Navidea Biopharmaceuticals, Inc.

Thank you, and thank you all for joining us for today's earning call. 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 filing with the SEC. And now let's begin with our update. During the first quarter of 2022 and since, we have continued to work on financing for the company. We continue our engagement with multiple investment banks and options are being pursued. In terms of capital, Erica will cover the financials in detail, but we have the bridge loan funds we have received from the company's largest shareholder and vice chair of the board of directors, Mr. Kim Scott, as well as a small milestone payment due and another potential payment upcoming. This is all I can say at the current time, but be assured that we are working on this continually. We will provide you with updates as we are able to do so. Overall, we've made good progress on our Phase IIb trial in rheumatoid arthritis, comparing imaging to biopsy, and I hope you saw our press release several weeks ago highlighting the promising preliminary results and our ability to distinguish the fibroid pathotype from the non-fibroid in our first 11 evaluated patients. These strong early results support our hypotheses and provide great data in support of telmanisept imaging as a biomarker of CD206 expression in joints of patients with RA. We also continue to enroll into the RA Phase III and have recently opened up another site. Additionally, we are advancing our therapeutics and imaging applications through collaborative relationships with various well-known institutions and investigators across the globe, and we 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 continues to work 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, and we will provide you with updates as soon as we are able and as appropriate. Now I would like to provide more detail around the clinical updates. I'll begin with progress in our rheumatoid arthritis or RA program. So we continue to enroll into the Phase III trial in RA. We've reached double digits now in patient enrollment and have just recently opened up a third site. We've selected the first sites carefully based on our experience with them in our previous Phase IIb trial and we're happy to see that they've hit the ground running. 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, to identify patients with low level of localization who are less likely to respond to anti-TNF alpha therapy. As we have discussed previously, there is a large unmet need for a 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 health consequences along with unnecessary high drug costs for ineffective therapies that bring with them possible side effects. Our Phase III trial will establish the ability of telmanicept imaging to serve as an early predictor of treatment response in RA patients switching to an anti-TNF-alpha therapy, addressing that unmet medical need. Once we have funding in place, we can really hit the gas and open up many more sites that we have been lining up. In preparation for that, we have been and are negotiating site contracts with a large number of sites, and we have conducted literally dozens of site qualification visits to prepare the sites for opening. NAV 332, our comparison study of telmanisept imaging to joint biopsy, remains in active recruitment. As we've announced and discussed recently, The preliminary results of this trial were promising. Our aim is to recruit patients with each of the three pathotypes of RA to obtain comparative imaging and pathology results. And the trial is designed so that we enroll a minimum of four subjects in each of the three pathotypes of RA, the fibroid, the diffuse myeloid, and lymphomyeloid. So overall trial size has been expected to range between 12 and 24. To date, we have 11 patients who have had both their imaging and joint biopsies completed, another patient scheduled for imaging next week, and others in the queue. Out of the completed 11, we have seven fibroid, three diffuse myeloid, and one lymphomyeloid. Importantly, there is currently no way in advance to know what pathotype of RA a patient has other than via biopsy. So our enrollment is based on those who are willing and eligible to enroll. The primary objective of this study is to assess the relationship between joint-specific telmanicept uptake values and the pathobiology of RA-involved joints. Knowledge of an individual RA patient's pathotype may be clinically important because it may predict to which RA therapy a patient is likely to respond. There is a growing body of literature suggesting that those patients with the fibroid subtype of RA are much less responsive to the anti-TNF-alpha drugs than the other subtypes. And so a means of determining whether or not a patient has this particular pathotype is seen as extremely important to a number of key opinion leaders in rheumatology. As I just mentioned, as of this time, there is no reliable way of assessing the pathotype of a patient's RA other than by doing a biopsy. And we have hypothesized that telmanicept imaging could provide this information. So preliminary results on those first 11 patients indicate that telmanicept uptake in RA inflamed joints is able to discreetly differentiate patients with the fibroid pathotype, those who have low macrophage involvement, from those having either the diffuse myeloid or lymphomyeloid pathotypes of RA, those with higher macrophage involvement. So seven of the subjects had relatively low levels of telmanicept uptake. All seven of those subjects were found to have the fibroid pathotype, seven out of seven. Out of the remaining four subjects, three had the diffuse myeloid and one had the lymphomyeloid pathotypes. Those subjects with either the diffuse myeloid or lymphomyeloid pathotypes had, on average, more than three times the telmanicept uptake as the average subject with the fibroid pathotype. So all of those subjects had higher uptake than the fibroid patients. To date, we have been able to clearly classify patients then as either fibroid or non-fibroid based on our imaging results taken before the biopsy in all 11 cases. These data also provide support for one of our indications in the phase three trial, namely the ability to predict from a baseline scan alone whether a patient is likely to receive a meaningful clinical benefit from an anti-TNF-alpha therapy. Since, as I mentioned, there is increasing evidence that if a patient has the fibroid pathotype of RA, they are less likely to receive significant clinical benefit from anti-TNF-alpha therapy. You might recall that in our previously completed Phase IIb study that contained a pilot arm looking at the efficacy of telmanisept imaging at early prediction of treatment response, those patients who exhibited a low level of telmanisept uptake in their joints on their baseline scan had an almost 90% non-response rate to anti-TNF alpha therapy using the clinical gold standard assessments. Finally, these biopsy trials are notoriously slow recruiting, but in fact, our recruitment rate over our number of sites is several times faster than what our lead principal investigator indicated he would have expected. As usual, the clinical operations team here has done a great job at exceeding expectations. We have another patient scheduled, as I mentioned, for imaging next week, several more in screening or in discussions about screening over the next several weeks. We'll keep you posted on the progress. We continue to make very good progress on automating the image quantification as well, which will have significant benefit for the commercial product. We have the letter of intent and are working closely with MIM software on the full agreement for them to be our commercial partner for imaging quantification of telmanicept imaging in RA. Once again, MIM is a leading medical imaging software company based in Cleveland with a large footprint in the nuclear medicine space. They 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 algorithm. This will be important for rollout of a commercial product. The ability to perform the quantitative reads rapidly and reproducibly and at large scale through automated means is critical to large-scale use of Tolmanisept for RA. Keep in mind that all of this, the image analysis methodology as well as the data upon which it is built, including the normative database you've heard us discuss before, is not only critical to deriving the most accurate and sensitive objective read of our RA images, but it also serves as a significant barrier to entry to possible competitors in this space. We'll continue to work with MIM to finalize terms of the partnership, and we'll make an announcement when we're done. There are many factors to consider as we work through the agreement, but our goal is to have it completed within the next couple of months. We also recently released the updated primary US market and secondary European market research valuation for the RA product if it is approved. That report is available on our website. The results of this analysis validate our assumptions regarding the great need for and potential value of our potential product in RA and include input from leading rheumatologists across the United States. The Jubilant MOU and exclusivity period are still in effect. As we have mentioned in the past, the completion of the NAV332 biopsy study is an important milestone for both us and Jubilant. I have been and continue to be in communication with their leadership and have been involved in these discussions since the beginning. We are keeping them up to date on the study progress and NAV 332 results. As we advance in our clinical program and as long as our data remains supportive of our hypotheses, not only are we de-risking the program and asset, but also increasing our value position. On the cardiovascular disease front, Work completed on the investigator-initiated atherosclerotic plaque imaging study at Mass General Hospital in Boston. The data are promising in terms of localization of telmanicept to sites of plaque and have been in line with what was reported in the pilot study we co-published with them several years ago. The group at MGH presented an abstract at an international conference in February and have submitted a manuscript based on the full study results. When that manuscript is accepted, we will let you know. On the preclinical therapeutic assets front, we are advancing our candidates in the oncology and anti-inflammatory spaces. 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. We have completed work on our NIH-funded preclinical studies for evaluating gallium, tilmanisept, and various new imaging agents similar to tilmanisept in a mouse model of atherosclerosis. Work on another important set of preclinical imaging studies was completed, and an abstract has been accepted at an international meeting, and a manuscript has been submitted as well. This work looked at a new technology designed to increase the localization of our imaging agent to target tissues. while a second technology was designed to block off-target imaging agent localization to the liver, which is a major site of localization when telmanisept is administered by intravenous injection. These studies were very successful, showing that we can dramatically increase localization of a new telmanisept-like imaging agent to tumors while simultaneously and significantly blocking off-target localization to the liver. Additional work on new drug delivery constructs and new targeted payloads has also progressed. These new constructs carry new drug payloads that may be more effective than doxorubicin for beneficially altering the immune status of tumor macrophages, for example. Results in mouse models have demonstrated that when administered alone or in combination with another cancer drug, these therapeutic constructs significantly reduce the rate of tumor growth. Some of these results should soon be presented at a cancer therapeutics meeting as well. When we are allowed to release details, we will. We also announced recently that we have received a notice of allowance from the USPTO for our patent application covering a mannosep-based therapeutic for leishmaniasis. Leishmaniasis is a vector-borne chronic disease caused by a protozoan parasite that replicates in CD206-positive macrophages. It is transmitted to humans through the bite of infected sandflies found in parts of the tropics, subtropics, and southern Europe. It's rare in the U.S., but in more tropical countries where the sandfly vectors are found, leishmaniasis is a common, serious, and potentially life-threatening disease. Because of this situation, it's classified as a neglected tropical disease and is on the FDA's list of tropical diseases eligible to receive a priority review voucher. These are vouchers issued by the FDA that allow the recipient to expedite review of a new drug product. These vouchers can be sold to other companies and dollar figures have ranged from as low as $67 million to hundreds of millions of dollars. The goal is to spur the development of new treatments for diseases that would otherwise not be developed. So back to Leishmaniasis, we have earlier work published in 2017 demonstrating that high CD206 expressing macrophages play a role in the dominant form of the disease. And more recently, we have renewed preclinical studies with one of the world leaders in this area and have promising early results. A follow-on preclinical study is currently underway. As these studies progress, we will keep you updated. If further research supports the efficacy of our therapeutic constructs for treating leishmaniasis, The awarding of a priority review voucher could have significant economic value for NVIDIA. This is extremely important and reveals more of the potential of our platform technology as well as our strategy. And so our therapeutic pipeline is robust and moving forward. That brings me to our overall intellectual property front. We continue to submit new provisional applications and work on our pending applications. In the last six months, since November 1st, We have conceived and submitted several new provisionals, two in the last quarter up till now, and have another two in the works that should go out in the coming days and weeks. The first of those recently filed is related to new methods of attaching chemotherapeutics to the MANICEP platform, and the second relates to maximizing target tissue uptake and off-target competitive blocking. These have important implications for pipeline indications. As you can see on today's earnings call update press release, we have also had claims allowed on different patent applications in various countries. 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. We also recently press released the regulatory approval of Lymphaseq as LymphoAIM in India. As mentioned in that release, our partner in India, Sayer Therapeutics, will lead the commercialization efforts there. We're delighted that LymphoAIM has received regulatory approval in India and will be available to patients in need. There is a small milestone payment due for completion of the regulatory application inquiry process, as well as another due upon receipt of the import license. We'd expect that first payment by the end of this quarter. So these are just some of the highlights of the last quarter that we wanted to touch on for this update. We remain largely focused on the RA 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. Thank you, and now let's move on to the financial updates, and with that I'll introduce Erika Ease. Erika?

Thanks, Mike. So total net revenues for the first quarter of 2022 were zero, compared to $124,000 for the same period in 2021. The decrease was primarily due to the 2021 partial recovery of debts previously written off in 2015. coupled with recognition of license revenue related to transitional sales in Europe in 2021. Research and development expenses for the first quarters of both 2022 and 2021 were approximately $1.2 million. Decreases in MANICEP diagnostic and to MANICEP development costs and decreased regulatory consulting expenses were offset by increased MANICEP therapeutic development costs employee compensation, including fringe benefits and incentive-based awards, and recruiting expenses. Selling general and administrative expenses for the first quarter of 2022 were $1.8 million, compared to $2.2 million in the same period in 2021. Decreases in employee compensation, including fringe benefits and incentive-based awards, legal and professional services, general office expenses, travel, franchise taxes, and investor relations costs were offset by increased director fees, some losses on the abandonment of certain intellectual property, and increased insurance costs. NVIDIA's net loss attributable to common stockholders for the first quarter of 2022 was $3 million or 10 cents per share, compared to $3 million or 11 cents per share for the same period in 2021. And finally, NVIDIA ended the first quarter of 2022 with $1.2 million in cash and cash equivalents. With the receipt of the $1.5 million bridge loan from Mr. Scott, we believe we currently have enough cash on hand to continue operations at least through the end of the second quarter. And turn it back over to Mike.

Thank you. And now let's open up the questions.