PAVmed (NASDAQ:PAVM) said it has completed a two-year restructuring effort aimed at simplifying its capital structure, while outlining progress across its Lucid Diagnostics and Veris Health businesses and a relaunched medical device portfolio.
Chairman and Chief Executive Officer Dr. Lishan Aklog told investors on the company’s business update call that the “final step” in fixing PAVmed’s legacy capital structure had been completed in recent weeks. He said the company’s capitalization table now consists of common stock and term debt, positioning PAVmed to pursue its founding strategy as a diversified life sciences company with independently financed subsidiaries operating under a shared services model.
Medical Device Portfolio Relaunched Under Joe Virgilio
Aklog said PAVmed has relaunched its medical device portfolio under Joe Virgilio, who has been focused on advancing opportunities including PortIO and endoscopic imaging technology licensed from Duke under the Octeris umbrella.
According to Aklog, Virgilio is also working across PAVmed’s broader medical device portfolio, with responsibilities that include helping build and scale growth-stage businesses and raising capital for individual medical device initiatives.
Aklog said the company is evaluating potential business development assets and has already completed diligence on one opportunity, which it ultimately passed on. PAVmed is now conducting a second major diligence exercise, he said, and expects the process to result in commercial assets being added to the portfolio.
During the question-and-answer session, Aklog said most technologies brought to PAVmed have historically come from the U.S., often through academic medical centers and physician-led innovation. He said the company remains open to opportunities from outside North America, but its strongest sourcing relationships have been domestic.
Asked whether PAVmed is focused on devices, diagnostics or therapeutics, Aklog said the company is open to all three. He noted that PAVmed began in traditional medical devices, expanded into diagnostics through Lucid Diagnostics, and later moved into digital health through Veris. He said the company has also reviewed therapeutic assets, but prior capital structure constraints limited its ability to pursue those opportunities.
Lucid Diagnostics Remains a Key Holding
Aklog said Lucid Diagnostics is approaching “transformative milestones,” including what PAVmed believes is impending Medicare coverage. He acknowledged frustration with the time it has taken, but said the company’s confidence “has not wavered.”
PAVmed remains Lucid’s largest shareholder. Aklog said Lucid’s progress and potential inflection points are expected to benefit PAVmed.
Aklog highlighted several developments discussed on Lucid’s own business update call, including early activity with the Department of Veterans Affairs after securing Federal Supply Schedule pricing. He said first orders are being placed, the pipeline is expanding and the company expects revenue from that channel. He also said Lucid has had direct engagement with commercial payers and received positive coverage through one laboratory benefit manager, which he said would be made public soon.
Aklog also noted that Lucid completed a capital raise that extended its runway “well into 2027.”
Veris Health Advances Ohio State Rollout, Implantable Monitor
Aklog said Veris is well into the commercial phase of its strategic engagement with The Ohio State University. The rollout has initially focused on the three clinical departments that participated in a successful pilot study, with additional departments expected to be added under a rollout schedule developed with OSU leadership.
He said electronic health record integration is live and working well, and that feedback from OSU’s clinical and administrative teams remains “excellent.”
A major focus for Veris is its implantable physiological monitor. Aklog said development is progressing toward a planned submission by the end of the year. He said the company’s contract development and manufacturing partner, Velentium, is helping move the product toward design freeze and final pre-submission development and testing. Recent work has focused on optimizing battery life to achieve a full two years, he said.
In response to an analyst question, Aklog declined to provide specific patient enrollment numbers for the OSU rollout, but said the ramp is trending on target toward OSU’s goal of 1,000 patients within the first year of the registry. He said the trajectory is not linear and noted some delays related to EHR integration, but said the overall plan remains on track.
Aklog also said Veris is learning from real-world use at OSU, including how alerts flow through the cancer center’s dedicated call center and how the platform integrates into care for newly diagnosed cancer patients undergoing complex treatment.
Asked about expanding beyond OSU, Aklog said Veris has held conversations with other academic medical centers and cancer-care entities, including oncology practice networks. However, he said the company is unlikely to begin another major engagement until it can raise additional capital to support a broader commercial footprint.
Financial Update Highlights Recapitalization
Chief Financial Officer Dennis McGrath reviewed the company’s recapitalization steps. In February, PAVmed completed a $30 million Series D preferred stock offering and issued a $15 million senior secured note to an existing investor. The company used proceeds, consisting of a $22.3 million cash payment and the $15 million note, to redeem all outstanding Series C convertible preferred stock and fully retire its previously existing convertible debt.
The replacement note matures in February 2029. McGrath said it has a nominal conversion price of $450 per share for tax-status reasons, but described it as a long-term, three-year note with quarterly interest-only payments and a balloon payment at maturity.
Following shareholder approval on March 27, the Series D preferred stock was mandatorily converted into PAVmed common stock and eliminated. In connection with the financing, PAVmed also issued $30 million in warrants that are callable upon publication of a positive EsoGuard local coverage determination, McGrath said.
PAVmed reported $6.5 million in cash at March 31, a figure McGrath said does not include the expected $30 million from warrant exercises after LCD publication or $2.5 million from Veris warrants callable upon FDA clearance of the Veris implantable physiological monitor.
McGrath said PAVmed owns about 15% of Lucid Diagnostics’ common shares outstanding and, together with its board and management, has approximately a 25% voting interest. Shares outstanding were approximately 7.3 million including unvested restricted stock awards, while GAAP quarter-end outstanding shares were 6.3 million.
For the quarter, McGrath said PAVmed reported a GAAP net loss of $1.1 million before non-controlling interest and preferred dividends, compared with a prior-year profit of $18.6 million, primarily due to changes in the fair value of Lucid shares. GAAP net loss attributable to PAVmed was $60,000 before preferred dividends of approximately $6.9 million. After preferred dividends, GAAP loss per share was $4.42; without them, pro forma GAAP net loss per share would have been $0.04.
Non-GAAP operating expenses were $5.9 million for the quarter, about $1.1 million above the average of the prior four quarters. McGrath attributed the increase to about $300,000 in incremental Veris research and development spending and additional general and administrative costs tied to the recapitalization, financing and professional fees.
About PAVmed (NASDAQ:PAVM)
PAVmed Inc is a clinical-stage medical technology company focused on acquiring, developing and commercializing innovative medical devices aimed primarily at gastrointestinal endoscopy and related therapeutic areas. Its portfolio includes FDA-cleared products such as EsoFLIP® Distensibility System for the treatment of esophageal strictures and MUSE™ (Medigus Ultrasonic Surgical Endostapler) for endoscopic fundoplication in gastroesophageal reflux disease (GERD). In addition to its gastrointestinal franchise, PAVmed is advancing early-stage programs targeting indications in oncology, urology and dermatology.
Founded in 2012, PAVmed has built its pipeline through internal research and development as well as strategic collaborations and acquisitions.
