Miromatrix Medical Inc. (NASDAQ:MIRO) Q2 2023 Earnings Call Transcript August 19, 2023
Operator: Good day, and welcome to the Miromatrix Medical, Inc. Second Quarter 2023 Earnings Conference Call. All participants’ will be in listen-only mode. [Operator Instructions] Please note this event is being recorded. I would now like to turn the conference over to Max Forgan with Gilmartin Investor Relations. Please go ahead.
Max Forgan: Good afternoon and thank you for joining us. Earlier today, Miromatrix released financial results for the quarter ended June 30, 2023. 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, future expenses and revenue, capital requirements, cash runway and needs for additional financing should be deemed to be forward-looking statements.
hywards/Shutterstock.com
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 the material risks and uncertainties associated with our business, please see our filings with Securities and Exchange Commission. The information provided in this conference call speaks only to the live broadcast today, August 14, 2023. Miromatrix 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.
With that, I will now turn the call over to Jeff.
Jeff Ross: Thanks, Max. Good afternoon, and thank you, everyone, who has joined us for today's earnings call. We continue to make significant progress on addressing the items identified within the FDA clinical hold letter, relating to our miroliverELAP IND submission. Our goal remains to submit a full response to the FDA in the second-half of 2023, and we envision gaining authorization to treat patients with acute liver failure shortly thereafter. As a reminder, we are prioritizing miroliverELAP in the near-term, because we believe it provides us with the fastest path to treating organ failure patients with our bioengineered organs. And that program provides us with valuable insight to our fully implantable bioengineered organ programs.
As I consistently mentioned, we may decide to invest more heavily into any of our fully implantable organ programs, if a partnership arises or circumstances change. Specific to miroliverELAP, you may recall a couple of longer lead items that we are addressing as part of the clinical hold related to a preclinical animal study and biocompatibility study. I am happy to report that we commenced both studies during the second quarter and are nearing completion for the in-life portion of the animal study and the biocompatibility study. As a reminder, the animal safety study has two arms consisting of eight animals in each, four treats and four controls. This safety study is smaller than our original safety study that was submitted as part of the IND package.
In our original animal safety study, there was no evidence of systemic toxicity in the miroliverELAP group or the control group. However, there was substantial mortality in all groups due to the immobilization techniques and the anesthesia required to provide therapy in a pig model, which makes longer therapies in a mobilized animal model challenging. The current safety study utilized and improved the mobilization techniques and anesthesia to reduce mortality in all animals. We are currently gathering all the data relating to this study to incorporate into our response to the FDA. Regarding the biocompatibility study, the FDA requested that we do additional testing regarding the final finished fluid path comprised of third-party components.
The biocompatibility testing we submitted on our liver graft as part of the IND was not part of the FDA's questions, only the third-party components. We envisioned about compatibility study will be wrapped up by the end of the month. In addition to the clinical hold work, we continue to progress with our manufacturing and clinical readiness plans to ensure that once we obtain IND clearance, we can quickly initiate our Phase 1 clinical trial. This involves ensuring our manufacturing process meets GMP standards and the preclinical sites are identified as part of the clinical trial, each site will be contained a Baxter prismatic system running software developed specifically for miroliverELAP. In summary, we believe we are taking all the necessary steps to submit a thorough response to the FDA's clinical hold better in the second-half of this year, and we look forward to being able to treat patients with acute liver failure in a Phase 1 clinical trial as soon as the FDA authorization is obtained.
Moving beyond, miroliverELAP to our fully implantable bioengineered programs, we continue to make progress and gain industry recognition for the promise of our fully implantable bioengineered programs. During the second quarter, we represented the cell and gene therapy sector to Capitol Hill policymakers at the Alliance for Regenerative Medicine's Congressional Fly-In. We presented at the American Transplant Congress, and we were awarded Best in Congress for our mirokidney poster. The National Kidney Foundation invited us to participate in their Innovation Day, highlighting innovative solutions for patients with renal failure and the Association of Organ Procurement Organizations invited us to participate in their annual meeting to discuss how bioengineered organs may someday benefit transplant patients and how Miromatrix is aligned with AOO.
We also had a manuscript published in Frontiers and Bioengineering and Biotechnology titled, sustained in vivo perfusion of a re-endothelialized tissue engineered kidney graft in a human-scale animal model that demonstrated how a bioengineered kidney graft could maintain patency with consistent blood flow. Those results established a foundational platform for our ongoing research and to add to our growing body of evidence on the potential of using bioengineered kidneys as an alternative to human allograft kidneys. Amidst all of this activity, our Medical Director, Dr. Jack Lake was presented a lifetime achievement award by the American Transplant Congress, which really capped off a busy and rewarding second quarter. So I'd like to extend my congratulations to Dr. Lake for being acknowledged by the transplant community and a key thought leader in the industry.
Looking forward to the rest of the year, we will be presenting at ARM's tissue engineering and therapeutic workshop and ASN's Kidney Week and finally, AASLD's Liver Meeting. These upcoming high-profile events should sequence well with our responses to the FDA from miroliverELAP. Now I will turn the call over to Jim Douglas, our Chief Financial Officer, to discuss our financial results.
Jim Douglas: Thank you, Jeff. We finished the second quarter of 2023 with unrestricted cash and investments totaling $20.4 million, which we believe is sufficient to operate our business through the second quarter of 2024. Additionally, we received cash payments for $457,000 of the $527,000 employee retention credit receivable subsequent to the second quarter, and the remaining amount has been confirmed for upcoming receipt by the IRS. Moving to the income statement, operating loss was $6.7 million and $14.8 million for the three and six month periods ended June 30, 2023, respectively, as compared to $8.2 million and $15.4 million for the three and six month periods ended June 30, 2022, respectively. The decrease in operating loss for comparable periods was primarily attributable to decreased research and development lab supply costs.
Net loss was $6.5 million or $0.24 per share and $14 million or $0.56 per share for the three and six months ended June 30, 2023, respectively, as compared to $8.2 million or $0.40 per share and $15.4 million or $0.75 per share for the three and six months ended June 30, 2022, respectively. The decrease in net loss for comparable periods was primarily attributable to decreased research and development lab supply costs in addition to one-time employee retention credits totaling $527,000 that was recorded as other income in the first quarter of 2023. With that, I will turn the call back over to the operator to open the line for questions.
