Q1 2021 Capricor Therapeutics Inc Earnings Call

May 13, 2021

[music].

Greetings and welcome to the Capricorn Therapeutics first quarter 2021 earnings and corporate update call. At this time all participants are in a listen only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference.

Operator: Greetings, and welcome to Capricor Therapeutics Q1 2021 Earnings and Corporate Update Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference call is being recorded. I'd now like to turn the conference over to your host, Mr. AJ Bergmann. Thank you. You may begin.

Please press Star zero on your telephone keypad as a reminder of this conference call is being recorded I would now like to turn the conference over to your host Mr. A J berkman. Thank you you may begin.

AJ Bergmann: Thank you. Before we start, I would like to state that we will be making certain forward-looking statements during today's presentation. These statements may include statements regarding, among other things, the efficacy, safety, and intended utilization of our product candidates, our future research and development plans, including our anticipated conduct and timing of preclinical and clinical studies, our plans to present or report additional data, our plans regarding regulatory filings, potential regulatory developments involving our product candidates, and our possible uses of existing cash and investment resources. These forward-looking statements are based on current information, assumptions, and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward-looking statements. These and other risks are described in our periodic filings made with the SEC, including our quarterly and annual reports.

Thank you before we start I would like to state that we will be making certain forward looking statements. During today's presentation. These statements may include statements regarding the among other things the efficacy safety and intended utilization of our product candidate for future research and development plan.

Our anticipated conduct and timing of preclinical and clinical studies.

For example report additional data our plans regarding regulatory filings.

Potential regulatory developments and loving the product candidates under our possible uses of existing cash and invest the resources. These forward looking statements are based on current information assumptions and expectations that are subject to change and involve a number of risks and uncertainties that may cause actual results to differ materially from those contained in the forward looking statements. These and other risks are described in our periodic.

<unk> made with the SEC, including our quarterly and annual reports are cautioned to put.

AJ Bergmann: We are cautioned not to place undue reliance on these forward-looking statements, and we disclaim any obligation to update such statements. With that, I'll turn the call over to CEO Linda Marbán.

Cautioned not to place undue reliance on these forward looking statements and we disclaim any obligation to update such statements with that I'll turn the call over to CEO Linda Martin Good afternoon, and thank you for joining us for our first quarter 2021 Corp.

Linda Marbán: Good afternoon, and thank you for joining us for our Q1 2021 corporate update call. We will begin today with an update on our Duchenne muscular dystrophy program, followed by an update on our exosome platform technology and our COVID-19 clinical program. We have several important updates on each of these programs and multiple key events we are looking forward to over the next several months. Let me begin with an update on our Duchenne muscular dystrophy program. One year ago, we reported positive top-line data from our HOPE-2 clinical trial, which was a randomized, double-blind, placebo-controlled phase 2 trial of CAP-1002, our cell therapy product, in non-ambulant boys and young men with advanced DMD. We saw improvements in skeletal muscle or upper limb, as well as improvement in cardiac function. This trial was focused on older patients with DMD who were primarily non-ambulant.

Quick update call.

We will begin today with an update on our Duchenne muscular dystrophy program, followed by an update on our axon platform technology, and our COVID-19 clinical program.

We have several important updates on each of these program and multiple key events. We're looking forward to over the next couple of months.

Let me begin with an update on our defined muscular dystrophy program.

One year ago, we reported positive top line data from our hope two clinical trial, which was a randomized double blind placebo controlled phase two trial of cap 10 O to our cell therapy products and non ambulant boys and young men with advanced the empty.

We saw improvements in skeletal muscle or upper limb as well as improvement in cardiac function.

This trial was focused on older patients with DMD, who are primarily non ambulant.

Linda Marbán: It is important to understand the market size for CAP-1002 in DMD. There are approximately 20,000 boys and young men with this disease in the United States who have limited to no other options available to them. Current estimates point to over half of the US DMD population as being non-ambulant and potentially eligible for CAP-1002. If approved, we envision that CAP-1002 may be administered four times per year over many years. Over the past several years, our cell therapy product, CAP-1002, has been given safely to over 200 patients and to approximately 35 DMD patients for which we have gathered robust safety and efficacy data to date.

It is important to understand the market size for cap kind of chew in the empty. There are approximately 20000 boys and young men with this disease in the United States, who have limited to no other options available to them for them.

Current estimates point to over half of the U S. D M D population as the.

The non ambulant and potentially eligible for cop 10 O two.

If approved we envision the cap 10 O two may be administered for times per year over many years.

Over the past several years, our cell therapy product cap 10 O. Two husbands given safely over 200 patients until approximately 35 D. M D patients for which we have gathered robust safety and efficacy data to date.

Based on the strength of the data and our desire to be ready for commercialization of cap 10 of two should it be approved we announced early in the first quarter of this year of collaboration with Lonzo of commercial manufacturing company for the development of cap 10, or two for DMD and other potential indications.

Linda Marbán: Based on the strength of the data and our desire to be ready for commercialization of CAP-1002 should it be approved, we announced early in Q1 of this year a collaboration with Lonza, a commercial manufacturing company, for the development of CAP-1002 for DMD and other potential indications. The collaboration aims to expand our ability and capacity to manufacture CAP-1002 for potential late-stage clinical trials and commercialization. Lonza operates in 120 sites and offices in more than 35 countries and has over 15,000 full-time employees. This collaboration with Lonza provides us with a partner who has world-class expertise in cell therapy manufacturing and an established track record of commercializing biologics.

The collaboration aims to expand our ability and capacity to manufacture of cap 10 O two for potential late stage clinical trials and commercialization.

Onto operating 120 sites and offices and more than 35 countries and has over 15000 of full time employees.

This collaboration with lines of provides us with a partner.

Who has world class expertise in cell therapy manufacturing and of the.

Stablish track record of commercializing biologics.

Linda Marbán: Now, the path forward for CAP-1002 in DMD continues to be very exciting, and I would like to update you today on several key events that have occurred recently. First, we have submitted a new data package to FDA based on the complete HOPE-2 data sets and analysis. Based on our RMAT designation, which allows preferred access and an expedited path to registration for cell and gene therapies, we have requested a Type B meeting to continue our discussions regarding our path towards registration for this product. We believe that based on the strength of the clinical data, an expedited path to registration might be warranted. To this end, we continue to explore ways to work with the FDA to accelerate the pathway to approval of this therapeutic for DMD.

Now the path forward for cap 10 of them two in DMT continues to be very exciting and I would like to update you today on several parochial events that have occurred recently for.

We have submitted a new data package to FDA based on the complete hope two datasets and analysis.

And based on our our mat designation, which allows preferred access and an expedited path to registration for cell and gene therapy, we have.

Requested a type b meeting to continue our discussions regarding our path towards registration for this product. We believe that based on the strength of the clinical data and expedited path to registration might be warranted.

And we continue to explore ways to work with the FDA to accelerate the pathway to approval of the therapeutic for the M D.

Linda Marbán: Now while we remain optimistic, we recognize that FDA may remain firm in their requirement for another clinical trial. To that end, we are engaged in discussions with various parties regarding a potential partnership opportunity for this program, and we will keep you updated as to our progress on this front as well. We do anticipate further clarity on this program by Q3. Now, shifting gears for a moment, let's talk about our exosomes and specifically our vaccine for SARS-CoV-2, commonly called COVID-19. We continue our efforts to develop a novel vaccine candidate for SARS-CoV-2. While we are grateful that the currently available mRNA vaccines are working so well, this is by no means a solved issue. Experts predict that COVID will become endemic in the global population, and therefore, annual or even semiannual vaccines may be necessary to combat emerging variants or prolong protection from the virus.

Now, while we remain optimistic we recognized the FDA may remain firm in the requirement for another clinical trial.

To that end, we are engaged in discussions with various parties regarding a potential partnership opportunity for this program and we will keep you updated as to our progress on this front as well.

We do anticipate further clarity on this program by the third quarter.

Now shifting gears for a moment, let's talk about our Exosomes and specifically our vaccine for Sars Cov, two commonly called COVID-19.

We continue our efforts to develop a novel vaccine candidate for Sars Cov two.

While we are grateful that the currently available mrna vaccines are working so well. This is by no means of solved the issue.

Experts predict the COVID-19 will become endemic in the global population and therefore annual or even semiannual vaccines may be necessary to come back emerging variance or prolonged protection from the virus.

Linda Marbán: Our approach, which is multivalent and uses the exosome as a delivery vehicle, can potentially provide an alternative vaccine candidate to anything currently available or in development that we are aware of today. In addition, as we have been stating, the development of this vaccine product paves the way for expanded pipeline opportunities to use the exosomes as drug delivery vehicles, essentially nature's lipid nanoparticles, whether for other infectious diseases or for therapeutics. Part of the clinical development of exosomes as delivery vehicles is to establish their regulatory pathway, and we believe that we have done that through our work to date. Based on a recently submitted pre-IND, we received feedback from the FDA on our multivalent exosome mRNA vaccine. This feedback has given us the ability to focus on exactly what is necessary for approval of an IND.

Our approach, which is multivalent and uses the extra the AUM as of delivery vehicle can potentially provide an alternative vaccine candidate to anything currently available or in development that we are aware of today.

In addition, as we have been stating the development of this vaccine product paves the way for expanded pipeline opportunities to use the exosomes as drug delivery vehicles.

Essentially the nature lipid nanoparticle.

Whether for other infectious diseases or other therapeutics.

Part of the clinical development of Exosomes as delivery vehicles is to establish the regulatory pathway and we believe that we have done that through our work to date.

Based on our recently submitted pre Int, we received feedback from the FDA on our multi balance access all of them.

Rene vaccine.

This feedback has given us the ability to focus on exactly what is necessary for approval of an int.

Linda Marbán: We are currently underway with IND-enabling studies, and as planned, we are aiming to submit an IND by Q3 of this year. Based on our conversations with the National Institute of Allergy and Infectious Diseases, a part of the National Institutes of Health, with whom we have been speaking about our vaccine program, we are considering the following strategies. Since a high percentage of the US population will have been vaccinated by the fall and will likely be needing a booster, we are designing our phase 1 vaccine clinical trial with the idea that it can be used in addition to currently available vaccines as well as in a naive population. We still believe the Capricor vaccine can be an important tool in the prevention of SARS-CoV-2.

We are currently underway with ion the enabling studies and as planned we are aiming to submit an IND by the third quarter of this year.

Based on our conversations with the National Institute of allergy and infectious diseases, a part of the National Institutes of health with whom we Havent speaking about our vaccine program. We are considering the following strategy.

Since a high percentage of the U S population will have been vaccinated by the fall.

It will likely be meeting of booster, we are designing our phase one vaccine clinical trial with the idea that it can be used in addition to currently available vaccine as well as in the naive population.

We still believe the cap of course vaccine can be an important tool and the prevention of Sars Cov two.

Linda Marbán: Further, the data we have published to date has shown that exosomes are less toxic than lipid nanoparticles, and that the multiple proteins in the Capricor vaccine may potentially provide broader-based immunity to variants of COVID-19. We are designing the phase I trial to be conducted in approximately 20 patients, and it will likely provide a roadmap for this product and future vaccines using exosomes to deliver mRNA. We are hopeful that the FDA will support this plan. In addition, we will survey the landscape prior to the time of clinical trial initiation and evaluate if our vaccine candidate will be synergistic or beneficial when compared to the currently available vaccines. Various potential partners are intrigued by our approach as are various government agencies. We will keep you updated on possible funding opportunities for this program, so please stay tuned for updates on that as well.

Further the data we have published to date has shown that exosomes are less toxic than lipid nanoparticles and at the multiple proteins and the copper core of vaccine.

Tensely provide broader based immunity to variance of COVID-19.

We are designing the phase one trial to be conducted in approximately 20 patients.

It will likely provide a roadmap for this product and future of vaccine using exosomes to deliver mrna.

We are hopeful that the ought to be able to support. This plan. In addition, we will survey the landscape of prior to the time of clinical trial initiation and evaluate if all of that vaccine candidate will be synergistic of beneficial when compare to the currently available of vaccine.

Various potential partners are treated by our approach as our various government agencies. We will keep you updated on possible funding opportunities for this program. So please stay tuned for updates on that as well.

Now I'm going to the turning to the expansion of our axon platform technical technology.

Linda Marbán: Now I'm going to be turning to the expansion of our exosome platform technology. Earlier this month, we announced the execution of a worldwide exclusive license agreement with Johns Hopkins University focused on exosome-based vaccines and therapeutics to treat a broad spectrum of diseases. Expansion of our portfolio allows for rapid advances in the therapeutic development of exosomes as delivery vehicles and also continues to support the growth of our vaccine program. We have built a high throughput relationship with the lab of Dr. Steven Gould at Johns Hopkins University, and this license agreement codifies the opportunity to translate innovative science into new products with an expanding intellectual property portfolio, which we will continue to strengthen. As we have worked with Dr. Gould over the past year, this relationship will create more opportunities for future licensing based on the work we do together.

Earlier this month, we announced the execution of a worldwide exclusive license agreement with Johns Hopkins University focused on exercise based vaccines and therapeutics to treat a broad spectrum of diseases.

Expansion of our portfolio allows for rapid advances in the therapeutic development of Exosomes as delivery vehicles and also continues to support the growth of our vaccine program.

We have built the high throughput relationship with the lab of doctors Stephen Gould at Johns Hopkins University, and this license agreement caught of highest the opportunity to translate innovative science into new products with an expanding intellectual property portfolio, which we will continue to strengthen.

As we have worked with Dr. Gould over the past year. This relationship will create more opportunities for future licensing based on the work we do together.

Now turning to our accident therapeutic program.

Linda Marbán: Now turning to our exosome therapeutic program, we can talk about the call that we had in March. We focused on some of the scientific work which is ongoing in the Capricor lab as we are focused on becoming a leading engineered exosome company. Our first targets, as we mentioned, are based on loading RNAs into the exosomes and focus on our ultimate goal of generating formulation of engineered exosomes and mRNAs to potentially prevent and treat human diseases. We have been focused on building out our core R&D, product development, and manufacturing teams to support the expansion of our technology, and plan to have 1 to 2 indications identified over the next few quarters for which we plan to file INDs. As you know, we began enrollment of a phase 2 placebo-controlled double-blind trial in up to 60 patients with severe COVID-19 late last year.

We can talk about the call that we had in March we focused on some of the scientific work, which is ongoing in the top of core labs.

We are focused on becoming a leading engineered exosomes company.

Our first targets as we mentioned are based on loading Rnas into the Exosomes.

And focus on our ultimate goal of generating formulation of engineered Exosomes and M. Rnas chip eventually potentially prevent and treat human diseases.

We have been focused on building out our core R&D product development and manufacturing teams to support the expansion of our technology and plan to have one to two indications.

Densify it over the next few quarters for which we plan to file <unk>.

As you know we began enrollment of a phase two placebo.

The boat controlled double blind trial in up to 60 patients with severe COVID-19 late last year the.

Linda Marbán: This is with CAP-1002, our cell therapy product. We have been selective in our inclusion/exclusion criteria because we only want to treat those patients that we believe will benefit from CAP-1002. Let me remind you, the targeted patients are those that are in the hospital and need supplemental oxygen but are not ventilated. Our goal is to keep these patients off ventilation because in many cases, once a patient is artificially ventilated for COVID complications, their prognosis worsens considerably. Many are too sick for therapeutic solutions to save by that point. We look forward to seeing the data as our early clinical data suggested a potential benefit in this population of patients. A very recent paper in the journal Nature by Benjamin Izar and his colleagues showed that lung tissue from terminal COVID patients are filled with macrophages and other immune cells.

This is with top 10 O to our cell therapy products.

We have been selective in our inclusion exclusion criteria, because we only want to treat those patients that we believe will benefit from cap 10 of them too.

Let me remind you the targeted patients are those that are in the hospital and need supplemental oxygen, but are not ventilated.

Our goal is to keep these patients off of the ventilation because in many cases once a patient is artificially ventilated for COVID-19 complications there of prognosis worsens considerably.

Many are too sick for therapeutic solutions to save by that point.

We look forward to seeing the data as our early clinical data suggested a potential benefit in this population of patients.

A very recent paper in the journal nature by Benjamin ISR and his colleague showed that lung tissue from terminal COVID-19 patients are filled with macrophages and other immune cells.

Linda Marbán: We know from many preclinical studies that the exosomes from CAP-1002, the identified mechanism of action of the cells, change macrophages from M1 towards an M2 expression profile. In other words, it turns them from inflammatory towards anti-inflammatory. The findings from this paper give me great hope for CAP-1002 in treating severe COVID. I expect us to have data available in Q3 of this year. Following receipt of this data, and if positive, we will plan to meet with FDA to discuss the next steps in development. In summary, we have various exciting programs ongoing at different levels of development with multiple key milestones coming up over the next several months.

No for many preclinical studies that the Exosomes from cap Turner to the.

The identified mechanism of action of the cells change of macrophages from N. One towards the M. Two expression profile in other words, it turns them from inflammatory towards anti inflammatory.

The need from this paper gives me great hope for cap 10 of two in treating severe COVID-19.

I expect us to have data available in the third quarter of this year.

Following the receipt of this data and if positive we will plan to meet with FDA to discuss the next steps in development.

In summary, we have various exciting programs ongoing at different levels of development with multiple key milestones coming up over the next several months.

We have over $40 million in cash to execute on our plans and are working on strengthening our senior management team to be able to execute on our strategic plans moving through 2021 and into 'twenty 'twenty two.

Linda Marbán: We have over $40 million in cash to execute on our plans and are working on strengthening our senior management team to be able to execute on our strategic plans moving through 2021 and into 2022. Please stay tuned regarding the announcement of new leaders to our team. Earlier today, we had the opportunity to present at the American Society of Gene & Cell Therapy on the opportunity to use exosomes in SARS-CoV-2 vaccines. Next week, we are presenting a poster at the International Society for Extracellular Vesicles. Additionally, in June, we plan to present data at the PPMD conference to discuss our CAP-1002 program in DMD. Lastly, we have multiple publications in review with peer-review journals and expect several key announcements over the next several months regarding our programs.

Please stay tuned regarding the announcement of new leaders to our team.

Earlier today, we had the opportunity to present at the American Society of cell and gene therapy on the opportunity to use Exosomes and Sars cov two vaccine.

And next week, we are presenting a poster at the international society for extracellular of basketball.

Additionally in June we plan to present data at the P. P. M D conference to discuss our Cop 10 O T program and the empty.

Lastly, we have multiple publications in review with peer reviewed journal unexpected several key announcements over the next several months regarding our programs I continue to be energized by the progress we are making both on the extra sound platform and with regards to pursuing a pathway for cop 10 or two towards potential.

Linda Marbán: I continue to be energized by the progress we are making, both on our exosome platform and with regards to pursuing a pathway for CAP-1002 towards potential approval and commercialization. I will now turn the call over to AJ Bergmann, our CFO, for an update on the financials.

Oh I can do the commercialization.

I will now turn the call over to AJ Bergmann, our CFO for an update on the financials.

Thank you Lynn.

AJ Bergmann: Thank you, Linda. This afternoon's press release provided a summary of our Q1 2021 financials on a GAAP basis. You may also refer to our quarterly report on Form 10-Q, which we expect to become available in the next few days and will be accessible on the SEC website as well as the financial section of the Capricor website. As of 31 March 2021, the company's cash equivalents totaled approximately $41.9 million, compared to approximately $32.7 million on 31 December 2020. Based on our current plans and projections, Capricor expects its cash and cash equivalents will fund our research and development programs, and other operations through at least Q2 2023. In Q1 2021, our net cash used in operating activities was approximately $3.3 million.

The.

This afternoon's press release provided a summary of our first quarter of 2021 financials on a GAAP basis may also refer to our quarterly report on form 10-Q, which we expect to become available in the next few days will be accessible on the SEC website as well as the financial section of the Capricorn website as of March 31, 2021, the company's cash.

Cash cash equivalents totaled approximately 41 9 million compare.

Compared to approximately $32 7 million on December 31, 2020 based on our current plans and projections Capricorn expects its cash and cash equivalents will fund our research and development programs and other operation for at least the second quarter of 2023.

In the first quarter of 2021 of net cash used in operating activities was approximately $3 $3 million and for the first quarter of 2021, excluding stock based compensation, our research and development expenses was approximately $3 2 million compared to approximately $1 1 million in Q1 2020.

AJ Bergmann: For the first quarter of 2021, excluding stock-based compensation, our research and development expenses was approximately $3.2 million, compared to approximately $1.1 million in Q1 2020. Again, excluding stock-based compensation, our G&A expense was approximately $1.3 million in Q1 2021 and approximately $900,000 in Q1 2020. Net loss for the first quarter of 2021 was approximately $5.2 million, compared to a net loss of approximately $2.1 million for the first quarter of 2020. Thank you very much for your time and attention today. We will now open the line up for questions.

Again, excluding stock based compensation, our G&A expense was approximately $1 3 million in Q1, 2021, and approximately 900000 in Q1 2020.

Net loss for the first quarter of 2021 was approximately $5 $2 million compared to a net loss of approximately $2 1 million for the first quarter of 2020.

You very much for your time and attention today, we will now open the line up for questions.

Operator: Thank you. We will now be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Our first question comes from Alan Leong with BioWatch News. Please proceed with your question.

Thank you.

We will now be conducting a question and answer session. If you like.

Like to ask a question. Please press star one on your telephone keypad at.

The confirmation tone will indicate your line is in the question queue. You May press star two if you'd like to remove your question from the queue for.

For participants using speaker equipment, it may be necessary to pick up of your handset before pressing the sarkies one moment. Please while we poll for questions.

James.

My first question comes from out of my own with Bio Watch news. Please proceed.

With your question.

Alan Leong: Hi, Linda. Hi, AJ. Thank you for taking my question.

I remember the high AG. Thank you for taking my question.

Alan Leong: In your extended DMD package to the FDA, can we safely assume that the longer-term data has the same trends as we saw before? There's no disconfirmation or contradiction from the earlier results.

And your extended the DMD package to the FDA.

Can we safely assume that the longer term data.

Had the same trends as we saw before Theres no no.

Just confirmation of the contradiction from what from the earlier in the zone.

Hi, Alan good to hear your voice.

Linda Marbán: Hi, Alan. Good to hear your voice. Yes, we are carefully discussing what's in the package and also in a submitted manuscript because of embargo policies. I will say that I am even more excited by the final data than I was by the top-line data. As happens sometimes in clinical trials, once the database is locked, and you can do the final analysis, the data is, you know, fine-tuned in a certain way. I will just say that we believe more than ever that CAP-1002 is an effective treatment for the treatment of DMD.

Yes, we are.

I'm carefully.

Discussing what's in the package and also in the submitted manuscript because of the embargo policies I will say that I am even more excited.

By the final data than I was by the top line data as happens sometimes in clinical trials. Once the database is locked and you can do the final analysis the data as you know.

Fine tuned in a certain way and I will just say that we believe more than ever the captain of tours and effective treatment for the treatment of TMT.

Alan Leong: I'm looking forward to the manuscript when it comes out. I wonder if you could help differentiate for my clients because I get some questions. You have the engineered exosomes, and you have the StealthX platforms. Can you? I know you talked about the engineered exosomes, but can you just go into a little more color and why, and differentiate these proprietary platforms? Then I have a question about can you combine the capabilities. But really it's just to kinda compare the two, why there's a couple different platforms there.

I'm looking forward for the two.

Two the non descript when it comes out.

I Wonder if you could help differentiate from my clients kind of get from questions. Do you have the engineered equity films I mean, you have the assets platforms can do.

I know you talked about the engineered from exercise, but can you.

Just go into a little more color.

Why and differentiate these provocative platforms and other question Bob can you combine the capabilities and the.

Really it's just the kind of compare of the two why why why does a couple of different platforms. There.

Linda Marbán: Yeah. Thank you. You know, we're very careful to say that our engineered exosome platform is expanding because it is. We can start with multiple different cell types, and then drive the exosome to do different jobs biologically. In certain cases, for instance, like with the SARS-CoV-2 vaccine, we're starting with a standard HEK293F cell, which is a commercially available cell line. It's perfect for loading in those RNAs for the vaccine and just getting them where we need to go to derive an immune response. On the other side, the StealthX are an engineered version of a CDC exosome, or the exosomes that we believe are responsible for the mechanism of action of CAP-1002.

Yeah. Thank you so.

We're very careful to say that our engineered and the extra day one platform is expanding because it is so we can start with multiple different cell types, and then drive the extra zone to do different jobs biologically.

In certain cases for instance, like with the Sars Cov, two vaccine and we're starting with the standard HEK 293, upsell, which is a commercially available cell line, it's perfect for our loading in those arent as for the vaccine and just getting them, where we need to go to the to derive an immune response.

On the other side the other attacks or an engineered version of a CDC acts as the or the accident that we believe are responsible for the mechanism of action of cap 10 O. Two because we wanted to be able to ascertain the piece can be made commercially we actually have fabricated them using a standard cell line.

Linda Marbán: Because we wanted to be able to ascertain that these could be made commercially, we actually have fabricated them using a standard cell line and then putting several molecular components inside so that we can drive that same benefit. Different uses. You know, potentially one is a therapy for inflammatory diseases, another potentially for vaccines, for treatment of monogenic diseases, and other opportunities of custom loading. We don't, we reserve the right to custom load the StealthX as time goes on as well. You know, this is a multi-pronged platform starting with the same basic component, which is an exosome.

And then putting several molecular of components inside so that we can drive that same benefit.

For uses.

Potentially one of the of therapy for inflammatory diseases and other potentially for vaccines for treatment of monogenic diseases and other opportunities of custom loading.

And we don't we reserve the right to custom load the aspects of as time goes on as well. So you know this is a multi pronged platform starting with the same basic component within the next of them.

Thank you and last question and this is really for AG I think how do you see funding goals going forward you know over the years when there's been kind of a magician.

Alan Leong: Thank you. Last question, and this is really for AJ, I think. How do you see funding going forward? You know, over the years, Linda's been kind of a magician. Do you have some general comments about how you approach this?

You have some general comments about how you approached us.

AJ Bergmann: Yeah, sure. Thanks, Alan. Well, I think you heard me say in our remarks, we're in a great cash position for our current time and what we've laid out. We have over $40 million in the bank. And that will fund everything that we have planned right now from our phase 1 vaccine trial to moving forward in the next steps of our Duchenne program, as well as advancing pre-clinically some of the candidates in areas that we're thinking of taking the exosome technology. Obviously, we are going to be opportunistic, but we're in a really good position right now to continue to deliver and hopefully lay out the progress for the milestones that you heard today. There are opportunities for non-dilutive funding, and Capricor has been very successful in years past, and we continue to pursue various options for that type of funding.

Yeah sure. Thanks Alan.

I think you heard me say in our remarks, we're in a great cash position for our current time and what we've laid out we of over $40 million in the bank.

And that will find everything that we have planned right now from our phase one vaccine trial to moving forward in the next steps of our Duchenne program as well as advancing preclinical ease some of the candidates in areas that were thinking of taking the extra zone technology.

Lee we are going to be opportunistic, but we're in a really good position right now to continue to deliver and hopefully lay out the progress for the milestones that you heard today there are opportunities for non dilutive funding and Capricorn has been very successful in years passed and the continuing to pursue various options for that type of funding.

Well. Thank you good luck for the future I look forward.

Alan Leong: Well, thank you. Good luck to the future. I look forward to the things coming out for Q3. Thanks.

For two of the things coming out for Q3 free.

<unk>.

AJ Bergmann: Thanks, Alan.

Thanks Alan.

Linda Marbán: Thanks, Alan. Be well.

Thanks, Alan at the well.

Our next question comes from Joe.

Operator: Our next question comes from Joe Pantginis with H.C. Wainwright. Please proceed with your question.

Pan Janus with H C. Wainwright. Please proceed with your question. Good afternoon. This is Matt on for Joe This afternoon.

[Analyst] (H.C. Wainwright): Good afternoon. This is Matt on for Joe this afternoon. Just a couple of questions for you. The first one, as you continue discussions with the FDA regarding muscular dystrophy, what do you consider to be the major limiting step at this point?

Couple of questions for you the first one.

As you continue the discussions with the FDA regarding the muscular dystrophy, what do you consider to be the major limiting step at this point.

Linda Marbán: Can you clarify what you're trying to ask? What is the major limiting step with FDA or for us. Help me understand what-

Can you clarify what you're trying to ask what is the major limiting step with the FTAA or for us or help me on the.

Linda Marbán: Can you clarify what you're trying to ask? What is the major limiting step with FDA or for us. Help me understand what-

[Analyst] (H.C. Wainwright): Oh.

Linda Marbán: I can answer for you.

I can answer for you.

[Analyst] (H.C. Wainwright): Yeah, no worries. Particularly on your end, do you think that there's anything that with your conversations with the FDA that you guys can provide? Are you waiting on the FDA to come back to you quicker? Is there anything you can provide in the meantime that could slow down or speed up the process to move this forward?

Yeah, No worries, particularly on your end do you think that there's anything.

That with your conversations with the FDA that you guys can provide are you waiting on the FDA to come back to you quicker is there anything you can provide in the meantime that could slow down or speed of the process to moving forward.

Linda Marbán: You know, we are proceeding very quickly and expeditiously towards our goal of registration. We're very lucky to have RMAT designation, which gives us preferred access to FDA. We've been in ongoing dialogue with them over this very exciting data for a little bit of time now. Stay tuned for more exciting news on this program.

Yeah. No you know we are proceeding very very quickly and expeditiously towards our goal of registration.

We're very lucky to have army designation, which gives us preferred access to FDA and so we've been in ongoing dialogue with them over the very exciting data for a little bit of time now so stay tuned for more exciting news on this program.

Yeah, great. Thanks for the clarification the almond.

[Analyst] (H.C. Wainwright): Yeah. Great. Thanks for the clarification there. Switching gears a bit, it's very nice to see the Johns Hopkins agreement that you mentioned previously, for exosomes and the progress you made on that front. COVID vaccines are obviously one of your leads. I was wondering if you can give any additional insight or be more specific about possible indications that you guys might be targeting, that we can look for probably in the near future.

And then switching gears a bit of it's very nice to see the Johns Hopkins agreement that you've mentioned previously for Exosomes and the progress you've made on upfront COVID-19 and the vaccines are obviously one of your lead I was wondering if you've given any additional insight or be more specific about possible indications that you guys might be targeting.

You can look for probably in the near future.

Yeah. So thanks, Matt.

Linda Marbán: Yeah. Thanks, Matt. We have been exploring multiple opportunities using the exosomes as delivery vehicles. What we've learned and are really excited about is that you can take mRNA, you can put it inside of an exosome, and then you can drive biology in terms of the translation of a protein into a full and active protein. We've been able to show that with the vaccine candidate in animals, driving expression and ultimately an immune response to the nucleocapsid and the S spike protein.

We have been exploring multiple opportunities using the extra the as delivery vehicles. So what we've learned and are really excited about is that you can take mrna you can put it inside of an ex US and then you can derive biology in terms of the translation of approaching into a full and active protein and we've been able.

The show that with the vaccine candidate in animals I'm driving expression of ultimately an immune response to the end nuclear capsid and the S. Spike protein and then also and this has been published and bio archive online publication, we have been able to show that there is.

Linda Marbán: This has been published in bioRxiv online publications. We've been able to show that there is this imaging mRNA called Antares2, that if you put it in your exosome and you deliver it, not only is the Antares2 protein expressed, but it has enzymatic activity, which allows us to drive that signal to light up and we can image, you know, and do all kinds of exciting biodistribution studies. In terms of indications, we have several that we are actively exploring and doing preclinical work on. We'll look forward to updating you as the time comes.

Imaging mrna called Antara, but if you put it in the likes of them and deliver it not only is the entirety of protein expressed but it has enzymatic activity, which allows us to drive.

That signaled for light up and we can image do all kinds of exciting bio distribution studies in terms of indications. We have several that we are actively exploring and doing preclinical work on and we look forward to updating you as the time comes.

[Analyst] (H.C. Wainwright): Yeah, great. It's very exciting. Thank you again for taking our questions and congrats on all the progress.

Yeah, great. It's very exciting. Thank you again for two of your questions and congrats on all of the progress.

Thank you.

Linda Marbán: Thank you.

As a reminder, if you'd like to ask a question. Please press star one on your telephone keypad.

Operator: As a reminder, if you'd like to ask a question, please press star one on your telephone keypad. One moment, please, while we poll for questions. Our next question comes from Mark Swam with Elisser Capital. Please proceed with your question.

All of it please while we poll for questions. Our next question comes from Mike Swamp with tell US the capital. Please proceed with your question.

Mark Swam: Hi, Linda, it's Mark Swam. Nice to talk to you.

[Analyst]: Hi, Linda, it's Mark Swam. Nice to talk to you.

Hi, Linda its Mark swim nice to talk to you the nice presentation.

Linda Marbán: Nice.

Mark Swam: Nice presentation. Two quick questions. Is there any possibility of interim data analysis on the use of CAP-1002 in the COVID-19 for the lung involvement?

[Analyst]: Nice presentation. Two quick questions. Is there any possibility of interim data analysis on the use of CAP-1002 in the COVID-19 for the lung involvement?

A quick two quick questions is there any possibility of interim data analysis on the use of cash tended to in the kind of of <unk> 19 for the lung involvement.

Yeah.

Yeah, Hi, Mark its great to hear your voice, it's been a while.

Linda Marbán: Yeah. Hi, Mark. It's great to hear your voice. It's been a while.

Mark Swam: Yeah.

[Analyst]: Yeah.

Linda Marbán: You know, we are actively enrolling that study. We look to have full enrollment by Q3. We have made the decision not to do an interim analysis based on the fact that the trial's enrolling well, and we'd like to see the full data set. Stay tuned. I know it's hard for all of us to wait, but we really believe that the best way to do this is to get all the patients in and then take a good look at the data. The good news is it's a short endpoint, so it's a 90-day endpoint, which is nice.

Yeah.

We are we are actively enrolling that study we look to have full enrollment by Q3, and we have made the decision not to do an interim analysis based on the fact of the trials enrolling well and we'd like to see the full dataset so stay.

Tuna I know, it's hard for all of us to wait, but we really believe that the best way to do this is to get all of the patients then and then take a good luck of the data the good news as of as you know of short end points. So it's a 90 day endpoint, which is nice.

Mark Swam: Could you give a little more granularity on how early in the course of the illness of those patients are they being randomized? I mean, you know, just the use of supplemental O2 is a bit of a vague criterion. Is there an effort to get the cardiospheres on board early?

[Analyst]: Could you give a little more granularity on how early in the course of the illness of those patients are they being randomized? I mean, you know, just the use of supplemental O2 is a bit of a vague criterion. Is there an effort to get the cardiospheres on board early?

Could you could you give a little more granularity on how how early in the course of of.

The illness of those patients or are they being randomized I mean the.

Just the use of supplemental owe to the debt.

The pervade criterion.

Is there a is there an effort to get.

Because of the seat the credit.

The series onboard early.

Yeah.

Linda Marbán: Yeah. Yeah. Exactly. Of course, we'd like to get in there as early as possible. What we know unequivocally is that they seem to be most bioactive when there's pretty active inflammation going on.

Yeah, Yeah, exactly so of course, we'd like to get in there.

As early as possible about what we know unequivocally is that they seem to be most bioactive.

They're pretty active inflammation going on so we look for are reduced.

Mark Swam: Yeah.

[Analyst]: Yeah.

Linda Marbán: We look for a reduced, you know, oxygen saturations in the blood, patients needing PO2 or needing oxygen supplementation, but not needing ventilation. We like to see them not needing ventilation sort of upcoming in the next 24, 48 hours. There are several others including exclusion criteria that we could go through, you know, after this call or another time just for brevity.

Saturation of the oxygen in the blood patients meeting P O two.

Our leading aquino oxygen supplementation, but not.

Meeting ventilation and we'd like to see them not meeting ventilation sort of upcoming in the next 24 48 hours and there are several other inclusion exclusion criteria that we should go through.

After the call or in other times, just for brevity, but essentially just to sort of debt to the nut of what youre, saying of what you're asking is what we're trying to get them at the point, where they've got active inflammation active.

Linda Marbán: Essentially, just to sort of get to the nut of what you're saying, of what you're asking is, you know, we're trying to get them at the point where they've got active inflammation, active attenuation of ability to breathe normally, but hopefully, you know, not being so far gone that they're in, you know, have ARDS or you know, multi-organ system failure or other types of pathologies such as that.

Attenuation of of ability to breathe normally but hopefully not being so far gone out there and how they are the us or multi.

Multi organ system failure or other types of pathology such as that.

Mark Swam: Yeah. Are you tracking IL-6 levels in those patients as a consequence of the cardiospheres?

[Analyst]: Yeah. Are you tracking IL-6 levels in those patients as a consequence of the cardiospheres?

Are you tracking IL six levels some of those patients as the consequence of the courteous of yours, yes, yes.

Linda Marbán: Yes. Yeah.

Mark Swam: Yeah.

[Analyst]: Yeah.

Linda Marbán: We're

Mark Swam: Very soon.

[Analyst]: Very soon.

Linda Marbán: We're looking for several of the biomarkers, you know, of course, IL-1, alpha and beta, IL-2, IL-6, IL-10, IL-12, and then, you know, ferritin and some of the others that have been correlated with outcomes.

They're looking for several of the Biomarkers you net off for a final one.

All of them beta of IL, two IL six IL 10, IL 12.

And then fair of 10, and some of the others that have been correlated with the outcomes.

Mark Swam: Just a quick shift of gears, and I won't keep annoying you, but on the issue of the DMD trial, that's a wonderful amount of cash on hand to have. Is the thinking still that probably embarkation on a phase 3 trial in DMD would be only with a partner?

And just a quick shifting gears and I won't keep annoying, but on the on the issue of the DMD trial.

[Analyst]: Just a quick shift of gears, and I won't keep annoying you, but on the issue of the DMD trial, that's a wonderful amount of cash on hand to have. Is the thinking still that probably embarkation on a phase 3 trial in DMD would be only with a partner?

That's the wonderful amount of cash on the hand to have.

Is the thinking still the probably embarkation on the phase III trial in DMD would be.

Only with the partner.

You know where we are.

Linda Marbán: You know.

Mark Swam: Would that be a fair question?

[Analyst]: Would that be a fair question?

Linda Marbán: Mark Swam, yeah, we are really enthusiastic about our DMD program.

We are really enthusiastic about our DMD program and holding back the.

Mark Swam: As are we.

[Analyst]: As are we.

Linda Marbán: I'm holding back a little bit because I have to. We want to get this published in a major journal in our field. We feel that will power the data forward. We're working with FDA. We don't wanna say anything publicly that could change the tenor of those, you know, very friendly interactions. What I can say for sure is that once we have clarity from the FDA, and the good news is, you know, we expect that by Q3 of this year.

I'm holding back a little bit because I have to we want to get the published in the major journal of our field. The show that will power of the data for we're working with FDA, we don't want to say anything publicly that could change.

Change the the tenor of those you know very friendly interactions.

But you know what I can say for sure is that once we have clarity from the FDA and the good news is we expect that by the third quarter of the shear.

Mark Swam: Yeah

[Analyst]: Yeah

Linda Marbán: ... the manuscript to be published, we'll decide then, you know, what to do next with the program. We may decide to do the Phase 3. We may partner it. We may partner some of it, do some of it ourselves. It really depends on sort of the feedback we get from FDA.

You know the manuscript to be published will decide then you know what to do next with the program. We may decide to do the phase three we may partner at we May partner some of the do some of it ourselves it really depends on sort of the feedback.

Feedback, we get from FDA, yes lots of moving parts of it sounds like so okay.

Mark Swam: Yeah. Lots of moving parts, it sounds like, so. Okay.

[Analyst]: Yeah. Lots of moving parts, it sounds like, so. Okay.

Linda Marbán: Yeah.

Mark Swam: All right. Thank you. Long Capricor.

[Analyst]: All right. Thank you. Long Capricor.

Alright, Thank you for <unk>.

There's also just very very quickly there is also the opportunity and the MD of non dilutive funding you know theres been supported by the California Institute of regenerative medicine in the past, we haven't ruled out the opportunity of of going back and saying if that would be a way of funding of the program should we want to do it that way.

Linda Marbán: There's also, just very, very quickly, there's also the opportunity in DMD of non-dilutive funding. You know, there's been support by the California Institute for Regenerative Medicine in the past. We haven't ruled out the opportunity of going back and seeing if that would be a way of funding the program, should we want to do it that way.

Mark Swam: Wonderful. Okay. I really appreciate it, Linda. Thank you.

[Analyst]: Wonderful. Okay. I really appreciate it, Linda. Thank you.

Perfect.

Really appreciate the Linda Thank you.

Linda Marbán: Thank you. Be well.

Thank you D well.

Operator: We have reached the end of the question and answer session. I'd like to turn the call back over to Linda Marbán for closing comments.

We have reached down as the question and answer session I would like to turn the call back over to Linda Marvin for closing comments.

Thank you for joining us today on our first quarter call. We look forward to providing updates to you over the next couple of months on these exciting milestones and please look for us presenting at the various meetings that I mentioned and be well in the is very tight trying times. Thank you.

Linda Marbán: Thank you for joining us today on our Q1 call. We look forward to providing updates to you over the next several months on these exciting milestones. Please, look for us presenting at the various meetings that I mentioned. Be well in these very trying times. Thank you.

This concludes today's conference you may disconnect your lines at this time and we thank you for your participation. Thank you.

Operator: This concludes today's conference. You may disconnect your lines at this time, and we thank you for your participation.

Linda Marbán: Thank you.

Okay.

Q1 2021 Capricor Therapeutics Inc Earnings Call

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