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PAVmed Inc. (NASDAQ:PAVM), a medical technology company with a market capitalization of $22.75 million, reported a robust financial performance for Q1 2025, showcasing a GAAP net income of $18.6 million and a positive EPS. The company also highlighted strategic operational changes, including a significant reduction in liabilities and a promising outlook for its product pipeline. Despite these positive developments, the stock saw a minor dip in premarket trading, reflecting a 1.1% decrease to $0.722. While the stock has gained 16.35% year-to-date, InvestingPro analysis suggests the stock is currently fairly valued based on its comprehensive Fair Value model.
Key Takeaways
- PAVmed reported a GAAP net income of $18.6 million for Q1 2025.
- The company restructured its debt, significantly reducing liabilities by $25 million.
- Strategic partnerships and product developments are underway, including a notable collaboration with Ohio State University.
- Despite strong financial results, the stock decreased by 1.1% in premarket trading.
Company Performance
PAVmed’s performance in Q1 2025 was marked by a strong financial showing and strategic operational shifts. The company reported a GAAP net income of $18.6 million, driven by a positive EPS and a significant gain from its investment in Lucid Diagnostics. However, the company faces challenges with gross profit margins of -61.6% and a concerning current ratio of 0.06. PAVmed’s restructuring efforts, including the exchange of 80% of its outstanding debt for preferred equity, resulted in a substantial reduction in liabilities, positioning the company for future growth. InvestingPro has identified 12 additional key insights about PAVmed’s financial health and market position, available to subscribers.
Financial Highlights
- Revenue: Not specified in detail
- GAAP Net Income: $18.6 million
- Positive Primary EPS: $1.28
- Positive Diluted EPS: $0.34
- Operating Expenses: $5.4 million
- Non-GAAP Operating Loss: $910,000
- Lucid Investment Gain: $21 million
Outlook & Guidance
PAVmed’s future outlook is optimistic, with expectations for Medicare coverage for its EsoGuard product "imminently." The partnership with Ohio State University is set to enroll 1,000 patients in its first year, with plans for 300 Verus implants following clearance. The company is also targeting an FDA filing for its implantable monitor in the first half of 2026, while exploring potential acquisitions in the biopharma sector. Analyst price targets range from $4 to $19.50, reflecting diverse views on the company’s potential. For detailed analysis of PAVmed’s growth prospects and financial health, access the comprehensive Pro Research Report available on InvestingPro, part of their coverage of over 1,400 US stocks.
Executive Commentary
Dr. Lishan Aklog, CEO of PAVmed, emphasized the company’s strategic positioning: "PAVmed is structured to be a parent company that delivers innovative medical technologies and addresses unmet clinical needs." He also highlighted the company’s readiness to accelerate commercialization efforts, stating, "We have plenty of runway and are well positioned to accelerate our commercialization once we secure Medicare coverage."
Risks and Challenges
- Regulatory Approvals: Delays in FDA approvals for new products could impact timelines.
- Market Acceptance: New products, like the implantable monitor, may face challenges in market adoption.
- Competition: Increased competition in the medical technology sector could pressure margins.
- Economic Conditions: Broader economic uncertainties may affect investment and growth opportunities.
PAVmed’s Q1 2025 results reflect a company in transition, leveraging strategic partnerships and financial restructuring to drive future growth. While the stock’s minor premarket dip suggests cautious investor sentiment, the company’s robust financials and strategic initiatives underscore a promising outlook.
Full transcript - PAVmed Inc (PAVM) Q1 2025:
Conference Operator: Good morning and welcome to the PAVmed First Quarter twenty twenty five Business Update Conference Call. At this time, all lines are in listen only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, Please note this event is being recorded. I would now like to turn the conference over to Matt Reilly, PathMed’s Senior Director of Investor Relations.
Please go ahead.
Matt Reilly, Senior Director of Investor Relations, PAVmed: Thank you, operator, and good morning, everyone. Thank you for participating in today’s business update call. Joining me today on the call are Doctor. Naklog, Chairman and Chief Executive Officer of PAVmed, along with Dennis McGrath, Chief Financial Officer of PAVmed. The press release announcing our business update and financial results is available on PAVmed’s website.
Please take a moment to read the disclaimers about forward looking statements in the press release. The business update, release and the conference call all include forward looking statements and these forward looking statements are subject to known and unknown risks and uncertainties that may cause actual results to differ materially from statements made. Factors that could cause actual results to differ are described in the disclaimer and in our filings with the SEC. For a list and a description of these and other important risks and uncertainties that may affect future operations, see Part one, Item 1A entitled Risk Factors in PAVmed’s most recent annual report on Forms 10 ks filed with the SEC and any subsequent updates filed in quarterly reports on Forms 10 Q and subsequent Forms eight ks. Except as required by law, PAVmed disclaims any intentions or obligations to publicly update or revise any forward looking statements to reflect changes in expectations or events, conditions or circumstances on which the expectations may be based or that may affect the likelihood that actual results will differ from those contained in the forward looking statements.
I would now like to turn the call over to Doctor. Lishan Aklog, Chairman and CEO of PAVmed. Lishan? Thank you, Matt, and good morning, everyone.
Dr. Lishan Aklog, Chairman and CEO, PAVmed: Thank you all for joining our quarterly update call. As always, I’d like to thank our long term shareholders for your ongoing support and commitment. We’ll be delving into some of our operational highlights, but just let’s start with a few high level comments. As we’ve talked about before, the series of critical steps that we took to stabilize our corporate structure and balance sheet, PAVmed really now is very well positioned to operate as a diversified commercial life sciences company with multiple independently financed subsidiaries that operate under shared services model. So that’s just an overview for those of you who are not familiar, PAVmed’s corporate structure and portfolio.
PAVmed is structured to be a parent company that delivers innovative medical technologies and addresses unmet clinical needs. And as our subsidiaries such as Lucid succeed, PadMed will also succeed. Lucid, of course, is our publicly traded diagnostic company. It’s our strongest and most advanced asset that’s on the cusp of key milestones, including Medicare coverage, making commercial progress along certain new sales channels that I’ll talk about a little bit more. And are just really focused on securing broad coverage.
We have plenty of runway and are well positioned to accelerate our commercialization once we secure Medicare coverage. Verus is our privately held digital health company that offers a cancer care platform that enhances personalized cancer care. We have financings now secure to restart development of a critical implantable monitor. And we’re excited to update you on those developments shortly. PMX is our incubator that has several promising technologies that we’re seeking to advance.
We’re focused right now on PortIO, which is a implantable intraosseous device, and we’re getting traction with some strategic potential strategic partners as we’ll discuss further. And then, you know, as I’ve talked about before, we’re always looking for other assets and other opportunities to diversify. We have a history of starting in medical devices and expanding into diagnostics and digital health. And an area that we’re actually quite focused on right now is expanding into the biopharma space. We have a really credibility as a partner here based on our track record of advancing our subsidiaries and performing clinical trials.
And we have a partnership with one of our directors where we’ve been able to review some very attractive biopharma assets out there that fit within our shared services business structure model that we’re looking forward to see if we can consummate in the near future. With regard to Lucid, of course, I encourage you to listen to yesterday’s Lucid Business Update Call for greater detail each of these areas. I’ll try to just focus on some of the main takeaways. Lucid is really now better positioned than ever to capitalize on e cigars, very large clinical and market opportunity. We reported revenue of $800,000 this last quarter and the test volume of 3,034, which is sort of at the upper end of our target range of 2,500 to 3,000 tests per quarter.
The key development this quarter was that significantly strengthened our balance sheet with an underwritten public offering of netting $16,100,000 And this really bolstered our balance sheet. We said had 40,000,000 in pro form a cash at the end of Q1. And it extends the runway well past well into 2026 and past some key upcoming milestones. As we discussed yesterday, we have seen continued momentum on some of these new sales channels that we’re pursuing, particularly on the concierge medicine side, which is a cash pay channel. We’re also making meaningful progress on executing employer market contrasts, all of this to complement our ongoing efforts that traditional seeking traditional coverage pathways.
And we do continue to expect these initiatives, the Concierge Initiative and the Employer Market Initiative to have an impact on revenue in the second half of this year. We have to do a way to response from the MolDX program regarding Medicare coverage for EsoGuard, which we continue to believe is imminent. So let’s move on to various health. We’ve having completed financing recently, we’ve now successfully restarted the development of the key implantable physiologic monitor. And we’ve reengaged with FDA.
We had a recent engagement with them that was so favorable that we did not have to follow-up with an in person meeting. We expect the work to continue through this year with our having reengaged with our development partners with an FDA filing targeted for the first half of twenty twenty six. Our pilot program with OSU is complete, and we are really very close to finalizing our long term commercial strategic partnership related to imminent. It’s been signed off all by the lawyers. It’s just really awaiting signatures.
The commercial agreement will start once we complete the process of integrating the Verus platform with the electronic health record at OSU. And once that launches, which again, we expect to be very soon, the commercial agreement is to enroll at least 1,000 patients in the first year and 300 various implants once it’s cleared. So we’re very much looking forward to getting rolling on that. The incubator, as I mentioned, we’re focused on seeking out direct financing with PortIO and engaging with strategics. That process is actually accelerating.
We’ve had continue to have discussions with now about a dozen strategics who have expressed interest and are active in this space. And we look forward to hopefully consummating a strategic partnership that comes with a strategic investment to allow us to launch to relaunch BORD. And initiate the clinical trial to get it towards clearance. So with that I’ll pass the call off to Dennis.
Dennis McGrath, Chief Financial Officer, PAVmed: Thanks Lishan and good morning everyone. Our summary financial results for the first quarter were reported in our press release that has been distributed. On the next three slides I’ll emphasize a few key highlights from the first quarter, but I encourage you to consider those remarks in the context of the full disclosures covered in our quarterly report on Form 10 Q is filed with the SEC. A couple reminders as our financials, particularly the income statement with year over year comparisons will for the next couple quarters illustrate periods before 09/10/2024 with Lucid’s operating results being consolidated into the presented PAVmed results versus the 2025 periods will be without Lucid’s operating results. This all related to the consolidation and deconsolidation of the PAVmed financials.
We do present some supplementary information in footnote four of the 10 Q that should help with some of the comparisons. With regard to the balance sheet, you will recall from our last two calls in November 2024 in March of this year that the company is engaged in a multi step process to gain compliance with NASDAQ listing standard for a minimum equity, which it did in February, and also position the company for long term financial stability. The two key components were deconsolidating Lucid from PAVET’s consolidated financial statements and restructuring our debt whereby we exchanged about 80% of our outstanding debt for a new series C preferred equity. The slide reflects the balance sheets for both the first quarter and the fourth quarter, both after deconsolidation, which occurred on 09/10/2024. But now the first quarter shows the impact of the debt exchange, which occurred after December 31.
Notably the liability reduction of about 25,000,000 coming in part from a significant reduction in the convertible notes about 23,000,000 and a $2,000,000 reduction in accrued expenses in exchange for an increase of approximately $25,000,000 in preferred stock. So a couple of key things to point out on each of these balance sheets. Cash does not include any lucid cash. The equity method investment balance of almost $47,000,000 at March 31 reflects the 31,300,000.0 lucid shares mark to market, a $21,000,000 gain since year end representing an 82% increase in the lucid stock price between the periods. This amount was previously eliminated from PAVmed’s balance sheet prior to deconsolidation.
For note that there’s plenty more information in 10 Q on both the debt exchange, the series C preferred stock. And the equity method treatment of padmed investment in lucid shares. At present, have met continues to be the single largest shareholder of lucid diagnostics with ownership of approximately 29% of the common shares outstanding. Although, patent no longer has voting control of lucid. PAVmed, its board and management still have significant influence over Lucid with more than 27% voting interest.
Shares outstanding today, including unvested restricted stock awards and pre funded warrants are approximately 18,400,000.0 shares. The gap outstanding shares at the end of the quarter of 16,800,000.0 are reflected on the slide as well as on face of the balance sheet in the 10 Q. GAAP shares do not reflect on invested RSA amounts. Additionally, there are about 25,000 series C preferred shares outstanding. And if they were converted at its conversion price of 1.7 per share would represent an increase of approximately 23,000,000 common shares.
The Z warrants having a conversion price of $24 and after having been extended for one year beyond their initial five year term expired on April 30. Next slide please. Similar to the past presentation, this slide provides some gap and non GAAP year over year quarterly and annual comparisons. As cautioned earlier my comments, there are some significant differences in how the information is compiled between the comparative periods, given the changes in patents, financial control of lucid. Importantly, the gap construct for deconsolidating loosen on September tenth of last year, somewhat blurs the historical understanding of the information patent as a standalone entity and gap does not allow the presentation for prior periods on the face of the financial statements to be similarly adjusted.
Although as mentioned, there is some supplemental information in the footnotes of the financial statements in the 10 Q. On a pro form a basis and purely for illustrative purposes on this slide only, the various revenue and the lucid management fee income are combined collectively more than 3,000,000 per quarter to visually align PAVED’s income sources versus its operating expenses. For SEC reporting purposes, the MSA income is a below the line item. Furthermore, for the first quarter, you see on the slide and in the 10 Q, a large gap net income of 18,600,000.0 before NCI and preferred dividends. This results in gap positive primary EPS of a dollar 28 per share and a positive diluted EPS of $0.34 per share.
Admed’s ownership of 31,300,000.0 lucid common shares are mark to market quarterly and with an 82% increase in the stock price, a gain of 21,000,000 is recognized in the P and L for the period. I’m happy to answer any detailed questions in the slide in the Q and A, but I think it’s more informative to look at the first quarter standalone information presented in this slide And the full first quarter information presented in our press release that shows a company baseline bias of operating at cash flow break even. And incurring incremental pad met expenses for development activities that are offset by dedicated funding. So, in the first quarter, you see a non GAAP loss of 910,000, which has been funded in part by the NIH grant proceeds of 900,000 in the fourth quarter and a pad med verse $2,400,000 financing during the quarter. Operating expenses for the first quarter were approximately 5,400,000.0, which includes stock based compensation expenses of 1,000,000 and deal expenses of $200,000.
Next slide please. With regard to the non GAAP operating expenses on this slide, you see a graphic illustration of our operating expenses over time as presented in more detail in the press release. Total non GAAP OpEx is 4,400,000.0 for the first quarter of twenty five, which is almost the exact same amount incurred in the fourth quarter after accounting for $200,000 of deal expenses in the first quarter. Decrease is equally related to A, the impact of the deconsolidation and B, the fact that the combined OpEx ignoring deconsolidation for PAV and LUCIN would have been in line with the previous quarters anyway. With that operator, let’s open it up for questions.
Conference Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Please press star followed by the number one on your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by the number two.
If you are using a speakerphone, please leave the handset before pressing any keys. One moment please for your first question. Your first question comes from Jeremy Perlman of Maxim Group. Please go ahead.
Dr. Lishan Aklog, Chairman and CEO, PAVmed: Hi, Jeremy.
Jeremy Perlman, Analyst, Maxim Group: Thanks taking my question.
Matt Reilly, Senior Director of Investor Relations, PAVmed: How are doing? Great.
Jeremy Perlman, Analyst, Maxim Group: So maybe now that the pilot program is complete, is there any metrics or information feedback maybe you could share from the physicians and the patients? And has that any of that feedback influenced any changes you’re going to make to the platform before you fully commercialize it?
Dr. Lishan Aklog, Chairman and CEO, PAVmed: Great, great question. And the answer is yes, we’ve had excellent feedback. This is a formal pilot program, so it included pre specified metrics and performance metrics, patient satisfaction, demonstrating of clinical success and outcomes, logging of sort of anecdotal clinical success stories where the monitoring of the patient led to improved outcomes. And all of those pre specified performance metrics were met and there’s really a lot of enthusiasm. Mean, you know, big academic medical centers can be hard, you know, move slowly, they’re just big.
And the speed with which the desire and the demand for this technology across the cancer center has been really encouraging. It hasn’t required any, and we don’t expect there to be any immediate changes to the platform. The platform works. People are very excited and what’s driving some of that enthusiasm is the opportunity to add the implantable monitor and the not too distant features, everyone’s looking forward to that. And frankly, they’re looking forward to being the first site to do the first implant and part of the proposed strategic partnership includes a registry for the implantable, which we’re looking forward to.
We have learned some lessons on how to implement this and that’s obviously, that was our goal to really focus on one big OSU, the James is the third biggest cancer hospital in the country. And so one of the goals of focusing on them was to learn the to learn lessons on on how to implement this more broadly. And and then we learned some lessons on sort of how to utilize their call center. You know, they they have a very sophisticated process where they have call centers and are able to triage calls and how to adjust alerts, customize alerts based on their individual needs and so forth. So process wise, sure, we’ve learned a lot and we’re implementing it, but the core software platform was very well received and fulfilled all of them all of the metrics.
Jeremy Perlman, Analyst, Maxim Group: Okay. Great. And then just is there a mix I don’t think there is, but just to remind us if there’s did they have an exclusive right to the to the various platform? Or are you still in negotiations to cut talks with other large centers, You know, possibly Oh,
Dr. Lishan Aklog, Chairman and CEO, PAVmed: no. I mean, there’s some local, you know, there’s some local, you know, rights to sort of, you know, advance it locally, but not in any way that limits our broader our broader ability to move forward on this. This is a, we expect this to be a commercial agreement that includes a registry for both patients enrolled on the platform as well as when the implantable starts there. Did commit to letting them be the first setting to do the implantable, but that’s going be natural anyway because they’re going have a big head start. We expect a thousand, minimum a thousand commercial patients in the first year And they’ll be well into that by the time the implantable is FDA cleared and ready to go.
But no, we’re not, we’re, you know, the broader vision here is to, really, as I said earlier, to use this very, what’s now become a very strong relationship with one of the top cancer centers in the country to work out a template and work out a model that can be replicated at dozens of other NCI designated cancer centers across the country.
Jeremy Perlman, Analyst, Maxim Group: Okay, great. And then just one last question, to the new year, mentioning your expansion goes into the biopharma segment. Just maybe a little bit more information around the rationale, the strategic rationale, why now? Sure. Mean, you have it seems like you have a lot of pokers in the fire.
You still have Lucid, you have Verus, PortIO, so now and then the financing for this, will it be similar to like the incubator style where you’re looking for external financing before you move ahead with procuring a potential asset or will this be financed within Tavan itself?
Dr. Lishan Aklog, Chairman and CEO, PAVmed: Yeah. This is a great question. So look, the way I would like you to think of this is that, you know, we spend a good amount of time just kind of getting our corporate structure right, getting our balance sheet adjusted, all of the moves that we made over the last now it’s coming on six to eight months, it really put us in a position to put kind of PAVmed back to its roots with a twist. Right? So PAVmed’s always been designed really from from its inception to be nimble and able to go look for shareholder value kind of wherever it might be.
And the reason we’re in a position to, you know, have what we think is a substantial near term opportunity, you know, for our shareholders with Lucid is because we were willing to pounce on that opportunity when it became available when at the time we were focused on medical devices. And that’s similarly true with various, right? We added digital health as an area that where we thought there were opportunities. And this is something that’s been a bit on our radar for a while, but it really accelerated when we joined forces and engaged with a long time biotech investor who is now on our board, on Padmed’s board, doctor Cindy Agarwal. He has a ton of experience in this space over several decades and you know, came to us with sort of a thesis that, you know, Padmed’s infrastructure, its manager of services structure, its acts you know, history of having access to public capital, the history of doing public public financings, IPOs and otherwise, and the sort of model of independently financed subsidiaries is one that he felt within the ecosystem of biopharma, biotech could be really interesting and attractive because earlier stage assets were struggling to raise private capital under traditional means, particularly those that have really interesting assets that are sitting outside The US.
And when we thought about it further, it’s actually in some ways less of a deviation from what we had to do to become a diagnostics, to create a diagnostic subsidiary which required getting a lab and figuring out how to run effectively and efficiently, you know, at a high level diagnostic lab and so forth. These assets are, there’s just a large pipeline of assets in oncology and in cardiometabolic that are in the early, late preclinical phase or in early phase one or late in phase one clinical stage that just need to, really just need clinical research. And we have that. We have a clinical research team. They’ve shown success of getting studies across the finish line, operating them successfully.
And frankly, not much else from our kind of internal resources. So we don’t, we believe that we have infrastructure here that we can leverage. We have a track record and there are assets out there that can use this. To your point about financing, as I’ve said, we said, you know, ever since we’ve kind of made the some adjustments with how our Padmat operates that our model is that the individual subsidiaries raise their own capital. And so that’s been true with Lucid now going all the way back to the Lucid IPO.
It’s been true with Verus, including this most recent financing. And that would be the case within the biopharma space. Anyone who’s following the life sciences sector broadly knows that there’s a lot more capital available in biotech assets. And it’s a bit more of a, you know, kind of streamlined straightforward pathway to value creation if you can find a good asset. So, you know, we’re just we’re not there yet, but just wanted to make it clear that that’s something we’ve hinted at before that we’re really actively pursuing and hope to dive into in the short term.
And no concerns about how it might impact our bandwidth or ability of the company to continue to push forward on these other structures on these other assets like Lucent and Verus because the way it’s designed is they’re they’re, you know, they operate effectively independently, you know, with, you know, with services from the parent company as needed.
Jeremy Perlman, Analyst, Maxim Group: Okay. Great. Thank you for all that information. I’ll rejoin the queue. Have a nice day.
Dr. Lishan Aklog, Chairman and CEO, PAVmed: Yeah. Thanks, Jeremy. Your
Conference Operator: next question comes from Edward Yu of Ascension Capital. Please go ahead.
Matt Reilly, Senior Director of Investor Relations, PAVmed: Hello, Ed. Hi, Ed.
Dr. Lishan Aklog, Chairman and CEO, PAVmed: Yeah, thanks for answering my questions. Has the volatility in the market affected your ability to raise capital in terms of, do you have wide fluctuations when you’re trying to go out to the capital markets to raise money? Let Dennis, why don’t you go ahead and answer that? The answer is no, we’ve been fortunate to have good luck from investors who buy into our vision both for the parent company as well as the subsidiaries. But I’ll let Dennis provide a little bit more color.
Dennis McGrath, Chief Financial Officer, PAVmed: Yeah, well said. As evidenced by the financing we did in the first quarter, we did a combination with PAVmed and Verus equities that is indicative, was indicative of the implicit value of Verus was done at a 35,000,000 pre market, pre money value and you know, we have access to, know, investors that align with our vision and we believe that the additional tranches needed for Verus will be available when needed and given the assets we’re looking at and narrowing down on the biopharma side, we believe that will also know, have we will also have access to both private capital and ultimately public capital as well. So we think we’re in pretty good shape to execute on both of them and the money will be available as needed when the time is is right to sign those agreements.
Dr. Lishan Aklog, Chairman and CEO, PAVmed: Great. Well, thanks for answering my questions and I wish you guys good luck. Thanks, Ed. Appreciate
Dennis McGrath, Chief Financial Officer, PAVmed: it. Thanks, Ed.
Conference Operator: Thank you, ladies and gentlemen. That concludes our question and answer session. I will now turn the conference back over to Doctor. Vishan Blogg. Please go ahead.
Dr. Lishan Aklog, Chairman and CEO, PAVmed: Great. Thank you, operator, and thank you all for joining today and for the great questions. Really, PAVmed is really well positioned as I just articulated in some additional detail, and we are going to aggressively execute on the strategic vision that I just outlined. Lucid and Verus are now well capitalized through key upcoming milestones. We believe there’ll be value creators in the near term.
And we’re just excited to and ready to pursue the significant opportunities we have to leverage our model and our infrastructure and further diversify into a new sector. And we hope to make some progress on that in very near future. So with that said, again, I do encourage you to stay connected with our progress through news releases, these calls, sign up for email alerts on our website, and follow us on social media. So thank you so much, and everyone have a great day.
Conference Operator: This concludes today’s conference. Thank you for attending. You may now disconnect your lines.
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