Cardica's CEO Discusses F4Q12 Results - Earnings Call Transcript

Cardica, Inc. (CRDC)

F4Q12 Earnings Call

August 2, 2012 4:30 p.m. ET

Executives

Robert Newell - Chief Financial Officer and Vice President, Finance

Bernard Hausen - President, Chief Executive Officer and Co-Founder

Analysts

Akiva Felt - Wedbush Securities

Ed Arce - McNicoll, Lewis & Vlak

Presentation

Operator

Good day, ladies and gentlemen and welcome to the Q4 2012 Cardica Financial Results Conference Call. My name is Claire and I will be your operator for today. At this time all participants are in listen-only mode. We will conduct a question-and-answer session towards the end of the conference call. (Operator Instructions) As a reminder this conference is being recorded for replay purposes. I would now like to turn the call over to Bob Newell, Chief Financial Officer. Please proceed, sir.

Robert Newell

Good afternoon, and thank you for participating in our fiscal 2012 fourth quarter and full year financial results conference call. Earlier today we issued press release setting forth our financial results, so please refer to the release for a complete detail.

The conference call will include forward-looking statements, including all statements regarding the continued clinical and other developments, products features regulatory approval, and commercial launch and use of products in our planned MicroCutter product line, including our MicroCutter XCHANGE 30, XCHANGE 45, and XPRESS 30, including the timing thereof and our expectations future support for and sales of our automated anastomosis product.

Any statements contained in this conference call that are not historical facts may be deemed to be forward-looking statements. The words anticipated, expect, continue, will, can, potentially, may, plan, planned, beginning, would, will, intend, look forward and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause our results to differ materially from those indicated by these forward-looking statements, including those set forth in our press release of today as well as other risk detailed from time to time in our reports filed with the U.S. Securities and Exchange Commission, including our quarterly report on Form 10-Q for the fiscal quarter ended March 31, 2012.

We expressly disclaim any obligation or undertaking to release publicly any updates or revisions to any forward-looking statement. You are encouraged to read our reports filed with the SEC, available at www.sec.gov. This all is a property of Cardica and any rebroadcasting of this call without the express written permission of Cardica is prohibited.

At this time I would like to turn the call to Bernard Hausen, Cardica’s President and CEO for corporate update.

Bernard Hausen

Thank you, Bob. Good afternoon, everyone. Thank you for joining us on our call today. Over the course of the last several months we have made tremendous progress on the path towards commercialization of our Cardica MicroCutter XCHANGE 30, a cartridge-based device with a 5-millimeter shaft diameter and articulation of up to 80 degrees. We announced last week that we have resumed the European clinical study of the MicroCutter and it is going very well. Prior to the resumption of the trial, more than 30 surgeons performed over 80 procedures with more than 250 deployments in total over the course of the last three months.

MicroCutter has been used in appendectomies, intestinal resections, lung resections, vascular transections and a host of other gastrointestinal procedures. Already, surgeons have used the XCHANGE 30 to treat ten patients in or clinical trial. Many of these patients have been discharged and to date we are not aware of any serious adverse events associated with the use of the MicroCutter.

One of the highlights of the last week was a seven-year old patient who needed an appendectomy. This procedure was performed flawlessly with the MicroCutter system, which allowed the surgeon to resect the appendix with our stapling device through a 5 mm trocar port. Avoiding larger torcars with their associated prevalence for surgical complications, pain and discomfort in children is considered when they have very appealing features of the MicroCutter XCHANGE 30. Therefore, as the MicroCutter is used by more surgeons, we believe there will be an increasing number of pediatric applications.

Other surgical applications that may benefit from the availability of the MicroCutter include vascular transaction, all forms of (inaudible) surgery including liver, kidney, spleen and lung resection. It is probably safe to assume that with this significant change in size and articulation, stapling may find its way into procedures where stapling is currently not an option today.

In the ongoing clinical study, four sites have enrolled patients to date. Initially, our clinical plan is to limit the number of enrolling sites with approximately 30 surgeons trained to deploy the MicroCutter XCHANGE 30. Depending on the enrollment rate and the adequacy of patients of follow-up, according to the study protocol we have the ability to expand the number of enrolling sites to a total of ten. The study protocol calls for the enrollment of 160 patients followed for 30 days after their procedure. We expect to complete the clinical trial enrollment for protocol by the end of the calendar year. We may expand the sample size to approximately 200 patients to increase statistical power of the study.

With this plans larger study sample size, we expect to complete enrollment in the first quarter of calendar 2013. We plan to use the clinical data from this trial for our 510(k) regulatory filing with the FDA in the second quarter of calendar year 2013. We anticipate that we will begin booking commercial sales with XCHANGE 30 in the second half of calendar 2012. We are increasing our manufacturing capacity for both XCHANGE 30 devices and cartridges in order to meet the demand of the clinical trial sites in our initial European commercial customers.

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