On Friday, PAVmed (NASDAQ:PAVM) discussed second-quarter financial results during its earnings call. The full transcript is provided below.

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Summary

PAVmed Inc. reported the elimination of Series D preferred stock and issued $30 million in warrants convertible into common stock, pending positive EsoGuard LCD publication.

As of June 30, cash stood at $3.8 million, not including expected $30 million from warrants and $2.5 million from Verus warrants contingent on FDA clearance.

PAVmed holds approximately 15% of Lucid Diagnostics, with significant influence despite not having voting control.

GAAP net loss for the second quarter was $5.5 million ($0.87 per share), improved from a prior year loss of $12.3 million, with non-GAAP loss at $1.7 million ($0.27 per share).

R&D expenses increased, primarily due to Verus implantable device development, contributing to a rise in non-GAAP operating expenses to $6.1 million.

FDA engagement for PortIO is planned, with potential to pursue a 510(k) pathway, which could reduce costs and time if successful.

Commercialization efforts for Verus are progressing, with a target of enrolling 1,000 patients in a registry over a year.

Clinical validation for OCTaris is underway, with several years anticipated before product commercialization.

The company remains committed to a diversified model, aiming to enhance shareholder value through multiple opportunities.

Full Transcript

OPERATOR (Moderator)

Thank you, ladies and gentlemen. We will now begin the question-and-answer session. Should you have a question, please press star followed by the one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to be removed from the polling process, please press star followed by the two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment, please, for your first question.

Your first question comes from Ed Wu with Ascendient Capital. Your line is now open.

Dr. Leshawn Aklog

Good morning, Ed.

Ed Wu, Analyst at Ascendient Capital

Yes, yeah, congratulations on all the progress. You mentioned that you're going to have an FDA meeting with PortIO in the fourth quarter. Do you anticipate, you know, news shortly thereafter? And what do you think the regulatory pathway may be in 2027?

Dr. Leshawn Aklog

Yeah, so we'll be ready to submit for a request for a pre-submission meeting. So the actual meeting may end up leaking into the beginning of 2027, but I will take the opportunity to kind of flesh out a little bit what I had said in my prepared comments about the regulatory pathway. Those of you who have been with us before and saw the progress we've made on PortIO prior to us pausing that project, our previous engagement with FDA prior to our publication of the first-in-human data was firmly in the De Novo pathway, which is longer and takes more capital.

As we've been preparing with the relaunch of the portfolio and the relaunch of PortIO, as we've been preparing to update our regulatory strategy and, in consultation with some outside consultants as well as our very strong internal team, it appears that we may—there's no certainty yet—but that we may be able to pursue a 510(k) pathway with existing short-term intraosseous devices as a predicate. This would, again, be based on the fact that we've in the interim had a successful first-in-human study.

This is how we're going to pursue our reengagement with the FDA. If that's successful, then as I mentioned in my comments, that would be a big win, as we'll still need a clinical trial, but the cost and the time associated with that would be significantly less.

Ed Wu, Analyst at Ascendient Capital

That sounds good. Another, the last question I would have is on PortIO and also the probe with Duke. Do those include global rights, or are they only rights in the U.S.?

Dr. Leshawn Aklog

The PortIO is an internal IP, so it's not a license. So PAVmed owns the full rights to that. And the license with Duke University for the OCTaris technology includes worldwide rights as well.

Ed Wu, Analyst at Ascendient Capital

Great. Well, thanks for answering my questions, and I wish you good luck. Thank you.

Dr. Leshawn Aklog

Thanks, Ed.

OPERATOR (Moderator)

Ladies and gentlemen, as a reminder, should you have a question, please press star one. Your next question comes from Jeremy Pearlman with Maxim Group. Your line is now open.

Dr. Leshawn Aklog

Good morning, Jeremy.

Jeremy Pearlman, Analyst at Maxim Group

Good morning. How are you doing? First question on the Verus platform. I know it seems like commercialization is going well. Are there any metrics maybe you could provide—how many patients have been onboarded? How quickly is the number growing? And then maybe what milestones investors should look forward to as they gauge, you know, the commercial traction of that platform?

Dr. Leshawn Aklog

Yeah, we're not providing hard numbers on that, but I can give you a pretty good qualitative sense. So the agreement with the strategic partnership with OSU, The James, involves a commitment for them to enroll 1,000 patients in a registry. These are all commercial patients, but enrolled within a registry over a year. And the gun went off when EHR integration was completed in the spring. So obviously at the beginning we started with a limited number of departments, two and then three departments that had participated in the previous pilot, and now we are accelerating with now two-thirds of the departments.

The James is a very large cancer hospital, with two-thirds of the departments now onboarding and enrolling. So the target of getting to 1,000 patients within the first year is still—both us and folks at OSU believe that's attainable—and we expect to reach that. And the enrollment has really accelerated over the last couple of months, so we're on a good path to get to that target.

Jeremy Pearlman, Analyst at Maxim Group

Okay, great. And then maybe just skipping to OCTaris—you mentioned you're preparing for a clinical validation. Just what specifically will the clinical validation study demonstrate? I mean, how should we think about the timeline from that study to a potential FDA submission?

Dr. Leshawn Aklog

Yeah, so let me just provide a little bit more color on that. So at the time of our license, the work that had been done—there had been clinical work on a prototype probe that had demonstrated the fundamental findings and value of the technology in terms of its ability to measure the nuclear size within esophageal and mucosal cells and, using that, correlating that nuclear size to the presence or absence of the more advanced pre-cancer, esophageal dysplasia.

So that work had been completed. So the basic core principles around using this combination of advanced OCT to do those measurements and really outstanding ability to discriminate have been well established. So after the license, the focus has been on modifying the probe, making it smaller and more user friendly and more applicable to the broad range of patient sizes. That's the active work that's going on now, and that will require a validation study, but also just sort of the ease of use in terms of the ergonomics for the clinician.

From that point on, there will still be additional product development work. There's product development work on the console as well as advancing and transitioning the work out of the laboratory into a commercial setting. So there's a reasonable amount of time. The validation work is really a step in the process of getting to design freeze of the definitive probe. On the probe side of things, we are considering doing some parallel work on the console depending on our access to capital.

We may do some of that in parallel, but this overall project is still several years wide.

Jeremy Pearlman, Analyst at Maxim Group

Okay, understood. And then just last question. You mentioned that if you get a 510(k) pathway for the PortIO it might speed up the potential approval. Do you have a commercialization plan in place for that? Are you working on that, or it's still a little early?

Dr. Leshawn Aklog

Yeah, we don't mind a pretty clear plan. The PortIO commercialization is actually fairly straightforward. The target physician specialties are pretty straightforward. There are folks who currently implant vascular access devices. They tend to be vascular surgeons and interventional radiologists primarily. We have some internal work on pricing, on coding, and on the opportunities depending on where PAVmed is, and again our access to resources at the time.

We have a lot of flexibility with regard to an early commercial launch that includes building a small sales team and partnering with distributors. Distributors are very active in the vascular access space, so there's a lot of options for us when it comes time to do the initial commercial launch.

Jeremy Pearlman, Analyst at Maxim Group

Okay, great. Thank you for all the information. I'll hop back in the queue. Have a nice day.

Dr. Leshawn Aklog

Great, thanks, Jeremy.

OPERATOR (Moderator)

There are no further questions at this time. I will now turn the call over to Dr. Leshawn Aklog for closing remarks.

Dr. Leshawn Aklog

So great. Thanks, operator. And thank you all for taking the time and for your attention this morning. Obviously appreciate the questions and the opportunity to discuss our business and our technology with the covering analysts. Hopefully you found that informative as well. So to summarize, we believe we remain in a strong position to advance PAVmed's strategic plan and its mission. Our two independently financed commercial subsidiaries, Lucid and Verus, are progressing well and each are approaching key milestones, and importantly, we're starting to see traction and are quite excited on our relaunched medical device portfolio, including progress on PortIO. And so we remain firmly committed to PAVmed's diversified model, this model offering multiple opportunities—multiple shots on goal—to enhance shareholder value. And we look forward to continued progress on all those fronts. So with that, as always, we encourage you to continue to keep abreast of our progress. Please follow our news releases, these update calls, and continue to follow us on our website and through social media. As always, also feel free to reach out with any specific questions.

So with that, I hope everybody has a great day, and thank you so much for your participation.

OPERATOR (Moderator)

Ladies and gentlemen, this concludes the conference call for today. We thank you for participating and ask that you please disconnect your lines.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company's SEC filings and official press releases. Corporate participants' and analysts' statements reflect their views as of the date of this call and are subject to change without notice.