Navidea Biopharmaceuticals, Inc.

Thank you all for joining us today. This call is being webcast live on our website, ir.nvidia.com, and a replay will be made available. Following prepared remarks, we will be conducting a live Q&A session. NVIDIA's Vice President of Finance and Administration, Erica Eves, will be joining me on the call today. During the course of this conference call, we will be making forward-looking statements regarding future events and the future performance of the company. These events relate to our business plans to develop NVIDIA's molecular diagnostics and immunotherapeutics, which include clinical and regulatory developments and timing of clinical data readouts, along with capital resources and strategic matters, as well as the impact of the COVID-19 pandemic on NVIDIA's business operations. All of these statements are based on the beliefs and expectations of management as of today. These statements involve certain assumptions, risks, and uncertainties, and could cause actual results to differ materially. We assume no obligation to revise or update forward-looking statements, whether as a result of new information, future events, or otherwise. Investors should read carefully the risks and uncertainties described within the Safe Harbor section of our website, as well as the risk factors included in the company's most recent quarterly and annual filings with the FCC. So with that, let's begin with our update. During the fourth quarter of 2021 and since, we have continued to work on financing for the company. We have engaged with an investment bank and options are being pursued. This is all I can say at the current time, but be assured that the board of directors and senior management are working on this tirelessly. We will provide you with updates as we are able to do so. Overall, we've made excellent progress on our phase 2b trial in rheumatoid arthritis or RA. comparing imaging to biopsy, and begun enrollment into our phase three following dialogue with the FDA. We continue to advance the therapeutics and imaging applications through collaborative relationships with various well-known institutions and investigators across the globe and are growing and diligently maintaining the company's intellectual property. The team here works extremely hard and efficiently, and I'm very proud to be associated with this outstanding group of individuals. Senior management is working closely with the board of directors and we are united in moving the company forward. As we've said in the recent past, there are many things we are working on behind the scenes. We will provide you with updates as soon as we are able and as appropriate. So now I'd like to provide some more detail around clinical updates. I'll begin with progress on our rheumatoid arthritis program. We initiated and have enrolled into our phase three trial in RA titled Evaluation of Technetium 99M Tilmanisept Imaging for the Early Prediction of Anti-TNF Alpha Therapy Response in Patients with Moderate to Severe Active RA. The indications we're going for in RA are, one, early prediction of treatment response to a new or first-time anti-TNF alpha therapy, and two, identify RA patients with low level of localization who are less likely to respond to anti-TNF alpha therapy. As we've discussed previously, there is a large unmet need for reliable early predictor of whether or not a therapy is working in a patient with RA. Because if a drug is not working, the patient's disease is not being treated. And this can lead to long-term consequences along with unnecessary high drug costs for ineffective therapies that bring with them possible side effects. Recall that our previously completed Phase IIb study demonstrated that telmanicept can provide robust quantitative imaging in healthy controls and in patients with active RA, that this imaging is reproducible and can define joints with and without RA-involved inflammation, and that tolmanicept imaging can provide an early prediction of treatment efficacy of anti-TNF-alpha therapy. And anti-TNF-alphas are by far the most commonly prescribed second-line therapy for those suffering from RA. Analysis of that study demonstrated high accuracy at early prediction of treatment effect, with a strong predictive value in particular for non-responders to anti-TNF-alpha therapies, even from the baseline scan alone in a defined subset of patients. In these patients, those who exhibit a low level of telmanicept uptake in their joints on their initial baseline scan, who likely represent the fibroid subtype of RA, and There was an almost 90% non-response rate to anti-TNF alpha therapy using a clinical gold standard assessment. This result on its own, the ability to use a single time point scan to predict that an anti-TNF alpha therapy is highly unlikely to work in a particular group of patients would be a powerful tool for rheumatologists to be able to rule out an entire class of therapies from the get-go. avoiding the high cost, possible side effects, and possible worsening of disease that could otherwise be the case. So in combination with the predictive capacity we saw in the rest of the subjects, the data continued to support our hypotheses. We are preparing to submit the results from the full data set from this trial for presentation at an upcoming international meeting, and of course we plan to write these up for publication in a medical journal. As we've also discussed previously, we had our end of phase two type B meeting with the FDA back in September, where we reviewed the phase two B data and the proposed phase three plan. After that constructive meeting with the FDA and after receipt of the formal meeting minutes to make sure we remained in alignment, we finalized agreed upon modifications to the phase three protocol design and statistical analysis plan and sent those back for comment. We then initiated the phase three. Following additional feedback from the FDA, we reorganized and restructured several of the trial objectives while the trial protocol itself did not change. As part of this restructuring, we revisited the targets to achieving the trial objectives and were able to reduce the trial size from an earlier range of 318 to 728 patients down to 200 to 672 patients. We then opened up the trial for enrollment. As of this moment, we have opened up two sites for this Phase III with another in process. These are sites that were involved in the Phase IIb study and are well acquainted with the trial design and operations. We have also completed enrollment into the Healthy Control Study, NAV 335, to establish what is called a normative database for tilmaniseptin RA. An integral part of our ability to discriminate RA inflamed joints from those that do not have inflammation is the knowledge of what healthy joints look like quantitatively. We use the healthy control data from one of the arms of the completed Phase IIb to start to set these parameters, and we're using this study to add to the size of the current normative database. This should enable us to discriminate RA-involved joints from non-RA inflamed joints with improved accuracy and should have a positive impact on our ability to predict treatment response. So this normative database establishing the parameters of what a normal joint looks like with Telmanisept will play an essential part in both the phase three data analysis, as well as the commercial product, and will serve as one of many barriers to entry for possible competition. Our comparison study of Telmanisept imaging to joint biopsy, NAV332, is in active recruitment. In this Phase IIb study, we are comparing telmanicept imaging to histopathology from the joints of patients with active RA. We aim to recruit patients with each of the three subtypes of RA to obtain comparative imaging and pathology results in order to establish the correlation between our imaging signal and the number and density of macrophages in these patients' joints. As of this call, we have 11 subjects who have completed both imaging and biopsies. with an additional four to five subjects in screening. The trial is designed so that we enroll a minimum of four subjects in each of the three subtypes of RA. So overall trial size is expected to range between 12 and 24. In terms of recruitment into this trial, we are doing quite well. As a guidepost for that, when we first approached our UK site expert and world leader in synovial tissue biopsy, or the biopsy of the joints of patients with RA, His estimate was that if we were able to open up 10 sites, he could achieve enrollment of one and a half subjects per month overall across all those sites. We have done about as well as that with only three sites open. How we do this is we pick our sites very carefully and make sure we have excellent relationships with what we know are very motivated primary investigators and their staff. Remember, this trial is not required for FDA approval in the initial indications in RA that we're going for and that I just mentioned earlier, but we believe it is critical in order to achieve qualification of CD206 as a biomarker for RA, as well as to engage with pharma for its use in trials of new RA therapeutics. It will also provide rheumatologists with gold standard information related to our imaging readout and the fundamental biology of a patient's RA. For example, results from this study could directly demonstrate that telmanicept imaging can be used to determine a patient's subtype of RA, and this would have implications for what class of therapeutics might or might not work on that particular patient. This could therefore have significant impact on the management of RA patients if approved. We continue to make very good progress on automating the image quantification as well, which will have significant benefits for the commercial product. We have signed a letter of intent with the image analysis company MIM Software to be the company's commercial partner for image quantification of telmanisept imaging in RA. MIM is a leading medical imaging software company based in Cleveland with a large footprint in the nuclear medicine space. It is a privately held company that sells its products globally to imaging centers, hospitals, specialty clinics, research organizations, and pharmaceutical companies. They have their software installed in more than half of the nuclear medicine facilities in the U.S. and have cloud-based applications as well. We've been working on this for a while, and we believe MIM is the right partner. They have completed a pilot study using data from our trials, demonstrating that they can develop a fully automated application that can robustly reproduce our quantitative imaging reads using our proprietary algorithms. This will be important for rollout of a commercial product. The ability to perform the quantitative reads rapidly and reproducibly at large scale through automated means is critical to large scale use of Telmanisept for RA. This letter of intent is an acknowledgement of their commitment as well as ours to partner to provide for the image analysis, image transfer, and imaging redistribution for the RA commercial product. We will work with them over the next several months to finalize terms of the partnership. On the cardiovascular disease front, work has completed on the investigator-initiated atherosclerotic plaque imaging study at MGH Mass General Hospital in Boston. The group there is presented in abstract at an international conference in February. The data are promising in terms of localization of telmanisept to sites of plaque, and have been in line with what was reported in the pilot study we co-published with them previously. Preclinical studies on gallium-68 tilmanisept for PET imaging and related next-generation manisept imaging agents have progressed significantly through internal work at NVIDIA and through extramural collaborations with researchers at the University of Alabama, Birmingham, or UAB. Progress includes completion of our NIH-funded preclinical studies for evaluating gallium-68 tilmanisept and various new imaging agents similar to tilmanisept in a mouse model of atherosclerosis. Data analysis shows significant uptake of gallium tilmanisept-like imaging agent in atherosclerotic plaques in this mouse model. Another important set of preclinical imaging studies were recently completed with our collaborators at UAB. These studies evaluated two new imaging technologies in a mouse model of cancer. The first technology is designed to increase imaging agent localization to target tissues, while the second technology is designed to block off-target imaging agent localization to the liver, a major site of localization when tolmanicept is administered by intravenous injection. These studies were highly successful, showing that we can dramatically increase localization of a new tolmanicept-like imaging agent to tumors in while simultaneously significantly blocking off-target localization to the liver. With help from our colleagues at UAB, a manuscript describing these results has been prepared for publication. We'll submit it for publication in the next few weeks following intellectual property review by our patent counsel. So the success of these imaging studies greatly expands our imaging know-how and potentially illuminates a path to a next-generation imaging agent. Perhaps as importantly, the success of these imaging studies also points to a pathway leading to synthesis of more effective therapeutic drug delivery constructs. Building on this information, new drug delivery constructs have been synthesized that carry a variety of payloads that include dexamethasone and doxorubicin. In addition, other new constructs have been synthesized that carry new drug payloads that may be more effective than doxorubicin for beneficially altering the immune status of tumor macrophages. Six of these new constructs have been evaluated in a human macrophage assay system, with the first new construct carrying a doxorubicin payload and a second construct carrying a different payload having progressed to evaluation in a mouse model. Results show that when administered alone or in combination with another cancer drug, Navidius therapeutic construct significantly reduced the rate of tumor growth in that model. The dexamethasone-carrying construct will also be evaluated but in the mouse model of inflammation rather than cancer. This construct could have broad-reaching applications in autoimmunity, inflammation, and in diseases of metabolism. As these preclinical studies are completed, we will update you and announce when and where results will be presented. And so our therapeutic pipeline is robust and moving forward. On the progress of Lymphaseq's approval in India as LymphoAIM, we were informed last week that the senior regulatory reviewer has accepted our most recent replies to their organization's inquiries, and the file has been moved to the administrative department for further processing. They weren't able to give us a timeline, but this is promising news that things are moving towards approval. On the intellectual property front, we have submitted two new provisional applications. The first is related to new methods of attaching chemotherapeutics to our Manasep platform, and the second relates to maximizing target tissue uptake and off-target competitive blocking. These have important implications for pipeline applications. We also recently held an IP meeting with Cardinal Health to make sure we are aligned on IP strategy as they lead prosecution of certain patents in North America and we in the rest of the world. This was a very good meeting and we will work closely together going forward. We have an active IP protection strategy that we believe will provide needed protections and rights to both our current diagnostic and therapeutic agents as well as to our next generation molecules and disease indications. I was recently looking back at the company's IP history, and with these above items, plus the other new provisionals based on ideas from the current team here that we have filed in the three years since I arrived, and with the signing of the license agreement with Ohio State recently, this has arguably been the most productive three years in the company's history IP-wise. Those are just some of the highlights of the last quarter that I wanted to touch on for this update. We remain largely focused on the rheumatoid arthritis pipeline, specifically the Phase 2B imaging to biopsy trial and the Phase 3, while we continue to support and push for progress on our other diagnostic and therapeutic indications. As always, I want to thank the team here for their tireless efforts to keep things moving. and our network of clinical trial sites and academic research collaborators for all of their hard work. And with that, I'll stop and I will turn the call over to Erica for financial updates. Erica, take it away.

Thanks, Mike. Total net revenues for the fourth quarter of 2021 were $50,000 compared to $219,000 for the same period in 2020. Total net revenues for the full year of 2021 were $532,000 compared to $914,000 in 2020. The decrease was primarily due to decreased grant revenue related to small business innovation research grants from the National Institutes of Health supporting MANICEP development and decreased royalty and license revenue from sales of to MANICEP in Europe. These decreases were offset by the partial recovery of debts previously written off and receipt of reimbursement from Cardinal Health of certain R&D costs. Research and development expenses for the fourth quarter of 2021 were $1.4 million compared to $1.3 million in the same period in 2020. R&D expenses for the full year of 2021 were $5.1 million compared to $4.9 million in 2020. The net increase during the year to date was primarily due to increased regulatory consulting, employee compensation, travel, recruiting, and general office expenses, coupled with net increases in drug project expenses, including increased MANICEP therapeutic and TC99M to MANICEP development costs, offset by decreased MANICEP diagnostic development costs. Selling general and administrative expenses for the fourth quarter of 2021 were $2.3 million compared to $1.7 million in the same period in 2020. SG&A expenses for the full year of 2021 were $7.5 million compared to $6.7 million in 2020. The net increase during the year to date was primarily due to separation of our former Chief Executive Officer coupled with increased consulting services related to European distribution of TC99M tilmanisept, director compensation related to additional board members and increased board compensation rates, insurance costs, losses on the abandonment of certain intellectual property, recruiting fees, travel, and general office expenses. These increases were offset by decreases in legal and professional services, employee compensation, investor relations costs, European annual registration fees, facilities costs, and franchise taxes. We would like to clarify that this morning's press release used the word termination to describe the accounting for separation expenses related to the resignation of our former CEO Jed Latkin. Our relationship with Mr. Latkin remains amicable. NVIDIA's net loss attributable to common stockholders for the fourth quarter of 2021 was $3.7 million, or 12 cents per share, compared to $3 million, or 11 cents per share, for the same period in 2020. And NVIDIA's net loss attributable to common stockholders for the full year of 2021 was $11.7 million, or 40 cents per share, compared to $11.4 million, or 48 cents per share, in 2020. And finally, NVIDIA ended the fourth quarter of 2021 with $4.2 million in cash and cash equivalents. I will now turn the call back over to Mike.

Thank you, Erica. We'll now begin the Q&A portion of the call.