Miromatrix Medical Inc. (MIRO) Q2 2023 Earnings Call Transcript

Miromatrix Medical Inc. (NASDAQ:MIRO) Q2 2023 Earnings Convention Name August 14, 2023 4:30 PM ET

Firm Individuals

Max Forgan – Gilmartin Investor Relations

Jeff Ross – Chief Govt Officer

Jim Douglas – Chief Monetary Officer

Convention Name Individuals

Alex Nowak – Craig-Hallum

Phillip Dantoin – Piper Sandler

Operator

Good day, and welcome to the Miromatrix Medical, Inc. Second Quarter 2023 Earnings Convention Name. All members’ might be in listen-only mode. [Operator Instructions] Please notice this occasion is being recorded.

I might now like to show the convention over to Max Forgan with Gilmartin Investor Relations. Please go forward.

Max Forgan

Good afternoon and thanks for becoming a member of us. Earlier at the moment, Miromatrix launched monetary outcomes for the quarter ended June 30, 2023. The discharge is presently obtainable on the corporate’s web site at www.miromatrix.com. Jeff Ross, Chief Govt Officer; and Jim Douglas, Chief Monetary Officer, will host this afternoon’s name.

Earlier than we get began, I want to remind everybody that administration might be making statements throughout this name that embrace forward-looking statements throughout the which means of federal securities legal guidelines, that are made pursuant to the Protected Harbor provisions of the Personal Securities Litigation Reform Act of 1995. Any statements contained on this name that aren’t statements of historic truth, together with statements concerning the potential timing of pre-IND and IND filings, and the initiation of associated medical trials, future bills and income, capital necessities, money runway and desires for extra financing must be deemed to be forward-looking statements. All forward-looking statements are primarily based upon present estimates and varied assumptions. These statements contain materials dangers and uncertainties that would trigger precise outcomes to vary materially from these anticipated or implied by these forward-looking statements.

Accordingly, you shouldn’t place undue reliance on these statements. For a listing and descriptions of the fabric dangers and uncertainties related to our enterprise, please see our filings with Securities and Trade Fee. The knowledge offered on this convention name speaks solely to the reside broadcast at the moment, August 14, 2023. Miromatrix disclaims any intention or obligation, besides as required by legislation, to replace or revise any data, monetary projections or different forward-looking statements, whether or not due to new data, future occasions or in any other case.

With that, I’ll now flip the decision over to Jeff.

Jeff Ross

Thanks, Max. Good afternoon, and thanks, everybody, who has joined us for at the moment’s earnings name. We proceed to make vital progress on addressing the gadgets recognized throughout the FDA medical maintain letter, referring to our miroliverELAP IND submission. Our objective stays to submit a full response to the FDA within the second-half of 2023, and we envision gaining authorization to deal with sufferers with acute liver failure shortly thereafter.

As a reminder, we’re prioritizing miroliverELAP within the near-term, as a result of we consider it gives us with the quickest path to treating organ failure sufferers with our bioengineered organs. And that program gives us with invaluable perception to our absolutely implantable bioengineered organ packages.

As I persistently talked about, we might determine to speculate extra closely into any of our absolutely implantable organ packages, if a partnership arises or circumstances change. Particular to miroliverELAP, you could recall a few longer lead gadgets that we’re addressing as a part of the medical maintain associated to a preclinical animal research and biocompatibility research.

I’m blissful to report that we commenced each research in the course of the second quarter and are nearing completion for the in-life portion of the animal research and the biocompatibility research. As a reminder, the animal security research has two arms consisting of eight animals in every, 4 treats and 4 controls. This security research is smaller than our unique security research that was submitted as a part of the IND package deal.

In our unique animal security research, there was no proof of systemic toxicity within the miroliverELAP group or the management group. Nevertheless, there was substantial mortality in all teams as a result of immobilization strategies and the anesthesia required to offer remedy in a pig mannequin, which makes longer therapies in a mobilized animal mannequin difficult. The present security research utilized and improved the mobilization strategies and anesthesia to scale back mortality in all animals. We’re presently gathering all the info referring to this research to include into our response to the FDA.

Concerning the biocompatibility research, the FDA requested that we do further testing concerning the ultimate completed fluid path comprised of third-party parts. The biocompatibility testing we submitted on our liver graft as a part of the IND was not a part of the FDA’s questions, solely the third-party parts. We envisioned about compatibility research might be wrapped up by the tip of the month.

Along with the medical maintain work, we proceed to progress with our manufacturing and medical readiness plans to make sure that as soon as we receive IND clearance, we will rapidly provoke our Part 1 medical trial. This entails making certain our manufacturing course of meets GMP requirements and the preclinical websites are recognized as a part of the medical trial, every website might be contained a Baxter prismatic system operating software program developed particularly for miroliverELAP.

In abstract, we consider we’re taking all the required steps to submit a radical response to the FDA’s medical maintain higher within the second-half of this yr, and we stay up for having the ability to deal with sufferers with acute liver failure in a Part 1 medical trial as quickly because the FDA authorization is obtained.

Transferring past, miroliverELAP to our absolutely implantable bioengineered packages, we proceed to make progress and achieve business recognition for the promise of our absolutely implantable bioengineered packages. Throughout the second quarter, we represented the cell and gene remedy sector to Capitol Hill policymakers on the Alliance for Regenerative Medication’s Congressional Fly-In. We introduced on the American Transplant Congress, and we had been awarded Finest in Congress for our mirokidney poster.

The Nationwide Kidney Basis invited us to take part of their Innovation Day, highlighting revolutionary options for sufferers with renal failure and the Affiliation of Organ Procurement Organizations invited us to take part of their annual assembly to debate how bioengineered organs might sometime profit transplant sufferers and the way Miromatrix is aligned with AOO.

We additionally had a manuscript printed in Frontiers and Bioengineering and Biotechnology titled, sustained in vivo perfusion of a re-endothelialized tissue engineered kidney graft in a human-scale animal mannequin that demonstrated how a bioengineered kidney graft might preserve patency with constant blood stream. These outcomes established a foundational platform for our ongoing analysis and so as to add to our rising physique of proof on the potential of utilizing bioengineered kidneys as a substitute for human allograft kidneys.

Amidst all of this exercise, our Medical Director, Dr. Jack Lake was introduced a lifetime achievement award by the American Transplant Congress, which actually capped off a busy and rewarding second quarter. So I might like to increase my congratulations to Dr. Lake for being acknowledged by the transplant neighborhood and a key thought chief within the business. Wanting ahead to the remainder of the yr, we might be presenting at ARM’s tissue engineering and therapeutic workshop and ASN’s Kidney Week and at last, AASLD’s Liver Assembly. These upcoming high-profile occasions ought to sequence properly with our responses to the FDA from miroliverELAP.

Now I’ll flip the decision over to Jim Douglas, our Chief Monetary Officer, to debate our monetary outcomes.

Jim Douglas

Thanks, Jeff. We completed the second quarter of 2023 with unrestricted money and investments totaling $20.4 million, which we consider is enough to function our enterprise by means of the second quarter of 2024. Moreover, we obtained money funds for $457,000 of the $527,000 worker retention credit score receivable subsequent to the second quarter, and the remaining quantity has been confirmed for upcoming receipt by the IRS.

Transferring to the earnings assertion, working loss was $6.7 million and $14.8 million for the three and 6 month intervals ended June 30, 2023, respectively, as in comparison with $8.2 million and $15.4 million for the three and 6 month intervals ended June 30, 2022, respectively. The lower in working loss for comparable intervals was primarily attributable to decreased analysis and growth lab provide prices.

Internet loss was $6.5 million or $0.24 per share and $14 million or $0.56 per share for the three and 6 months ended June 30, 2023, respectively, as in comparison with $8.2 million or $0.40 per share and $15.4 million or $0.75 per share for the three and 6 months ended June 30, 2022, respectively. The lower in web loss for comparable intervals was primarily attributable to decreased analysis and growth lab provide prices along with one-time worker retention credit totaling $527,000 that was recorded as different earnings within the first quarter of 2023.

With that, I’ll flip the decision again over to the operator to open the road for questions.

Query-and-Reply Session

Operator

We’ll now start the question-and-answer session. [Operator Instructions] The primary query comes from Alex Nowak with Craig-Hallum. Please go forward.

Alex Nowak

Okay, nice. Good afternoon, everybody. Sounds just like the biocomp research is wrapping up right here on the finish of the month, the animal research probably perhaps ends in September. These are my very own phrases. So perhaps — might you resubmit to the FDA by the tip of September, early October? What are your ideas there?

Jeff Ross

Sure, Alex. As we highlighted within the name, actually pleased with the progress that we made on the 2 type of lead lengthy poles of the tent that we have been engaged on. And as you highlighted, actually excited that the biocomp will wrap up by the tip of this month, blissful to report that all the things that we have examined to this point has handed. There weren’t many surprises there, but it surely’s good to get that passing grades on these as properly. So we’re simply remaining on two further exams which might be scheduled to return in on the finish of the month.

On the preclinical security facet, as we highlighted, there’s eight animals that make up that complete cohort, excited to report that seven of these are accomplished. We now have one take a look at animal to finish, after which that is able to go off to the pathologist and get the ultimate report to have the ability to submit that. So when you take a look at the timing related to that, actually aren’t going to offer further steering on that. I believe our steering continues to be the second-half of this yr. However I believe the reassuring factor is that these exams are going properly and searching ahead to that information coming in, so we will submit a really robust response to the FDA.

Alex Nowak

That may be very useful, Jeff. Respect it. You realize, almost about the preclinical animal research, the issue prior to now was the pig mile that you simply needed to depend upon, and I believe you needed to engineer a singular pig mannequin for the brand new preclinical research. Are you able to perhaps communicate to how that new animal mannequin in the end — how did it fare with the seven out of the eight pig to this point? Have been you fairly pleased with these outcomes?

Jeff Ross

Sure, as you highlighted, and we have highlighted prior to now, I imply, our largest complication was actually arising with a mannequin the place you might ship this life-saving new kind of expertise, however to have the ability to do this, you bought to mobilize the pig for a length of time. And that was actually the problem in our preliminary research the place we noticed excessive ranges of mortality related to it. So even contained in the management, which is simply being anesthetized, we noticed a fallout within the research of that. Comfortable to report that preclinical crew right here has accomplished an exceptional job of actually redesigning that research and dealing with veterinaries, working with thought leaders to have the ability to give you an answer.

And we actually examined that at varied pilot research and proved that out. So we had been in a position to roll that out. And as a part of our ongoing, we have now not misplaced any animals previous to the termination of the research itself when all the things is up and operating. We have nonetheless had some minor issues related to issues that you simply usually see in a preclinical research like a catheter are available enhance or one thing like that, that’s simply excluded as a part of your cohorts. However when the remedy is definitely being delivered within the new mannequin, it has been extremely steady, which supplies us a number of confidence to have the ability to spherical out this final take a look at topic and transfer ahead with the info set.

Alex Nowak

Okay, glorious. Good to listen to. Perhaps communicate to the actions that you simply’re doing underway on the medical trial websites and getting transplant facilities and able to carry out the first-in-human research. Have you ever picked the primary website but?

Jeff Ross

We now have — as we talked about on our final earnings name, the record of exercise related to that, we see a excessive degree of curiosity throughout the medical neighborhood to be a part of our medical research. So we have now whittled that record right down to eight, and we have prequalified not less than 5 medical websites that might be able to go as soon as we obtain our IND clearance. And prioritizing these out of the gate, we have now eight which might be — a further three which might be lined up, able to go as properly. However we’re actually attempting to judge is what are the medical websites the place we will be activated as quickly as attainable as a result of we all know there’s going to be a number of pleasure and demand for this remedy as soon as our IND is cleared.

Alex Nowak

Glorious. Perhaps simply final query. The Lancet final month had a full write-up on the cardiac transplant affected person that occurred a few yr in the past or so. As you have reviewed the case research there, how does that affect your view round Miromatrix method to organ growth versus the Xenotransplant method? And what are you listening to within the business?

Jeff Ross

I believe it nonetheless highlights the significance of the method that we’re endeavor and going ahead with. And I believe it highlights two issues with the bioengineered organ method that we have highlighted earlier than. And one is as a result of we have already commercialized the matrix itself and is a part of our decellularization course of, we get viral clearance. So the facet and the protection facet from the porcine virus standpoint, we really feel we have already addressed that.

And the opposite huge unknown and Lancet article seems at that in addition to immunosuppression. As we take a look at our remedy within the bioengineered method, we’re recellularizing with allogeneic human cells. So we consider that our immunosuppression protocol might be much like the gold normal that is used at the moment as a part of cadaveric an organ donation at the moment. So I believe it was useful to see spotlight how that case had gone ahead, however a few of the challenges related to that, that I see extra on the expertise facet that must be offered within the xeno facet.

And I believe our bioengineered organ method has actually addressed these dangers properly as we transfer ahead. So once more, that is why the main focus that we talked about earlier than, the significance of ELAP as our first product after which the read-through to the absolutely transplantable organ platform is de facto our first alternative to begin to exhibit that with a bioengineered organ, which we consider then opens up the chance for our absolutely transplantable packages to proceed ahead.

Alex Nowak

Completely. Alright, properly admire the replace. Thanks.

Jeff Ross

Completely. Thanks, Alex.

Operator

The following query comes from Matthew O’Brien with Piper Sandler. Please go forward.

Phillip Dantoin

Hey, that is Phil on for Matt. Thanks for taking our questions. Only one or two for us. The primary one being simply new position, I suppose, previous position simply type of doubled up right here. Are you able to give us your places and takes on type of stepping again into this position and the way you are going to type of double up the CEOs Head of Analysis there, R&D? Thanks.

Jeff Ross

Sure, I admire the query, Phil. That was partially a pure transition. As you’ve gotten highlighted earlier than, my background is powerful within the technical facet and got here from the R&D facet. In order we actually began specializing in the place we would have liked to go ahead as we deal with ELAP, it actually was a pure transition to have the ability to deliver that position again in and actually be capable to focus that, that enables us a number of focus on the firm. With that mentioned, issues proceed to go very properly from that standpoint.

Phillip Dantoin

And my closing one simply being, you have introduced three posters at ATC, Affiliation of Organ Procurement Organizations, et cetera, et cetera. Simply how is curiosity constructing over time? And what are docs saying?

Jeff Ross

Sure. I imply it is thrilling to go to these conferences and see the joy across the expertise and begin to open up the chance to consider what the longer term might appear to be with these kind of organs going ahead. I believe as we take a look at ATC, I believe the neighborhood was actually, I say, stunned or impressed with the extent and the standard of information that was put forth on the renal facet, not solely exhibiting the revascularization sustained potential to perfuse the organ, but additionally a few of the stuff that we’re beginning to present on the protein retention and the filtration impact of the recellularized kidney that we have began to launch that information out. So I believe from that standpoint, the neighborhood continues to be impressed and stunned with the progress that we proceed to make.

Phillip Dantoin

Glad to listen to. Thanks, congrats once more on all the method made on the quarter.

Jeff Ross

Thanks loads.

Operator

This concludes our question-and-answer session. The convention has now concluded. Thanks for attending at the moment’s presentation. Chances are you’ll now disconnect.