Tivic Health Systems’ Earnings Call Highlights Strategic Shift

Tivic Health Systems, Inc. ((TIVC)) has held its Q4 earnings call. Read on for the main highlights of the call.

Tivic Health Systems is undergoing a significant transformation, marked by a strategic shift towards diversified therapeutics and the acquisition of a promising drug candidate. Despite facing current financial challenges, such as decreased revenue and gross profit, the company exhibits potential for future growth and regulatory approvals.

Acquisition of Immunomodulatory Drug Candidate

Tivic Health Systems has acquired worldwide exclusive rights to a phase three immunomodulatory drug candidate, Intellimod, from Staterra Biopharma. This acquisition includes rights to five additional indications and a second molecular structure, Entelasta. With over $140 million invested in its development, Intellimod aims to treat acute radiation syndrome (ARS) and has shown a threefold increase in survival rates in animal models.

Strategic Transformation into a Diversified Therapeutics Company

The company is transitioning into a diversified therapeutic entity, combining biologic and bioelectronic medicine to address immune dysrhythmias. This strategic shift is supported by the addition of former Staterra Biopharma CEO Michael K. Hanley as Chief Operating Officer, indicating a robust pipeline and a promising future.

Progress in Vagus Nerve Stimulation (VNS) Program

Tivic Health Systems is advancing its noninvasive cervical vagus nerve stimulation device, which has demonstrated a 400% increase in effects with personalized stimulation. This device is designed to treat conditions such as inflammatory, cardiac, and neurologic disorders without the need for invasive surgeries.

NASDAQ Compliance and Financial Flexibility

The company anticipates regaining NASDAQ compliance with continued listing requirements and has secured a $25 million equity line of credit. This financial flexibility is expected to fund the stages of development, potentially fully supporting Intellimod’s commercialization.

Decrease in Revenue and Unit Sales

Tivic Health Systems reported a decrease in revenue, net of returns, to $0.8 million from $1.2 million, primarily due to a 41% decrease in unit sales. This decline is associated with reductions in marketing spend, reflecting the company’s current financial challenges.

Lower Gross Profit

The company’s gross profit dropped significantly to $2,000 from $287,000, influenced by $354,000 in inventory reserves recorded in 2024. This highlights the financial hurdles Tivic Health Systems is navigating as it undergoes its strategic transformation.

Net Loss and Cash Decrease

Tivic Health Systems reported a net loss reduction to $5.7 million from $8.2 million, yet cash and cash equivalents decreased to $2 million from $3.4 million at the end of 2023. This financial snapshot underscores the company’s need for strategic financial management.

Forward-Looking Guidance

In its forward-looking guidance, Tivic Health Systems emphasized its strategic transformation and financial performance for 2024, with a strong focus on 2025 initiatives. The company plans to move into manufacturing validation for Intellimod, with expectations of FDA approval potentially leading to market availability in two years. Additionally, the advancement of its noninvasive vagus nerve stimulation program and securing a $25 million equity line of credit are pivotal to its future growth strategy.

In summary, Tivic Health Systems is navigating a transformative phase with a strategic focus on diversified therapeutics and promising drug candidates. Despite current financial challenges, the company is poised for future growth, supported by strategic acquisitions and advancements in its therapeutic programs.