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spk03: Greetings and welcome to Miro Matrix Medical, Inc. First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during today's conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn this conference over to your host, Ms. Hannah Jeffries from Gilmartin. Thank you, ma'am. You may begin your presentation at this time.
spk04: Good afternoon, and thank you for joining us today. Earlier today, Miro Matrix released financial results for the quarter ended March 31st, 2022. The release is currently available on the company's website at www.miromatrix.com. Jeff Ross, Chief Executive Officer, and Jim Douglas, Chief Financial Officer, will host this afternoon's call. Before we get started, I would like to remind everyone that management will be making statements during this call that include forward-looking statements within the meaning of federal securities laws, which are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any statements contained in this call that are not statements of historical fact, including statements regarding the potential timing of the filing of the IND application from NeuroLiver ELAP and the initiation of the related clinical trial, should be deemed to be forward-looking statements. All forward-looking statements are based upon current estimates and various assumptions. These statements involve material risks and uncertainties that could cause actual results to differ materially from those anticipated or implied by these forward-looking statements. Accordingly, you should not place undue reliance on these statements. For a list and descriptions of material risks and uncertainties associated with our business, please see our filings with the Securities and Exchange Commission. The information provided in this conference call speaks only to the live broadcast today, May 16, 2022. Miro Matrix disclaims any intention or obligation, except as required by law, to update or revise any information, financial projections, or other forward-looking statements, whether because of new information, future events, or otherwise. I will now turn the call over to Jeff.
spk01: Thanks, Hannah. Good afternoon, and thank you to everyone who has joined us today for our first quarter 2022 earnings call. Today I'll start with a brief overview of MiroMatrix to remind everyone of our positioning and differentiation, followed by a business update from our first quarter before turning the call over to our CFO, Jim Douglas, for a financial review. MiroMatrix is positioned as a life science company dedicated to pioneering a novel technology for bioengineering fully transplantable organs to help save and improve patients' lives. We are one of a small group of companies at the forefront of developing alternatives to human donor organ transplants. We are differentiated versus other technologies in the category by our proprietary technology platform that utilizes a two-step decelerization and resellerization process to bioengineered organs for transplant into humans. While our initial focus is on bioengineering livers and kidneys, our technology platform is also applicable to all organs. Among several differentiating benefits of our technology platform that I've previously discussed and are included in our public filings, I'd like to highlight two of them again today. First, we believe our bioengineered organs will not be classified as xenotransplantation because our decelerization step removes all living biologic material from the porcine organs. We believe this is a significant regulatory distinction versus xenotransplantation technologies. such as gene editing. Second, we believe our bioengineered organs will have a favorable rejection profile similar to donated organs because our receleration step recedes the decelerized porcine organ matrix with unmodified human cells. We believe this is a significant clinical distinction. Our technology differentiation continues to be appreciated by more and more people in the field, and I'd like to highlight some notable industry events that we have recently attended. In March, we participated in CareDx's Xenotransplantation Innovation Day, a symposium that brought together experts in the transplant field. In April, we presented at the 2022 Gene and Cell Meeting on the Mediterranean. And in May, we were highlighted at a National Kidney Foundation event. At these events, it was evident that people understand that transplant is one of the largest unmet medical needs in the world. And importantly for us, these audiences gained an appreciation for the differentiated nature of our solution. Now I'd like to provide status updates on our three lead product candidates. Mural Liver ELAP is our external liver assist product that is designed to treat acute liver failure patients. Mural Liver ELAP consists of an external perfusion system and our bioengineered liver that will reside outside the human body to provide temporary liver support in an ICU setting. In early March, we received a formal response from the FDA regarding our pre-IND submission. We remain on track to file an IND application for mural liver ELAP in the second half of 2022. Following IND clearance from the FDA, we plan to initiate a phase one clinical trial. MuroLiver, our fully implantable bioengineered liver, is intended to treat acute and chronic liver failure patients. In collaboration with the Mayo Clinic, we published a 2021 study in Nature Communications Biology announcing the heterotopic implant of our bioengineered livers into large animals. The study provided excellent proof of concept as we progressed towards human clinical trials. We have had consultations with the FDA And we remain on track to submit our pre-IND request in 2023. Similar to mural liver ELAP, after the FDA responds to our pre-IND submission, we'll have a better sense of timing regarding filing our IND application for mural liver and our path to the clinic. Mural kidney, or fully implantable bioengineered kidney, is intended to treat patients with end-stage renal disease. We remain on track to submit our pre-IND request in 2023. Consistent with our other programs, after the FDA responds to our pre-IND submission, we will have a better sense of timing regarding filing our IND application for mural kidney and our path to the clinic. On the operational front, we recently hosted a ribbing cutting ceremony for the grand opening of our new headquarters. This world-class facility provides us with in-house manufacturing capabilities allowing us to control our development timelines and quality throughout clinical trials. It was a very well-attended event, and we had several news organizations present that produced content that has been shared on several media outlets. Finally, I'd like to acknowledge the efforts of Laji Katengal, our Vice President of Quality, who will be transitioning from Neuromatrix at the end of July for health and personal reasons. Laji is a multi-organ transplant recipient who joined Mural Matrix in large part because of his belief in our mission and the potential impact our technology holds for patients in need. Laji consistently has been a driving force on our team as we strive to make bioengineered organs a reality. We wish Laji all the best, and we are pleased that he will continue to lead our quality team as we search for a successor to ensure a seamless transition. Thank you for your continued support. I will now turn the call over to Jim Douglas, our Chief Financial Officer, to discuss our financial results in the first quarter of 2022.
spk02: Thank you, Jeff. MiroMatrix is a preclinical stage company with small amounts of licensing revenue relating to two legacy products that are offset by the cost of goods sold relating to payments we make to the University of Minnesota to license our platform technology. Operating loss was $7.2 million in the first quarter of 2022 compared to $2.7 million in the same period in 2021. The $4.5 million increase in operating loss was primarily attributable to increased research and development costs of $2.1 million and increased general and administrative costs of $1.7 million. The primary drivers of the spending growth are costs attributable to being a public company, hiring of additional employees, and purchasing of clinical and lab supplies to advance our bioengineered organ programs. Net loss for the first quarter of 2022 was 7.2 million, or 35 cents a share, compared to a net loss of 400,000, or 19 cents a share, for the first quarter of 2021. The $6.8 million increase in net loss during the first quarter was primarily driven by the 4.5 million increase in operating loss as well as 2.5 million of net investment gains were recorded in the first quarter of 2021, without similar gains recorded in the first quarter of 2022. Net loss per share was impacted by the items mentioned, as well as a significant increase in our weighted average number of shares following our IPO. Finally, we ended the quarter with $44.7 million of cash, which reflects 1.7 million of one-time cash outlays in the quarter related to the build out of our new headquarters. We continue to believe our cash balance is sufficient to last us through 2023 and will allow us to achieve key milestones for our bioengineered organ programs that Jeff highlighted earlier. And with that, I will turn the call back over to the operator to open the line for questions.
spk03: At this time, we'll be conducting a question and answer session If you would like to ask a question, please press star 1 on your telephone keypad. A confirmation symbol indicate your line is in the question queue. You may press star 2 to remove your question from the queue. For participants using speaker equipment, it may be necessary for you to pick up your handset before pressing the star keys. One moment while we poll for questions. Our first question comes to the line of Alex Nowak with Craig Hallam. You may proceed with your question.
spk00: Great. Good afternoon, everyone. It was only, it seems like a couple of weeks ago since the last update here. But, you know, on the last earnings call, it was mentioned with FDA's feedback from the pre-sub meeting that the data that was needed for the eLAB IND submission was achievable and in sight. We essentially had to boost up the data package a little bit. Can you just speak to how that effort is ongoing, the additional studies that you're running through, and just the confidence in hitting that second half 2022 timeline for IND submission?
spk01: Yeah, I appreciate the question, Alex. And Jim and I were talking about the same thing moments ago. It seems like we were just on the call with the K. And you're absolutely right. I mean, so what's occurred since we gave that guidance to today, we've really focused now on deploying resources on those key activities to be able to build out the rest of that data set to be able to submit the IND.
spk00: No, that's good. There was some commentary inter-quarter, though, with regard to the xenotransplantation, specifically with porcine viruses. Have you had any conversation with the transplant community out there with regards to artificial organs? What's kind of the feedback there on xenotransplant in light of that news?
spk01: Yeah, I mean, that news really came out last week. And what I think we feel good about it from our standpoint, and this goes back to our legacy products of MiroMesh and MiroDerm, because to be able to bring those products forward, we had to validate that we had complete viral inactivation in our decelerization process and validated that. So if you really look at from our process that we continue to talk about how we're bioengineering transplantable organs, that that decelerization is a key aspect of our product. And the fact that we've already demonstrated the viral clearance for us really pulls that off the table from our standpoint and just further highlights our differentiation to xenotransplantation where, you know, with our process, there's no animal cells remaining in that matrix prior to their decelerization with human cells. That's perfect.
spk00: What additional discussions have you had with transplant centers as you're getting ready to launch the e-lab study? Just what can you do to make that kind of a seamless transition from IND acceptance to starting that phase one study?
spk01: Yeah, I can say our clinical department is really deployed on looking at exactly that and now talking to multiple potential sites just to make sure that everything that we can do to bring in anything required that would extend or delay the start of a clinical trial that we're addressing that now because we really do want the shortest process from the time of the clearance the time of initiating our first human clinical studies and what i can say though is as we're out talking to potential sites there's a lot of interest in what we're doing and a lot of excitement around it as you can imagine Perfect.
spk00: And then on publications, anything to watch out for as far as maybe new nature studies or abstract at industry conferences?
spk01: Yeah, I mean, nothing to disclose at this point. I think I talked about this on the last call as well. I mean, right now we're really head down on the IND and really focused on bringing that and initiating our first human clinical studies. I think once we hit that, you'll see some additional publications and other presentations that will be targeted.
spk00: on our fully transplantable organs at that point. Okay, perfect. And then maybe final ones here for Jim. I guess with staffing up that you're undertaking right now, are there any staffing challenges you're ultimately experiencing? Obviously inflation is impacting from a labor standpoint, but I guess just how is the current talent pool for biotech here in Minnesota shaping up so far this year?
spk02: We've been very fortunate with the success we've had and continue to have a lot of folks reaching out to us. And I think we've had some bi-coastal inquiries for positions here at Mural Matrix. So I think that we're looking at the employment environment as positive for our story specifically. And I think we have all of our key positions hired out right now, Alex.
spk00: Okay, perfect. And then that just feeds into the last question is just how to think about spending increasing throughout this year. Is this a fair run rate? Is it fair to assume R&D kicks up a little bit here as we approach the IND submission and then ultimately launching that study?
spk02: Yeah, as you noted in our earnings call, the quarterly burn included 1.7 million of one-time facility costs. So if we back that out, our quarter spend excluding one-time facility costs, was about $6.4 million. That's plus or minus $2 million per month, which is a pretty good barometer as to what we think the remainder of 2022 and 2023 will look like. And so the trials for the Phase I on mural liver ELAP, that likely will not be a significant cost driver because the size of that Phase I is going to be fairly small, and we have that included in our assumptions here from the guidance we've provided. Perfect.
spk00: Excellent. Well, I appreciate the update. Thank you. Thank you, Alex.
spk03: Ladies and gentlemen, we have reached the end of today's question and answer session. This does conclude today's conference. You may disconnect your lines at this time. Thank you for your participation and enjoy the rest of your day.
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