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spk01: Greetings and welcome to Myromatrix Medical Inc. Second Quarter 2022 Earnings Conference Call. At this time, all participants are in listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star then zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Hannah Jeffrey. Please go ahead.
spk00: Good afternoon, and thank you for joining us. Earlier today, Miro Matrix released financial results for the quarter and six months ended June 30, 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 pre-IND and IND filings and the initiation of related clinical trials, 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 description of the 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, August 15, 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.
spk05: Thanks, Hannah. Good afternoon, and thank you to everyone who has joined us today for our second quarter 2022 earnings call. Today's call we'll cover a business update from the second quarter, followed by a financial review given by our CFO, Jim Douglas. First, we remain on track to file our IND application for Mural Liver ELAP, our external liver assist product before year end. Following IND clearance from the FDA, we plan to initiate a phase one clinical trial. I have an exciting update to share with you coming out of our fully implantable kidney program this quarter. We have successfully bioengineered kidneys that demonstrated urine production and protein retention in our preclinical bench testing model. We believe this is the first time a bioengineered kidney has produced urine, and it represents an important milestone in the development pathway. The progress we have made in our liver and kidney programs is a result of our extremely talented and dedicated team of scientists. Our scientific team has bioengineered more than 400 organs this year at our new fully integrated headquarters. This astounding number of bioengineered organs speaks to the talent of our scientists, as well as the scalability and the capacity of our manufacturing capabilities as we move towards clinical trials. Transitioning from those updates and highlights, I'd like to level set everyone on this call to make sure our positioning and differentiation is fully appreciated. MiroMatrix is a life science company pioneering a novel technology for bioengineering fully transplantable organs to help save and improve patient lives. We are one of a small group of companies at the forefront of developing alternatives to human donor organ transplant. We are meaningfully differentiated from other technologies in this category, such as xenotransplantation, which include gene editing, by our proprietary technology platform that consists of a two-step decelerization and resellerization process. The decelerization step creates an acellular organ matrix, and the resellerization step seeds the matrix with unmodified human cells. While our initial focus is on bioengineering livers and kidneys, which accounts for nearly 95% of the organ waiting list, our proprietary platform is applicable to bioengineer all organs. This quarter, the FDA hosted a public advisory committee meeting to discuss scientific and regulatory topics relating to the organ transplant field, specifically xenotransplantation. ViroMatrix and the medical community are excited about the potential of xenotransplantation to someday save and improve the lives of patients suffering from end-stage organ failure. Before that potential can be realized, xenotransplantation technologies are working to solve key challenges, including pig virus transmission and organ rejection. During the FDA meeting, an FDA representative commented on the topic of decelerization, explaining that decelerized products and xenotransplantation products are viewed separately from a regulatory perspective. because the risks for a decelerized product are less than the risk of a product with cells. MiroMatrix has consistently communicated that we believe our bioengineered organs will not be classified as xenotransplantation products because our decelerization step creates an acellular matrix. The explanation provided by the FDA representative is consistent with our viewpoint. We believe this provides our technology with a significant point of differentiation versus xenotransplantation technologies as it relates to the risk of pig virus transmission. The FDA did not specifically address resellerization during the public advisory committee meeting, but I want to remind everyone of the differentiation of this step provides us compared to other technologies. During resellerization, we reseed the decelerized organ matrix with unmodified human cells, which we believe could provide our bioengineered organs with a rejection profile similar to a donated human organ. In summary, we continue to believe our decelerization and resellerization technologies provide us with significant points of differentiation versus some of the key challenges facing xenotransplantation technologies. Now I would like to provide updates on our three lead product candidates, Mural Liver ELAP, Mural Liver, and Mural Kidney. Mural Liver ELAP, our external liver assist product, 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 As I mentioned at the beginning of this call, we remain on track to file an IND application for mural liver ELAP before year-end. Following IND clearance from the FDA, we plan to initiate a Phase I clinical trial. We are extremely excited about the upcoming milestone and are eager to begin treating patients. Mural liver and mural kidney are fully implantable bioengineered organs intended to treat end-stage liver and kidney 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 in large animals. This study provided excellent proof of concept for implantable product candidates as we progress towards human clinical trials. For both our fully implantable programs, 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 our path to the clinic for our fully transplantable bioengineered organs. As I mentioned, to start this call, Our mural kidney team has successfully bioengineered kidneys that demonstrated urine production and protein retention in our preclinical bench testing model under the leadership of John Berry, VP of R&D, and Emily Beck, Senior Manager of the Kidney Program. We believe this is the first time a bioengineered kidney has produced urine and marks an important milestone in our development pathway. We are planning to publish these findings in the near future. I would like to thank John, Emily, and our entire scientific team for this wonderful achievement. Thank you for your continued support, and I will now turn the call over to Jim Douglas, our Chief Financial Officer, to discuss our financial results in the second quarter of 2022.
spk02: Thank you, Jeff. I'll start off with the balance sheet, where cash and investments totaled $38.6 million as of June 30, 2022, as compared to $44.7 million as of March 31, 2022. We continue to believe this is sufficient to fund the company through 2023. Additionally, during the second quarter, we celebrated our one year anniversary as a public company, which allowed us to file a shelf and an ATM, which we have not accessed. Moving to the income statement, operating loss was $8.2 million and $15.4 million for the three and six month periods ended June 30th, 2022, as compared to 3.6 million and 6.3 million for the three- and six-month periods ended June 30, 2021. The increase in operating costs for comparable periods was primarily attributable to increased research and development costs and general and administrative costs, notably cost increases relating to payroll, preclinical lab supplies and services, as well as increased costs associated with being a public company. Our net loss was $8.2 million, or 40 cents per share, and $15.4 million, or $0.75 a share for the three and six-month periods ended June 30, 2022, respectively, as compared to $3.7 million, or $1.27 a share, and $4.1 million, or $1.60 a share, for the three and six months ended June 30, 2021. The increase in net loss for comparable periods was primarily attributable to the same cost increases described within operating loss above. plus one-time gains recognized in the first quarter of 2021 that impacts six-month period comparisons. The reduction in net loss per share for comparable periods was largely attributable to the significant increase in weighted average shares outstanding resulting from the company's IPO in June 2021. With that, I will turn the call back over to the operator to open the line for questions. Thank you.
spk01: Thank you. Ladies and gentlemen, at this time, we will be conducting a question and answer session. If you would like to ask a question, please press star then 1 on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star then 2 if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your headset before pressing the star keys. Our first question is from Alex Noah from Craig Hallam.
spk04: Great. Good afternoon, everyone. I was hoping we could start on the foreign to organs that have been processed through the new lab. That's a really nice achievement. Can you maybe speak to what sort of insights you've learned now going through the resell experience a couple of times here? Have you gotten the process pretty well documented on the liver side? Maybe speak to how well you're going to do in the reselling on the kidney side and maybe speak to what sort of variability still exists as you're going through the resell process with the organs.
spk05: hi alex thanks for the question um i think you picked up a good point and that is just the magnitude of organs that we've been able to resellerize in this facility as we highlighted you know in the call was not only our ability to do that but it also gives you a good sense on what our scale and manufacturing capabilities are inside of our new facility You know, a lot of those organs are utilized both from the standpoint of what we're putting together for the data package for the FDA to demonstrate consistency, process controls, and those various other aspects as we look at that overall development process. So, you know, we continue to execute well on the resale side, certainly moving into the IND submission. You know, that process is getting well documented and well refined from that standpoint. And then moving on to the kidney, you saw some of that exciting stuff that we released on the kidney as well, just shows that level and that reproducibility that we're starting to see on that side as well.
spk03: Understood.
spk04: Maybe on the bench studies that you're doing for the IAD here, has any study in particular kind of been a roadblock for the team? Or would you say that the requirements to get the IND package personalized here generally within reach at this current stage? Yeah, I'd say it's well within reach at the current stage.
spk05: As part of our IPO and what we released in the past is really the ability of our grafts to clear ammonia is one of the key features that we've always honed in on, especially for liver function, but also for the need of that in acute liver failure. You know, what we've subsequently done and have been creating that data package as well is really looking at those other functionalities that the liver can do. Many of those are the really high energy intensive functionalities and then demonstrating that our liver grafts also do those functions. So from that standpoint, no big surprises. I think the premise that we've always had is bioengineering the liver should have that level of liver function. And that's the data that we continue to see.
spk04: Maybe speak to the activities to prepare for then the liver assist trial launch once you do get the IND clearances. How are those conversations with those potential sites going? Do you have any sites signed up yet? Or is that kind of TBD once we get the IND accepted here? No.
spk05: If you look at our clinical team, they're very active, both in conversations with potential sites, starting to move those sites forward. I mean, the last thing that we want to do is get the clearance and then not have initiated the process. So we're well underway at different stages with multiple sites, being able to get them qualified through the due diligence and really ready to be able to accelerate that once we get the IND clearance.
spk04: And maybe on that topic, we've seen in the field of artificial organs, I would say it's probably reached a peak recently. We've seen a number of studies progress in living patients, a number in brain dead patients. Do you think this willingness by the FDA with regard to specifically, you know, transplantation, but broader artificial organs, is that helping the conversations with KOLs in the space and getting them willing to enroll in a pretty landmark study?
spk03: Yeah, I think that's a great question.
spk05: I mean, as we look at some of that, right, I mean, I think what this speaks to, Alex, is just the tremendous need that's out there, right? I can't speak directly to where the FDA is on some of that stuff. I think we saw that with their recent advisory board committee on kind of, you know, transplantation in general. But, you know, some of the takeaways from that was really them leaning in, I felt, towards trying to move organs forward. And I think that really just speaks to the need, the tremendous need that's out there for patients. And I think that even goes further with the KOLs and the various centers. I can say we have yet to have a center that we've approached or talked to that is really interested in moving this stuff forward.
spk04: Got it. And then maybe just two more questions, this time for Jim. Regarding future investments, we've seen the company increase the test count a little bit here. Any additional hires or investments that you want to make as you get ready for the IND acceptance and then following and then after that the trial launch?
spk02: No, I think we're going to operate within the burn that we've kind of seen here historically up through submission, and I would say just consistent with any growth company as we get on the other side of, IND clearance and into the trial, we'll start thinking about what additions need to be made to the corporation to help build our growth profile. But as we go into year end here, there's no significant additions that need to be made.
spk04: Okay, perfect. And then the 5.9 million investments on the down sheet for long-term assets, just to confirm, that is cash put into a long-term investment, but we should consider that cash at the end of the day.
spk02: Exactly. We've put some different investments that mature every couple of months out through next year just to take advantage of the new interest rate environment. So you'll see that we earned a reasonable amount of interest income this quarter, and that's all we're doing is putting our cash to work. Okay. Understood. Makes sense.
spk03: Thanks for the update. Appreciate it. Thanks, Alex. Thanks, Alex.
spk01: Thank you. Ladies and gentlemen, we have reached the end of our question and answer session, and I would like to tell Nicole back to Jeff Ross for closing remarks.
spk05: Great. Thank you. Thank you, everyone, for listening in today. Excited about our update on the quarter, and look forward to executing and filing our IMD before the end of the year.
spk03: Thank you.
spk01: Thank you, sir. Ladies and gentlemen, that then concludes today's conference. Thank you for joining us. We now disconnect your lines.
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