the endoscopic imaging technology and I know LOI sometimes, doesn't result in a definitive agreement, but, do you have some exclusivity with this LOI and what's the timing do you believe that it could lead to a definitive agreement. And then would you first take that in, it sounds like because it's.

In the Pavmed press release with that first go into the PavMed, portfolio and then it would there be a plan to eventually shift that To Lucid Diagnostics.

Great, a lot to unpack there. So just let me know if I missed anything. So, the first answer to your question is that no, this LOI will translate into a licensing agreement, and it, it's, it'll be forthcoming very soon. We're in the final stages of ironing out that language, so we expect to sign the definitive, license. This Agreement for this technology very shortly, that will, and that will be within a subsidiary, a separate subsidiary of Padmed, to advance the technology through some additional development work and then ultimately to a through an FDA submission and clearance that work will begin immediately upon us.

Signing the license agreement, there's development work to be done, that will be done at the, laboratory, where this technology is being developed at Duke, to TRY to make some adjustments to the sizing, just maybe a little bit of. Background, we haven't spent a lot of time on this. This is technology that has actually been used in humans. One of our longtime colleagues and partners, Dr. Nick Shaheen, who's a PI in our studies and the head of Lucid MAB, is the clinical gastroenterologist who's been working with Duke on this. So they've used this in humans and have demonstrated its efficacy in being able to detect dysplasia at the time of a diagnostic endoscopy. There's additional design work to kind of, so from a form factor point of view and how it sort of snaps together with the endoscope and so forth that we'll be supporting at Duke, and once that has been completed, we'll transition it into a commercial product development. Pathway, and then ultimately submit. We have a, we do have a regulatory, we've kind of finalized our regulatory strategy around how to pursue this.

We are convinced this is also a 510k.

It'll likely require a small clinical study. But nothing too large or resource intensive, so that's the, plan. So it's coming, we're going to get this thing done. It's just, dotting I's and crossing T's on the, on the documents understood.

Perfect. And you, sorry, you had mentioned the relationship with lucid. Sorry, I forgot and, so look, the, obviously lucid is in the space, these are patients that Eoguard will be finding, right, who will be undergoing a confirmatory endoscopy, based on a positive Eoguard test that will.

Require an endoscopy to determine whether they, whether they're a true positive and if they're a true positive, where they are along the spectrum for further follow-up, right? So, clearly, the work of Lucid is linked to the application of this technology. We've decided for the time being to keep it separate. Lucid has plenty on its plate. It's kind of positioned as a molecular diagnostic company.

Lucid. There's an agreement between Lucid and Padm for, a modest equity position in the subsidiary, so Lucid will have, upside on that. And then, when it's near commercialization, we'll decide, sort of what the right, what the right pathway, for it. If there's synergies that make sense at the time with Lucid, we'll pursue that. If it's a distraction to Lucid, we will, we'll pursue it separately.

Okay great thanks for all that color I appreciate it.

Great, thanks, Anthony. So with that said, let's, wrap things up. Just, would like to again encourage you to remain connected to us and our progress, follow our press releases and the, these quarterly update calls, subscribe to our email alerts and, just contact us by phone if necessary. So thank you very much and everybody have a great day.

Ladies and gentlemen, this does conclude your conference call for today. We thank you very much for your participation, and you may now disconnect. Have a great day.